Document ID: EPA-HQ-OAR-2006-0905-0001
Agency: epa
Document Type: Proposed Rule
Title: Revisions of Standards of Performance for New and Existing Stationary Sources; Electric Utility Steam Generating Units; Federal Plan Requirements for Clean Air Mercury Rule; and Revisions of Acid Rain Program Rules
Posted Date: 2006-12-22T05:00Z

[Federal Register: December 22, 2006 (Volume 71, Number 246)]
[Proposed Rules]               
[Page 77099-77147]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22de06-25]                         

[[Page 77099]]

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Part II

Environmental Protection Agency

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40 CFR Parts 60, 62, 72, and 78

 Revisions of Standards of Performance for New and Existing Stationary 
Sources; Electric Utility Steam Generating Units; Federal Plan 
Requirements for Clean Air Mercury Rule; and Revisions of Acid Rain 
Program Rules; Proposed Rule

[[Page 77100]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 60, 62, 72, and 78

[EPA-HQ-OAR-2006-0905; FRL-8255-1]
RIN 2060-AN98

 
Revisions of Standards of Performance for New and Existing 
Stationary Sources; Electric Utility Steam Generating Units; Federal 
Plan Requirements for Clean Air Mercury Rule; and Revisions of Acid 
Rain Program Rules

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: In this action, EPA proposes a Federal Plan to implement Clean 
Air Act (CAA) section 111 mercury (Hg) standards of performance for new 
and existing coal-fired electric utility steam generating units 
(Utility Unit or EGU) located in States or Indian Country covered by 
the Clean Air Mercury Rule (CAMR) which do not have EPA approved and 
currently effective State plans. The EPA will not take final action on 
the proposed Federal Plan until EPA either finds that a State has 
failed to timely submit a plan or disapproves a submitted plan. Any 
final Federal Plan is expected to serve primarily to temporarily fill a 
regulatory gap in circumstances where either a State fails to timely 
submit a plan or EPA disapproves a submitted plan as, in either case, 
States will be free to submit an approvable plan after promulgation of 
the Federal Plan and upon approval of the State Plan by EPA, the 
Federal Plan will no longer apply to coal-fired Utility Units covered 
by the State Plan.
    This action also proposes certain revisions to both the CAMR State 
Plan model cap-and-trade rule (in order to make it compatible with the 
Federal Plan cap-and-trade rule and to make technical corrections) and 
the Acid Rain Program regulations (in order to simplify the provision 
concerning alternate designated representatives and to make the 
administrative appeals process applicable to the decisions of the 
Administrator under the State Plan and Federal Plan cap-and-trade 
rules).

DATES: Comments. Comments on this proposal must be received on or 
before February 20, 2007. A public hearing will be held in Washington, 
DC prior to the end of the public comment period. EPA will publish a 
separate Federal Register notice announcing the date, location, and 
time for the public hearing. Please refer to SUPPLEMENTARY INFORMATION 
for additional information on the public hearing.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-HQ-
OAR-2006-0905, by one of the following methods:
    A. Federal Rulemaking Portal: http://www.regulations.gov. Follow 

the on-line instructions for submitting comments.
    B. E-mail: A-AND-R-Docket@epa.gov.
    C. Mail: Air Docket, ATTN: Docket Number EPA-HQ-OAR-2006-0905, 
Environmental Protection Agency, Mail Code: 6102T, 1200 Pennsylvania 
Ave., NW., Washington, DC 20460.
    D. Hand Delivery: EPA Docket Center, 1301 Constitution Avenue, NW., 
Room 3334, Washington, DC. Such deliveries are only accepted during the 
Docket's normal hours of operation, and special arrangements should be 
made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA Docket 
Number EPA-HQ-OAR-2006-0905. EPA's policy is that all comments received 
will be included in the public docket without change and may be made 
available online at http://www.regulations.gov, including any personal 

information provided, unless the comment includes information claimed 
to be Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. Do not submit information 
that you consider to be CBI or otherwise protected through 
http://www.regulations.gov or e-mail. The www.regulations.gov Web site is an 

``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov your e-mail address will be 

automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the 
http://www.regulations.gov index. Although listed in the index, some 

information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in http://www.regulations.gov or 

in hard copy at the EPA Docket Center, EPA West, Room 3334, 1301 
Constitution Avenue, NW., Washington, DC. The Public Reading Room is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
legal holidays. The telephone number for the Public Reading Room is 
(202) 566-1744, and the telephone number for the Air Docket is (202) 
566-1742.

FOR FURTHER INFORMATION CONTACT: For information concerning this 
proposed CAMR Federal Plan as well as Integrated Planning Model (IPM) 
analyses performed in developing the final CAMR, contact Meg Victor, 
Program Development Branch, Clean Air Markets Division (MC 6204J), EPA, 
Washington, DC 20460; telephone number (202) 343-9193; fax number (202) 
343-2359; electronic mail address: victor.meg@epa.gov.
    For information concerning all other analyses performed in 
developing the final CAMR, contact Mr. William Maxwell, Energy 
Strategies Group, Sector Policies and Programs Division (Mail Code 
D243-01), EPA, Research Triangle Park, North Carolina 27711; telephone 
number (919) 541-5430; fax number (919) 541-5450; electronic mail 
address: maxwell.bill@epa.gov.

SUPPLEMENTARY INFORMATION:
    Regulated Entities. Categories and entities potentially regulated 
by this action include the following:

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                                    NAICS code   Examples of potentially
             Category                  \1\         regulated entities
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Industry.........................       221112  Fossil fuel-fired
                                                 electric utility steam
                                                 generating units.
Federal Government...............   \2\ 221122  Fossil fuel-fired
                                                 electric utility steam
                                                 generating units owned
                                                 by the Federal
                                                 government.
State/local/Tribal government....   \2\ 221122  Fossil fuel-fired
                                                 electric utility steam
                                                 generating units owned
                                                 by municipalities.

[[Page 77101]]

                                        921150  Fossil fuel-fired
                                                 electric utility steam
                                                 generating units in
                                                 Indian country.
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\1\ North American Industry Classification System.
\2\ Federal, State, or local government-owned and operated
  establishments are classified according to the activity in which they
  are engaged.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists examples of the types of entities EPA is now 
aware could potentially be regulated by this action. Other types of 
entities not listed could also be affected. To determine whether your 
facility, company, business, organization, etc., is regulated by this 
action, you should examine the applicability criteria in 40 CFR 60.45Da 
of the final new source performance standards (NSPS) amendments and 40 
CFR 60.24(h) of the final CAMR. If you have questions regarding the 
applicability of this action to a particular entity, consult your State 
or local agency (or EPA Regional Office).
    World Wide Web. In addition to being available in the docket, an 
electronic copy of this action will also be available on the World Wide 
Web through EPA's Office of Air and Radiation. Following signature by 
the Administrator, a copy of this action will be posted on the CAMR 
page at http://www.epa.gov/camr.

    Public Hearing. A public hearing will be held in Washington, DC 
prior to the end of the public comment period. EPA will publish a 
future Federal Register notice announcing the details of the public 
hearing including the time, date, and location, and will announce the 
public hearing on EPA's Web site for this rulemaking at http://www.epa.gov/CAMR
.

    Because the hearing will be held at a U.S. Government facility, 
everyone planning to attend should be prepared to show valid picture 
identification to the security staff in order to gain access to the 
meeting room. Oral testimony will be limited to 5 minutes per 
commenter. The EPA encourages commenters to provide written versions of 
their oral testimonies either electronically (on computer disk or CD-
ROM) or in paper copy. Verbatim transcripts and written statements will 
be included in the rulemaking docket.
    The public hearing will provide interested parties the opportunity 
to present data, views, or arguments concerning the proposed rule. The 
EPA may ask clarifying questions during the oral presentations, but 
will not respond to the presentations or comments at that time. Written 
statements and supporting information submitted during the comment 
period will be considered with the same weight as any oral comments and 
supporting information presented at a public hearing.
    Outline. The information presented in this preamble is organized as 
follows:

I. Background
    A. Summary of This Action
    B. Regulatory Background of CAMR
    C. State Plan Requirements
II. Federal Plan Process
    A. Legal Authority for Federal Plan
    B. Implementation of Federal Plan
    C. Timing of Federal Plan Action
    D. Federal Plan Control Measures
    E. National Mercury Budget and Compliance Dates
    F. State and Indian Country Emission Budgets
III. Federal Hg Cap-and-Trade Program
    A. Overall Structure of the Federal Hg Cap-and-Trade Program
    B. Sources Affected Under the Federal Cap-and-Trade Rule
    C. Allocation of Emission Allowances
    D. Allowance Banking
    E. Source-Level Emissions Monitoring and Reporting Requirements
    F. Compliance and Penalties
    G. Elements of the Federal Hg Trading Program That Differ From 
the State Model Hg Trading Program
IV. Proposed Revisions of the CAMR State Model Cap-and-Trade Program 
Rule
V. Proposed Revisions of the Acid Rain Program Regulations
VI. Units Subject to the CAMR Federal Plan and New Source 
Performance Standards
VII. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. Background

A. Summary of This Action

    On May 18, 2005, EPA finalized CAMR and established standards of 
performance for Hg for new and existing coal-fired electric utility 
steam generating units (Utility Units or EGUs). (The standards of 
performance for existing Utility Units are in the form of emission 
guidelines which do not apply to individual sources until they are 
implemented through an EPA approved State plan or a promulgated Federal 
plan.) (See 70 FR 28606.) CAMR established a mechanism by which Hg 
emissions from new and existing coal-fired Utility Units are capped at 
specified, nation-wide levels. A first phase cap of 38 tpy becomes 
effective in 2010, and a second phase cap of 15 tpy becomes effective 
in 2018. EPA then set State level emission caps that States must meet 
and developed an emissions cap-and-trade program States can use to meet 
these caps. State plans to implement and enforce these standards of 
performance were due to EPA by November 17, 2006.\1\ Under 40 CFR 
60.27(b), the Administrator must approve or disapprove State Plans 
within 4 months of the November 17, 2006 submission deadline.
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    \1\ In a separate Federal Register notice entitled ``Notice of 
Finding that Certain States Did Not Submit Clean Air Mercury Rule 
(CAMR) State Plans for New and Existing Electric Utility Steam 
Generating Units and Status of Submission of Such Plans,'' EPA made 
findings that certain States did not submit CAMR State Plans by the 
November 17, 2006 deadline and otherwise provided notice of the 
status of State Plan submissions.
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    CAA section 111 requires States, and CAA section 301(d) and the 
Tribal Air Rule, 40 CFR part 49, allow Tribes granted treatment as 
States (TAS), with existing coal-fired Utility Units to submit plans to 
EPA that implement and enforce the standards of performance. The CAMR 
itself requires States to submit a plan for addressing Hg emissions 
from new Utility Units even if there are no existing Utility Units in 
the State.
    CAA section 111(d)(2) grants the Administrator the same authority 
to prescribe a plan for a State in cases where the State fails to 
submit a satisfactory plan as he would have under section 110(c) of the 
CAA in the case of a State's failure to submit an

[[Page 77102]]

implementation plan. Section 60.27 of 40 CFR part 60 directs the 
Administrator to promptly prepare and publish proposed regulations for 
a State if the State fails to submit a plan by the prescribed deadline 
or the Administrator disapproves the State's submitted plan and to 
promulgate those regulations by the date 6 months after the date 
required for plan submission. Thus, if a State didn't submit a plan by 
November 17, 2006, EPA is required to promulgate a Federal Plan no 
later than 6 months after the deadline, unless, prior to such 
promulgation, the State submits a plan that the Administrator 
determines to be approvable. In this action, EPA proposes a Federal 
Plan to implement standards of performance for Utility Units located in 
all States, the District of Columbia, and Indian Country covered by 
CAMR (see 40 CFR 60.24(h)(1) listing the jurisdictions covered by CAMR) 
for which a plan was not submitted by November 17, 2006.\2\ In 
addition, with regard to jurisdictions that submitted plans by November 
17, 2006, EPA proposes to adopt a Federal Plan, as set forth in today's 
notice, in the event that EPA reviews the submitted plan and determines 
that the plan does not meet the requirements of CAMR. The EPA believes 
that it is appropriate to propose now the Federal Plan that would apply 
to each jurisdiction without an approvable plan, whether or not the 
jurisdiction involved submitted a plan by November 17, 2006. In all of 
these potential circumstances, the Agency would be hard pressed to both 
propose and promulgate a Federal Plan of this magnitude in a six-month 
time period and so must begin the process now by proposing the Federal 
Plan that would apply if the Agency determines that the jurisdiction 
does not have an approvable plan. Because in today's action EPA is 
proposing the Federal Plan that would apply to any jurisdiction that 
the Agency determines not to have an approvable plan, the Agency 
requests that all persons with concerns about or comments on the 
proposed Federal Plan submit comments in response to today's notice, 
whether such concerns or comments involve sources in jurisdictions that 
submitted plans by November 17, 2006 or jurisdictions that did not 
submit plans by that deadline. Today's action provides the opportunity 
for public comment on the Federal Plan that the Agency proposes to use 
for any jurisdiction for which the Agency may promulgate a Federal Plan 
under 40 CFR 60.27 because of the absence of a plan meeting the 
requirements of CAMR. The EPA will not take final action on the 
proposed Federal Plan for any specific jurisdiction until EPA either 
finds that a plan has not been timely filed or disapproves a submitted 
plan. (See also ``Notice of Finding that Certain States Did Not Submit 
Clean Air Mercury Rule (CAMR) State Plans for New and Existing Electric 
Utility Steam Generating Units and Status of Submission of Such 
Plans.'')
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    \2\ Under the TAR (40 CFR part 49), which implements CAA section 
301(d), Tribes may elect to be treated in the same manner as a State 
in implementing sections of the CAA. However, EPA determined in the 
TAR that it was inappropriate to treat Tribes in a manner similar to 
a State with regard to specific plan submittal and implementation 
deadlines.
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B. Regulatory Background of CAMR

1. Relevant Federal Register Actions
    On December 20, 2000, EPA issued a finding pursuant to CAA section 
112(n)(1)(A) that it was appropriate and necessary to regulate coal- 
and oil-fired Utility Units under CAA section 112. In making this 
finding, EPA considered the results of the study mandated by CAA 
section 112(n)(1)(A) (the Utility Study), which was completed and 
submitted to Congress in February 1998.
    In December 2000, EPA concluded that the positive appropriate and 
necessary determination under CAA section 112(n)(1)(A) constituted a 
decision to list coal- and oil-fired Utility Units on the CAA section 
112(c) source category list. Relying on CAA section 112(e)(4), EPA 
explained in its December 2000 finding that neither the appropriate and 
necessary finding under CAA section 112(n)(1)(A) nor the associated 
listing were subject to judicial review at that time. EPA did not add 
natural-gas fired units to the CAA section 112(c) list in December 
2000, because it did not make a positive appropriate and necessary 
finding for such units.
    On January 30, 2004, EPA published in the Federal Register a notice 
of proposed rulemaking (NPR) entitled ``Proposed National Emissions 
Standards for Hazardous Air Pollutants; and, in the Alternative, 
Proposed Standards of Performance for New and Existing Stationary 
Sources: Electric Utility Steam Generating Units.'' (See 69 FR 4652.) 
In that NPR, EPA proposed three alternative regulatory approaches. 
First, EPA proposed to retain the December 2000 Finding and associated 
listing of coal- and oil-fired Utility Units and to issue maximum 
achievable control technology-based (MACT) national emission standards 
for hazardous air pollutants (NESHAP) for such units under CAA section 
112. Second, EPA alternatively proposed revising the Agency's December 
2000 Finding, removing coal- and oil-fired Utility Units from the CAA 
section 112(c) list,\3\ and issuing final standards of performance 
under CAA section 111 using emissions cap-and-trade for new and 
existing coal-fired units that emit Hg and new and existing oil-fired 
units that emit nickel (Ni). Finally, as a third possible alternative, 
EPA took comment on retaining the December 2000 finding and regulating 
Hg emissions from Utility Units under CAA section 112(n)(1)(A) using a 
cap-and-trade approach.
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    \3\ We did not propose revising the December 2000 finding for 
gas-fired Utility Units because EPA continues to believe that 
regulation of such units under CAA section 112 is not appropriate 
and necessary. We, therefore, take no action today with regard to 
gas-fired Utility Units.
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    On March 16, 2004, EPA published in the Federal Register a 
supplemental notice of proposed rulemaking (SNPR) entitled 
``Supplemental Notice for the Proposed National Emission Standards for 
Hazardous Air Pollutants; and, in the Alternative, Proposed Standards 
of Performance for New and Existing Stationary Sources: Electric 
Utility Steam Generating Units.'' (See 69 FR 12398.) In the SNPR, EPA 
proposed certain additional regulatory text that largely addressed the 
proposed CAA section 111 standards of performance for Hg, which 
included a cap-and-trade program. The SNPR also proposed State Plan 
approvability criteria and a model cap-and-trade rule for Hg emissions 
from coal-fired Utility Units.
    On December 1, 2004, EPA published in the Federal Register a notice 
of data availability (NODA) entitled ``Proposed National Emission 
Standards for Hazardous Air Pollutants; and, in the Alternative, 
Proposed Standards of Performance for New and Existing Stationary 
Sources, Electric Utility Steam Generating Units: Notice of Data 
Availability.'' (See 69 FR 69864.) EPA issued this NODA: (1) To seek 
additional input on certain new data and information concerning Hg that 
the Agency received in response to the January 30, 2004 NPR and March 
16, 2004 SNPR; and (2) to seek input on a revised proposed benefits 
methodology for assessing the benefits of regulating Hg.
    On March 29, 2005 (70 FR 15994), EPA revised the December 2000 
appropriate and necessary finding and concluded that it is not 
appropriate and necessary to regulate coal- and oil-fired Utility Units 
under CAA section 112. We took this action because we now believe that 
the December 2000 finding lacked foundation and because recent 
information demonstrates that it is not

[[Page 77103]]

appropriate or necessary to regulate coal- and oil-fired Utility Units 
under CAA section 112. Based solely on the revised finding, we removed 
coal- and oil-fired Utility Units from the CAA section 112(c) list and 
instead established standards of performance for Hg for new and 
existing coal-fired Utility Units under CAA section 111 on May 18, 2005 
(70 FR 28606). The regulations promulgated pursuant to EPA's authority 
under CAA section 111 established a mechanism by which Hg emissions 
from new and existing coal-fired Utility Units are capped at specified, 
nation-wide levels. A first phase cap of 38 tons per year becomes 
effective in 2010, and a second phase cap of 15 tons per year becomes 
effective in 2018. The final CAMR included State Plan approvability 
criteria and a model cap-and-trade rule for Hg emissions from coal-
fired Utility Units.
2. CAA Section 111 Authority
    CAA section 111 creates a program for the establishment of 
``standards of performance.'' A ``standard of performance'' is ``a 
standard for emissions of air pollutants which reflects the degree of 
emission limitation achievable through the application of the best 
system of emission reduction, which (taking into account the cost of 
achieving such reduction, any non-air quality health and environmental 
impacts and energy requirements), the Administrator determines has been 
adequately demonstrated.'' (42 U.S.C. 7411(a)(1).)
    For new sources, EPA must first establish a list of stationary 
source categories, which the Administrator has determined ``causes, or 
contributes significantly to, air pollution which may reasonably be 
anticipated to endanger public health or welfare.'' (42 U.S.C. 
7410(b)(1)(A).) EPA must then set Federal standards of performance for 
new sources within each listed source category. (42 U.S.C. 
7411(b)(1)(B).) The standards for new sources under CAA section 111(b) 
apply nationally and are applicable to sources on which construction, 
reconstruction or modification is commenced after the date of proposal 
of the standards. (See id.)
    Existing sources are addressed under CAA section 111(d). EPA must 
issue a standard of performance for existing sources in a source 
category for a pollutant if it has established a standard of 
performance for new sources covering an air pollutant for which air 
quality criteria have not been issued or which is not included on a 
list published under CAA section 108(a), even where those pollutants 
are subject to the standard for new sources. (See 42 U.S.C. 
7411(d)(1)). CAA section 111(d) authorizes EPA to promulgate standards 
of performance that States must adopt through a SIP-like process, which 
requires State rulemaking action followed by review and approval of 
State Plans by EPA. If a State fails to submit a satisfactory plan, EPA 
has the authority to prescribe a plan for the State. (See 42 U.S.C. 
7411(d)(2)(A).)
    The final CAMR (70 FR 28606; May 18, 2005) discusses in more detail 
(i) The applicable standards of performance for Hg from new coal-fired 
Utility Units under CAA section 111(b), (ii) the legal authority under 
CAA section 111(d) to regulate Hg from existing coal-fired Utility 
Units, and (iii) the legal authority to implement a cap-and-trade 
program for existing and new Utility Units.

C. State Plan Requirements

1. Summary of State Plan Requirements
    As finalized under CAMR (70 FR 28632), each State is required to 
submit a State Plan that assures compliance with the State's assigned 
Statewide Hg emission budget for coal-fired Utility Units. CAMR is 
described here primarily for the convenience of the reader, and EPA is 
only requesting comments on CAMR with regard to revisions to the CAMR 
State model trading rule that are proposed in this notice. See Section 
IV of this preamble. Because the State must meet a coal-fired EGU Hg 
emission budget, all emission reductions must necessarily come from 
coal-fired Utility Units. Each State Plan should include fully-adopted 
State rules for the EGU Hg reduction strategy with compliance dates 
providing for controls by 2010 and 2018 that will achieve the State EGU 
Hg emissions budgets. The State Plans were due by November 17, 2006. As 
a required element of a State Plan, a State must demonstrate that it 
has the legal authority to adopt and implement the emission 
requirements and compliance schedules in the State Plan. The State also 
must identify the enforceable State mechanism for implementing the 
emission guidelines (e.g., a State rule or other State enforcement 
mechanism). Following receipt of a State Plan, EPA has up to 4 months 
to approve or disapprove the plan. (See 40 CFR 60.27(b).)
    The emission reduction requirement in CAMR applies to all coal-
fired Utility Units located in all 50 States of the U.S., the District 
of Columbia, as well as those located in Indian country. (As used 
herein, the term ``Indian country'' generally refers to all areas 
within Indian reservations, dependent Indian communities, and Indian 
allotments.) CAMR includes mercury emission budgets for coal-fired 
Utility Units located in Indian country; the emission budgets cover 
both existing and new units. EPA generally will implement the emission 
trading rule for coal-fired Utility Units located in Indian country 
unless a Tribe seeks and obtains Treatment-as-a-State (TAS) status and 
submits a Tribal Plan to implement the allocated Hg emissions budget. 
Eligible Tribes which choose to do so will be responsible for 
submitting a Tribal Plan analogous to the State Plans discussed 
throughout this preamble, and, like States, can choose to adopt the 
model trading rule.
2. Performance Standard Approvability Criteria
    As discussed in CAMR (70 FR 28616), CAA sections 111(a) and (d)(1) 
authorize EPA to promulgate a ``standard of performance'' that States 
must apply to existing EGU sources through a State Plan, and EPA 
interpreted the term ``standard of performance,'' as applied to 
existing EGU sources, to include a cap-and-trade program.
    The State EGU Hg budgets are not an independently enforceable 
requirement. Rather, each State must impose control requirements that 
the State demonstrates will limit Statewide Hg emissions from affected 
new and existing EGU sources to no more than the amount of the EGU Hg 
budget. Under CAMR, EPA finalized that States may meet their Statewide 
EGU Hg emission budgets by allowing their EGU sources to participate in 
a national cap-and-trade program. That is, a State may authorize its 
affected EGU sources to buy and sell Hg allowances allocated in or 
outside of the State, so that any difference between the State's EGU Hg 
budget and the total amount of Statewide EGU Hg emissions will be 
offset in another State (or other States). Regardless of State 
participation in the national cap-and-trade program, EPA believes that 
the best way to assure this emission limitation is for the State to 
limit total EGU Hg emissions for new and existing units in the State to 
the amount of the State EGU Hg budget. In addition, EPA finalized that 
sources will be required to comply with the 40 CFR part 75 
requirements. EPA believes that compliance with these requirements is 
necessary to demonstrate compliance with a mass emissions limit.

[[Page 77104]]

II. Federal Plan Process

A. Legal Authority for Federal Plan

    CAA section 111(d) and 40 CFR 60.24(h) require States to develop 
and implement State Plans for coal-fired Utility Units designed to 
implement and enforce the promulgated Hg emission guidelines. The State 
Plans were due by November 17, 2006. Following receipt of a State Plan, 
EPA has up to 4 months to approve or disapprove the plan. (CAA section 
111(d)(2)(A) provides EPA the same authority to prescribe a plan for a 
State in cases where the State fails to submit a satisfactory plan as 
the Agency would have under CAA section 110(c) in the case of a failure 
to submit an implementation plan.)
    EPA is proposing a CAMR Federal Plan that will fulfill the Agency's 
obligation under the CAA to establish emission limits and other 
requirements for coal-fired Utility Units located in States that have 
not timely submitted approvable plans or for which EPA has disapproved 
a submitted plan. EPA is proposing the Federal Plan under the legal 
authority of CAA sections 111(d)(2) and 301(a). The Federal Plan is 
intended, upon promulgation, to implement the emission guidelines 
adopted as part of CAMR. Any final Federal Plan is expected to serve 
primarily to temporarily fill a regulatory gap in circumstances where 
either a State fails to timely submit a plan or EPA disapproves a 
submitted plan as, in either case, States will be free to submit an 
approvable plan after promulgation of the Federal Plan and upon 
approval of the State Plan by EPA, the Federal Plan will no longer 
apply to coal-fired Utility Units covered by the State Plan.

B. Implementation of Federal Plan

    Congress has determined that the primary responsibility for air 
pollution control rests with State and local agencies. See 42 U.S.C. 
1401(a)(3). It is also intended under CAA section 111 that the States 
take the primary responsibility for ensuring that emission reduction 
targets are met. (See, 42 U.S.C. 7411(d)(1).) Accordingly, EPA has 
designed the proposed CAMR Federal Plan to readily facilitate the 
transfer of authority for implementing and enforcing the emission 
guidelines from EPA to State and local agencies. For this action, EPA 
is identifying two mechanisms for transferring implementation 
responsibility to State and local agencies: (1) If EPA approves a State 
Plan submitted to EPA after the Federal Plan is promulgated and is 
effective in that State, the approved State Plan will supersede the 
Federal Plan. (In approving the State Plan, EPA may impose conditions 
it determines necessary to ensure that the transition from the Federal 
Plan to the approved State Plan will be minimally disruptive.); or (2) 
if EPA approves a State allocation methodology that addresses only 
allowance allocations and meets certain requirements for such 
allocations, EPA would implement the Federal Plan except for the 
allocation provisions that the State would implement under the approved 
State allocation methodology.\4\
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    \4\ The proposed option for States to implement allowance 
allocations under a CAMR Federal Plan is similar to the option with 
respect to Clean Air Interstate Rule (CAIR) implementation wherein a 
State can submit an abbreviated CAIR SIP revision to make 
implementation decisions about certain elements of the CAIR FIP 
trading programs (71 FR 25345). The proposed CAMR option is limited 
to allowance allocations.
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1. State Submits a State Plan After Becoming Subject to the Federal 
Plan--Full Transfer of Authority Through State Plan Approval
    Even after coal-fired Utility Units in a particular State become 
subject to the Federal Plan, the State or a local agency may still 
adopt and submit to EPA for approval a State Plan. The EPA will 
determine if the State Plan is at least as protective as the CAMR 
emission guidelines. If EPA determines that the State Plan is at least 
as protective as the emission guidelines, EPA will approve the State 
Plan. Upon the approval and effectiveness of the State Plan, the 
Federal Plan will no longer apply and the State will implement and 
enforce the State Plan in lieu of the Federal Plan. Making the State 
Plan effective as soon as possible after approval expedites a State's 
assumption of responsibility for implementing the CAMR emission 
guidelines through the State Plan mechanism as intended by Congress. 
(EPA recognizes, however, that there may be circumstances in which it 
will be necessary to delay the effective date of an approved State 
Plan, or impose other conditions in approving the State Plan, in order 
to minimize the impacts of any disruption resulting from the transition 
from the Federal Plan to an approved State Plan.) If EPA determines 
that the State Plan is not at least as protective as the guidelines, 
EPA cannot approve the State Plan.
2. State Implements Allowance Allocations Under the Federal Plan
    The State may implement allowance allocations even if there is not 
a State Plan in effect. EPA believes that, to the extent authorized by 
State law, States may want to undertake implementation of Hg 
allocations under a Federal Plan cap-and-trade program. A State could 
choose to submit a State allocation methodology, rather than submitting 
a State Plan addressing all elements of the Hg model trading rule (see 
Section III.C of this preamble for discussion of allocations). In this 
way, the State could choose to allocate Hg allowances to its EGU 
sources as it deems most appropriate, while leaving other elements of 
CAMR implementation to the Federal Plan.

C. Timing of Federal Plan Action

    As described in CAMR and summarized in section I.C of this notice, 
EPA required States to develop, adopt and submit their State Plans by 
November 17, 2006. Proposing a CAMR Federal Plan today is necessary in 
order for EPA to promulgate a Federal Plan in accordance with 40 CFR 
60.27 for States without timely submitted, approvable plans. EPA 
intends to expedite the Federal Plan promulgation to help assure 
emission reductions occur expeditiously.
    In a separate Federal Register notice entitled ``Notice of Finding 
that Certain States Did Not Submit Clean Air Mercury Rule (CAMR) State 
Plans for New and Existing Electric Utility Steam Generating Units and 
Status of Submission of Such Plans,'' EPA made findings that certain 
States did not submit CAMR State Plans by the November 17, 2006 
deadline and otherwise provided notice of the status of State Plan 
submissions. EPA intends to promulgate a Federal Plan for any State 
that fails to timely submit an approvable plan. EPA intends to approve 
expeditiously State Plans that meet the CAMR requirements. In order to 
meet the requirements of CAA section 111(d), this notice proposes a 
Federal Plan for all States covered by CAMR (50 States, District of 
Columbia, and Indian country). The proposed Federal Plan requirements 
for each State are identical. Final rulemaking on the proposed Federal 
Plan may address only one State or may address several States, 
depending on how the individual States respond to the provisions of the 
final CAMR.
    The Agency is proposing this action to provide a Federal backstop 
for CAMR in circumstances where not all States submit timely, 
approvable State Plans. In no way should the proposed Federal Plan for 
CAMR be viewed as a sign of any concern about States ultimately making 
the emission reductions required under CAMR. Rather, the Agency intends 
the Federal Plan to represent an additional option for achieving the 
emission reductions specified in CAMR. States which would otherwise 
adopt the model trading

[[Page 77105]]

program in CAMR as their State Plan can accept the Federal Plan and 
significantly reduce the State resources needed to establish a program 
to implement CAMR.
    The Agency proposes to provide States that are subject to these 
proposed Federal requirements with the option to submit a State 
allocation methodology without submitting a State Plan to meet the 
requirements of CAMR. By proposing to accept a State allocation 
methodology, the Agency intends to increase the options available for 
States to comply with CAMR. As there are no sanctions associated with 
the proposed Federal Plan, EPA anticipates that some States may prefer 
to avoid spending the time and resources necessary to adopt and submit 
a State Plan. Upon approval of any State allocation methodology, EPA 
anticipates that the corresponding portions of the CAMR Federal Plan 
for that State would be replaced or their application to affected 
sources would be modified.
    In offering a framework for submission of a State allocation 
methodology, the Agency anticipates that some States will wish to 
retain control over the allocation of allowances to their EGU sources 
even in circumstances where the Federal Plan otherwise governs. EPA 
requests comment on the proposed option for States to submit a State 
allocation methodology under the Federal Plan trading program. A more 
complete discussion of the proposed State allocation methodology 
provisions is found in Section III, below.
    Although the deadline for States to develop, adopt, and submit 
State Plans that meet the requirements of CAMR was November 17, 2006, 
EPA remains ready to work with the States to develop fully-approvable 
State Plans. The Federal Plan will only be effective in a State where 
EPA has found that a State has not timely submitted an approvable State 
Plan. In addition, EPA will withdraw the Federal Plan for any affected 
State after EPA approves a State Plan that meets the CAMR requirements 
in that State.
    EPA's goal is to have approvable programs in place that meet the 
requirements of CAMR whether they are in the form of a State Plan or a 
Federal Plan. By finalizing a Federal Plan, EPA would in no way 
preclude a State from developing its own State Plan that either adopts 
the Hg model trading rule with any discretionary elements allowed by 
CAMR or meets the State's EGU Hg emissions budget through different 
measures of the State's choosing. EPA will carefully consider the 
timing of the Federal Plan adoption process, and the transition from a 
finalized Federal Plan to an approved State Plan, to make sure to 
preserve each State's freedom to develop and implement a State Plan. In 
this way, EPA will enhance each State's options for complying with the 
requirements of CAMR while ensuring that all the Hg emissions 
reductions and environmental benefits of CAMR are realized.

D. Federal Plan Control Measures

    In contrast to the State Plan process--where selection and 
implementation of control measures is the primary responsibility of the 
State--in the case of a Federal Plan, it is EPA's responsibility to 
select the Hg control measures for each coal-fired EGU and assure 
compliance with those measures. (See, 40 CFR 60.27(e).) Thus, the 
Federal Plan would be designed by EPA to achieve the same total 
Statewide EGU Hg emission budgets as those described in CAMR and 
discussed below. The specific emission reductions assigned in the 
Federal Plan could be different from what a State might choose. In 
selecting the specific Hg emission reductions for the CAMR Federal 
Plan, EPA is proposing to adopt as the Federal Plan the CAMR State 
model cap-and-trade program rule, modified slightly to allow for 
Federal instead of State implementation.
    EPA believes it is essential that compliance with the Hg control 
strategy be verified. Tracking emissions is the principal mechanism to 
ensure compliance with the Hg emissions budget. The Hg emissions 
control requirements for coal-fired Utility Units proposed in the CAMR 
Federal Plan include requirements that the affected EGU sources 
directly report emissions data to EPA that can be used to determine 
compliance with the Hg emissions decreases required by the proposed 
Federal Plan. The specifics of the Hg cap-and-trade program for the 
Federal Plan are discussed below in Section III. The Federal Plan 
includes the proposed methodology for allocating Hg allowances that EPA 
would use to allocate allowances to units but does not include the 
allocations themselves. EPA will provide the allocations for individual 
units in later regulatory actions; the allocations will meet the State 
Hg budgets that are established in CAMR for coal-fired Utility Units.

E. National Mercury Budget and Compliance Dates

    In this action, the Agency is proposing a Federally-administered 
program to meet the CAMR Hg emission reduction requirements in 
accordance with the caps and timeline under CAMR. This action does not 
establish those emission reduction requirements or schedule, which were 
established by the CAMR rulemaking. Thus, the Agency is not requesting 
comment on the emission reduction requirements or the schedule for 
implementing these reductions.
    For CAMR, EPA determined that there was authority under CAA section 
111(d) for a Hg cap-and-trade program. Thus, EPA interpreted the term 
``standard of performance,'' as applied to existing EGU sources, to 
include a cap-and-trade program. EPA also determined that a cap-and-
trade program based on Hg control technology available in the relevant 
timeframe is the best demonstrated system for reducing Hg emissions 
from existing coal-fired Utility Units. CAMR adds Hg to the list of 
pollutants covered under 40 CFR part 60, subpart Da, by establishing 
emission limits for new sources and emission guidelines for existing 
EGU sources.
    CAMR established a mechanism by which Hg emissions from new and 
existing Hg Budget units are capped at specified, nation-wide levels. A 
first phase cap of 38 tons per year becomes effective in 2010, and a 
second phase cap of 15 tons per year becomes effective in 2018. 
Facilities must demonstrate compliance with the standard by holding one 
``allowance'' for each ounce of Hg emitted in any given year. 
Allowances are readily transferable among all regulated facilities.
    The added benefit of the cap-and-trade approach is that it 
dovetails well with the sulfur dioxide (SO2) and nitrogen 
oxides (NOX) emission caps under CAIR (see 70 FR 25162, May 
12, 2005). CAIR establishes a broadly-applicable cap-and-trade program 
that significantly limits SO2 and NOX emissions 
from the power sector. The advantage of regulating Hg at the same time 
and using the same basic regulatory mechanism as for SO2 and 
NOX is that significant Hg emissions reductions, especially 
reductions of oxidized Hg, can and will be achieved by the air 
pollution controls designed and installed to reduce SO2 and 
NOX emissions. Because significant Hg emissions reductions 
can be obtained as a ``co-benefit'' of controlling emissions of 
SO2 and NOX, the coordinated regulation of Hg, 
SO2, and NOX allows Hg reductions to be achieved 
in a timely and cost-effective manner.
    As discussed in CAMR, a Phase I cap based on ``co-benefits'' 
fulfills EPA's obligation to set a standard of performance based on the 
best demonstrated system of emissions reduction. The Phase I Hg cap is

[[Page 77106]]

supported by current information on the availability of control 
technologies, incremental cost-effectiveness of Hg emissions reductions 
beyond co-benefits, and analysis of engineering, financial, and other 
factors needed to install controls. The Phase I Hg emissions cap of 38 
tons reflects the co-benefits level and is established as a fixed cap 
in CAMR.
    In CAMR, EPA established a Phase II Hg emissions cap based on the 
reductions in Hg emissions resulting from the CAIR program together 
with reductions that can be reasonably obtained through the use of Hg-
specific controls. This Hg cap of 15 tons is effective in 2018. As 
discussed in CAMR, EPA concluded that the 2018 cap is warranted because 
Hg-specific air pollution control technologies such as activated carbon 
injection (ACI) will be available for general use sufficiently before 
2018, thereby allowing for their deployment to comply with the Phase II 
cap in 2018. The 15-ton cap in 2018 is also supported by cost 
considerations, because the cap level will not have significant impacts 
on energy supply and the cost of energy to the consumer.

F. State and Indian Country Emission Budgets

    In CAMR, EPA outlined a method for apportioning the nation-wide 
budget to coal-fired Utility Units located in individual States and in 
Indian country. EPA maintains that the Hg emissions budget provides an 
efficient method for achieving necessary reductions in Hg emissions, 
while providing substantial flexibility in implementing the program. 
The methodology for determining State budgets is described in CAMR (see 
70 FR 28606). The 2010 State budgets were revised slightly as a result 
of the reconsideration process (see Notice of Final Action on 
Reconsideration, 71 FR 33388, June 9, 2006). EPA is not inviting 
comment on the CAMR State and Indian country Hg budgets in connection 
with this proposed rule.
    In CAMR, EPA finalized a formula for determining the Hg budget for 
coal-fired Utility Units located in a State or Indian country for 2010 
and 2018. Under that formula, the EGU Hg budget for the State or Indian 
Country equals the sum of the weighted shares for each existing 
affected EGU in the State or Indian country of total baseline heat 
input, where a unit's baseline heat input and the total baseline heat 
input are adjusted to reflect the ranks of coal combusted by the unit 
during the baseline period, to total heat input of all affected units. 
As discussed in CAMR, EPA finalized adjustment factors of 1 for 
bituminous, 1.25 for subbituminous, and 3 for lignite coals (see also 
``Technical Support Document for the Clean Air Mercury Rule Notice of 
Final Rulemaking, State, and Indian Country Emissions Budgets,'' EPA, 
March 2005; EPA-HQ-OAR-2002-0056-6154).
    Each of the 50 States and the District of Columbia covered by the 
final CAMR has been assigned a State Hg emissions budget for coal-fired 
Utility Units. An EGU Hg emissions budget has also been assigned for 
existing coal-fired Utility Units located in Indian country. States 
have the flexibility to meet these State budgets by participating in a 
trading program or establishing another methodology for Hg emissions 
reductions from coal-fired Utility Units, as discussed elsewhere in 
this action. States have the ability to require Hg reductions beyond 
those required by the State budget determined by EPA. Tribes that 
choose to seek and obtain TAS status for that purpose have the same 
flexibility in developing an appropriate Tribal Plan. The State EGU Hg 
emission budgets are a permanent cap regardless of growth in the 
electric sector and, therefore, States have the responsibility of 
incorporating new coal-fired units in their EGU Hg emission budgets. 
Similarly, the Hg emission budgets for coal-fired Utility Units located 
in Indian country act as a permanent cap, and EPA, or a Tribe that has 
obtained TAS status and is implementing an approved Tribal Plan, has 
responsibility for incorporating new units into the EGU Hg emission 
budget.
    The final State, Indian country, and District of Columbia EGU Hg 
emission budgets are presented in Table II-1 of this preamble. In CAMR 
(as revised in the CAMR Notice of Final Action on Reconsideration, 71 
FR 33388), EPA established budgets for the 50 States, the District of 
Columbia, the Navajo Nation and the Ute Indian Tribe.
    In CAMR, for areas of Indian country that do not currently have any 
coal-fired electricity generation, EPA noted its intent to address any 
future planned construction of coal-fired Utility Units in those areas 
on a case-by-case basis, by working with the relevant Tribal government 
to regulate the Utility Units through either a Tribal Plan, if an 
eligible Tribe chooses to submit one, or a Federal Plan. The Agency 
further explained that ``EPA does not believe that there is sufficient 
information to design allocation provisions for new generation which 
locates in Indian country at this time. Therefore, rather than create a 
Federal allowance set-aside for Tribes, the EPA will work with Tribes 
and potentially affected States to address concerns regarding the 
equity of allowance allocations on a case-by-case basis as the need 
arises. The EPA may choose to revisit this issue through a separate 
rulemaking in the future.'' (See 70 FR 28606).
    In this action, EPA is proposing to address the issue of how new 
generation in areas of Indian country without an emissions budget will 
be treated under CAMR and the CAMR Federal Plan. Since CAMR was 
finalized, EPA has become aware of potential development of new 
generation in Indian country, and the need to provide such generation 
with certainty related to compliance costs.
    After detailed consideration of this issue, EPA proposes to treat 
new generation in areas of Indian country without an emissions budget 
in the same way it treats new generation in States without emissions 
budgets. New units in areas of Indian country without an emissions 
budget and participating in the CAMR trading program would not receive 
an allowance allocation, though these units, like new units in States 
without emissions budgets, would be required to hold allowances equal 
to emissions. For the two Tribes that have existing generation and, 
thus, an emissions budget, they can provide new sources with allowances 
through a new unit set-aside if they choose to seek, and ultimately are 
granted, treatment as State (TAS) status for that purpose and then 
submit a tribal implementation plan (TIP) which incorporates the CAMR 
trading program. EPA does not believe that there is a strong argument 
for treating new units locating in areas of Indian country without Hg 
emissions budgets differently from new units locating in States without 
emissions budgets. Further, EPA analysis suggests that the cost of 
allowance purchase will be a very small share of the total annual cost 
associated with a new unit, on the order of 1 percent of total 
annualized costs in 2010. (See TSD and spreadsheet titled ``Cost 
Analysis of Potential New Subbituminous Coal Plant'' available in the 
docket.)
    EPA is also taking comment on the alternative of creating a set-
aside budget for new unit generation locating in areas of Indian 
country that do not have an emissions budget. A potential option is 
that EPA could create a 300-pound (lb) annual set-aside budget 
(approximately the annual Hg emissions for 10 new 300 MW coal-fired 
units with 90 percent Hg control) for new unit generation in such 
areas. This would require additional revisions to the CAMR State 
budgets. The set-aside budget would be created by reducing each State's 
EGU Hg emission budget by about 0.4 percent for years 2012-2017 and by 
1.0 percent for 2018 and thereafter, to maintain

[[Page 77107]]

nationwide annual budgets of 38 tons and 15 tons, respectively. Such a 
set-aside budget would not be created until 2012, in order to allow 
States time to adjust their budgets and planned control strategies. 
Considering the lead-time required to develop new coal-fired 
generation, a new unit set-aside budget commencing in 2012 would likely 
be well-timed to coincide with the earliest that new generation might 
come on-line.
    EPA would distribute this set-aside budget to new sources based on 
a source's emissions from the previous year, consistent with the 
approach that is used to determine the distribution of the new source 
set-aside discussed in section III.C. If this budget were over-
subscribed for a given year, EPA would distribute the budget on a pro-
rata basis. However, if this budget were undersubscribed for a given 
year, EPA would not redistribute the remaining portion of the budget 
because of the further changes to State Plans that doing so would 
require.
    EPA requests comment on the creation of such a budget, the 
appropriate size and start date, as well as whether the set-aside 
should be available to new generation in States that do not have an Hg 
emission budget, in addition to new generation in areas of Indian 
country with no Hg emission budget.
    As discussed in CAMR, EPA finalized Hg emission budgets of zero 
tons for three States (Idaho, Rhode Island, and Vermont) and the 
District of Columbia. New coal-fired Utility Units locating in these 
areas will, nevertheless, be required to hold allowances equal to their 
Hg emissions. As participants in the cap-and-trade program, these 
sources could buy Hg allowances and meet their requirements. This is 
similar to the situation that new units face under the existing Acid 
Rain Program.

            Table II-1.--State Annual EGU Hg Emission Budgets
------------------------------------------------------------------------
                                                   Budget (tons)
                                         -------------------------------
                  State                                      2018 and
                                             2010-2017      thereafter
------------------------------------------------------------------------
Alaska..................................           0.010           0.004
Alabama.................................           1.289           0.509
Arkansas................................           0.516           0.204
Arizona.................................           0.454           0.179
California..............................           0.041           0.016
Colorado................................           0.706           0.279
Connecticut.............................           0.053           0.021
Delaware................................           0.072           0.028
District of Columbia....................           0               0
Florida.................................           1.232           0.487
Georgia.................................           1.227           0.484
Hawaii..................................           0.024           0.009
Idaho...................................           0               0
Iowa....................................           0.727           0.287
Illinois................................           1.594           0.629
Indiana.................................           2.097           0.828
Kansas..................................           0.723           0.285
Kentucky................................           1.525           0.602
Louisiana...............................           0.601           0.237
Massachusetts...........................           0.172           0.068
Maryland................................           0.49            0.193
Maine...................................           0.001           0.001
Michigan................................           1.303           0.514
Minnesota...............................           0.695           0.274
Missouri................................           1.393           0.550
Mississippi.............................           0.291           0.115
Montana.................................           0.377           0.149
Navajo Nation Indian Country............           0.600           0.237
North Carolina..........................           1.133           0.447
North Dakota............................           1.564           0.617
Nebraska................................           0.421           0.166
New Hampshire...........................           0.063           0.025
New Jersey..............................           0.153           0.060
New Mexico..............................           0.299           0.118
Nevada..................................           0.285           0.112
New York................................           0.393           0.155
Ohio....................................           2.057           0.812
Oklahoma................................           0.721           0.285
Oregon..................................           0.076           0.030
Pennsylvania............................           1.779           0.702
Rhode Island............................           0               0
South Carolina..........................           0.58            0.229
South Dakota............................           0.072           0.029
Tennessee...............................           0.944           0.373
Texas...................................           4.656           1.838
Utah....................................           0.506           0.200
Ute Indian Tribe Reservation Indian                0.060           0.024
 Country................................
Virginia................................           0.592           0.234
Vermont.................................           0               0
Washington..............................           0.198           0.078

[[Page 77108]]

Wisconsin...............................           0.89            0.351
West Virginia...........................           1.394           0.550
Wyoming.................................           0.952           0.376
------------------------------------------------------------------------

III. Federal Hg Cap-and-Trade Program

A. Overall Structure of the Federal Hg Cap-and-Trade Program

    In this action, EPA proposes to regulate coal-fired Utility Units 
using a market-based, cap-and-trade program with a declining cap. As 
discussed in CAMR (70 FR 28617), this type of program is a proven 
method for achieving highly cost-effective emissions reductions while 
providing sources compliance flexibility and certainty.
    In 40 CFR part 62, subpart LLL, EPA proposes a Federal Hg cap-and-
trade program as a means of controlling Hg mass emissions from coal-
fired Utility Units (the proposed rules use the term ``electric 
generating unit'' or ``EGU'') in a State for which this Federal Plan is 
promulgated. Participation in the Hg Budget Trading Program would be 
mandatory for all Utility Units covered by the final Federal Plan 
resulting from this proposal. Mercury allowances--each allowance 
representing a limited authorization to emit one ounce of Hg--would be 
the currency used in the trading program. A total number of Hg 
allowances would be allocated to coal-fired Utility Units in a State 
equal to the amount of the State's EGU Hg trading program budget under 
the Federal Plan. Utility Units participating in either the Federal Hg 
cap-and-trade program or the CAMR State Hg cap-and-trade program would 
be able to trade Hg allowances with each other, and use, for 
compliance, Hg allowances issued under either type of program.
    Under 40 CFR part 62, subpart LLL, as proposed, EPA would be 
responsible for all aspects of program implementation, with the 
exception of permitting. Permitting responsibility will lie with State 
and local air permitting authorities with title V permit programs found 
by EPA to meet the requirements of title V and its implementing 
regulations, or in appropriate circumstances, with tribal authorities 
implementing a delegated 40 CFR part 71 permit program. Mercury Budget 
sources that currently have title V permits will be required to obtain 
an amended permit which includes the Hg Budget Trading Program 
requirements. Any Utility Unit that does not currently have a title V 
permit will be required to obtain one which includes the necessary Hg 
Budget Trading Program requirements. While they must be included in a 
Hg Budget source's title V permit, the requirements of the Federal Hg 
Budget Trading Program rule are Federally enforceable independent of 
that permit.
    As explained further in Section II of this preamble, the Agency is 
proposing to provide an additional option under which States could 
choose to submit a State allocation methodology, rather than a complete 
State Plan addressing all elements of the CAMR Hg trading program. In 
this way, the State could choose the methodology for allocating Hg 
allowances to its EGU sources which it deems most appropriate, while 
leaving other elements of CAMR implementation to a Federal Plan.
    Under 40 CFR part 62, subpart LLL, as proposed, sources in the 
Federal Hg Budget Trading Program would be required to monitor and 
report their emissions in accordance with relevant portions of 40 CFR 
part 75. Under CAMR, EPA promulgated revisions to 40 CFR part 75 that 
establish Hg mass monitoring requirements and provide some flexibility 
to regulated sources. Consistent and accurate monitoring of emissions 
is necessary for accountability regarding compliance with the 
requirement to hold Hg allowances and to ensure that an ounce of Hg 
emissions attributed to one source in one State is equivalent to an 
ounce attributed to another source in the same or another State.
    EPA intends that if States choose to meet their Hg emission 
reduction obligations under CAMR by adopting the State Plan model cap-
and-trade rule and participating in the EPA-administered trading 
program, the EPA-administered State Plan trading program will be fully 
integrated with the Federal Hg trading program that EPA may promulgate 
in a final Federal Plan. Integration is possible because CAMR and the 
corresponding Federal Plan both seek to achieve the same level of Hg 
emission reductions from the same sources (i.e., coal-fired Utility 
Units), and the State Hg model trading rule and the Federal Hg trading 
rule contain essentially the same provisions.
    In particular, EPA believes that, in order to be eligible to 
participate in an effective Hg emissions cap and trade program, a 
source must meet two principal criteria. The first criterion is that 
each source must be able to account accurately and consistently for all 
of its emissions to ensure the trading program goal of maintaining 
emissions within a cap. Emissions monitoring must be accurate and 
consistent among all sources so that each allowance represents the same 
amount of emissions. The second criterion for participation in a 
trading program is that each source must identify a responsible party 
who would be accountable for demonstrating and ensuring compliance with 
program requirements. EPA believes that this action--like the State Hg 
model trading rule--imposes requirements that meet those criteria. The 
Agency also believes that, because this action contains the same 
program elements as are in the State Plan model trading program and is 
designed to meet the same environmental goals and cap the same sources 
at the same levels as that model trading program, it is appropriate to 
design a CAMR Federal Plan that is integrated with the CAMR State Plan 
trading program.
    Under this scenario of an integrated trading program, EGU sources 
subject to the Federal Hg trading program under the Federal Plan and 
EGU sources in States choosing to participate in the EPA-administered 
CAMR State Plan trading program could trade Hg allowances with one 
another under common emissions caps across participating States. 
Integration of the trading programs reduces the possibility of 
inconsistent or conflicting deadlines or requirements, increases the 
potential cost savings for sources, and streamlines program 
administration. Unnecessary inconsistencies between the two types of 
trading programs could hamper sources' ability to plan and achieve the

[[Page 77109]]

needed reductions as cost effectively as possible and could complicate 
program administration. In addition the integration of the programs 
means that, if a State would submit a State Plan including the EPA-
administered Hg emissions trading program after EPA had established a 
Federal Hg trading program under a Federal Plan, disruptions to sources 
that would shift from regulation under a Federal Plan to regulation 
under a State Plan would be minimized.
1. Road Map of Federal Hg Cap-and-Trade Rule
    The following is a brief ``road map'' to the proposed Federal Hg 
cap-and-trade program and is provided as a convenience to the reader. 
Please refer to the detailed provisions of the proposed rule for 
further information.
    a. State Participation. States may be granted the authority to 
implement Hg allowance allocations through a State allocation 
methodology submitted under the Federal Plan. In this submission, a 
State could adopt its own methodology or adopt this proposed Federal 
allocation methodology and allocate Hg allowances.
    State and local agencies would be the permitting authorities for 
the majority of Hg Budget sources, with title V permits that would 
include, in the Hg-Budget-permit portion, Hg Budget Trading Program 
requirements.
    b. Allocation of Allowances to Sources. Mercury allowances would be 
allocated by the Administrator based on the methodology proposed in 
this Federal Plan preamble and described in the proposed regulatory 
text, unless a State allocation methodology is approved.
    c. Emission Monitoring and Reporting by Sources. Utility Units 
would monitor and report their Hg mass emissions using 40 CFR part 75.
    Source information management, emissions data reporting, and 
allowance trading will be conducted through on-line systems similar to 
those currently used for the Acid Rain SO2 and 
NOX Budget Trading programs.
    d. Compliance and Penalties. For the Federal Hg cap-and-trade 
program, any Utility Unit found to have excess emissions would have to 
surrender allowances from the next control period equal to three times 
the ounces of excess emissions.

B. Sources Affected Under the Federal Hg Cap-and-Trade Rule

    As discussed above, EPA is proposing a Federal Hg cap-and-trade 
program as a means of controlling Hg emissions from coal-fired Utility 
Units in each State and Indian country for which a Federal Plan is 
promulgated. For the reasons discussed in CAMR (70 FR 28625) and the 
CAMR Notice of Final Action on Reconsideration (71 FR 33388), EPA is 
proposing to use the same applicability provisions for the Federal Plan 
in 40 CFR part 62, subpart LLL, and the State Plan in 40 CFR part 60, 
subpart HHHH.
    As discussed in detail below, certain coal-fired units, in a State 
or Indian country for which a Federal Plan is promulgated, will be Hg 
Budget units (i.e., units subject to the Federal Hg Budget Trading 
Program), and any source that includes one or more such units will be 
an Hg Budget source, subject to the requirements of 40 CFR part 62, 
subpart LLL.
    With certain clarifications and exemptions, the provisions of 40 
CFR part 62, subpart LLL (and 40 CFR part 60, subpart HHHH), generally 
apply to Utility Units (boilers or combustion turbines serving on or 
after November 15, 1990 a generator with a nameplate capacity greater 
than 25 megawatts electrical (MWe) and producing electricity for sale) 
that are coal-fired (i.e., units where any amount of coal or coal-
derived fuel is used at any time). The definition of ``coal-fired'' is 
similar to the definition that is used in the Acid Rain Program.
    In the CAMR Notice of Final Action on Reconsideration (71 FR 
33388), EPA finalized revisions to the applicability provisions in the 
CAMR State Plan model trading rule (see Section IV below). The 
applicability provisions in this proposed Federal Hg trading program 
are identical to the revised applicability provisions for the CAMR 
model State trading rule.
    First, in the Notice of Final Action on Reconsideration, EPA 
clarified the applicability provisions in the State Plan Hg model 
trading rule (40 CFR 60.4104) to specifically exclude from the trading 
program certain solid waste incineration units (municipal waste 
combustors (MWC)) subject to an applicable NSPS, an EPA-approved State 
Plan, or certain Federal Plans. In this action, EPA is proposing to 
include this same exemption in the Federal Hg trading rule.
    Second, in the Notice of Final Action on Reconsideration, EPA 
discussed the potential inclusion of certain industrial boilers in both 
CAMR and the CAA section 112 Industrial Commercial Institutional Steam 
Generating Unit MACT standards (the Boiler MACT, 70 FR 55217, 40 CFR 
part 63, subpart DDDDD). EPA addressed this potential overlap in two 
ways. First, EPA issued language amending 40 CFR part 63, subpart DDDDD 
(see National Emission Standards for Hazardous Air Pollutants for 
Industrial, Commercial, and Institutional Boilers and Process Heaters: 
Reconsideration of Emissions Averaging Provision and Technical 
Corrections) in response to a petition for reconsideration for the 
Boiler MACT. The amended language specifically excludes units subject 
to CAMR from regulation under the Boiler MACT. Second, EPA revised the 
applicability provisions in the State Plan Hg model trading rule (40 
CFR 60.4104) to include only stationary, coal-fired boilers or 
stationary, coal-fired combustion turbines serving, at any time on or 
after November 15, 1990, a generator with a nameplate capacity of more 
than 25 MWe producing electricity for sale. This date would be 
consistent with the dates used in the Acid Rain Program and CAIR. EPA 
is proposing the same language in the applicability provisions of this 
Federal Hg trading rule.
    Finally, as discussed in the Notice of Final Action on 
Reconsideration, EPA made certain other clarifying changes to 
applicability provisions in 40 CFR 60.4104 with regard to cogeneration 
units in order to ensure that the regulatory text unambiguously 
reflects EPA's intent, as expressed in the CAMR preamble (see 70 FR 
28612, 28625-26) regarding cogeneration units. EPA is proposing today 
to include the same language in the applicability provisions of the 
Federal Hg trading rule.
    In particular, certain cogeneration units would be exempt from the 
proposed Federal Hg cap-and-trade program. Cogeneration units are units 
having equipment used to produce electricity and useful thermal energy 
for industrial, commercial, heating, or cooling purposes through 
sequential use of energy which also meet certain operating and 
efficiency standards. The program would have different applicability 
provisions for non-cogeneration units and cogeneration units. Any 
cogeneration unit, serving (since the later of November 15, 1990 or the 
start-up of the unit), a generator with a nameplate capacity of greater 
than 25 MWe supplying more than \1/3\ of its potential electric output 
capacity and more than 219,000 MW-hr annually to any utility power 
distribution system for sale, would be subject to the requirements of 
the proposed Federal CAMR trading rule. Otherwise, the unit would 
qualify for an exemption under the proposed Federal rule.
    In summary, EPA is proposing that, except for a unit that qualifies 
as a cogeneration unit and meets certain other requirements or an MWC 
that is subject to an applicable NSPS, an EPA-

[[Page 77110]]

approved State Plan, or certain Federal Plans, a Hg Budget unit is any 
stationary, coal-fired boiler or stationary, coal-fired combustion 
turbine serving at any time, since the later of November 15, 1990 or 
the start-up of the unit's combustion chamber, a generator with 
nameplate capacity of more than 25 MWe producing electricity for sale.

C. Allocation of Emission Allowances

    For States that choose under CAMR to participate in the EPA-
administered State Plan Hg cap-and-trade program, EPA provided an 
example methodology for allocating Hg allowances to individual units in 
the Hg model trading rule. For this proposed Federal Plan, the Agency 
is proposing to use an Hg allocation methodology that is the same as 
the example methodology in the model trading rule. Within each affected 
State, the Agency would allocate to existing and new units a total 
amount of allowances that equals the tonnage in the State's Hg budget. 
The Agency's proposed timeline for allocating and recording Hg 
allowance allocations and proposed Hg allowance allocation methodology 
are described below.
1. Timing for Initial Allocation Distributions
    The Agency proposes that, for all but the first 3 years of Hg 
allocations, EPA will record unit-by-unit allocations of allowances for 
existing units for a given year in the source compliance accounts no 
less than 3 years before January 1 of that year (i.e., the first year 
for which the allowance can be used to meet the allowance-holding 
requirement). This approach provides sources sufficient lead time to 
facilitate their participation in the allowance market (e.g., by buying 
or selling allowances or allowance futures). For the first set of Hg 
allocations under the Federal Plan (covering control periods 2010-
2014), the Agency proposes to record unit-by-unit allocations in source 
accounts as follows: by December 1, 2007, for allocations for 2010; by 
December 1, 2008, for allocations for 2011; by December 1, 2009, for 
allocations for 2012-2013; and by December 1, 2010 for allocations for 
2014.
    As explained in CAMR, States had until November 17, 2006 to submit 
State Plans to the Agency, at which time a State that chooses to 
participate in the EPA-administered Hg cap-and-trade program would 
submit its Hg trading rule (including Hg allocation methodology) and 
first set of allocations. As mentioned above, the Agency is proposing 
to provide an additional option under which a State could choose to 
submit only a State allocation methodology, rather than a complete Hg 
trading rule. In this way, the State could choose to allocate Hg 
allowances to its EGU sources in the manner it deems most appropriate, 
while leaving other elements of the trading program to be governed by 
the Federal Plan. Under this option, the Agency proposes that States 
would have until May 30, 2007 to submit the State allocation 
methodology. The Agency intends to work with the States to assure 
(consistent with timing requirements for allowance recordation) that, 
for any State that chooses to allocate Hg allocations (either under an 
approved State Plan or an approved State allocation methodology), the 
State's allocations, rather than EPA-determined Federal Plan 
allocations, would be recorded in EGU source accounts.
    As discussed in CAMR, allowance allocation decisions in a cap-and-
trade program raise primarily distributional issues, as economic forces 
are expected to result in economically least-cost and environmentally 
similar outcomes regardless of the manner in which allowances are 
initially distributed. Consequently, in a State allocation methodology 
submitted in the context of a Federal Plan (like in a State Plan under 
CAMR), States are given latitude in developing their Hg allocation 
approach. Specifically, States will have flexibility concerning whether 
allowances are distributed to sources for free and concerning the 
frequency of Hg allocations, the basis for distributing the Hg 
allowances, and the use and size of Hg allowance set-asides. The final 
CAMR preamble provides a further discussion of Hg allocation 
approaches. (See 70 FR 28627).
    For the reasons discussed in Section II.C above, EPA intends to 
finalize a CAMR Federal Plan. By finalizing a Federal Plan, the EPA 
would in no way preclude a State from developing and submitting for 
approval its own State Plan for Utility Units that either adopts the Hg 
model trading rule (with the flexibility allowed by CAMR concerning 
allocation of Hg allowances) or meets the CAMR Hg emission reduction 
requirements for Utility Units through different measures of the 
State's choosing.
    The Agency's preference is for States participating in the EPA-
administered cap-and-trade program to make decisions about Hg 
allocations for their EGU sources. EPA intends to determine Federal 
Plan unit-by-unit Hg allocations (with opportunity for public 
objections). However, we intend to only record those EPA-determined 
allocations in allowance accounts for EGU sources located in a State 
without a timely, approved CAMR State Plan or a timely, approved State 
allocation methodology.
    In considering when to record Federal Plan Hg allocations in EGU 
source accounts, the Agency seeks to balance the following two goals: 
(1) To provide certainty to sources regarding their CAMR Hg allocations 
and time for EGU sources to make compliance decisions, and (2) to 
provide States choosing to allocate CAMR Hg allowances with time to do 
so and EPA with time to approve State Plans that include State-
determined allocations. Taking into consideration the submission 
deadlines for a State Plan or a State allocation methodology, the 
amount of time needed by the Agency to approve a State Plan or State 
allocation methodology, and the amount of time remaining before the 
initial CAMR control period, EPA developed a proposed schedule 
(summarized above and in Table III-1) for recording Hg allocations in 
source accounts for the Federal Hg trading program. EPA seeks comment 
on this proposed schedule.
    The Agency will endeavor to work with States to ensure that we can 
approve State Plans or State allocation methodologies and timely record 
State Hg allocations in EGU source accounts. EPA intends to act in such 
a way that, once EPA-determined Federal Plan Hg allocations are 
recorded for a particular control period (which would only occur in the 
absence of a timely, approved State Plan or a timely, approved State 
allocation methodology), we would not approve overlapping State 
allocations for that same control period.\5\ Rather, EPA will work with 
the States to approve State Plans, or State allocation methodologies, 
providing State Hg allocations for control periods that begin upon the 
expiration of the last control period for which EPA-determined 
allocations have been recorded in EGU source accounts. It would be 
highly disruptive to the allowance market if EPA-determined Hg 
allowances that had already been recorded and then traded in the market 
could subsequently be rendered invalid due to approval of overlapping 
State-determined allocations for the same control period.
---------------------------------------------------------------------------

    \5\ As discussed in CAMR, each State has flexibility in the 
State Plan to allocate its allowances however it chooses (within its 
State budget) so long as certain timing requirements are met. A 
State would have the same flexibility in developing a State 
allocation methodology in the context of the Federal Plan.
---------------------------------------------------------------------------

    The discussion in this section is focused on the timing for 
recordation of EPA-determined Hg allocations in coordination with 
approval of State Plans or State allocation methodologies

[[Page 77111]]

and recordation of State allocations, assuming States choose to 
participate in the EPA-administered CAMR trading program. The Agency 
would also carefully consider the timing of a transition from Federal- 
to State-implemented programs for any State choosing to use a method 
other than the EPA-administered State Plan model trading program to 
meet CAMR obligations.
    As discussed further below, EPA intends to record EPA-determined 
Federal Plan Hg allocations for 2010 and 2011 one year at a time. In 
this manner, even if a State does not have an approved State Plan in 
time for the Agency to record State allocations for the first or second 
control period, it would be possible to record State allocations for 
subsequent control periods. The Agency strongly urges States to submit 
State Plans or State allocation methodologies to the Agency in a timely 
manner. We intend to work with States and ensure that there will not be 
overlapping Hg allocations for any control period.
    The State Plan Hg model trading rule, revised somewhat in the 
Notice of Final Action on Reconsideration (71 FR 33388), and 40 CFR 
60.24(h), require States to submit their State Plans by November 17, 
2006. For a State that chooses to participate in the EPA-administered 
Hg model trading program, this State Plan submittal would be required 
to comprise a full trading program including the State's Hg allocation 
methodology. The EPA anticipates that it may require about 6 months to 
approve a State Plan submission.
    As discussed above, the Agency is proposing that States may choose 
to submit only a State allocation methodology, which would allocate Hg 
allowances to individual Utility Units in the State in the context of 
the Federal Plan. In this way, a State could choose to allocate Hg 
allowances to its Utility Unit sources in the manner it deems most 
appropriate while letting the Federal Plan control all other aspects of 
the trading program. Through submission of a State allocation 
methodology, a State can also ensure that its Hg allocations will apply 
even in circumstances where its State Plan is still undergoing EPA 
review. The Agency proposes that States would have until May 30, 2007 
to submit their State allocation methodologies. The EPA proposes to 
allow States to submit State allocation methodologies later than State 
Plans because we anticipate that we will be able to complete the 
approval process more quickly for State allocation methodologies due to 
their narrower scope. The Agency proposes that the State would have 
until October 31, 2007 to submit the first set of Hg allocations 
pursuant to an approved State allocation methodology submission.
    Assuming that States submit State allocation methodologies by the 
May 2007 deadline and that EPA can approve these submissions in about 6 
months and assuming that some additional time may be required for 
coordination between States and EPA before State allocations can be 
recorded in EGU source accounts, it is reasonable to assume that EPA 
will be able to record such allocations by December 1, 2007. Therefore, 
EPA proposes to record Hg allocations in EGU source accounts for the 
2010 control period by December 1, 2007. If a State's timely Hg 
allocations are approved, then the Agency would record State Hg 
allocations for the 2010 control period. However, for any State for 
which a State Plan or State allocation methodology is not approved by 
December 1, 2007, the EPA would record EPA-determined Hg allocations 
for 2010. Recording Hg allocations by December 1, 2007 for the 2010 
control period would provide affected EGU sources with certainty of 
their allocations just over 2 years in advance of the beginning of the 
control period.
    The Agency proposes to record EPA-determined Hg allocations in 
source accounts 1 year at a time for the 2010 and 2011 control periods 
in order to provide flexibility to States. If EPA records EPA-
determined allocations for the 2010 control period and subsequently 
approves a State's timely State Plan or timely State allocation 
methodology, the Agency would record the State's allocations for future 
years. The Agency does not intend to approve State Hg allocations for 
any control period that would overlap with EPA-determined allocations 
already recorded in source accounts.
    EPA proposes to record EPA-determined Hg allocations in source 
accounts by December 1, 2008 for the 2011 control period. If a State's 
Hg allocations are approved by then, the Agency may record State 
allocations for the 2011 control period. However, for any State for 
which a State Plan or State allocation methodology is not approved by 
December 1, 2008, EPA would record EPA-determined Hg allocations for 
2011. Therefore, if a State obtained State Plan or State allocation 
methodology approval after December 1, 2007 but before December 1, 
2008, the State's Hg allocations may be recorded in source accounts for 
the 2011 control period.
    The Agency proposes to record Hg allocations in source accounts by 
December 1, 2009 for the 2012 and 2013 control periods. Therefore, if a 
State obtained State Plan or State allocation methodology approval 
after December 1, 2008 but before December 1, 2009, the State's Hg 
allocations may be recorded in source accounts for the 2012 and 2013 
control periods. However, for any State for which a State Plan or State 
allocation methodology is not approved by December 1, 2009, the EPA 
would record EPA-determined Hg allocations for 2012 and 2013.
    Beginning in 2010 and each year thereafter, EPA proposes to record 
EPA-determined Hg allocations for the Federal Hg trading program in 
source accounts by December 1 for the control period in the fourth year 
after the recordation year, thereby providing allowances about 3 years 
in advance for sources to plan their compliance strategies. For 
example, EPA would record allocations for the 2014 control period by 
December 1, 2010.
    Table III-1, below, summarizes the Agency's proposed timing for 
recording Hg allocations in EGU source accounts for the Federal Hg 
trading program. The table shows the timing through the 2016 control 
period. Timing for subsequent control periods would follow the same 
pattern as is shown for 2013-2016 (i.e., allocations would be recorded 
by 3 years in advance of the control period).

     Table III-1.--Proposed Recordation Deadlines for Hg Allocations for the Federal Hg Trading Program \6\
----------------------------------------------------------------------------------------------------------------
                                               Deadline by which Hg
                                           allocations are recorded for
          CAMR control period            Federal Hg trading program (EPA-   Time between  recordation date and
                                         determined allocations or State-       beginning of control period
                                             determined allocations)
----------------------------------------------------------------------------------------------------------------
2010...................................  December 1, 2007...............  About 2 years.
2011...................................  December 1, 2008...............  About 2 years.
2012...................................  December 1, 2009...............  About 2 years.
2013...................................  December 1, 2009...............  About 3 years.

[[Page 77112]]

2014...................................  December 1, 2010...............  About 3 years.
2015...................................  December 1, 2011...............  About 3 years.
2016...................................  December 1, 2012...............  About 3 years.
----------------------------------------------------------------------------------------------------------------

    The Agency \6\ intends to publish its determination of Hg 
allocations for 2010-2014 in a single NODA with opportunity for 
submission of objections to the determination. Starting in 2011, the 
Agency would publish its determination of Hg allocations with 
opportunity for submission of objections prior to July 31 of each year 
for the control period 4 years from the year of publication. For 
example, we would publish EPA-determined Hg allocations for the 2015 
control period by July 31, 2011.
---------------------------------------------------------------------------

    \6\ The Agency does not intend to wait until December 1, 2007 to 
record State Hg allocations for the 2010 control period but, rather, 
would record approved State Hg allocations as soon as feasible. EPA 
proposes that we would not record EPA-determined Hg allocations for 
any State until December 1, 2007 for the 2010 control period in 
order to provide the opportunity for State allocations to be 
submitted and approved. The Agency proposes the same process for 
future years as well (e.g., we would record State allocations for 
the 2011 control period as soon as is feasible, but would wait until 
December 1, 2008 to record EPA-determined allocations for 2011 in 
order to provide opportunity for States to allocate).
---------------------------------------------------------------------------

    For States choosing to submit a State Plan for CAMR, the Agency 
suggests they could consider designating Hg allocation provisions as 
being submitted both as part of a State Plan and as a State allocation 
methodology submission in the context of the Federal Plan. Because the 
Agency anticipates that we would be able to approve State allocation 
methodologies more quickly than State Plans, a State could, by 
designating its Hg allocation provisions as a State allocation 
methodology (as well as being part of a State Plan), potentially allow 
for the allocation provisions to be approved more quickly. This might 
have benefit, for example, in a situation in which it was not feasible 
to approve a State's State Plan before December 1, 2007. If the Hg 
allocation provisions could be approved by December 1, 2007, then the 
State's Hg allocations may be recorded in source accounts in the 
context of the Federal Plan. Until the State Plan was subsequently 
approved, the other elements of the trading program would be controlled 
by the Federal Plan. Provisions for withdrawal of the Federal Plan for 
a State are discussed elsewhere in this preamble.
2. Hg Allowance Allocation Methodology
    In this action, the Agency is proposing its Hg allocation 
methodology for the Federal Hg cap and trade program. In CAMR, EPA 
included an example allocation methodology for States (offered for 
informational guidance only). This methodology distributes allocations 
to existing coal-fired Utility Units based on historic baseline heat 
input and reflects adjustments based on coal type. Allocations are 
calculated annually to take into account new units on a modified-output 
basis, where output would be converted into heat input using specified 
conversion factors. This methodology also utilizes a new unit set-aside 
for new coal-fired Utility Units that have not yet established baseline 
data to be used for updating or are otherwise not yet included in the 
updating. In this action, for the reasons discussed in CAMR (70 FR 
28627), EPA is proposing the same methodology for the Federal Plan.
    For existing units, the proposed Hg allocation methodology uses 
input-based allocations, adjusting baseline heat input for each year of 
data by factors based on coal type, as discussed below. As in the 
example allocation methodology in the CAMR model rule, for existing 
units, the Agency proposes to calculate baseline heat input as the 
average of the 3 highest amounts of a unit's adjusted heat input for 5 
years (2000-2004). EPA believes that this approach provides baseline 
heat input data that reasonably represents normal operating conditions. 
Relevant data for these years is currently available. EPA also asks for 
comment on two modifications to this approach: (1) Using heat input 
based on 3 or 4 years of data rather than 5 years; or (2) using heat 
input data from 2001 through 2005 rather than 2000 through 2004.
    For new units that have established 5 years of baseline data, EPA 
proposes that allocations will be based on generation using a modified 
output approach (described below) to convert output to heat input, and 
allocations to existing units would be updated to take into account new 
generation, because these new units would receive allocations from the 
pool of allowances shared with existing sources. New units that have 
not yet established baseline data or that are otherwise not yet 
included in the updating would receive allowances from a new unit set-
aside.
    Under the proposed method, allocations are made from the given 
State's EGU Hg budget covered by a Federal Plan for the first five 
control periods (2010 through 2014) of the Federal Hg cap-and-trade 
program for existing EGU sources on the basis of historic baseline heat 
input. Consistent with CAMR, EPA is proposing January 1, 2001 as the 
cut-off on-line date for considering Utility Units as existing units, 
so that there are at least 5 years of operating data, i.e., data for 
2000 through 2004 (the Agency also seeks comment on, if data for 2001 
through 2005 were used instead, the use of January 1, 2002 as the cut-
off on-line date). The allowances for 2015 and later will be determined 
from the State's EGU Hg budget annually, 4 years in advance, taking 
into account output data from new units with established baselines 
(modified by the specified conversion factors to yield heat input 
numbers). As new coal-fired Utility Units enter into service and 
establish baselines, they are allocated Hg allowances in proportion to 
their share of the total calculated heat input (which is existing 
units' adjusted heat input plus new units' modified output). Once a 
baseline heat input is established for a new or existing EGU, this 
baseline heat input does not change. Allowances allocated to existing 
Utility Units slowly decline as their share of total calculated heat 
input decreases with the entry of new Utility Units.
    New coal-fired Utility Units that have entered service in States or 
areas of Indian country that have an Hg emissions budget, but have not 
yet started receiving Hg allowances through the update, would receive 
allowances each year after the first year of commercial operation from 
a new unit set-aside. Consistent with CAMR, the new unit set-aside 
would be equal to 5 percent of a State's Hg emission budget for the 
years 2010-2014 and 3 percent of a State's Hg emission budget for the 
subsequent years. New Utility Units would begin receiving Hg allowances 
from the set-aside for the control period immediately following the 
control period in which the new Utility Unit commences commercial 
operation, based on the Utility Unit's Hg emissions

[[Page 77113]]

from the preceding control period (a new Utility Unit would not be 
allocated allowances for the control period in which it commences 
operation). For instance, a source might be required to hold Hg 
allowances during its start-up year, but would not receive an 
allocation for that year. Under the proposed CAMR Federal Plan, EPA 
would allocate Hg allowances from the set-aside to all new Utility 
Units in any given year as a group. If there are more Hg allowances 
requested than in the set-aside, allowances would be distributed on a 
pro-rata basis. Allowance allocations for a given new Utility Unit in 
following years will continue to be based on the prior year's Hg 
emissions until the new Utility Unit establishes a baseline, is treated 
as an existing Utility Unit, and is allocated Hg allowances through the 
updating process.
    Under the proposed Federal Plan, after 5 years of operation, a new 
EGU would have an adequate operating baseline of output data to be 
incorporated into the calculations for Hg allocations to all affected 
Utility Units. The average of the highest 3 years from these 5 years 
would be converted to a modified output value that would be used as the 
unit's baseline heat input for determining the new Utility Unit's Hg 
allowance allocation. The new unit's modified output would be 
calculated by multiplying its gross output (expressed in kWh) by a heat 
rate conversion factor of 7,900 British thermal units per kilowatt-hour 
(Btu/kWh). The 7,900 Btu/kWh value for the conversion factor is an 
average of heat-rates for new pulverized coal plants and new integrated 
gasification combined cycle (IGCC) coal plants (based upon assumptions 
in the Energy Information Administration's (EIA's) Annual Energy 
Outlook (AEO) 2004). (See EIA, ``Annual Energy Outlook 2004, with 
Projections to 2025,'' January 2004 and http://www.eia.doe.gov/oiaf/archive/aeo04/assumption/tbl38.html.
) As discussed in CAMR, a single 

conversion rate would create consistent and level incentives for 
efficient generation, rather than favoring new Utility Units with 
higher heat rates.
    New units would update their heat input numbers only once--for the 
initial 5-year baseline period after they start operating. As in the 
CAMR State Plan example methodology, existing units as a group would 
not update their heat input. This eliminates the potential for a 
generation subsidy because current or future operating behavior would 
not impact the units' allocations. Retired Utility Units would continue 
to receive Hg allowances indefinitely, thereby creating an incentive to 
retire less efficient Utility Units instead of continuing to operate 
them in order to maintain the Hg allowance allocations.
    a. Adjustments to Heat Input Data by Coal Adjustment Factors. For 
the reasons discussed in CAMR, EPA is proposing the use of heat input 
adjustment factors, differentiated by coal type, for the Hg allocation 
process. Consistent with the methodology used to establish the State Hg 
budgets in CAMR, EPA is proposing that these adjustment factors 
primarily reflect the relative abilities of bituminous, subbituminous, 
and lignite coals to be controlled for Hg through the use of 
NOX and SO2 controls. Consistent with CAMR, EPA 
is proposing to use the coal adjustment factors of 1.0 for bituminous 
coals, 1.25 for subbituminous coals, and 3.0 for lignite coals for 
adjusting baseline heat input.
    During the CAMR reconsideration process, EPA performed an analysis 
comparing the allocation approach of the model rule with allocations 
based on pure (unadjusted) heat input (see 71 FR 33388). In comparing 
these two allocation approaches, EPA used the same methodology that was 
used to compare EPA's chosen allocations approach for NOX 
and SO2 with alternative approaches for the CAIR Notice of 
Final Action on Reconsideration (see 70 FR 25328). This analysis 
compares the extent to which State budgets reflect projected emissions 
under CAIR as well as under CAIR and CAMR.
    EPA followed the approach presented in the CAIR Statewide 
NOX Budgets Calculations technical support document (TSD) 
(http://www.epa.gov/cair/pdfs/0053-2228.pdf) which states ``To 

quantitatively evaluate whether the fuel factor approach is providing 
States with annual NOX budgets that more closely reflected 
their projected emissions, EPA calculated the arithmetic mean of the 
(absolute) difference between a State's coverage ratio and 1.0 (i.e., 
the value representing a State's projected emissions matching the 
State's CAIR NOX budget). In other words, EPA calculated how 
far off the State's coverage ratio was from 1.0, and then averaged 
these values for each approach.'' Under this approach, the closer this 
mean value is to zero, the more the allowance allocation approach 
minimizes disparities between State budgets and emissions.
    For Hg, EPA compared the State budgets to projected emissions for 
CAIR, which is the appropriate baseline for evaluating the CAMR State 
budgets (rather than the 1999 ICR data), as well as projected emissions 
under CAMR. Using projected CAIR emissions for 2010, the resulting 
average absolute differences were 0.57 for the coal-adjustment factor 
approach under CAMR, and 0.63 for the pure heat input approach. Using 
projected CAMR emissions for 2010, the resulting average absolute 
differences were 0.59 for the coal-adjustment approach under CAMR and 
0.68 for the pure heat input approach. Likewise, for 2020, using 
projected CAIR emissions, the resulting average absolute differences 
were 0.26 for the coal-adjustment approach under CAMR and 0.30 for the 
pure heat input approach. Using projected CAMR emissions for 2020, the 
resulting average absolute differences were 0.32 for the coal-
adjustment approach, and 0.36 for the pure heat input approach.
    This analysis suggests that while the two allocation methods yield 
results that are similar, the adjusted heat input approach used by EPA 
in the final CAMR minimizes the discrepancies between State budgets and 
State emissions more effectively than a pure heat input approach. This 
analysis is explained in the TSD and spreadsheet titled ``CAMR Hg 
Allowance Allocation Approach Analysis,'' available in the docket.
    EPA recognizes that units may have been blending coals or may have 
switched coals during the baseline period. For this reason, EPA is 
proposing to adjust baseline heat input data separately for each year 
in order to reflect the coal burned during that year. If a unit was 
blending coal during any year, a weighted average coal adjustment 
factor would be used. This approach is consistent with the example 
allocation approach included in the CAMR model rule.
    In CAMR, EPA adjusted coal type for the calculation of State 
budgets using coal use data from the 1999 ICR. EPA does not routinely 
collect coal type and use data, and, therefore, proposes to adjust 
baseline heat input data using EIA plant-level data for the years that 
comprise the baseline. Because the EIA data are reported at the plant 
level, EPA proposes to apply the same coal-adjustment factor to all 
affected units at a given plant.
    EPA is not proposing adjustments by coal type with the modified 
output approach because we do not want the allocation process to favor 
the use of any particular rank of coal for new coal units. In other 
words, EPA does not want to provide an incentive for new units to burn 
a certain type of coal in order to increase the number of allowances 
they receive.
    b. New Cogeneration Units. For new cogeneration Utility Units, 
their shares of the Hg allowances would be

[[Page 77114]]

calculated by converting the available thermal output (Btu) of useable 
steam from a boiler to an equivalent heat input by dividing the total 
thermal output (Btu) by a general boiler/heat exchanger efficiency of 
80 percent. For new cogeneration units that are combustion turbines, 
electrical output would be converted to heat input, the heat energy of 
steam from the heat recovery steam generator would be converted to heat 
input, and the units' shares of the Hg allowances would be based on the 
sum of these heat inputs. Steam output, like electrical output, is a 
useable form of energy that can be utilized to power other processes. 
Because it would be nearly impossible to adequately define the 
efficiency in converting steam energy into the final product for all of 
the various processes, this approach focuses on the efficiency of a 
cogeneration unit in capturing energy in the form of steam from the 
fuel input.
    c. Sources of Data for Hg Allocations. The Agency proposes for the 
Federal Plan Hg allocations to use heat input and fuel type data 
reported to EPA's Electronic Data Reporting (EDR) system, where 
available, and to use best available heat input and fuel type data 
(e.g., data from the EIA) where EDR data are not available.

D. Allowance Banking

    EPA proposes to include banking as a feature in the Federal Hg 
Budget Trading Program for the reasons set forth in CAMR. Proposed 40 
CFR part 62, subpart LLL, sets forth the same provisions for banking 
and the management of banked allowances as specified in 40 CFR part 60, 
subpart HHHH. In accordance with these provisions, Hg allowances held, 
and not used for compliance in the year for which they are issued, may 
be banked for future use.
    Banking is the retention of unused allowances from one calendar 
year for use in a later calendar year. Banking allows sources to make 
reductions beyond required levels and ``bank'' the unused allowances 
for use later. Generally, banking has several advantages. First, 
banking results in early reductions as companies over-control their 
units' emissions; it is very unlikely that significant levels of early 
reductions would occur without banking. Second, banked allowances can 
be used at any time, so they provide flexibility for companies to 
respond to growth and changing marketplace conditions over time as well 
as any unforeseen Hg control technology difficulties. Although banking 
can result in emissions below the cap on allowances allocated in early 
years of the program and emissions above the cap level in the later 
years of the compliance period, the permanency of the cap in each phase 
of the program ensures that banking does not result in an increase in 
cumulative emissions. This is an important trade-off for getting early 
reductions.
    Therefore, like in subpart HHHH (the State Plan model cap-and-trade 
rule), EPA is proposing that banking would be allowed without 
restriction after the start of the Federal Hg cap-and-trade program in 
2010.

E. Source-Level Emissions Monitoring and Reporting Requirements

    CAMR added subpart I to 40 CFR part 75. (Although EPA is requesting 
comment on the monitoring, reporting, and recordkeeping requirements in 
the proposed Federal trading rule, EPA is not requesting comments on 40 
CFR part 75, which is described here only for the convenience of the 
reader.) 40 CFR part 75, subpart I, specifies the basic emission 
monitoring, reporting, and recordkeeping requirements necessary to 
administer an Hg trading program for new and existing Hg Budget units. 
CAMR also revised the regulatory language at several places in 40 CFR 
parts 72 and 75 to include specific Hg monitoring definitions and 
provisions, in support of 40 CFR part 75, subpart I. Mercury Budget 
units would be required to comply with these Hg monitoring provisions 
as part of a Federal Hg cap-and-trade program. The changes to 40 CFR 
part 75 are discussed in greater detail in CAMR (70 FR 28633).
    Monitoring and reporting of an affected source's emissions are 
integral parts of any cap-and-trade program. Consistent and accurate 
measurement of Hg emissions ensures that each Hg allowance actually 
represents one ounce of emissions and that one ounce of reported 
emissions from one source is equivalent to one ounce of reported 
emissions from another source. This establishes the integrity of each 
allowance and instills confidence in the market mechanisms that are 
designed to provide sources with flexibility in achieving compliance. 
In addition, those flexibilities result in substantial cost savings to 
the industry and to the public consumer of electricity.
    Given the variability in the unit type, manner of operation, and 
fuel mix among coal-fired Utility Units, EPA believes that Hg emissions 
must generally be monitored continuously in order to ensure the 
precision, reliability, accuracy, and timeliness of Hg emissions data 
necessary to support the cap-and-trade program. For application in both 
the Federal and State trading programs, CAMR allows two methodologies 
for continuously monitoring Hg emissions: (1) Hg continuous emission 
monitors (CEMS); and (2) sorbent trap monitoring systems. EPA believes 
it is reasonable to expect that both technologies will be well-
developed and commercially available by the time CAMR monitoring 
requirements take effect in 2009.
    As provided in CAMR, for affected sources with Hg emissions at or 
below a specified threshold value, 40 CFR 75.81(b) provides additional 
regulatory flexibility by allowing default Hg concentrations obtained 
from periodic Hg emission testing to be used to quantify Hg mass 
emissions, instead of continuously monitoring the Hg concentration. The 
use of this low mass emitter option is restricted to sources that emit 
no more than 29 lb (464 ounces) of Hg per year. The rationale for this 
threshold is provided in CAMR (70 FR 28633-28635).
    The amendments to 40 CFR part 75 set forth the specific monitoring 
and reporting requirements for Hg mass emissions necessary for a cap-
and-trade program. The provisions of 40 CFR part 75 are used in both 
the Acid Rain and the NOX Budget Trading programs, and most 
sources affected by CAMR are already meeting the requirements of 40 CFR 
part 75 to monitor SO2 and/or NOX for one or both 
of those programs.
    In order to ensure program integrity, the proposed Federal trading 
rule requires year-round 40 CFR part 75 monitoring and reporting for Hg 
emissions for all Hg Budget units. Deadlines for monitor certification 
and other details are specified in the proposed Federal trading rule. 
EPA believes that if these provisions are implemented, emissions will 
be accurately and consistently monitored and reported from unit-to-unit 
and from State-to-State, ensuring the overall integrity of the Hg 
trading program.
    As is required for SO2 and NOX emissions data 
in the Acid Rain Program and the NOX Budget Trading Program, 
Hg emissions data will be provided to EPA on a quarterly basis in a 
format specified by the Agency and submitted to EPA electronically 
using EPA-provided software. We found this centralized reporting 
requirement necessary to ensure consistent review, checking, and 
posting of the emissions and monitoring data from all affected sources, 
which contributes to the integrity and efficiency of the trading 
program.
    Finally, consistent with the current requirements in 40 CFR part 75 
for the Acid Rain Program and the NOX Budget

[[Page 77115]]

Trading Program, CAMR allows sources to petition for an alternative to 
any of the specified monitoring, reporting, or recordkeeping 
requirements in the final rule. This provision also provides sources 
with the flexibility to petition to use an alternative monitoring 
system under 40 CFR part 75, subpart E, as long as the requirements of 
40 CFR 75.66 are met.

F. Compliance and Penalties

    Penalty provisions for excess emissions under the CAMR State model 
trading rule are described in CAMR (70 FR 28624). The Agency intends 
the penalty provisions for excess emissions in the Federal Plan trading 
rule to be identical to the provisions in CAMR. Under CAMR, for the Hg 
cap-and-trade program, any source found to have excess emissions must 
surrender allowances from the next control period equal to three times 
the excess emissions. This includes a one-for-one offset of, and an 
additional two-for-one surrender for, each ounce of excess emissions.

G. Elements of the Federal Hg Trading Program That Differ From the 
State Model Hg Trading Program

    EPA proposes to make the Federal and State Hg Budget Trading 
Programs as similar as possible. Although EPA has modeled proposed 40 
CFR part 62, subpart LLL, largely after 40 CFR part 60, subpart HHHH, 
finalized under CAMR, EPA also proposes some revisions to 40 CFR part 
60, subpart HHHH, that would integrate the two trading programs and 
would generally also be reflected in proposed 40 CFR part 62, subpart 
LLL. EPA notes that discussion of the evolution of the Hg Budget 
Trading Program is set forth in the SNPR at 69 FR 12403 and in CAMR at 
70 FR 28624. The following provides a discussion of the sections in 40 
CFR part 62, subpart LLL, that incorporate certain differences from the 
corresponding sections in subpart 40 CFR part 60, HHHH, to provide for 
Federal implementation of the Hg Budget Trading Program.
    The general provisions explain that proposed 40 CFR part 62, 
subpart LLL, sets forth the provisions for the Federal Hg Budget 
Trading Program. For 40 CFR part 62, subpart LLL, EPA is proposing to 
use essentially the same definitions as those for 40 CFR part 60, 
subpart HHHH, revised as proposed in this action.
    With regard to the Hg allowance allocations under 40 CFR part 62, 
subpart LLL, these provisions are the same as the example allocation 
methodology provisions in 40 CFR part 60, subpart HHHH, except that the 
Administrator, rather than the State permitting authority, would 
allocate Hg allowances under the Federal Hg Budget Trading Program. 
This reflects the fact that the Federal Hg Budget Trading Program would 
be Federally implemented, rather than implemented by the State as under 
CAMR. A detailed discussion of the allocation of emission allowances 
under the Federal Plan is provided in Section III.C, above.
    40 CFR part 62, subpart LLL, also addresses monitoring and 
reporting requirements including, among other things, general 
requirements, initial certification and recertification procedures, out 
of control periods, notifications, recordkeeping and reporting, and 
petitions. These provisions are essentially the same as the monitoring-
related provisions of 40 CFR part 60, subpart HHHH. The differences 
between the provisions reflect the fact that administration of the 
monitoring requirements is overseen by the Administrator, rather than 
by the Administrator and the permitting authority as in the State Plan 
Hg model trading program. As a result, for example, monitoring 
certification applications are submitted to the appropriate EPA 
Regional Office and the Administrator, not the permitting authority, 
will act on the applications. Further, the Administrator handles all 
audit decertifications and all petitions for alternatives to the 
monitoring requirements.
    EPA is proposing these monitoring provisions under 40 CFR part 62, 
subpart LLL, for the reasons set forth both in CAMR and in order to 
minimize differences between the Federal and State Hg Budget Trading 
Programs. In particular, for the reasons set forth in CAMR, EPA 
proposes that Hg budget units be required to meet the monitoring, 
reporting, and recordkeeping requirements for Hg monitoring in 40 CFR 
part 75, subpart I (70 FR 28633).

IV. Proposed Revisions of the CAMR State Model Cap-and-Trade Program 
Rule

    EPA is proposing several revisions of the CAMR State model cap-and-
trade program. Some of the proposed revisions are necessary to 
integrate the State model Hg trading program and the proposed Federal 
Hg trading program, while other proposed revisions reflect needed 
technical and clarifying changes and are consistent with the analogous 
provisions of the proposed Federal Hg trading program.
    In particular, several of the definitions of terms are proposed to 
be revised. For example, the definitions of ``Hg designated 
representative'' and ``alternate Hg designated representative'' would 
be modified to require that the respective individuals designated for 
these positions be the same individuals as designated, for a given 
source, as the designated representative and alternate designated 
representative under all applicable CAIR trading programs. (In order to 
implement this change, new definitions for ``CAIR NOX 
source'', ``CAIR NOX Ozone Season source'', and CAIR 
SO2 source'' would be added.) This would greatly simplify 
the administration of the allowance tracking systems for the trading 
programs and obviate the need for the requirement (which would be 
eliminated from the recordkeeping and reporting provisions) that 
quarterly emissions reports, which include emissions data for all 
trading programs applicable to the unit involved, be signed by more 
than one individual.
    As a further example, certain new definitions would be added 
(``municipal waste,'' ``replacement,'' and ``solid waste incineration 
unit'') and certain definitions would be modified (``cogeneration 
unit,'' ``commence commercial operation,'' and ``commence operation'') 
to reflect the revised applicability provisions for the Hg trading 
program and to clarify and streamline the language in the definitions. 
In the CAMR Notice of Final Action on Reconsideration (71 FR 33388), 
EPA revised the definition of ``electric generating unit or EGU'' in 40 
CFR 60.24(h) and the applicability provisions of the State model 
trading rule (40 CFR 60.4104) to: (1) Exempt certain solid waste 
incineration units from CAMR; (2) limit applicability to coal-fired 
units serving, as of November 15, 1990 or any time later, a generator 
with a greater than 25 MWe nameplate capacity producing electricity for 
sale; and (3) clarify the language concerning cogeneration units. In 40 
CFR 60.24(h), EPA also added definitions for ``municipal solid waste'' 
and ``solid waste incineration unit.'' The new and revised definitions, 
in the State Plan Hg model trading rule, related to applicability would 
be consistent with the definitions in 40 CFR 60.24(h) and the 
applicability provisions in 40 CFR 60.4104.
    In addition, the definitions of ``allocate,'' ``Hg allowance,'' and 
``Hg Budget Trading Program'' would be modified to provide for 
integrated operation of the State Hg trading programs administered by 
EPA and Federal Hg trading program. Mercury allowances issued under 
either type of program would be an ``Hg allowance''

[[Page 77116]]

usable for meeting the allowance-holding requirement under the State 
model trading program (or Federal Hg trading program) regulations. In 
addition, the definition of ``maximum design heat input'' would be 
simplified, and the definition of ``nameplate capacity'' would be 
clarified.
    Further, the retired unit exemption provisions would be revised to 
clarify that the appeal procedures generally applicable to final 
actions of the Administrator would be applicable to final actions of 
the Administrator with regard to retired units. The rule text 
concerning the appeal procedures themselves would be revised simply to 
reference part 78 of the Acid Rain Program regulations, and part 78 
would, in turn, be revised to refer specifically, where appropriate, to 
the Hg trading programs in the same way as part 78 currently refers 
specifically, where appropriate, to the CAIR trading programs.
    In addition, the provisions listing the content of a certificate of 
representation are revised to clarify that the identification of each 
unit covered by the certificate of representation includes 
identification and nameplate capacity of each generator served by the 
unit. EPA believes that the current rule language requiring 
``identification'' of each unit subject to the trading program is 
already broad enough to encompass such information concerning each 
generator served by the unit, particularly since only a unit serving a 
generator with a nameplate capacity greater than 25 MWe can be subject 
to the Hg trading programs. However, EPA is proposing the revised 
language to make it clear that generator information is required in the 
certificate of representation.
    EPA also proposes technical revisions to the provisions concerning 
the reflection in certificates of representation of the owners and 
operators of the source and units involved. The changes would make it 
clear that all owners and operators must be listed and that those that 
should be, but are not, listed are still bound by the certificate of 
representation and the CAMR designated representative.
    Further, new provisions concerning designated representatives and 
authorized account representatives would be added to clarify that such 
individuals may use agents in order to make electronic submissions. The 
existing State model trading program regulations provide for certain 
submissions (i.e., certificates of representation, applications for 
general account, allowance transfers, and quarterly emissions reports) 
required to be ``in a format prescribed'' or ``in a format specified'' 
by the Administrator. (The terms ``prescribed'' and ``specified'' have 
the identical meaning in these contexts.) These submissions may be 
made, or in the case of quarterly emissions reports must be made, 
electronically. Although the formats for the Hg Budget Trading Program 
have not yet been developed, other EPA-administered trading programs 
(i.e., the Acid Rain Program and the NOX Budget Trading 
Program) have analogous language concerning submission formats and have 
existing, prescribed formats for submissions. The electronic formats 
prescribed by the Administrator for the Acid Rain Program and the 
NOX Budget Trading Program allow the designated 
representative or authorized account representative, as appropriate, to 
designate other individuals (``agents'') who may make the electronic 
submissions for the designated representative or authorized account 
representative, who is fully bound by the agent's actions. EPA 
maintains that the references in the Acid Rain Program and 
NOX Budget Trading Program regulations to ``prescribed'' (or 
``specified'') formats, coupled with the existing electronic formats, 
provide the legal authority necessary for designated representatives 
and authorized account representatives to use agents to make electronic 
submissions in the applicable trading programs. EPA plans to adopt 
electronic formats for the Hg Budget Trading Program that, similarly, 
allow for the use of agents. EPA believes that the existing references 
in the CAMR State model trading program regulations to ``format[s] 
prescribed'' or ``specified'' by the Administrator, when coupled with 
the appropriate electronic formats, will similarly provide the legal 
authority necessary for the use of agents. However, in order to remove 
any uncertainty about such legal authority, EPA proposes to add 
provisions to the State Hg model trading program regulations (and to 
include a provision in the Federal Hg trading program regulations) that 
explicitly authorize the use of agents for electronic submissions.
    In addition, in the permitting provisions, EPA proposes to revise 
the deadline for submission of Hg Budget permit applications to run 
from the later of January 1, 2010 or the date on which the unit 
commences commercial operation, rather than the date on which the unit 
simply commences operation. A unit's date of commencement of commercial 
operation is not likely to range from more than a few days to a few 
months later than the unit's date of commencement of operation since 
owners and operators of electric generating units generally prefer to 
minimize using fuel without producing electricity. Moreover, running 
the permit application deadline from the commencement of commercial 
operation avoids the need for a complex definition of ``commence 
operation'' to account for units that are not subject to the Hg Budget 
Trading Program when they first combust fuel and that subsequently 
become Hg Budget units.
    Further, EPA proposes certain technical corrections in the Hg 
allowance allocation provisions. In particular, the current provisions 
concerning timing of submission of unit allocations by the permitting 
authority to the Administrator provide that if the unit allocations are 
not submitted on time, the Administrator will assume that the 
allocations are the same as in the prior year. If the year for which 
allocations are submitted late is 2018 (the beginning of phase II of 
the CAMR Hg Budget trading program), the Administrator will assume that 
the allocations equal the allocations for the control period in 2017, 
multiplied by the amount of ounces (i.e., tons multiplied by 32,000 
ounces/ton) of Hg emissions in the applicable State trading budget 
under Sec.  60.4140 for 2018 and thereafter and divided by such amount 
of ounces of Hg emissions for 2010 through 2017. EPA is removing these 
provisions both for existing and new units because they seem unlikely 
to be used and are unduly complicated. There are no comparable 
provisions in the proposed Federal Hg trading program regulations.
    EPA is also proposing to revise the current provisions for new unit 
allocations that provide that a new unit is eligible for allocations 
from the new unit set-aside until that unit has operated long enough to 
develop a baseline heat input using the 3 highest figures for converted 
control period heat input out of such figures for the first 5 years of 
operation. At that point, the unit is supposed to be allocated 
allowances from the pool of allowances allocated to all units that have 
a baseline heat input. However, allowances for units with baselines are 
allocated a number of years in advance of the first year for which such 
allowances may be used to meet the allowance-holding requirement. 
Consequently, it is possible for a new unit to have a baseline as of a 
given year but find that no more allowances are available for that year 
for units with baselines because the allowances for that year were 
allocated before the time when the new unit's baseline was developed. A 
new unit could find that, for some years, it was both ineligible for

[[Page 77117]]

the new unit set-aside and unable to obtain an allocation from the pool 
for units with baselines. EPA intended that new units move seamlessly 
from new-unit-set-aside eligibility to units-with-baselines allocations 
and not to fall in between the two types of allocation procedures. EPA 
proposes to revise the allocation provisions to clarify that a new unit 
continues to be eligible for the new unit set-aside so long as the unit 
is not allocated allowances from the pool for units with baselines 
allocations either because the new unit does not yet have a baseline or 
because all the allowances for units with baselines have already been 
allocated for the year involved.
    EPA also proposes technical changes that make it clear that a 
separate request for new-unit-set-aside allowances must be submitted 
for each control period for which they are sought and must be submitted 
by May 1 of that control period. This approach will reasonably put the 
burden on owners and operators to inform the State permitting authority 
each year. This will ensure that the State permitting authority can 
keep track, for each control period in the future, of which units are 
seeking new-unit-set-aside allowances for that control period. These 
submission deadlines will give the State permitting authorities more 
time to process (which may include, when appropriate, opportunity for 
public comment) the requests in time to submit the allocations to the 
Administrator for recordation by December 1.
    In addition, EPA proposes to adopt technical changes to the 
provisions for recordation of allowance allocations. For example, the 
current provisions require the Administrator to record the initial 
allocations for 2010-2014 by December 1, 2006. Because State Plans were 
not due until November 17, 2006, EPA cannot review and approve all 
State plans in time to record allowance allocations in those plans by 
December 1, 2006, which date EPA proposes to change to December 1, 
2007. Further, the current provisions also require the recordation of 
allocations for subsequent years to occur only after completion of the 
end-of-year compliance determination process for a previous year. 
Because of the need to finalize emissions data for a year before the 
compliance determination process for that year can be completed, the 
current provisions may delay recordation for a number of months. 
However, as a matter of logic, there is no necessary connection between 
one year's compliance determination and the future year's allocation 
recordation. Consequently, EPA proposes to remove the connection made 
in the current provisions and is setting an independent deadline 
(December 1) for allocation recordation, which will result in 
recordation several months earlier than under the current provisions.
    Further, EPA proposes technical changes to the provisions referring 
to when an allowance transfer by the owner of an allowance to another 
allowance tracking system account is ``correctly submitted.'' The 
changes would clarify that a ``correctly submitted'' allowance transfer 
is one that references allowances that both: Were in the owner's 
allowance tracking system account when the allowance transfer form was 
submitted to the Administrator; and continue to be in such account when 
the allowance transfer form is processed by the Administrator.
    In addition, EPA proposes to revise the provisions for deducting 
allowances to determine compliance with the allowance-holding 
requirement under the trading programs. The proposed revisions would 
not change the requirements that an allowance usable for compliance: Be 
allocated for the year, or a year before the year, for which compliance 
is being determined; and be in or covered by a proper request for 
transfer into the source's compliance account by the allowance transfer 
deadline. However, the statement indicating that the allowance must 
also not be necessary to account for excess emissions for a prior year 
would be removed because it is confusing and inconsistent with the 
compliance procedures that EPA has been using in its ongoing cap-and-
trade programs (i.e., the Acid Rain Program and the NOX 
Budget Trading Program).
    In addition, EPA proposes to revise certain provisions concerning 
the use of substitute data when the owner or operator of a unit adds a 
new stack or flue and fails to meet the deadline for monitoring 
certification. EPA proposes to remove procedures that would seem to 
allow for substitute data other than data reflecting maximum potential 
emissions. This is proposed because EPA believes that the removed 
provisions would actually still result in the use of data reflecting 
maximum potential emissions.
    Further, EPA proposes to remove a provision that separately 
requires units to monitor heat input. The provision is unnecessary 
because heat input monitoring is already explicitly required in the 
monitoring provisions in Sec.  60.4170.
    A few changes are proposed for some other provisions (e.g., 
revising the definitions of ``CAIR NOX Trading Program,'' 
``CAIR NOX Ozone Season Trading Program,'' and ``CAIR 
SO2 Trading Program'' to be consistent with the definitions 
of these terms in the CAIR trading rules) of the State model trading 
rule. These other changes are similarly technical or clarifying in 
nature. All of the above-proposed changes are consistent with the 
analogous provisions in the proposed Federal Hg trading program.

V. Proposed Revisions of the Acid Rain Program Regulations

    A few changes are proposed for the Acid Rain Program regulations. 
EPA proposes to revise the provisions concerning alternate designated 
representatives in order to simplify the provisions. Specifically, EPA 
proposes to remove 40 CFR 72.22(e), which allows in certain limited 
circumstances the appointment of two alternate designated 
representatives, rather than the customary one alternate designated 
representative, for an affected source under the Acid Rain Program. 
This option has rarely been used: Out of the approximately 1,500 
affected plants currently in the program, only 17 currently have two 
alternate designated representatives. As discussed above in Section IV 
of this preamble, the Acid Rain Program regulations already allow a 
designated representative or alternate designated representative to use 
agents to perform online many of the same tasks that a second alternate 
designated representative can perform under the existing Sec.  
72.22(e). Since Sec.  72.22(e) seems to be unnecessary and is rarely 
used, EPA proposes to remove it in order to simplify the provisions 
applicable to alternate designated representatives.
    Further, as discussed above in Section IV of this preamble, EPA 
proposes to revise the appeal provisions of 40 CFR part 78 to apply to 
the appeals procedures to final actions of the Administrator under the 
State Hg trading program and the Federal Hg trading program, just as 
these provisions already apply to final Administrator actions under the 
CAIR trading programs. 40 CFR part 78 would be revised to refer 
specifically, where appropriate, to the Hg trading programs in the same 
way as 40 CFR part 78 currently refers specifically, where appropriate, 
to the CAIR trading programs.

VI. Units Subject to the CAMR Federal Plan and New Source Performance 
Standards

    This section describes the relationship between the Federal Plan 
and the NSPS finalized under CAMR in

[[Page 77118]]

terms of applicability and Hg emission limits. As discussed above and 
in CAMR, CAMR added Hg to the list of pollutants covered under 40 CFR 
part 60, subpart Da, by establishing emission limits for new sources 
and guidelines for existing sources.
    CAMR finalized NSPS for new coal-fired Utility Units, 
subcategorized by coal type and, in some cases, unit type. In addition 
to complying with these standards, new Utility Units, along with 
existing coal-fired Utility Units, subject to the Federal Plan, will be 
subject to the cap-and-trade provisions finalized in CAMR and being 
proposed in this Federal Plan. The State Hg emission budgets are a 
permanent cap regardless of growth in the electric sector and, 
therefore, States, in the case of State Plans, and EPA, in the case of 
Federal Plan, have the responsibility of incorporating new Utility 
Units in their Hg emissions budgets.

VII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is an economically ``significant regulatory action.'' This 
determination is made in view of this action's important policy 
implications and potential effect on the economy of over $100 million. 
Accordingly, EPA submitted this action to the Office of Management and 
Budget (OMB) for review under EO 12866 and any changes made in response 
to OMB recommendations have been documented in the docket for this 
action.
    This Federal Plan proposal represents a Federal mandate to 
implement CAMR (70 FR 28606) covering the same Hg emissions reductions 
in the event that States fail to implement CAMR. For this reason, EPA 
is relying on the economic analysis conducted for CAMR entitled 
``Regulatory Impact Analysis of the Final Clean Air Mercury Rule.''

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions for the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et 
seq. The PRA requirements of this rule are satisfied through the 
Information Collection Request (ICR) submitted to OMB for review and 
approval as part of CAMR. The burden of this proposed rule is 
essentially the same as the burden estimated for CAMR. There is a 
modest transfer of burden from the States to EPA if the Federal plan is 
implemented rather than the CAMR State Plan. The overall total burden 
is essentially unchanged. The Office of Management and Budget (OMB) 
previously approved the information collection requirements contained 
in the final CAMR regulations (40 CFR 60.40Da--60.52Da; 40 CFR 
60.4100--60.4199) under the provisions of the PRA, and has assigned OMB 
control number 2060-0567 and EPA ICR number 2137.02. A copy of the OMB 
approved ICR may be obtained from Susan Auby, Collection Strategies 
Division; U.S. Environmental Protection Agency (2822T); 1200 
Pennsylvania Ave., NW., Washington DC 20460, or by calling (202) 566-
1672.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR, after appearing in the preamble of the final 
rule, are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; a small governmental jurisdiction that is a government of a 
city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of today's proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. As was 
discussed in the final CAMR, EPA determined that it was not necessary 
to prepare a regulatory flexibility analysis in conjunction with this 
rulemaking. Although not required by the RFA, the Agency conducted an 
additional analysis of the effects of CAMR on small entities in order 
to provide additional information to States and affected sources. This 
analysis is detailed in both the final CAMR and the ``Regulatory Impact 
Analysis of the Final Clean Air Mercury Rule.'' This analysis found 
that CAMR would not have a significant direct impact on a substantial 
number of small entities. This analysis is applicable to this proposed 
rule.
    We continue to be interested in the potential impacts of the 
proposed rule on small entities and welcome comments on issues related 
to such impacts.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) (UMRA), establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and Tribal 
governments and the private sector. Under UMRA section 202, 2 U.S.C. 
1532, EPA generally must prepare a written statement, including a cost-
benefit analysis, for any proposed or final rule that ``includes any 
Federal mandate that may result in the expenditure by State, local, and 
Tribal governments, in the aggregate, or by the private sector, of 
$100,000,000 or more * * * in any one year.'' A ``Federal mandate'' is 
defined under UMRA section 421(6), 2 U.S.C. 658(6), to include a 
``Federal intergovernmental mandate'' and a ``Federal private sector 
mandate.'' A ``Federal intergovernmental mandate,'' in turn, is defined 
to include a regulation that ``would impose an enforceable duty upon 
State, local, or Tribal governments,'' UMRA section 421(5)(A)(i), 2 
U.S.C. 658(5)(A)(i), except for, among other things, a duty that is ``a 
condition of Federal assistance,'' UMRA section 421(5)(A)(i)(I). A 
``Federal private sector mandate'' includes a regulation that

[[Page 77119]]

``would impose an enforceable duty upon the private sector,'' with 
certain exceptions, UMRA section 421(7)(A), 2 U.S.C. 658(7)(A).
    Before promulgating an EPA rule for which a written statement is 
needed under UMRA section 202, UMRA section 205, 2 U.S.C. 1535, 
generally requires EPA to identify and consider a reasonable number of 
regulatory alternatives and adopt the least costly, most cost-
effective, or least burdensome alternative that achieves the objectives 
of the rule.
    EPA has determined that this rule contains a Federal mandate that 
may result in expenditures of $100 million or more for State, local, 
and tribal governments, in the aggregate, or the private sector in any 
one year. Accordingly, EPA prepared a written statement for the final 
CAMR consistent with the requirements of UMRA section 202. Furthermore, 
as EPA stated in the rule, EPA is not directly establishing any 
regulatory requirements that may significantly or uniquely affect small 
governments, including Tribal governments. Thus, EPA is not obligated 
to develop under UMRA section 203 a small government agency plan. 
Furthermore, in a manner consistent with the intergovernmental 
consultation provisions of UMRA section 204, EPA carried out 
consultations with the governmental entities affected by this rule.
    For the final CAMR, EPA conducted an analysis of the potential 
economic impacts anticipated of CAMR on government-owned entities. The 
results support EPA's assertion in the NPR that the proposed rule would 
not have a disproportionate budgetary impact on government entities. 
This analysis is detailed in both the final CAMR and the ``Regulatory 
Impact Analysis of the Final Clean Air Mercury Rule.'' This analysis is 
applicable to this proposed rule.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the EO to 
include regulations that have ``substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government.''
    This proposed rule does not have Federalism implications. It will 
not have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in EO 13132. These effects would not occur from the final 
rule itself because it is the provisions of the CAA that require EPA, 
after a State has failed to submit a State Plan or a complete State 
Plan, to make a finding to that effect and then promulgate a Federal 
Plan. Although EPA would be exercising discretion to promulgate the 
Federal Plan at an early date, EPA would rescind the Federal Plan for 
each State that submits a State Plan that EPA approves. Moreover, as 
emphasized throughout the preamble, States are not required to adopt 
the Federal Plan provisions, or any particular portion thereof, in 
order for EPA to approve their State Plans. Thus, EO 13132 does not 
apply to this proposed rule.
    Even so, in the spirit of EO 13132, and consistent with EPA policy 
to promote communications between EPA and State and local governments, 
EPA consulted with State and local officials early in the process of 
developing the proposed regulation to permit them to have meaningful 
and timely input into its development. EPA is including a number of 
provisions for States in the proposed rule so as not to constrain 
States' abilities to complete approvable State Plans, such as the 
ability to submit State allocation methodologies, and intends to 
withdraw the Federal Plan upon approval of State Plans.

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

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by Tribal officials in the development of regulatory 
policies that have Tribal implications.'' This proposal does not have 
``Tribal implications'' as specified in EO 13175.
    This proposal addresses pollution composed of Hg and mercuric 
compounds. The final CAMR required annual Hg reductions for the power 
sector in 50 States, the District of Columbia, and in Indian country, 
through a cap-and-trade system that States and eligible Tribes have the 
option of adopting. The CAA provides for States and eligible Tribes to 
develop plans to regulate emissions of air pollutants within their 
areas. The regulations clarify the statutory obligations of States and 
eligible Tribes that develop plans to implement this rule. The TAR (40 
CFR 49.1-49.119) gives eligible Tribes the opportunity to develop and 
implement CAA programs, but it leaves to the discretion of the Tribe 
whether to develop these programs and which programs, or appropriate 
elements of a program, the Tribe will adopt. As noted earlier, the EPA 
will implement the emission trading rule for coal-fired Utility Units 
located in Indian country in accordance with the TAR unless the 
relevant Tribe for the land on which a particular coal-fired Utility 
Unit is located seeks and obtains TAS status and submits a TIP to 
implement the allocated Hg emissions budget. Tribes which choose to do 
so will be responsible for submitting a TIP analogous to the State 
Plans discussed throughout this preamble, and, like States, can choose 
to adopt the Model Cap-and-Trade Rule described elsewhere in this 
action.
    This proposal does not have Tribal implications as defined by EO 
13175. It does not have a substantial direct effect on one or more 
Indian Tribes, because no Tribe has implemented a Federally enforceable 
air quality management program under the CAA at this time. Furthermore, 
this proposal does not affect the relationship or distribution of power 
and responsibilities between the Federal government and Indian Tribes. 
The CAA and the TAR establish the relationship of the Federal 
government and Tribes in developing plans to attain the national 
ambient air quality standards (NAAQS), and this proposal does nothing 
to modify that relationship. EPA has complied with the provisions of EO 
13175.
    EPA notes that in the event a Tribe does implement a TIP in the 
future, this proposal could have implications for that Tribe, but it 
would not impose substantial direct costs upon the Tribe, nor preempt 
Tribal law. EPA has estimated that the total annual private costs for 
the rule for Hg as implemented by State, local, and eligible Tribal 
governments (or EPA in the absence of any Tribe seeking TAS status) is 
approximately $160 million in 2010, $100 million in 2015, and $750 
million in 2020 (1999$). There are currently three coal-fired Utility 
Units located in Indian country that will be affected by this rule and 
the percentage of Indian country that will be impacted is very small. 
For eligible Tribes that choose to regulate sources in Indian country, 
the costs would be attributed to inspecting regulated facilities and 
enforcing adopted regulations.

[[Page 77120]]

    EPA consulted with Tribal officials in developing the final CAMR 
and this proposal. The EPA encouraged Tribal input at an early stage. A 
Tribal representative from the Navajo Nation was a member of the 
official workgroup and was provided with all workgroup materials. EPA 
has provided two briefings for Tribal representatives and the newly 
formed National Tribal Air Association (NTAA), and other national 
Tribal forums such as the National Tribal Environmental Council (NTEC) 
and the National Tribal Forum during the period prior to issuance of 
the CAMR NPR. Another briefing for Tribal representatives, NTAA, and 
NTEC was provided post-proposal to provide opportunity for additional 
input. In addition, Tribal representatives participated in EPA's 
regional implementation workshops for CAMR in the summer of 2005.
    EPA conducted additional informal outreach for Tribes during the 
CAMR reconsideration process. First, EPA prepared an update on the 
reconsideration and CAMR Federal Plan development for the EPA Tribal 
Newsletter in January 2006. Second, EPA, through both Headquarters and 
Regional Offices, has worked to address Tribes' specific questions or 
concerns regarding implementation of CAMR. Finally, EPA has met with 
representatives from one Tribe that is concerned with the implications 
of CAMR for the development of new tribal electricity generation.

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

    Executive Order 13045, ``Protection of Children from Environmental 
Health and Safety Risks'' (62 FR 19885, April 23, 1997) applies to any 
rule that (1) Is determined to be ``economically significant'' as 
defined under EO 12866, and (2) concerns an environmental health or 
safety risk that EPA has reason to believe may have a disproportionate 
effect on children. If the regulatory action meets both criteria, 
Section 5-501 of the EO directs the Agency to evaluate the 
environmental health or safety effects of the planned rule on children, 
and explain why the planned regulation is preferable to other 
potentially effective and reasonably feasible alternatives considered 
by the Agency.
    We believe that the environmental health or safety risk addressed 
by this action may have a disproportionate effect on children. 
Accordingly, we have evaluated the environmental health or safety 
effects of this rule on children. The results of this evaluation are 
discussed in the final CAMR and in the ``Regulatory Impact Analysis for 
the Final Clean Air Mercury Rule.'' EPA concluded that CAMR will 
further improve air quality and will further improve children's health.

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

    Executive Order 13211 (66 FR 28355, May 22, 2001) provides that 
agencies shall prepare and submit to the Administrator of the Office of 
Regulatory Affairs, OMB, a Statement of Energy Effects for certain 
actions identified as ``significant energy actions.'' Section 4(b) of 
EO 13211 defines ``significant energy actions'' as ``any action by an 
agency (normally published in the Federal Register) that promulgates or 
is expected to lead to the promulgation of a final rule or regulation, 
including notices of inquiry, advance notices of final rulemaking, and 
notices of final rulemaking: (1)(i) That is a significant regulatory 
action under EO 12866 or any successor order, and (ii) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (2) that is designated by the Administrator of the Office 
of Information and Regulatory Affairs as a ``significant energy 
action.'' Although this proposal is a significant regulatory action 
under EO 12866, this rule likely will not have a significant adverse 
effect on the supply, distribution, or use of energy. EPA concluded 
that the impact of the final CAMR is not significant because the final 
rule did not have a greater than 1 percent impact on the cost of 
electricity production and because it does not result in the retirement 
of greater than 500 MW of coal-fired generation. EPA's analysis of the 
energy impacts of the final CAMR can be found in the ``Regulatory 
Impact Analysis for the Final Clean Air Mercury Rule.''

I. National Technology Transfer and Advancement Act

    As noted in the CAMR final rule, section 12(d) of the National 
Technology Transfer and Advancement Act (NTTAA) of 1995 (Pub. L. 104-
113; 15 U.S.C. 272 note) directs EPA to use voluntary consensus 
standards in their regulatory and procurement activities unless to do 
so would be inconsistent with applicable law or otherwise 
impracticable. Voluntary consensus standards are technical standards 
(e.g., material specifications, test methods, sampling procedures, 
business practices) developed or adopted by one or more voluntary 
consensus bodies. The NTTAA requires EPA to provide Congress, through 
OMB, with explanations when EPA decides not to use available and 
applicable voluntary consensus standards.
    During the development of the final CAMR, EPA searched for 
voluntary consensus standards that might be applicable. The search 
identified three voluntary consensus standards that were considered 
practical alternatives to the specified EPA test methods. An assessment 
of these and other voluntary consensus standards is presented in the 
preamble to the final CAMR (70 FR 28647; May 18, 2005). This proposed 
action does not propose the use of any additional technical standards 
beyond those cited in the final CAMR. Therefore, EPA is not considering 
the use of any additional voluntary consensus standards for this 
action.

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

    Executive Order 12898, ``Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations,'' requires 
Federal agencies to consider the impact of programs, policies, and 
activities on minority populations and low-income populations. 
According to EPA guidance,\7\ agencies are to assess whether minority 
or low-income populations face risks or a rate of exposure to hazards 
that are significant and that ``appreciably exceed or is likely to 
appreciably exceed the risk or rate to the general population or to the 
appropriate comparison group.'' (EPA, 1998)
---------------------------------------------------------------------------

    \7\ U.S. Environmental Protection Agency, 1998. Guidance for 
Incorporating Environmental Justice Concerns in EPA's NEPA 
Compliance Analyses. Office of Federal Activities, Washington, DC, 
April 1998.
---------------------------------------------------------------------------

    In accordance with EO 12898, the Agency has considered whether this 
proposal may have disproportionate negative impacts on minority or low 
income populations. The Agency expects this proposal to lead to 
beneficial reductions in air pollution and exposures generally with a 
small negative impact through increased utility bills. The increase in 
the price for electric power is estimated to be 0.2 percent of retail 
electricity prices when it is shared among all members of society 
equally. The price increase is not considered to be a disproportionate 
impact on minority populations and low-income populations. For this 
reason, negative impacts to these sub-populations that appreciably 
exceed

[[Page 77121]]

similar impacts to the general population are not expected.
    There will be beneficial outcomes to these populations as the 
result of this action. In the absence of CAMR, there are health effects 
that are likely to affect certain populations in the U.S., including 
subsistence anglers, Native Americans, and Asian Americans. These 
populations may include low income and minority populations who are 
disproportionately impacted by Hg exposures due to their economic, 
cultural, and religious activities that lead to higher levels of 
consumption of fish than the general populations. CAMR is expected to 
reduce Hg exposures among these populations. EPA's analysis of these 
impacts is found in the ``Regulatory Impact Analysis for the Final 
Clean Air Mercury Rule.''

List of Subjects

40 CFR Part 60

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Coal, Electric power plants, Intergovernmental 
relations, Metals, Natural gas, Nitrogen dioxide, Particulate matter, 
Reporting and recordkeeping requirements, Sulfur oxides.

40 CFR Part 62

    Environmental protection, Air pollution control, Hazardous 
substances, Reporting and recordkeeping requirements.

40 CFR Part 72

    Acid rain, Administrative practice and procedure, Air pollution 
control, Electric utilities, Intergovernmental relations, Nitrogen 
oxides, Reporting and recordkeeping requirements, Sulfur oxides.

40 CFR Part 78

    Acid rain, Administrative practice and procedure, Air pollution 
control, Electric utilities, Nitrogen oxides, Reporting and 
recordkeeping requirements, Sulfur oxides.

    Dated: December 7, 2006.
Stephen L. Johnson,
Administrator.
    For the reasons set forth in the preamble, parts 60, 62, 72, and 78 
of chapter 1 of title 40 of the Code of Federal Regulations are 
proposed to be amended as follows:

PART 60--[AMENDED]

    1. The authority citation for part 60 continues to read as follows:

    Authority: 42 U.S.C. 7401, 7403, 7426, and 7601.

Sec.  60.17  [Amended]

    2. Section 60.17 is amended, in paragraph (a)(14) by revising the 
words ``and 60.4102'' to read ``, 60.4120, and 62.15902''.
    3. Section 60.24 is amended as follows:
    a. In paragraph (h)(8) in the definition of ``Boiler'', by revising 
the words ``fossil-or other fuel-fired'' to read ``fossil- or other-
fuel-fired'';
    b. In paragraph (h)(8) in the definition of ``Cogeneration unit'', 
by revising in paragraph (2) the words ``after which'' to read ``after 
the calendar year in which'';
    c. In paragraph (h)(8) in the definition of ``Combustion turbine'', 
by revising in paragraph (2) the words ``heat recovery steam 
generator'' to read ``duct burner, heat recovery steam generator,'';
    d. In paragraph (h)(8), by removing the definition of ``Heat 
input'';
    e. In paragraph (h)(8), by revising the definition of ``Maximum 
design heat input'';
    f. In paragraph (h)(8) in the definition of ``Nameplate capacity'', 
by revising the words ``derates) as specified'' to read ``deratings) as 
of such installation as specified'' and by revising the words 
``derates), such increased maximum amount as specified'' to read 
``deratings), such increased maximum amount as of such completion as 
specified'';
    g. In paragraph (h)(8) in the definition of ``Sequential use of 
energy'', by revising in paragraph (2) the word ``seful'' to read 
``useful'';
    h. In paragraph (h)(8) in the definition of ``Useful thermal 
energy'', by revising in paragraph (2) the words ``heat'' to read 
``heating''; and
    i. In paragraph (h)(8), by adding new definitions of ``Municipal 
waste'' and ``Solid waste incineration unit'';
    j. By adding a new paragraph (h)(9) to read as follows:

Sec.  60.24  Emission standards and compliance schedules.

* * * * *
    (h) * * *
    (8) * * *
    Maximum design heat input means the maximum amount of fuel per hour 
(in Btu/hr) that a unit is capable of combusting on a steady-state 
basis as of the initial installation of the unit as specified by the 
manufacturer of the unit.
* * * * *
    Municipal waste means ``municipal waste'' as defined in section 
129(g)(5) of the Clean Air Act.
* * * * *
    Solid waste incineration unit means a stationary, coal-fired boiler 
or stationary, coal-fired combustion turbine that is a ``solid waste 
incineration unit'' as defined in section 129(g)(1) of the Clean Air 
Act.
* * * * *
    (9) Notwithstanding any other provision of this paragraph, a State 
may adopt, and submit by May 30, 2007, a State Hg allowance allocation 
methodology replacing the provisions in Sec. Sec.  62.15941 and 
62.15942 of this chapter under the Federal Hg Budget Trading Program 
under subpart HHHH of this part with:
    (i) Allocation provisions substantively identical to Sec. Sec.  
62.15941 and 62.15942 of this chapter, under which the permitting 
authority makes the allocations; or
    (ii) Any methodology for allocating Hg allowances to individual 
sources under which the permitting authority makes the allocations, 
provided that:
    (A) The State's methodology must not allow the permitting authority 
to allocate Hg allowances for a year in excess of the amount in the 
State's trading budget for such year.
    (B) The State's methodology must require that, for EGUs commencing 
operation before January 1, 2001, the permitting authority will 
determine, and notify the Administrator of, each unit's allocation of 
Hg allowances by October 31, 2007 for 2010, 2011, and 2012 and by 
October 31, 2009 and October 31 of each year thereafter for the 4th 
year after the year of the notification deadline.
    (C) The State's methodology must require that, for EGUs commencing 
operation on or after January 1, 2001, the permitting authority will 
determine, and notify the Administrator of, each unit's allocation of 
Hg allowances by October 31 of the year for which the Hg allowances are 
allocated.
    4. Section 60.4102 is amended as follows:
    a. By revising the definition of ``Allocate or allocation'';
    b. By revising the definition of ``Allowance transfer deadline'';
    c. In the definition of ``Alternate Hg designated representative'', 
by revising the words ``in accordance with Sec. Sec.  60.4110 through 
60.4114,'' to read ``, in accordance with Sec. Sec.  60.4110 through 
60.4115,'' and by adding four sentences at the end of the definition;
    d. In the definition of ``Automated data acquisition and handling 
system or DAHS'', by revising the words ``under Sec. Sec.  60.4170 
through 60.4176'' to read ``under Sec. Sec.  60.4170 through 60.4175'' 
and by revising the words ``required Sec. Sec.  60.4170 through 
60.4176'' to read ``required by Sec. Sec.  60.4170 through 60.4175''.

[[Page 77122]]

    e. In the definition of ``Boiler'', by revising the words ``fossil- 
or other-fuel-fired'' to read ``fossil- or other-fuel-fired'';
    f. By revising the definition of ``CAIR NOX Annual 
Trading Program'';
    g. By revising the definition of ``CAIR NOX Ozone Season 
Trading Program'';
    h. By revising the definition of ``CAIR SO2 Trading 
Program'';
    i. In the definition of ``Cogeneration unit'', by revising in 
paragraph (2) the words ``after which'' to read ``after the calendar 
year in which'';
    j. In the definition of ``Combustion turbine'', by revising in 
paragraph (2) the words ``heat recovery steam generator'' to read 
``duct burner, heat recovery steam generator,'';
    k. By revising the definition of ``Commence commercial operation'';
    l. By revising the definition of ``Commence operation'';
    m. In the definition of ``Continuous emission monitoring system or 
CEMS'', in the introductory text by revising the word ``CEMS'' to read 
``continuous emission monitoring systems'' and by revising the words 
``Sec. Sec.  60.4170 through 60.4176'' to read ``Sec. Sec.  60.4170 
through 60.4175'' whenever they appear and in paragraphs (1) and (2) by 
revising the words ``in units of'' to read ``in''.
    n. In the definition of ``Control period'', by revising the words 
``January 1 of a calendar year and'' to read ``January 1 of a calendar 
year, except as provided in Sec.  60.4106(c)(2), and'';
    o. In the definition of ``Emissions'', by revising the words 
``Sec. Sec.  60.4170 through 60.4176'' to read ``Sec. Sec.  60.4170 
through 60.4175'';
    p. In the definition of ``Heat input'', by revising the words 
``Sec. Sec.  60.4170 through 60.4176'' to read ``Sec. Sec.  60.4170 
through 60.4175'';
    q. By revising the definition of ``Hg allowance'';
    r. In the definition of ``Hg allowance deduction or deduct CAIR 
NOX allowances'', by adding, after the words ``compliance 
account'', the words ``, e.g.,'', by removing the words ``Sec. Sec.  
60.4150 through 60.4157 and'', and by revising the words ``Sec. Sec.  
60.4170 through 60.4176'' to read ``Sec. Sec.  60.4170 through 
60.4175'';
    s. In the definition of ``Hg authorized account representative'', 
by revising the words ``Sec.  60.4152'' to read ``Sec. Sec.  60.4110 
through 60.4115 and Sec. Sec.  60.4150 through 60.4157'';
    t. In the definition of ``Hg Budget emissions limitation'', by 
revising the words ``in ounces'' to read ``, in ounces of Hg emissions 
in a control period,'' and revising the words ``for a control period'' 
to read ``for the control period'';
    u. By revising the definition of ``Hg Budget Trading Program'';
    v. In the definition of ``Hg designated representative'', by 
revising the words ``Sec. Sec.  60.4110 through 60.4114'' to read 
``Sec. Sec.  60.4110 through 60.4115'' and by adding four sentences at 
the end of the definition;
    w. By revising the definition of ``Maximum design heat input'';
    x. In the definition of ``Monitoring system'', by revising the 
words ``Sec. Sec.  60.4170 through 60.4176'' to read ``Sec. Sec.  
60.4170 through 60.4175'';
     y. In the definition of Nameplate capacity'', by revising the 
words ``other deratings) as specified'' to read ``other deratings) as 
of such installation as specified'' and by revising the words ``maximum 
amount as specified'' to read ``maximum amount as of such completion as 
specified;
    z. In the definition of ``Ounce'', by revising the words 
``Sec. Sec.  60.4170 through 60.4176'' to read ``Sec. Sec.  60.4170 
through 60.4175'';
    aa. In the definition of ``Permitting authority'', by removing the 
words ``in accordance with Sec. Sec.  60.4120 through 60.4124'';
    bb. In the definition of ``Receive or receipt'', by revising the 
words ``correspondence log'' to read ``log'';
    cc. In the definition of ``Source'', by revising the word ``CAA'' 
to read ``Clean Air Act'';
    dd. In the definition of ``Title V operating permit'', by revising 
the word ``CAA'' to read ``Clean Air Act'';
    ee. In the definition of ``Title V operating permit regulations'', 
by revising the word ``CAA'' to read ``Clean Air Act'';
    ff. In the definition of ``Useful thermal energy'', by revising in 
paragraph (2) the words ``heat application'' to read ``heating 
application''; and
    gg. Adding new definitions of ``CAIR NOX Ozone Season 
source'', ``CAIR NOX source'', ``CAIR SO2 
source'', ``Municipal waste'', ``Replacement, replace, or replaced'', 
and ``Solid waste incineration unit'':

Sec.  60.4102  Definitions.

* * * * *
    Allocate or allocation means, with regard to Hg allowances, the 
determination by a permitting authority or the Administrator of the 
amount of such Hg allowances to be initially credited to a Hg Budget 
unit, a new unit set-aside, or other entity.
* * * * *
    Allowance transfer deadline means, for a control period, midnight 
of March 1 (if it is a business day), or midnight of the first business 
day thereafter (if March 1 is not a business day), immediately 
following the control period and is the deadline by which a Hg 
allowance transfer must be submitted for recordation in a Hg Budget 
source's compliance account in order to be used to meet the source's Hg 
Budget emissions limitation for such control period in accordance with 
Sec.  60.4154.
* * * * *
    Alternate Hg designated representative means * * * If the Hg Budget 
source is also a CAIR NOX source, then this natural person 
shall be the same person as the alternate CAIR designated 
representative under the CAIR NOX Annual Trading Program. If 
the Hg Budget source is also a CAIR SO2 source, then this 
natural person shall be the same person as the alternate CAIR 
designated representative under the CAIR SO2 Trading 
Program. If the Hg Budget source is also a CAIR NOX Ozone Season 
source, then this natural person shall be the same person as the 
alternate CAIR designated representative under the CAIR NOX Ozone 
Season Trading Program. If the Hg Budget source is also subject to the 
Acid Rain Program, then this natural person shall be the same person as 
the alternate designated representative under the Acid Rain Program.
* * * * *
    CAIR NOX Annual Trading Program means a multi-state nitrogen oxides 
air pollution control and emission reduction program approved and 
administered by the Administrator in accordance with subparts AA 
through II of part 96 of this chapter and Sec.  51.123(o)(1) or (2) of 
this chapter or established by the Administrator in accordance with 
subparts AA through II of part 97 of this chapter and Sec. Sec.  
51.123(p) and 52.35 of this chapter, as a means of mitigating 
interstate transport of fine particulates and nitrogen oxides.
    CAIR NOX Ozone Season source means a source that is subject to the 
CAIR NOX Ozone Season Trading Program.
    CAIR NOX Ozone Season Trading Program means a multi-state nitrogen 
oxides air pollution control and emission reduction program approved 
and administered by the Administrator in accordance with subparts AAAA 
through IIII of part 96 of this chapter and Sec.  51.123(aa)(1) or (2) 
(and (bb)(1)), (bb)(2), or (dd) of this chapter or established by the 
Administrator in accordance with subparts AAAA through IIII of part 97 
of this chapter and Sec. Sec.  51.123(ee) and 52.35 of this chapter, as 
a means of mitigating interstate transport of ozone and nitrogen 
oxides.

[[Page 77123]]

    CAIR NOX source means a source that is subject to the CAIR 
NOX Annual Trading Program.
    CAIR SO2 source means a source that is subject to the CAIR 
SO2 Trading Program.
    CAIR SO2 Trading Program means a multi-state sulfur dioxide air 
pollution control and emission reduction program approved and 
administered by the Administrator in accordance with subparts AAA 
through III of part 96 of this chapter and Sec.  51.124(o)(1) or (2) of 
this chapter or established by the Administrator in accordance with 
subparts AAA through III of part 97 of this chapter and Sec. Sec.  
51.124(r) and 52.36 of this chapter, as a means of mitigating 
interstate transport of fine particulates and sulfur dioxide.
* * * * *
    Commence commercial operation means, with regard to a unit:
    (1) To have begun to produce steam, gas, or other heated medium 
used to generate electricity for sale or use, including test 
generation, except as provided in Sec.  60.4105.
    (i) For a unit that is a Hg Budget unit under Sec.  60.4104 on the 
later of November 15, 1990 or the date the unit commences commercial 
operation as defined in paragraph (1) of this definition and that 
subsequently undergoes a physical change (other than replacement of the 
unit by a unit at the same source), such date shall remain the date of 
commencement of commercial operation of the unit, which shall continue 
to be treated as the same unit.
    (ii) For a unit that is a Hg Budget unit under Sec.  60.4104 on the 
later of November 15, 1990 or the date the unit commences commercial 
operation as defined in paragraph (1) of this definition and that is 
subsequently replaced by a unit at the same source (e.g., repowered), 
such date shall remain the replaced unit's date of commencement of 
commercial operation, and the replacement unit shall be treated as a 
separate unit with a separate date for commencement of commercial 
operation as defined in paragraph (1) or (2) of this definition as 
appropriate.
    (2) Notwithstanding paragraph (1) of this definition and except as 
provided in Sec.  60.4105, for a unit that is not a Hg Budget unit 
under Sec.  60.4104 on the later of November 15, 1990 or the date the 
unit commences commercial operation as defined in paragraph (1) of this 
definition, the unit's date for commencement of commercial operation 
shall be the date on which the unit becomes a Hg Budget unit under 
Sec.  60.4104.
    (i) For a unit with a date for commencement of commercial operation 
as defined in paragraph (2) of this definition and that subsequently 
undergoes a physical change (other than replacement of the unit by a 
unit at the same source), such date shall remain the unit's date of 
commencement of commercial operation of the unit, which shall continue 
to be treated as the same unit.
    (ii) For a unit with a date for commencement of commercial 
operation as defined in paragraph (2) of this definition and that is 
subsequently replaced by a unit at the same source (e.g., repowered), 
such date shall remain the replaced unit's date of commencement of 
commercial operation, and the replacement unit shall be treated as a 
separate unit with a separate date for commencement of commercial 
operation as defined in paragraph (1) or (2) of this definition as 
appropriate.
    Commence operation means:
    (1) To have begun any mechanical, chemical, or electronic process, 
including, with regard to a unit, start-up of a unit's combustion 
chamber.
    (2) For a unit that undergoes a physical change (other than 
replacement of the unit by a unit at the same source) after the date 
the unit commences operation as defined in paragraph (1) of this 
definition, such date shall remain the date of commencement of 
operation of the unit, which shall continue to be treated as the same 
unit.
    (3) For a unit that is replaced by a unit at the same source (e.g., 
repowered) after the date the unit commences operation as defined in 
paragraph (1) of this definition, such date shall remain the replaced 
unit's date of commencement of operation, and the replacement unit 
shall be treated as a separate unit with a separate date for 
commencement of operation as defined in paragraph (1), (2), or (3) of 
this definition, as appropriate.
* * * * *
    Hg allowance means a limited authorization issued by a permitting 
authority or the Administrator under provisions of a State plan that 
are approved under Sec.  52.24(h)(6) of this chapter, or under 
Sec. Sec.  62.15940 through 62.15943 of this chapter, to emit one ounce 
of mercury during a control period of the specified calendar year for 
which the authorization is allocated or of any calendar year thereafter 
under the Hg Budget Trading Program. An authorization to emit mercury 
that is not issued under provisions of a State plan that are approved 
under Sec.  52.24(h)(6) of this chapter or under Sec. Sec.  62.15940 
through 62.15943 of this chapter shall not be a ``Hg allowance.''
* * * * *
    Hg Budget Trading Program means a multi-state Hg air pollution 
control and emission reduction program approved and administered by the 
Administrator in accordance with this subpart and Sec.  60.24(h)(6) or 
established by the Administrator in accordance with subpart LLL of part 
62 of this chapter, Sec.  60.24(h)(9), and Sec.  62.13(f) of this 
chapter, as a means of reducing national Hg emissions.
* * * * *
    Hg designated representative means * * * If the Hg Budget source is 
also a CAIR NOX source, then this natural person shall be 
the same person as the CAIR designated representative under the CAIR 
NOX Annual Trading Program. If the Hg Budget source is also 
a CAIR SO2 source, then this natural person shall be the 
same person as the CAIR designated representative under the CAIR 
SO2 Trading Program. If the Hg Budget source is also a CAIR 
NOX Ozone Season source, then this natural person shall be 
the same person as the CAIR designated representative under the CAIR 
NOX Ozone Season Trading Program. If the Hg Budget source is 
also subject to the Acid Rain Program, then this natural person shall 
be the same person as the designated representative under the Acid Rain 
Program.
* * * * *
    Maximum design heat input means the maximum amount of fuel per hour 
(in Btu/hr) that a unit is capable of combusting on a steady-state 
basis as of the initial installation of the unit as specified by the 
manufacturer of the unit.
* * * * *
    Municipal waste means ``municipal waste'' as defined in section 
129(g)(5) of the Clean Air Act.
* * * * *
    Replacement, replace, or replaced means, with regard to a unit, the 
demolishing of a unit, or the permanent shutdown and permanent 
disabling of a unit, and the construction of another unit (the 
replacement unit) to be used instead of the demolished or shutdown unit 
(the replaced unit).
* * * * *
    Solid waste incineration unit means a stationary, coal-fired boiler 
or stationary, coal-fired combustion turbine that is a ``solid waste 
incineration unit'' as defined in section 129(g)(1) of the Clean Air 
Act.
* * * * *
    5. Section 60.4103 is revised to read as follows:

[[Page 77124]]

Sec.  60.4103  Measurements, abbreviations, and acronyms.

    Measurements, abbreviations, and acronyms used in this subpart are 
defined as follows:

Btu--British thermal unit.
CO2--carbon dioxide.
H2O--water.
Hg--mercury.
hr--hour.
kW--kilowatt electrical.
kWh--kilowatt hour.
lb--pound.
MMBtu--million Btu.
MWe--megawatt electrical.
MWh--megawatt hour.
NOX--nitrogen oxides.
O2--oxygen.
ppm--parts per million.
scfh--standard cubic feet per hour.
SO2--sulfur dioxide.
yr--year.

Sec.  60.4104  [Amended]

    6. Section 60.4104 is amended, in paragraph (a)(1) by removing the 
words ``and subparts BB through HH of this part''.

Sec.  60.4105  [Amended]

    7. Section 60.4105 is amended as follows:
    a. In paragraph (a)(1), by revising the words ``through (8), Sec.  
60.4107, and Sec. Sec.  60.4150'' to read ``through (7), Sec.  60.4107, 
Sec.  60.4108, Sec. Sec.  60.4110 through 60.4115, and Sec. Sec.  
60.4140'';
    b. In paragraph (b)(3), by revising the words ``shall retain at the 
source'' to read ``shall retain, at the source'' and
    c. In paragraph (b)(7), by revising the words ``Sec. Sec.  60.4170 
through 60.4176'' to read ``Sec. Sec.  60.4170 through 60.4175'' and by 
revising the words ``commences operation and commercial operation'' to 
read ``commences commercial operation''.

Sec.  60.4106  [Amended]

    8. Section 60.4106 is amended as follows:
    a. In paragraph (a)(1)(i), by revising the words ``in Sec.  
60.4121(a) and (b)'' to read ``in Sec.  60.4121'';
    b. In paragraph (a)(3), by revising the words ``is not required'' 
to read ``is not otherwise required'' whenever they appear;
    c. In paragraphs (b)(1), (b)(2), and (c)(1), by revising the words 
``Sec. Sec.  60.4170 through 60.4176'' to read ``Sec. Sec.  60.4170 
through 60.4175'';
    d. In paragraph (c)(2), by revising the words ``under paragraph 
(c)(1) of this section'' to read ``under paragraph (c)(1) of this 
section for the control period'' and by revising the words ``under 
Sec.  60.4170(b)(1) or (2)'' to read ``under Sec.  60.4170(b)(1) or (2) 
and for each control period thereafter'';
    e. In paragraph (c)(4), by revising the words ``Sec. Sec.  
60.4160'' to read ``Sec. Sec.  60.4150'';
    f. In paragraph (c)(7), by revising the words ``Sec. Sec.  
60.4150'' to read ``Sec. Sec.  60.4140'', by revising the words ``from 
a Hg Budget unit's compliance account'' to read ``from a Hg Budget 
source's compliance account'', and by removing the words ``that 
includes the Hg Budget unit'';
    g. In paragraph (d)(1), by removing the paragraph designation 
``(1)'' and by redesignating paragraph (d)(1)(i) as paragraph (d)(1);
    h. By removing paragraph (d)(2) and by redesignating paragraph 
(d)(1)(ii) as paragraph (d)(2);
    i. In paragraphs (e)(1)(ii) and (e)(2), by revising the words 
``Sec. Sec.  60.4170 through 60.4176'' to read ``Sec. Sec.  60.4170 
through 60.4175'' whenever they appear; and
    j. In paragraph (g), by revising the word ``CAA'' to read ``Clean 
Air Act''.

Sec.  60.4108  [Amended]

    9. Section 60.4108 is amended by revising the words ``shall be the 
procedures'' to read ``are'' and removing the second sentence.

Sec.  60.4110  [Amended]

    10. Section 60.4110 is amended, in paragraph (e)(2), by revising 
the words ``owner'' to read ``owners''.

Sec.  60.4111  [Amended]

    11. Section 60.4111 is amended, in paragraph (c), by revising the 
words ``60.4151, and 60.4174,'' to read ``60.4115, and 60.4151,''.

Sec.  60.4112  [Amended]

    12. Section 60.4112 is amended, in paragraph (c)(1), by revising 
the words ``a new owner'' to read ``an owner'', by revising the words 
``such new owner'' to read ``such owner'', and by revising the words 
``the new owner'' to read ``the owner''.

Sec.  60.4113  [Amended]

    13. Section 60.4113 is amended as follows:
    a. In paragraph (a)(1), by revising the words ``is submitted.'' to 
read ``is submitted, including identification and nameplate capacity of 
each generator served by each such unit''; and
    b. In paragraph (a)(4)(iv), by revising the words ``where a 
customer'' to read ``where a utility or industrial customer''.
    14. Add a new Sec.  60.4115 to read as follows:

Sec.  60.4115  Delegation by Hg designated representative and alternate 
Hg designated representative.

    (a) A Hg designated representative may delegate, to one or more 
natural persons, his or her authority to make an electronic submission 
to the Administrator provided for or required under this subpart.
    (b) An alternate Hg designated representative may delegate, to one 
or more natural persons, his or her authority to make an electronic 
submission to the Administrator provided for or required under this 
subpart.
    (c) In order to delegate authority to make an electronic submission 
to the Administrator in accordance with paragraph (a) or (b) of this 
section, the Hg designated representative or alternate Hg designated 
representative, as appropriate, must submit to the Administrator a 
notice of delegation, in a format prescribed by the Administrator, that 
includes the following elements:
    (1) The name, address, e-mail address, telephone number, and 
facsimile transmission number (if any) of such Hg designated 
representative or alternate Hg designated representative;
    (2) The name, address, e-mail address, telephone number, and 
facsimile transmission number (if any) of each such natural person 
(referred to as an ``agent'');
    (3) For each such natural person, a list of the type or types of 
electronic submissions under paragraph (a) or (b) of this section for 
which authority is delegated to him or her; and
    (4) The following certification statements by such Hg designated 
representative or alternate Hg designated representative:
    (i) ``I agree that any electronic submission to the Administrator 
that is by an agent identified in this notice of delegation and of a 
type listed for such agent in this notice of delegation and that is 
made when I am a Hg designated representative or alternate Hg 
designated representative, as appropriate, and before this notice of 
delegation is superseded by another notice of delegation under 40 CFR 
60.4115(d) shall be deemed to be an electronic submission by me.''
    (ii) ``Until this notice of delegation is superseded by another 
notice of delegation under 40 CFR 60.4115(d), I agree to maintain an e-
mail account and to notify the Administrator immediately of any change 
in my e-mail address, unless all delegation of authority by me under 40 
CFR 60.4115 is terminated.''
    (d) A notice of delegation submitted under paragraph (c) of this 
section shall be effective, with regard to the Hg designated 
representative or alternate Hg designated representative identified in 
such notice, upon receipt of such notice by the Administrator and until

[[Page 77125]]

receipt by the Administrator of a superseding notice of delegation 
submitted by such Hg designated representative or alternate Hg 
designated representative, as appropriate. The superseding notice of 
delegation may replace any previously identified agent, add a new 
agent, or eliminate entirely any delegation of authority.
    (e) Any electronic submission covered by the certification in 
paragraph (c)(4)(i) of this section and made in accordance with a 
notice of delegation effective under paragraph (d) of this section 
shall be deemed to be an electronic submission by the Hg designated 
representative or alternative Hg designated representative submitting 
such notice of delegation.

Sec.  60.4120  [Amended]

    15. Section 60.4120 is amended, in paragraph (a), by revising the 
words ``otherwise by this section and'' to read ``otherwise by 
paragraph (b) of this section, Sec.  60.4105, and''.

Sec.  60.4121  [Amended]

    16. Section 60.4121 is amended, in paragraph (a), by revising the 
words ``commences operation'' to read ``commences commercial 
operation''.

Sec.  60.4123  [Amended]

    17. Section 60.4123 is amended, in paragraph (b), by revising the 
words ``Sec. Sec.  60.4150'' to read ``Sec. Sec.  60.4140''.

Sec.  60.4141  [Amended]

    18. Section 60.4141 is amended as follows:
    a. In paragraph (b)(1), by removing the paragraph designation 
``(1)'' and by revising the words ``October 31, 2008'' to read 
``October 31, 2009'';
    b. By removing paragraph (b)(2);
    c. In paragraph (c)(1), by removing the paragraph designation 
``(1)''; and
    d. By removing paragraph (c)(2).
    19. Section 60.4142 is amended as follows:
    a. By revising paragraph (c) introductory text;
    b. In paragraph (c)(2), by revising the words ``The Hg allowance 
allocation request must be submitted on or before July 1 of the first 
control period for which Hg allowances are requested'' to read ``A 
separate Hg allowance allocation request for each control period for 
which Hg allowances are sought must be submitted on or before May 1 of 
such control period'';
    c. In paragraph (c)(3), by revising the words ``control period 
immediately before'' to read ``calendar year immediately before'';
    d. In paragraph (c)(4)(ii), by revising the words ``On or after 
July 1'' to read ``On or after May 1'';
    e. In paragraph (d), by revising the words ``for 2010 through 2014, 
and 97 percent for 2014'' to read ``for a control period in 2010 
through 2014, and 97 percent for a control period in 2015''.

Sec.  60.4142  Hg allowance allocations.

* * * * *
    (c) For each control period in 2009 and thereafter, the permitting 
authority will allocate Hg allowances to Hg Budget units in a State 
that are not allocated Hg allowances under paragraph (b) of this 
section because the units do not yet have a baseline heat input under 
paragraph (a) of this section or because the units have a baseline heat 
input but all Hg allowances available under paragraph (b) of this 
section for the control period are already allocated, in accordance 
with the following procedures:
* * * * *
    20. Section 60.4151 is amended as follows:
    a. By revising paragraph (b)(2) introductory text;
    b. In paragraph (b)(3)(iii)(A), by revising the words ``a new 
person'' to read ``a person'', by revising the words ``such new 
person'' to read ``such person'', and by revising the words ``the new 
person'' to read ``the person'';
    c. In paragraph (b)(3)(iii)(B), by revising the words ``addition of 
persons'' to read ``addition of a new person'';
    d. In paragraph (b)(4) introductory text, by revising the word 
``representative'' to read ``representative and alternate Hg authorized 
account representative'';
    e. In paragraphs (b)(4)(ii) and (iii), by revising the words 
``alternative Hg'' to read ``alternate Hg'' whenever they appear; and
    f. By adding a new paragraph (b)(5) to read as follows:

Sec.  60.4151  Establishment of accounts.

* * * * *
    (b) * * *
* * * * *
    (2) Authorization of Hg authorized account representative and 
alternate Hg authorized account representative. * * *
* * * * *
    (5) Delegation by Hg authorized account representative and 
alternate Hg authorized account representative.
    (i) A Hg authorized account representative may delegate, to one or 
more natural persons, his or her authority to make an electronic 
submission to the Administrator provided for or required under this 
section and Sec. Sec.  60.4152 through 60.4162.
    (ii) An alternate Hg authorized account representative may 
delegate, to one or more natural persons, his or her authority to make 
an electronic submission to the Administrator provided for or required 
under this section and Sec. Sec.  60.4152 through 60.4162.
    (iii) In order to delegate authority to make an electronic 
submission to the Administrator in accordance with paragraph (b)(5)(i) 
or (ii) of this section, the Hg authorized account representative or 
alternate Hg authorized account representative, as appropriate, must 
submit to the Administrator a notice of delegation, in a format 
prescribed by the Administrator, that includes the following elements:
    (A) The name, address, e-mail address, telephone number, and 
facsimile transmission number (if any) of such Hg authorized account 
representative or alternate Hg authorized account representative;
    (B) The name, address, e-mail address, telephone number, and, 
facsimile transmission number (if any) of each such natural person 
(referred to as an ``agent'');
    (C) For each such natural person, a list of the type or types of 
electronic submissions under paragraph (b)(5)(i) or (ii) of this 
section for which authority is delegated to him or her;
    (D) The following certification statement by such Hg authorized 
account representative or alternate Hg authorized account 
representative: ``I agree that any electronic submission to the 
Administrator that is by an agent identified in this notice of 
delegation and of a type listed for such agent in this notice of 
delegation and that is made when I am a Hg authorized account 
representative or alternate Hg authorized representative, as 
appropriate, and before this notice of delegation is superseded by 
another notice of delegation under 40 CFR 60.4151(b)(5)(iv) shall be 
deemed to be an electronic submission by me.''; and
    (E) The following certification statement by such Hg authorized 
account representative or alternate Hg authorized account 
representative: ``Until this notice of delegation is superseded by 
another notice of delegation under 40 CFR 60.4151 (b)(5)(iv), I agree 
to maintain an e-mail account and to notify the Administrator 
immediately of any change in my e-mail address unless all delegation of 
authority under 40 CFR 60.4151(b)(5) is terminated.''

[[Page 77126]]

    (iv) A notice of delegation submitted under paragraph (b)(5)(iii) 
of this section shall be effective, with regard to the Hg authorized 
account representative or alternate Hg authorized account 
representative identified in such notice, upon receipt of such notice 
by the Administrator and until receipt by the Administrator of a 
superseding notice of delegation submitted by such Hg authorized 
account representative or alternate Hg authorized account 
representative, as appropriate. The superseding notice of delegation 
may replace any previously identified agent, add a new agent, or 
eliminate entirely any delegation of authority.
    (v) Any electronic submission covered by the certification in 
paragraph (b)(5(iii)(D) of this section and made in accordance with a 
notice of delegation effective under paragraph (b)(5)(iv) of this 
section shall be deemed to be an electronic submission by the Hg 
designated representative or alternate Hg designated representative 
submitting such notice of delegation.
* * * * *
    21. Section 60.4153 is amended as follows:
    a. In paragraph (a), by revising the words ``By December 1, 2006,'' 
to read ``By December 1, 2007,'' and by revising the words ``at a 
source'' to read ``at the source'';
    b. In paragraph (b), by revising the words ``December 1, 2008'' to 
read ``December 1, 2009'' and by removing the words ``or as determined 
by the Administrator'';
    c. By revising paragraph (c); and
    d. In paragraph (d), by removing the words ``or determined by the 
Administrator''.

Sec.  60.4153  Recordation of Hg allowance allocations.

* * * * *
    (c) By December 1, 2010 and December 1 of each year thereafter, the 
Administrator will record in the Hg Budget source's compliance account 
the Hg allowances allocated for the Hg Budget units at the source, as 
submitted by the permitting authority in accordance with Sec.  
60.4141(b), for the control period in the sixth year after the year of 
the applicable deadline for recordation under this paragraph.
* * * * *

Sec.  60.4154  [Amended]

    22. Section 60.4154 is amended:
    a. In paragraph (a)(1), by revising the words ``prior year;'' to 
read ``prior year; and'';
    b. In paragraph (a)(2), by revising the words ``Sec. Sec.  60.4160 
through 60.4162 by the allowance transfer deadline for the control 
period; and'' to read ``Sec. Sec.  60.4160 and 60.4161 by the allowance 
transfer deadline for the control period.'';
    c. By removing paragraph (a)(3);
    d. In paragraph (b) introductory text, by revising the words 
``Sec. Sec.  60.4160 through 60.4162'' to read ``Sec.  60.4161'';
    e. In paragraph (b)(1), by revising the words ``Sec. Sec.  60.4170 
through 60.4176'' to read ``Sec. Sec.  60.4170 through 60.4175'';
    f. In paragraph (c)(2)(ii), by revising the words ``to any unit'' 
to read ``to any entity'';
    g. In paragraph (d)(2), by revising the word ``violation'' to read 
``violations'';
    h. In paragraph (e), by revising the words ``under paragraph (b) or 
(d)'' to read ``under paragraphs (b) and (d)''; and
    i. In paragraph (f)(2), by revising the words ``of this section.'' 
to read ``of this section, and record such deductions and transfers.''

Sec.  60.4157  [Amended]

    23. Section 60.4157 is amended in paragraphs (a) and (b) by 
revising the words ``Sec.  60.4160 through 60.4162'' to read 
``Sec. Sec.  60.4160 and 60.4161''.
    24. Section 60.4170 is amended as follows:
    a. In the introductory text and paragraphs (a)(1) and (a)(2), by 
revising the words ``Sec. Sec.  60.4170 through 60.4176'' to read 
``Sec. Sec.  60.4170 through 60.4175'';
    b. In paragraph (b) introductory text, by revising the words ``The 
owner'' to read ``Except as provided in paragraph (e) of this section, 
the owner'';
    c. In paragraph (c)(1), by removing the paragraph designation 
``(1)'' and by revising the words ``Except as provided in paragraph 
(c)(2) of this section, the owner'' to read ``The owner'';
    d. By removing paragraph (c)(2);
    e. In paragraph (d)(1), by revising the words ``Sec. Sec.  60.4171 
through 60.4176'' to read ``Sec. Sec.  60.4171 through 60.4174'';
    f. In paragraph (d)(2), by revising the words ``Sec. Sec.  60.4171 
through 60.4176'' to read ``Sec. Sec.  60.4171 through 60.4175'';
    g. In paragraph (d)(3), by revising the words ``the atmosphere'' to 
read ``the atmosphere or heat input'' and by revising the words 
``Sec. Sec.  60.4171 through 60.4176'' to read ``Sec. Sec.  60.4171 
through 60.4175'';
    h. In paragraph (d)(4) introductory text, by revising the words 
``this subpart'' to read ``this section and Sec. Sec.  60.4171 through 
60.4175''
    i. In paragraph (d)(4)(ii), by revising the words ``Sec. Sec.  
60.4171 through 60.4176'' to read ``Sec. Sec.  60.4171 through 
60.4175''; and
    j. By adding a new paragraph (e) to read as follows:

Sec.  60.4170  General requirements.

* * * * *
    (e) Long-term cold storage. The owner or operator of a Hg Budget 
unit is subject to the applicable provisions of part 75 of this chapter 
concerning units in long-term cold storage.

Sec.  60.4171  [Amended]

    25. Section 60.4171 is amended as follows:
    a. In paragraph (c) introductory text, by revising the words 
``(e.g.,'' to read ``(i.e.,'';
    b. In paragraph (c)(1), by revising the words ``each monitoring 
system under Sec.  60.4170(a)(1)'' to read ``each continuous monitoring 
system under Sec.  60.4170(a)(1)'';
    c. In paragraph (c)(3) introductory text, by revising the words 
``apply the word `recertification' instead of'' to read ``replace'' and 
revise the words ``and apply the word `recertified' instead of the word 
`certified' '' to read ``with the word `recertification', replace the 
word `certified' with the word `recertified','';
    d. In paragraph (c)(3)(v)(A), by revising the words ``Sec.  
75.20(a)(4)(iii), or'' to read ``Sec.  75.20(a)(4)(iii) or'';
    e. In paragraph (c)(3)(v)(A)(1), by revising the words ``of this 
chapter, and'' to read ``of this chapter.''; and
    f. In paragraph (e), by revising the words ``by the Administrator 
and, if applicable, the permitting authority'' to read ``by the 
Administrator''.

Sec.  60.4173  [Amended]

    26. Section 60.4173 is amended by removing the words ``, except 
that if the unit is not subject to an Acid Rain emissions limitation, 
the notification is only required to be sent to the permitting 
authority''.
    27. Section 60.4174 is amended as follows:
    a. By revising paragraph (a);
    b. In paragraph (d)(3), by removing the words ``and Sec.  
60.4176''; and
    c. In paragraph (e)(1), by removing the words ``Sec.  60.4176,''; 
and
    d. Revising paragraph (e)(2).

Sec.  60.4174  Recordkeeping and reporting.

    (a) General provisions. The Hg designated representative shall 
comply with all recordkeeping and reporting requirements in this 
section, the applicable recordkeeping and reporting requirements of 
Sec.  75.84 of this chapter, and the requirements of Sec.  
60.4110(e)(1).
* * * * *
    (e) * * *
    (2) For a unit with add-on Hg emission controls, a flue gas 
desulfurization system, a selective catalytic reduction system, or a 
compact hybrid particulate collector system and

[[Page 77127]]

for all hours where Hg data are substituted in accordance with Sec.  
75.34(a)(1) of this chapter,
    (i)(A) The Hg add-on emission controls, flue gas desulfurization 
system, selective catalytic reduction system, or compact hybrid 
particulate collector system were operating within the range of 
parameters listed in the quality assurance/quality control program 
under appendix B to part 75 of this chapter, or
    (B) With regard to a flue gas desulfurization system or a selective 
catalytic reduction system, quality-assured SO2 emission 
data recorded in accordance with part 75 of this chapter document that 
the flue gas desulfurization system was operating properly or quality-
assured NOX emission data recorded in accordance with part 
75 of this chapter document that the selective catalytic reduction 
system was operating properly, as applicable, and
    (ii) The substitute data values do not systematically underestimate 
Hg emissions.

Sec.  60.4175  [Amended]

    28. Section 60.4175 is amended by revising the words ``Hg unit'' to 
read ``Hg Budget unit'' and by removing the words ``and Sec.  60.4176'' 
whenever they appear.

Sec.  60.4176  [Removed]

    29. Section 60.4176 is removed.

PART 62--[AMENDED]

    30. The authority citation for part 62 continues to read as 
follows:

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

    31. Section 62.13 is amended by adding a new paragraph (f) to read 
as follows:

Sec.  62.13  Federal plans.

* * * * *
    (f) The substantive requirements of the coal-fired electric steam 
generating units mercury Federal plan are contained in subpart LLL of 
this part. These requirements include emission limits, compliance 
schedules, testing, monitoring, and reporting and recordkeeping 
requirements.
    32. Add a new subpart LLL to read as follows:
Subpart LLL--Emission Guidelines and Compliance Times for Coal-Fired 
Electric Steam Generating Units
Sec.

Hg Budget Trading Program General Provisions

62.15901 Purpose.
62.15902 Definitions.
62.15903 Measurements, abbreviations, and acronyms.
62.15904 Applicability.
62.15905 Retired unit exemption.
62.15906 Standard requirements.
62.15907 Computation of time.
62.15908 Appeal procedures.

Hg Designated Representative for Hg Budget Sources

62.15910 Authorization and responsibilities of Hg designated 
representative.
62.15911 Alternate Hg designated representative.
62.15912 Changing Hg designated representative and alternate Hg 
designated representative; changes in owners and operators.
62.15913 Certificate of representation.
62.15914 Objections concerning Hg designated representative.
62.15915 Delegation by Hg designated representative and alternate Hg 
designated representative.

Permits

62.15920 General Hg budget trading program permit requirements.
62.15921 Submission of Hg budget permit applications.
62.15922 Information requirements for Hg budget permit applications.
62.15923 Hg budget permit contents and term.
62.15924 Hg budget permit revisions.
62.15930 [Reserved]

Hg Allowance Allocations

62.15940 State trading budgets.
62.15941 Timing requirements for Hg allowance allocations.
62.15942 Hg allowance allocations.
62.15943 Alternative of allocation of Hg allowances by permitting 
authority.

Hg Allowance Tracking System

62.15950 [Reserved]
62.15951 Establishment of accounts.
62.15952 Responsibilities of Hg authorized account representative.
62.15953 Recordation of Hg allowance allocations.
62.15954 Compliance with Hg budget emissions limitation.
62.15955 Banking.
62.15956 Account error.
62.15957 Closing of general accounts.

Hg Allowance Transfers

62.15960 Submission of Hg allowance transfers.
62.15961 EPA recordation.
62.15962 Notification.

Monitoring and Reporting

62.15970 General requirements.
62.15971 Initial certification and recertification procedures.
62.15972 Out of control periods.
62.15973 Notifications.
62.15974 Recordkeeping and reporting.
62.15975 Petitions.
Appendix A to Subpart Lll of Part 62--States With Approved State 
Plans Concerning Allocations

Subpart LLL--Emission Guidelines and Compliance Times for Coal-
Fired Electric Steam Generating Units

Hg Budget Trading Program General Provisions

Sec.  62.15901  Purpose.

    (a) This subpart sets forth the general provisions and the 
designated representative, permitting, allowance, and monitoring 
provisions for the federal mercury (Hg) Budget Trading Program, under 
section 111 of the Clean Air Act (CAA), as a means of reducing national 
Hg emissions.
    (b) Sources located in the following States, for which the 
Administrator has made a finding of failure to submit an approvable 
State plan under Sec.  60.24(h) of this chapter and have not 
subsequently submitted to the Administrator an approved and currently 
effective State plan under Sec.  60.24(h) of this chapter are subject 
to this subpart: [Reserved].

Sec.  62.15902  Definitions.

    The terms used in this subpart shall have the meanings set forth in 
this section as follows:
    Account number means the identification number given by the 
Administrator to each Hg Allowance Tracking System account.
    Acid Rain emissions limitation means a limitation on emissions of 
sulfur dioxide or nitrogen oxides under the Acid Rain Program.
    Acid Rain Program means a multi-state sulfur dioxide and nitrogen 
oxides air pollution control and emission reduction program established 
by the Administrator under title IV of the CAA and parts 72 through 78 
of this chapter.
    Administrator means the Administrator of the United States 
Environmental Protection Agency or the Administrator's duly authorized 
representative.
    Allocate or allocation means, with regard to Hg allowances, the 
determination by a permitting authority or the Administrator of the 
amount of Hg allowances to be initially credited to a Hg Budget unit, a 
new unit set-aside, or other entity.
    Allowance transfer deadline means, for a control period, midnight 
of March 1 (if it is a business day), or midnight of the first business 
day thereafter (if March 1 is not a business day), immediately 
following the control period and is the deadline by which a Hg 
allowance transfer must be submitted for recordation in a Hg Budget 
source's compliance account in order to be used to meet the source's Hg 
Budget emissions limitation for such

[[Page 77128]]

control period in accordance with Sec.  62.15954.
    Alternate Hg designated representative means, for a Hg Budget 
source and each Hg Budget unit at the source, the natural person who is 
authorized by the owners and operators of the source and all such units 
at the source, in accordance with Sec. Sec.  62.15910 through 62.15915, 
to act on behalf of the Hg designated representative in matters 
pertaining to the Hg Budget Trading Program. If the Hg Budget source is 
also a CAIR NOX source, then this natural person shall be 
the same person as the alternate CAIR designated representative under 
the CAIR NOX Annual Trading Program. If the Hg Budget source 
is also a CAIR SO2 source, then this natural person shall be 
the same person as the alternate CAIR designated representative under 
the CAIR SO2 Trading Program. If the Hg Budget source is 
also a CAIR NOX Ozone Season source, then this natural 
person shall be the same person as the alternate CAIR designated 
representative under the CAIR NOX Ozone Season Trading 
Program. If the Hg Budget source is also subject to the Acid Rain 
Program, then this natural person shall be the same person as the 
alternate designated representative under the Acid Rain Program.
    Automated data acquisition and handling system or DAHS means that 
component of the continuous emission monitoring system (CEMS), or other 
emissions monitoring system approved for use under Sec. Sec.  62.15970 
though 62.15975, designed to interpret and convert individual output 
signals from pollutant concentration monitors, flow monitors, diluent 
gas monitors, and other component parts of the monitoring system to 
produce a continuous record of the measured parameters in the 
measurement units required under Sec. Sec.  62.15970 through 62.15975.
    Boiler means an enclosed fossil- or other-fuel-fired combustion 
device used to produce heat and to transfer heat to recirculating 
water, steam, or other medium.
    Bottoming-cycle cogeneration unit means a cogeneration unit in 
which the energy input to the unit is first used to produce useful 
thermal energy and at least some of the reject heat from the useful 
thermal energy application or process is then used for electricity 
production.
    CAIR NOX Annual Trading Program means a multi-state nitrogen oxides 
air pollution control and emission reduction program established by the 
Administrator in accordance with subparts AA through II of part 97 of 
this chapter and Sec. Sec.  51.123(p) and 52.35 of this chapter or 
approved and administered by the Administrator in accordance with 
subparts AA through II of part 96 of this chapter and Sec.  
51.123(o)(1) or (2) of this chapter, as a means of mitigating 
interstate transport of fine particulates and nitrogen oxides.
    CAIR NOX Ozone Season source means a source that is subject to the 
CAIR NOX Ozone Season Trading Program.
    CAIR NOX Ozone Season Trading Program means a multi-
state nitrogen oxides air pollution control and emission reduction 
program established by the Administrator in accordance with subparts 
AAAA through IIII of part 97 of this chapter and Sec. Sec.  51.123(ee) 
and 52.35 of this chapter or approved and administered by the 
Administrator in accordance with subparts AAAA through IIII of part 96 
of this chapter and Sec.  51.123(aa)(1) or (2) (and (bb)(1)), (bb)(2), 
or (dd) of this chapter, as a means of mitigating interstate transport 
of ozone and nitrogen oxides.
    CAIR NOX source means a source that is subject to the CAIR 
NOX Annual Trading Program.
    CAIR SO2 source means a source that is subject to the CAIR 
SO2 Trading Program.
    CAIR SO2 Trading Program means a multi-state sulfur dioxide air 
pollution control and emission reduction program established by the 
Administrator in accordance with subparts AAA through III of part 97 of 
this chapter and Sec. Sec.  51.124(r) and 52.36 of this chapter or 
approved and administered by the Administrator in accordance with 
subparts AAA through III of part 96 of this chapter and Sec.  
51.124(o)(1) or (2) of this chapter, as a means of mitigating 
interstate transport of fine particulates and sulfur dioxide.
    Certifying official means:
    (1) For a corporation, a president, secretary, treasurer, or vice-
president of the corporation in charge of a principal business function 
or any other person who performs similar policy or decision-making 
functions for the corporation;
    (2) For a partnership or sole proprietorship, a general partner or 
the proprietor respectively; or
    (3) For a local government entity or State, Federal, or other 
public agency, a principal executive officer or ranking elected 
official.
    Clean Air Act or CAA means the Clean Air Act, 42 U.S.C. 7401, et 
seq.
    Coal means any solid fuel classified as anthracite, bituminous, 
subbituminous, or lignite by the American Society of Testing and 
Materials (ASTM) Standard Specification for Classification of Coals by 
Rank D388-77, 90, 91, 95, 98a, or 99 (Reapproved 2004)[egr]1 
(incorporated by reference, see Sec.  60.17).
    Coal-derived fuel means any fuel (whether in a solid, liquid, or 
gaseous state) produced by the mechanical, thermal, or chemical 
processing of coal.
    Coal-fired means combusting any amount of coal or coal-derived 
fuel, alone or in combination with any amount of any other fuel, during 
any year.
    Cogeneration unit means a stationary, coal-fired boiler or 
stationary, coal-fired combustion turbine:
    (1) Having equipment used to produce electricity and useful thermal 
energy for industrial, commercial, heating, or cooling purposes through 
the sequential use of energy; and
    (2) Producing during the 12-month period starting on the date the 
unit first produces electricity and during any calendar year after the 
calendar year in which the unit first produces electricity:
    (i) For a topping-cycle cogeneration unit,
    (A) Useful thermal energy not less than 5 percent of total energy 
output; and
    (B) Useful power that, when added to one-half of useful thermal 
energy produced, is not less then 42.5 percent of total energy input, 
if useful thermal energy produced is 15 percent or more of total energy 
output, or not less than 45 percent of total energy input, if useful 
thermal energy produced is less than 15 percent of total energy output.
    (ii) For a bottoming-cycle cogeneration unit, useful power not less 
than 45 percent of total energy input.
    Combustion turbine means:
    (1) An enclosed device comprising 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 enclosed device under paragraph (1) of this definition 
is combined cycle, any associated duct burner, heat recovery steam 
generator, and steam turbine.
    Commence commercial operation means, with regard to a unit:
    (1) To have begun to produce steam, gas, or other heated medium 
used to generate electricity for sale or use, including test 
generation, except as provided in Sec.  62.15905.
    (i) For a unit that is a Hg Budget unit under Sec.  62.15904 on the 
later of November 15, 1990 or the date the unit commences commercial 
operation as defined in paragraph (1) of this definition and that 
subsequently undergoes a physical change (other than replacement of the 
unit by a unit at the same source), such date shall remain the

[[Page 77129]]

date of commencement of commercial operation of the unit, which shall 
continue to be treated as the same unit.
    (ii) For a unit that is a Hg Budget unit under Sec.  62.15904 on 
the later of November 15, 1990 or the date the unit commences 
commercial operation as defined in paragraph (1) of this definition and 
that is subsequently replaced by a unit at the same source (e.g., 
repowered), such date shall remain the replaced unit's date of 
commencement of commercial operation, and the replacement unit shall be 
treated as a separate unit with a separate date for commencement of 
commercial operation as defined in paragraph (1) or (2) of this 
definition as appropriate.
    (2) Notwithstanding paragraph (1) of this definition and except as 
provided in Sec.  62.15905, for a unit that is not a Hg Budget unit 
under Sec.  62.15904 on the later of November 15, 1990 or the date the 
unit commences commercial operation as defined in paragraph (1) of this 
definition, the unit's date for commencement of commercial operation 
shall be the date on which the unit becomes a Hg Budget unit under 
Sec.  62.15904.
    (i) For a unit with a date for commencement of commercial operation 
as defined in paragraph (2) of this definition and that subsequently 
undergoes a physical change (other than replacement of the unit by a 
unit at the same source), such date shall remain the date of 
commencement of commercial operation of the unit, which shall continue 
to be treated as the same unit.
    (ii) For a unit with a date for commencement of commercial 
operation as defined in paragraph (2) of this definition and that is 
subsequently replaced by a unit at the same source (e.g., repowered), 
such date shall remain the replaced unit's date of commencement of 
commercial operation, and the replacement unit shall be treated as a 
separate unit with a separate date for commencement of commercial 
operation as defined in paragraph (1) or (2) of this definition as 
appropriate.
    Commence operation means:
    (1) To have begun any mechanical, chemical, or electronic process, 
including, with regard to a unit, start-up of a unit's combustion 
chamber.
    (2) For a unit that undergoes a physical change (other than 
replacement of the unit by a unit at the same source) after the date 
the unit commences operation as defined in paragraph (1) of this 
definition, such date shall remain the date of commencement of 
operation of the unit, which shall continue to be treated as the same 
unit.
    (3) For a unit that is replaced by a unit at the same source (e.g., 
repowered) after the date the unit commences operation as defined in 
paragraph (1) of this definition, such date shall remain the replaced 
unit's date of commencement of operation, and the replacement unit 
shall be treated as a separate unit with a separate date for 
commencement of operation as defined in paragraph (1), (2), or (3) of 
this definition, as appropriate.
    Common stack means a single flue through which emissions from 2 or 
more units are exhausted.
    Compliance account means a Hg Allowance Tracking System account, 
established by the Administrator for a Hg Budget source under 
Sec. Sec.  62.15950 through 62.15957, in which any Hg allowance 
allocations for the Hg Budget units at the source are initially 
recorded and in which are held any Hg allowances available for use for 
a control period in order to meet the source's Hg Budget emissions 
limitation in accordance with Sec.  62.15954.
    Continuous emission monitoring system or CEMS means the equipment 
required under Sec. Sec.  62.15970 through 62.15975 to sample, analyze, 
measure, and provide, by means of readings recorded at least once every 
15 minutes (using an automated data acquisition and handling system 
(DAHS)), a permanent record of Hg emissions, stack gas volumetric flow 
rate, stack gas moisture content, and oxygen or carbon dioxide 
concentration (as applicable), in a manner consistent with part 75 of 
this chapter. The following systems are the principal types of 
continuous emission monitoring systems required under Sec. Sec.  
62.15970 through 62.15975:
    (1) A flow monitoring system, consisting of a stack flow rate 
monitor and an automated data acquisition and handling system and 
providing a permanent, continuous record of stack gas volumetric flow 
rate, in standard cubic feet per hour (scfh);
    (2) A Hg concentration monitoring system, consisting of a Hg 
pollutant concentration monitor and an automated data acquisition and 
handling system and providing a permanent, continuous record of Hg 
emissions in micrograms per dry standard cubic meter ([mu]g/dscm);
    (3) A moisture monitoring system, as defined in Sec.  75.11(b)(2) 
of this chapter and providing a permanent, continuous record of the 
stack gas moisture content, in percent H2O.
    (4) A carbon dioxide monitoring system, consisting of a 
CO2 concentration monitor (or an oxygen monitor plus 
suitable mathematical equations from which the CO2 
concentration is derived) and an automated data acquisition and 
handling system and providing a permanent, continuous record of 
CO2 emissions, in percent CO2; and
    (5) An oxygen monitoring system, consisting of an O2 
concentration monitor and an automated data acquisition and handling 
system and providing a permanent, continuous record of O2, 
in percent O2.
    Control period means the period beginning January 1 of a calendar 
year, except as provided in Sec.  62.15906(c)(2), and ending on 
December 31 of the same year, inclusive.
    Emissions means air pollutants exhausted from a unit or source into 
the atmosphere, as measured, recorded, and reported to the 
Administrator by the Hg designated representative and as determined by 
the Administrator in accordance with Sec. Sec.  62.15970 through 
62.15975.
    Excess emissions means any ounce of mercury emitted by the Hg 
Budget units at a Hg Budget source during a control period that exceeds 
the Hg Budget emissions limitation for the source.
    General account means a Hg Allowance Tracking System account, 
established under Sec.  62.15951, that is not a compliance account.
    Generator means a device that produces electricity.
    Gross electrical output means, with regard to a cogeneration unit, 
electricity made available for use, including any such electricity used 
in the power production process (which process includes, but is not 
limited to, any on-site processing or treatment of fuel combusted at 
the unit and any on-site emission controls).
    Heat input means, with regard to a specified period of time, the 
product (in MMBtu/time) of the gross calorific value of the fuel (in 
Btu/lb) divided by 1,000,000 Btu/MMBtu and multiplied by the fuel feed 
rate into a combustion device (in lb of fuel/time), as measured, 
recorded, and reported to the Administrator by the Hg designated 
representative and determined by the Administrator in accordance with 
Sec. Sec.  62.15970 through 62.15975 and excluding the heat derived 
from preheated combustion air, recirculated flue gases, or exhaust from 
other sources.
    Heat input rate means the amount of heat input (in MMBtu) divided 
by unit operating time (in hr) or, with regard to a specific fuel, the 
amount of heat input attributed to the fuel (in MMBtu) divided by the 
unit operating time (in hr) during which the unit combusts the fuel.

[[Page 77130]]

    Hg allowance means a limited authorization issued by a permitting 
authority or the Administrator under Sec. Sec.  62.15940 through 
62.15943, or under provisions of a State plan that are approved under 
Sec.  52.24(h)(6) of this chapter, to emit one ounce of mercury during 
a control period of the specified calendar year for which the 
authorization is allocated or of any calendar year thereafter under the 
Hg Budget Trading Program. An authorization to emit mercury that is not 
issued under Sec. Sec.  62.15940 through 62.15943 or under provisions 
of a State plan that are approved under Sec.  52.24(h)(6) of this 
chapter shall not be a ``Hg allowance.''
    Hg allowance deduction or deduct Hg allowances means the permanent 
withdrawal of Hg allowances by the Administrator from a compliance 
account, e.g., in order to account for a specified number of ounces of 
total mercury emissions from all Hg Budget units at a Hg Budget source 
for a control period, determined in accordance with Sec. Sec.  62.15970 
through 62.15975, or to account for excess emissions.
    Hg Allowance Tracking System means the system by which the 
Administrator records allocations, deductions, and transfers of Hg 
allowances under the Hg Budget Trading Program. Such allowances will be 
allocated, held, deducted, or transferred only as whole allowances.
    Hg Allowance Tracking System account means an account in the Hg 
Allowance Tracking System established by the Administrator for purposes 
of recording the allocation, holding, transferring, or deducting of Hg 
allowances.
    Hg allowances held or hold Hg allowances means the Hg allowances 
recorded by the Administrator, or submitted to the Administrator for 
recordation, in accordance with Sec. Sec.  62.15950 through 62.15962, 
in a Hg Allowance Tracking System account.
    Hg authorized account representative means, with regard to a 
general account, a responsible natural person who is authorized, in 
accordance with Sec. Sec.  62.15910 through 62.15915 and Sec. Sec.  
62.15950 through 62.15957, to transfer and otherwise dispose of Hg 
allowances held in the general account and, with regard to a compliance 
account, the Hg designated representative of the source.
    Hg Budget emissions limitation means, for a Hg Budget source, the 
equivalent, in ounces of Hg emissions in a control period, of the Hg 
allowances available for deduction for the source under Sec.  
62.15954(a) and (b) for the control period.
    Hg Budget permit means the legally binding and Federally 
enforceable written document, or portion of such document, issued by 
the permitting authority under Sec. Sec.  62.15920 through 62.15924, 
including any permit revisions, specifying the Hg Budget Trading 
Program requirements applicable to a Hg Budget source, to each Hg 
Budget unit at the source, and to the owners and operators and the Hg 
designated representative of the source and each such unit.
    Hg Budget source means a source that includes one or more Hg Budget 
units.
    Hg Budget Trading Program means a multi-state Hg air pollution 
control and emission reduction program established by the Administrator 
in accordance with this subpart, Sec.  60.24(h)(9) of this chapter, and 
Sec.  62.13(f) or approved and administered by the Administrator in 
accordance with subpart HHHH of part 60 and Sec.  60.24(h)(6) of this 
chapter, as a means of reducing national Hg emissions.
    Hg Budget unit means a unit that is subject to the Hg Budget 
Trading Program under Sec.  62.15904.
    Hg designated representative means, for a Hg Budget source and each 
Hg Budget unit at the source, the natural person who is authorized by 
the owners and operators of the source and all such units at the 
source, in accordance with Sec. Sec.  62.15910 through 62.15915, to 
represent and legally bind each owner and operator in matters 
pertaining to the Hg Budget Trading Program. If the Hg Budget source is 
also a CAIR NOX source, then this natural person shall be 
the same person as the CAIR designated representative under the CAIR 
NOX Annual Trading Program. If the Hg Budget source is also 
a CAIR SO2 source, then this natural person shall be the 
same person as the CAIR designated representative under the CAIR 
SO2 Trading Program. If the Hg Budget source is also a CAIR 
NOX Ozone Season source, then this natural person shall be 
the same person as the CAIR designated representative under the CAIR 
NOX Ozone Season Trading Program. If the Hg Budget source is 
also subject to the Acid Rain Program, then this natural person shall 
be the same person as the designated representative under the Acid Rain 
Program.
    Life-of-the-unit, firm power contractual arrangement means a unit 
participation power sales agreement under which a utility or industrial 
customer reserves, or is entitled to receive, a specified amount or 
percentage of nameplate capacity and associated energy generated by any 
specified unit and pays its proportional amount of such unit's total 
costs, pursuant to a contract:
    (1) For the life of the unit;
    (2) For a cumulative term of no less than 30 years, including 
contracts that permit an election for early termination; or
    (3) For a period no less than 25 years or 70 percent of the 
economic useful life of the unit determined as of the time the unit is 
built, with option rights to purchase or release some portion of the 
nameplate capacity and associated energy generated by the unit at the 
end of the period.
    Lignite means coal that is classified as lignite A or B according 
to the American Society of Testing and Materials (ASTM) Standard 
Specification for Classification of Coals by Rank D388-77, 90, 91, 95, 
98a, or 99 (Reapproved 2004) [egr]\1\ (incorporated by reference, see 
Sec.  60.17).
    Maximum design heat input means the maximum amount of fuel per hour 
(in Btu/hr) that a unit is capable of combusting on a steady-state 
basis as of the initial installation of the unit as specified by the 
manufacturer of the unit.
    Monitoring system means any monitoring system that meets the 
requirements of Sec. Sec.  62.15970 through 62.15975, including a 
continuous emissions monitoring system, an alternative monitoring 
system, or an excepted monitoring system under part 75 of this chapter.
    Municipal waste means ``municipal waste'' as defined in section 
129(g)(5) of the Clean Air Act.
    Nameplate capacity means, starting from the initial installation of 
a generator, the maximum electrical generating output (in MWe) that the 
generator is capable of producing on a steady-state basis and during 
continuous operation (when not restricted by seasonal or other 
deratings) as of such installation as specified by the manufacturer of 
the generator or, starting from the completion of any subsequent 
physical change in the generator resulting in an increase in the 
maximum electrical generating output (in MWe) that the generator is 
capable of producing on a steady-state basis and during continuous 
operation (when not restricted by seasonal or other deratings), such 
increased maximum amount as of such completion as specified by the 
person conducting the physical change.
    Operator means any person who operates, controls, or supervises a 
Hg Budget unit or a Hg Budget source and shall include, but not be 
limited to, any holding company, utility system, or plant manager of 
such a unit or source.

[[Page 77131]]

    Ounce means 2.84 x 10\7\ micrograms. For the purpose of determining 
compliance with the Hg Budget emissions limitation, total ounces of 
mercury emissions for a control period shall be calculated as the sum 
of all recorded hourly emissions (or the mass equivalent of the 
recorded hourly emission rates) in accordance with Sec. Sec.  62.15970 
through 62.15975, but with any remaining fraction of an ounce equal to 
or greater than 0.50 ounces deemed to equal one ounce and any remaining 
fraction of an ounce less than 0.50 ounces deemed to equal zero ounces.
    Owner means any of the following persons:
    (1) With regard to a Hg Budget source or a Hg Budget unit at a 
source, respectively:
    (i) Any holder of any portion of the legal or equitable title in a 
Hg Budget unit at the source or the Hg Budget unit;
    (ii) Any holder of a leasehold interest in a Hg Budget unit at the 
source or the Hg Budget unit; or
    (iii) Any purchaser of power from a Hg Budget unit at the source or 
the Hg Budget unit under a life-of-the-unit, firm power contractual 
arrangement; provided that, unless expressly provided for in a 
leasehold agreement, owner shall not include a passive lessor, or a 
person who has an equitable interest through such lessor, whose rental 
payments are not based (either directly or indirectly) on the revenues 
or income from such Hg Budget unit; or
    (2) With regard to any general account, any person who has an 
ownership interest with respect to the Hg allowances held in the 
general account and who is subject to the binding agreement for the Hg 
authorized account representative to represent the person's ownership 
interest with respect to Hg allowances.
    Permitting authority means the State air pollution control agency, 
local agency, other State agency, or other agency authorized by the 
Administrator to issue or revise permits to meet the requirements of 
the Hg Budget Trading Program or, if no such agency has been so 
authorized, the Administrator.
    Potential electrical output capacity means 33 percent of a unit's 
maximum design heat input, divided by 3,413 Btu/kWh, divided by 1,000 
kWh/MWh, and multiplied by 8,760 hr/yr.
    Receive or receipt of means, when referring to the permitting 
authority or the Administrator, to come into possession of a document, 
information, or correspondence (whether sent in hard copy or by 
authorized electronic transmission), as indicated in an official log, 
or by a notation made on the document, information, or correspondence, 
by the permitting authority or the Administrator in the regular course 
of business.
    Recordation, record, or recorded means, with regard to Hg 
allowances, the movement of Hg allowances by the Administrator into or 
between Hg Allowance Tracking System accounts, for purposes of 
allocation, transfer, or deduction.
    Reference method means any direct test method of sampling and 
analyzing for an air pollutant as specified in Sec.  75.22 of this 
chapter.
    Replacement, replace, or replaced means, with regard to a unit, the 
demolishing of a unit, or the permanent shutdown and permanent 
disabling of a unit, and the construction of another unit (the 
replacement unit) to be used instead of the demolished or shutdown unit 
(the replaced unit).
    Repowered means, with regard to a unit, replacement of a coal-fired 
boiler with one of the following coal-fired technologies at the same 
source as the coal-fired boiler:
    (1) Atmospheric or pressurized fluidized bed combustion;
    (2) Integrated gasification combined cycle;
    (3) Magnetohydrodynamics;
    (4) Direct and indirect coal-fired turbines;
    (5) Integrated gasification fuel cells; or
    (6) As determined by the Administrator in consultation with the 
Secretary of Energy, a derivative of one or more of the technologies 
under paragraphs (1) through (5) of this definition and any other coal-
fired technology capable of controlling multiple combustion emissions 
simultaneously with improved boiler or generation efficiency and with 
significantly greater waste reduction relative to the performance of 
technology in widespread commercial use as of January 1, 2005.
    Sequential use of energy means:
    (1) For a topping-cycle cogeneration unit, the use of reject heat 
from electricity production in a useful thermal energy application or 
process; or
    (2) For a bottoming-cycle cogeneration unit, the use of reject heat 
from useful thermal energy application or process in electricity 
production.
    Serial number means, for a Hg allowance, the unique identification 
number assigned to each Hg allowance by the Administrator.
    Solid waste incineration unit means a stationary, coal-fired boiler 
or stationary, coal-fired combustion turbine that is a ``solid waste 
incineration unit'' as defined in section 129(g)(1) of the Clean Air 
Act.
    Source means all buildings, structures, or installations located in 
one or more contiguous or adjacent properties under common control of 
the same person or persons. For purposes of section 502(c) of the Clean 
Air Act, a ``source,'' including a ``source'' with multiple units, 
shall be considered a single ``facility.''
    State means:
    (1) For purposes of referring to a governing entity, one of the 
States in the United States, the District of Columbia, or, if approved 
for treatment as a State under part 49 of this chapter, the Navajo 
Nation or Ute Indian Tribe where such governing entity is subject to a 
finding by the Administrator of failure to submit an approvable State 
plan under Sec.  60.24(h) of this chapter and has not subsequently 
submitted to the Administrator an approved and currently effective 
State plan under Sec.  60.24(h) of this chapter; or
    (2) For purposes of referring to geographic areas, one of the 
States in the United States, the District of Columbia, the Navajo 
Nation Indian country, or the Ute Tribe Indian country that is not 
covered by an Administrator approved and currently effective State or 
Tribal plan.
    Subbituminous means coal that is classified as subbituminous A, B, 
or C, according to the American Society of Testing and Materials (ASTM) 
Standard Specification for Classification of Coals by Rank D388-77, 90, 
91, 95, 98a, or 99 (Reapproved 2004) \1\ (incorporated by reference, 
see Sec.  60.17).
    Submit or serve means to send or transmit a document, information, 
or correspondence to the person specified in accordance with the 
applicable regulation:
    (1) In person;
    (2) By United States Postal Service; or
    (3) By other means of dispatch or transmission and delivery. 
Compliance with any ``submission'' or ``service'' deadline shall be 
determined by the date of dispatch, transmission, or mailing and not 
the date of receipt.
    Title V operating permit means a permit issued under title V of the 
Clean Air Act and part 70 or part 71 of this chapter.
    Title V operating permit regulations means the regulations that the 
Administrator has approved or issued as meeting the requirements of 
title V of the Clean Air Act and part 70 or 71 of this chapter.
    Topping-cycle cogeneration unit means a cogeneration unit in which 
the energy input to the unit is first used to produce useful power, 
including

[[Page 77132]]

electricity, and at least some of the reject heat from the electricity 
production is then used to provide useful thermal energy.
    Total energy input means, with regard to a cogeneration unit, total 
energy of all forms supplied to the cogeneration unit, excluding energy 
produced by the cogeneration unit itself.
    Total energy output means, with regard to a cogeneration unit, the 
sum of useful power and useful thermal energy produced by the 
cogeneration unit.
    Unit means a stationary, coal-fired boiler or a stationary, coal-
fired combustion turbine.
    Unit operating day means a calendar day in which a unit combusts 
any fuel.
    Unit operating hour or hour of unit operation means an hour in 
which a unit combusts any fuel.
    Useful power means, with regard to a cogeneration unit, electricity 
or mechanical energy made available for use, excluding any such energy 
used in the power production process (which process includes, but is 
not limited to, any on-site processing or treatment of fuel combusted 
at the unit and any on-site emission controls).
    Useful thermal energy means, with regard to a cogeneration unit, 
thermal energy that is:
    (1) Made available to an industrial or commercial process (not a 
power production process), excluding any heat contained in condensate 
return or makeup water;
    (2) Used in a heating application (e.g., space heating or domestic 
hot water heating); or
    (3) Used in a space cooling application (i.e., thermal energy used 
by an absorption chiller).
    Utility power distribution system means the portion of an 
electricity grid owned or operated by a utility and dedicated to 
delivering electricity to customers.

Sec.  62.15903  Measurements, abbreviations, and acronyms.

    Measurements, abbreviations, and acronyms used in this subpart are 
defined as follows:

Btu--British thermal unit.
CO2--carbon dioxide.
H2O--water.
Hg--mercury.
hr--hour.
kW--kilowatt electrical.
kWh--kilowatt hour.
lb--pound.
MMBtu--million Btu.
MWe--megawatt electrical.
MWh--megawatt hour.
NOX--nitrogen oxides.
O2--oxygen.
ppm--parts per million.
scfh--standard cubic feet per hour.
SO2--sulfur dioxide.
yr--year.

Sec.  62.15904  Applicability.

    (a) Except as provided in paragraph (b) of this section:
    (1) The following units in a State shall be Hg Budget units, and 
any source that includes one or more such units shall be a Hg Budget 
source, subject to the requirements of this subpart: Any stationary, 
coal-fired boiler or stationary, coal-fired combustion turbine serving 
at any time, since the later of November 15, 1990 or the start-up of 
the unit's combustion chamber, a generator with nameplate capacity of 
more than 25 MWe producing electricity for sale.
    (2) If a stationary boiler or stationary combustion turbine that, 
under paragraph (a)(1) of this section, is not a Hg Budget unit begins 
to combust coal or coal-derived fuel or to serve a generator with 
nameplate capacity of more than 25 MWe producing electricity for sale, 
the unit shall become a Hg Budget unit as provided in paragraph (a)(1) 
of this section on the first date on which it both combusts coal or 
coal-derived fuel and serves such generator.
    (b) The units in a State that meet the requirements set forth in 
paragraph (b)(1)(i) or (b)(2) of this section shall not be Hg Budget 
units:
    (1)(i) Any unit that is a Hg Budget unit under paragraph (a)(1) or 
(2) of this section:
    (A) Qualifying as a cogeneration unit during the 12-month period 
starting on the date the unit first produces electricity and continuing 
to qualify as a cogeneration unit; and
    (B) Not serving at any time, since the later of November 15, 1990 
or the start-up of the unit's combustion chamber, a generator with 
nameplate capacity of more than 25 MWe supplying in any calendar year 
more than one-third of the unit's potential electric output capacity or 
219,000 MWh, whichever is greater, to any utility power distribution 
system for sale.
    (ii) If a unit qualifies as a cogeneration unit during the 12-month 
period starting on the date the unit first produces electricity and 
meets the requirements of paragraphs (b)(1)(i) of this section for at 
least one calendar year, but subsequently no longer meets all such 
requirements, the unit shall become a Hg Budget unit starting on the 
earlier of January 1 after the first calendar year during which the 
unit first no longer qualifies as a cogeneration unit or January 1 
after the first calendar year during which the unit no longer meets the 
requirements of paragraph (b)(1)(i)(B) of this section.
    (2) Any unit that is a Hg Budget unit under paragraph (a)(1) or (2) 
of this section, is a solid waste incineration unit combusting 
municipal waste, and is subject to the requirements of:
    (i) A State Plan approved by the Administrator in accordance with 
subpart Cb of part 60 of this chapter (emissions guidelines and 
compliance times for certain large municipal waste combustors);
    (ii) Subpart Eb of part 60 of this chapter (standards of 
performance for certain large municipal waste combustors);
    (iii) Subpart AAAA of part 60 of this chapter (standards of 
performance for certain small municipal waste combustors);
    (iv) A State Plan approved by the Administrator in accordance with 
subpart BBBB of part 60 of this chapter (emission guidelines and 
compliance times for certain small municipal waste combustion units);
    (v) Subpart FFF, of part 62 of this chapter (Federal Plan 
requirements for certain large municipal waste combustors); or
    (vi) Subpart JJJ of part 62 of this chapter (Federal Plan 
requirements for certain small municipal waste combustion units).
    (c) A certifying official of an owner or operator of any combustion 
device may petition the Administrator at any time for a determination 
concerning the applicability, under paragraphs (a) and (b) of this 
section, of the Hg Budget Trading Program to the combustion device.
    (1) Petition content. The petition shall be in writing and include 
the identification of the combustion device and the relevant facts 
about the combustion device. The petition and any other documents 
provided to the Administrator in connection with the petition shall 
include the following certification statement, signed by the certifying 
official: ``I am authorized to make this submission on behalf of the 
owners and operators of the combustion device for which the submission 
is made. I certify under penalty of law that I have personally 
examined, and am familiar with, the statements and information 
submitted in this document and all its attachments. Based on my inquiry 
of those individuals with primary responsibility for obtaining the 
information, I certify that the statements and information are to the 
best of my knowledge and belief true, accurate, and complete. I am 
aware that there are significant penalties for submitting false 
statements and information or omitting

[[Page 77133]]

required statements and information, including the possibility of fine 
or imprisonment.''
    (2) Submission. The petition and any other documents provided in 
connection with the petition shall be submitted to the Director of the 
Clean Air Markets Division (or its successor), U.S. Environmental 
Protection Agency, who will act on the petition as the Administrator's 
duly authorized representative.
    (3) Response. The Administrator will issue a written response to 
the petition and may request supplemental information relevant to such 
petition. The Administrator's determination concerning the 
applicability, under paragraphs (a) and (b) of this section, of the Hg 
Budget Trading Program to the combustion device shall be binding on the 
permitting authority unless the petition or other information or 
documents provided in connection with the petition are found to have 
contained significant, relevant errors or omissions.

Sec.  62.15905  Retired unit exemption.

    (a)(1) Any Hg Budget unit that is permanently retired shall be 
exempt from the Hg Budget Trading Program, except for the provisions of 
this section, Sec.  62.15902, Sec.  62.15903, Sec.  62.15904, Sec.  
62.15906(c)(4) through (7), Sec.  62.15907, Sec.  62.15908, Sec. Sec.  
62.15910 through 62.15915, and Sec. Sec.  62.15940 through 62.15962.
    (2) The exemption under paragraph (a)(1) of this section shall 
become effective the day on which the Hg Budget unit is permanently 
retired. Within 30 days of the unit's permanent retirement, the Hg 
designated representative shall submit a statement to the permitting 
authority otherwise responsible for administering any Hg Budget permit 
for the unit and shall submit a copy of the statement to the 
Administrator. The statement shall state, in a format prescribed by the 
permitting authority, that the unit was permanently retired on a 
specific date and will comply with the requirements of paragraph (b) of 
this section.
    (3) After receipt of the statement under paragraph (a)(2) of this 
section, the permitting authority will amend any permit under 
Sec. Sec.  62.15920 through 62.15924 covering the source at which the 
unit is located to add the provisions and requirements of the exemption 
under paragraphs (a)(1) and (b) of this section.
    (b) Special provisions.
    (1) A unit exempt under paragraph (a) of this section shall not 
emit any mercury, starting on the date that the exemption takes effect.
    (2) The Administrator or the permitting authority will allocate Hg 
allowances under Sec. Sec.  62.15940 through 62.15943 to a unit exempt 
under paragraph (a) of this section.
    (3) For a period of 5 years from the date the records are created, 
the owners and operators of a unit exempt under paragraph (a) of this 
section shall retain, at the source that includes the unit, records 
demonstrating that the unit is permanently retired. The 5-year period 
for keeping records may be extended for cause, at any time before the 
end of the period, in writing by the permitting authority or the 
Administrator. The owners and operators bear the burden of proof that 
the unit is permanently retired.
    (4) The owners and operators and, to the extent applicable, the Hg 
designated representative of a unit exempt under paragraph (a) of this 
section shall comply with the requirements of the Hg Budget Trading 
Program concerning all periods for which the exemption is not in 
effect, even if such requirements arise, or must be complied with, 
after the exemption takes effect.
    (5) A unit exempt under paragraph (a) of this section and located 
at a source that is required, or but for this exemption would be 
required, to have a title V operating permit shall not resume operation 
unless the Hg designated representative of the source submits a 
complete Hg Budget permit application under Sec.  62.15922 for the unit 
not less than 18 months (or such lesser time provided by the permitting 
authority) before the later of January 1, 2010 or the date on which the 
unit resumes operation.
    (6) On the earlier of the following dates, a unit exempt under 
paragraph (a) of this section shall lose its exemption:
    (i) The date on which the Hg designated representative submits a Hg 
Budget permit application for the unit under paragraph (b)(5) of this 
section;
    (ii) The date on which the Hg designated representative is required 
under paragraph (b)(5) of this section to submit a Hg Budget permit 
application for the unit; or
    (iii) The date on which the unit resumes operation, if the Hg 
designated representative is not required to submit a Hg Budget permit 
application for the unit.
    (7) For the purpose of applying monitoring, reporting, and 
recordkeeping requirements under Sec. Sec.  62.15970 through 62.15975, 
a unit that loses its exemption under paragraph (a) of this section 
shall be treated as a unit that commences commercial operation on the 
first date on which the unit resumes operation.

Sec.  62.15906  Standard requirements.

    (a) Permit requirements.
    (1) The Hg designated representative of each Hg Budget source 
required to have a title V operating permit and each Hg Budget unit 
required to have a title V operating permit at the source shall:
    (i) Submit to the permitting authority a complete Hg Budget permit 
application under Sec.  62.15922 in accordance with the deadlines 
specified in Sec.  62.15921; and
    (ii) Submit in a timely manner any supplemental information that 
the permitting authority determines is necessary in order to review a 
Hg Budget permit application and issue or deny a Hg Budget permit.
    (2) The owners and operators of each Hg Budget source required to 
have a title V operating permit and each Hg Budget unit required to 
have a title V operating permit at the source shall have a Hg Budget 
permit issued by the permitting authority under Sec. Sec.  62.15920 
through 62.15924 for the source and operate the source and the unit in 
compliance with such Hg Budget permit.
    (3) The owners and operators of a Hg Budget source that is not 
otherwise required to have a title V operating permit and each Hg 
Budget unit that is not otherwise required to have a title V operating 
permit are not required to submit a Hg Budget permit application, and 
to have a Hg Budget permit, under Sec. Sec.  62.15920 through 62.15924 
for such Hg Budget source and such Hg Budget unit.
    (b) Monitoring, reporting, and recordkeeping requirements.
    (1) The owners and operators, and the Hg designated representative, 
of each Hg Budget source and each Hg Budget unit at the source shall 
comply with the monitoring, reporting, and recordkeeping requirements 
of Sec. Sec.  62.15970 through 62.15975.
    (2) The emissions measurements recorded and reported in accordance 
with Sec. Sec.  62.15970 through 62.15975 shall be used to determine 
compliance by each Hg Budget source with the Hg Budget emissions 
limitation under paragraph (c) of this section.
    (c) Mercury emission requirements.
    (1) As of the allowance transfer deadline for a control period, the 
owners and operators of each Hg Budget source and each Hg Budget unit 
at the source shall hold, in the source's compliance account, Hg 
allowances available for compliance deductions for the control period 
under Sec.  62.15954(a) in an amount not less than the ounces of total 
mercury emissions for the control period from all Hg Budget units at 
the source, as determined in

[[Page 77134]]

accordance with Sec. Sec.  62.15970 through 62.15975.
    (2) A Hg Budget unit shall be subject to the requirements under 
paragraph (c)(1) of this section for the control period starting on the 
later of January 1, 2010 or the deadline for meeting the unit's monitor 
certification requirements under Sec.  62.15970(b)(1) or (2) and for 
each control period thereafter.
    (3) A Hg allowance shall not be deducted, for compliance with the 
requirements under paragraph (c)(1) of this section, for a control 
period in a calendar year before the year for which the Hg allowance 
was allocated.
    (4) Hg allowances shall be held in, deducted from, or transferred 
into or among Hg Allowance Tracking System accounts in accordance with 
Sec. Sec.  62.15940 through 62.15962.
    (5) A Hg allowance is a limited authorization to emit one ounce of 
mercury in accordance with the Hg Budget Trading Program. No provision 
of the Hg Budget Trading Program, the Hg Budget permit application, the 
Hg Budget permit, or an exemption under Sec.  62.15905 and no provision 
of law shall be construed to limit the authority of the United States 
to terminate or limit such authorization.
    (6) A Hg allowance does not constitute a property right.
    (7) Upon recordation by the Administrator under Sec. Sec.  62.15940 
through 62.15962, every allocation, transfer, or deduction of a Hg 
allowance to or from a Hg Budget source's compliance account is 
incorporated automatically in any Hg Budget permit of the source.
    (d) Excess emissions requirements. If a Hg Budget source emits 
mercury during any control period in excess of the Hg Budget emissions 
limitation, then:
    (1) The owners and operators of the source and each Hg Budget unit 
at the source shall surrender the Hg allowances required for deduction 
under Sec.  62.15954(d)(1) and pay any fine, penalty, or assessment or 
comply with any other remedy imposed, for the same violations, under 
the Clean Air Act or applicable State law; and
    (2) Each ounce of such excess emissions and each day of such 
control period shall constitute a separate violation of this subpart, 
the Clean Air Act, and applicable State law.
    (e) Recordkeeping and reporting requirements.
    (1) Unless otherwise provided, the owners and operators of the Hg 
Budget source and each Hg Budget unit at the source shall keep on site 
at the source each of the following documents for a period of 5 years 
from the date the document is created. This period may be extended for 
cause, at any time before the end of 5 years, in writing by the 
permitting authority or the Administrator.
    (i) The certificate of representation under Sec.  62.15913 for the 
Hg designated representative for the source and each Hg Budget unit at 
the source and all documents that demonstrate the truth of the 
statements in the certificate of representation; provided that the 
certificate and documents shall be retained on site at the source 
beyond such 5-year period until such documents are superseded because 
of the submission of a new certificate of representation under Sec.  
62.15913 changing the Hg designated representative.
    (ii) All emissions monitoring information, in accordance with 
Sec. Sec.  62.15970 through 62.15975, provided that to the extent that 
Sec. Sec.  62.15970 through 62.15975 provides for a 3-year period for 
recordkeeping, the 3-year period shall apply.
    (iii) Copies of all reports, compliance certifications, and other 
submissions and all records made or required under the Hg Budget 
Trading Program.
    (iv) Copies of all documents used to complete a Hg Budget permit 
application and any other submission under the Hg Budget Trading 
Program or to demonstrate compliance with the requirements of the Hg 
Budget Trading Program.
    (2) The Hg designated representative of a Hg Budget source and each 
Hg Budget unit at the source shall submit the reports required under 
the Hg Budget Trading Program, including those under Sec. Sec.  
62.15970 through 62.15975.
    (f) Liability.
    (1) Each Hg Budget source and each Hg Budget unit shall meet the 
requirements of the Hg Budget Trading Program.
    (2) Any provision of the Hg Budget Trading Program that applies to 
a Hg Budget source or the Hg designated representative of a Hg Budget 
source shall also apply to the owners and operators of such source and 
of the Hg Budget units at the source.
    (3) Any provision of the Hg Budget Trading Program that applies to 
a Hg Budget unit or the Hg designated representative of a Hg Budget 
unit shall also apply to the owners and operators of such unit.
    (g) Effect on other authorities. No provision of the Hg Budget 
Trading Program, a Hg Budget permit application, a Hg Budget permit, or 
an exemption under Sec.  62.15905 shall be construed as exempting or 
excluding the owners and operators, and the Hg designated 
representative, of a Hg Budget source or Hg Budget unit from compliance 
with any other provision of the applicable, approved State 
implementation plan, a Federally enforceable permit, or the Clean Air 
Act.

Sec.  62.15907  Computation of time.

    (a) Unless otherwise stated, any time period scheduled, under the 
Hg Budget Trading Program, to begin on the occurrence of an act or 
event shall begin on the day the act or event occurs.
    (b) Unless otherwise stated, any time period scheduled, under the 
Hg Budget Trading Program, to begin before the occurrence of an act or 
event shall be computed so that the period ends the day before the act 
or event occurs.
    (c) Unless otherwise stated, if the final day of any time period, 
under the Hg Budget Trading Program, falls on a weekend or a State or 
Federal holiday, the time period shall be extended to the next business 
day.

Sec.  62.15908  Appeal procedures.

    The appeal procedures for decisions of the Administrator under the 
Hg Budget Trading Program are set forth in part 78 of this chapter.

Hg Designated Representative for Hg Budget Sources

Sec.  62.15910  Authorization and responsibilities of Hg designated 
representative.

    (a) Except as provided under Sec.  62.15911, each Hg Budget source, 
including all Hg Budget units at the source, shall have one and only 
one Hg designated representative, with regard to all matters under the 
Hg Budget Trading Program concerning the source or any Hg Budget unit 
at the source.
    (b) The Hg designated representative of the Hg Budget source shall 
be selected by an agreement binding on the owners and operators of the 
source and all Hg Budget units at the source and shall act in 
accordance with the certification statement in Sec.  
62.15913(a)(4)(iv).
    (c) Upon receipt by the Administrator of a complete certificate of 
representation under Sec.  62.15913, the Hg designated representative 
of the source shall represent and, by his or her representations, 
actions, inactions, or submissions, legally bind each owner and 
operator of the Hg Budget source represented and each Hg Budget unit at 
the source in all matters pertaining to the Hg Budget Trading Program, 
notwithstanding any agreement between the Hg designated representative 
and such owners and operators. The owners

[[Page 77135]]

and operators shall be bound by any decision or order issued to the Hg 
designated representative by the permitting authority, the 
Administrator, or a court regarding the source or unit.
    (d) No Hg Budget permit will be issued, no emissions data reports 
will be accepted, and no Hg Allowance Tracking System account will be 
established for a Hg Budget unit at a source, until the Administrator 
has received a complete certificate of representation under Sec.  
62.15913 for a Hg designated representative of the source and the Hg 
Budget units at the source.
    (e)(1) Each submission under the Hg Budget Trading Program shall be 
submitted, signed, and certified by the Hg designated representative 
for each Hg Budget source on behalf of which the submission is made. 
Each such submission shall include the following certification 
statement by the Hg designated representative: ``I am authorized to 
make this submission on behalf of the owners and operators of the 
source or units for which the submission is made. I certify under 
penalty of law that I have personally examined, and am familiar with, 
the statements and information submitted in this document and all its 
attachments. Based on my inquiry of those individuals with primary 
responsibility for obtaining the information, I certify that the 
statements and information are to the best of my knowledge and belief 
true, accurate, and complete. I am aware that there are significant 
penalties for submitting false statements and information or omitting 
required statements and information, including the possibility of fine 
or imprisonment.''
    (2) The permitting authority and the Administrator will accept or 
act on a submission made on behalf of owners or operators of a Hg 
Budget source or a Hg Budget unit only if the submission has been made, 
signed, and certified in accordance with paragraph (e)(1) of this 
section.

Sec.  62.15911  Alternate Hg designated representative.

    (a) A certificate of representation under Sec.  62.15913 may 
designate one and only one alternate Hg designated representative, who 
may act on behalf of the Hg designated representative. The agreement by 
which the alternate Hg designated representative is selected shall 
include a procedure for authorizing the alternate Hg designated 
representative to act in lieu of the Hg designated representative.
    (b) Upon receipt by the Administrator of a complete certificate of 
representation under Sec.  62.15913, any representation, action, 
inaction, or submission by the alternate Hg designated representative 
shall be deemed to be a representation, action, inaction, or submission 
by the Hg designated representative.
    (c) Except in this section and Sec. Sec.  62.15902, 62.15910(a) and 
(d), 62.15912, 62.15913, 62.15915, and 62.15951, whenever the term ``Hg 
designated representative'' is used in this subpart, the term shall be 
construed to include the Hg designated representative or any alternate 
Hg designated representative.

Sec.  62.15912  Changing Hg designated representative and alternate Hg 
designated representative; changes in owners and operators.

    (a) Changing Hg designated representative. The Hg designated 
representative may be changed at any time upon receipt by the 
Administrator of a superseding complete certificate of representation 
under Sec.  62.15913. Notwithstanding any such change, all 
representations, actions, inactions, and submissions by the previous Hg 
designated representative before the time and date when the 
Administrator receives the superseding certificate of representation 
shall be binding on the new Hg designated representative and the owners 
and operators of the Hg Budget source and the Hg Budget units at the 
source.
    (b) Changing alternate Hg designated representative. The alternate 
Hg designated representative may be changed at any time upon receipt by 
the Administrator of a superseding complete certificate of 
representation under Sec.  62.15913. Notwithstanding any such change, 
all representations, actions, inactions, and submissions by the 
previous alternate Hg designated representative before the time and 
date when the Administrator receives the superseding certificate of 
representation shall be binding on the new alternate Hg designated 
representative and the owners and operators of the Hg Budget source and 
the Hg Budget units at the source.
    (c) Changes in owners and operators.
    (1) In the event a owner or operator of a Hg Budget source or a Hg 
Budget unit is not included in the list of owners and operators in the 
certificate of representation under Sec.  62.15913, such owner or 
operator shall be deemed to be subject to and bound by the certificate 
of representation, the representations, actions, inactions, and 
submissions of the Hg designated representative and any alternate Hg 
designated representative of the source or unit, and the decisions and 
orders of the permitting authority, the Administrator, or a court, as 
if the owner or operator were included in such list.
    (2) Within 30 days following any change in the owners and operators 
of a Hg Budget source or a Hg Budget unit, including the addition of a 
new owner or operator, the Hg designated representative or any 
alternate Hg designated representative shall submit a revision to the 
certificate of representation under Sec.  62.15913 amending the list of 
owners and operators to include the change.

Sec.  62.15913  Certificate of representation.

    (a) A complete certificate of representation for a Hg designated 
representative or an alternate Hg designated representative shall 
include the following elements in a format prescribed by the 
Administrator:
    (1) Identification of the Hg Budget source, and each Hg Budget unit 
at the source, for which the certificate of representation is 
submitted, including identification and nameplate capacity of each 
generator served by each such unit.
    (2) The name, address, e-mail address (if any), telephone number, 
and facsimile transmission number (if any) of the Hg designated 
representative and any alternate Hg designated representative.
    (3) A list of the owners and operators of the Hg Budget source and 
of each Hg Budget unit at the source.
    (4) The following certification statements by the Hg designated 
representative and any alternate Hg designated representative:
    (i) ``I certify that I was selected as the Hg designated 
representative or alternate Hg designated representative, as 
applicable, by an agreement binding on the owners and operators of the 
source and each Hg Budget unit at the source.''
    (ii) ``I certify that I have all the necessary authority to carry 
out my duties and responsibilities under the Hg Budget Trading Program 
on behalf of the owners and operators of the source and of each Hg 
Budget unit at the source and that each such owner and operator shall 
be fully bound by my representations, actions, inactions, or 
submissions.''
    (iii) ``I certify that the owners and operators of the source and 
of each Hg Budget unit at the source shall be bound by any order issued 
to me by the Administrator, the permitting authority, or a court 
regarding the source or unit.''
    (iv) ``Where there are multiple holders of a legal or equitable 
title to, or a leasehold interest in, a Hg Budget unit, or where a 
utility or industrial customer purchases power from a Hg Budget unit 
under a life-of-the-unit, firm power

[[Page 77136]]

contractual arrangement, I certify that: I have given a written notice 
of my selection as the `Hg designated representative' or `alternate Hg 
designated representative,' as applicable, and of the agreement by 
which I was selected to each owner and operator of the source and of 
each Hg Budget unit at the source; and Hg allowances and proceeds of 
transactions involving Hg allowances will be deemed to be held or 
distributed in proportion to each holder's legal, equitable, leasehold, 
or contractual reservation or entitlement, except that, if such 
multiple holders have expressly provided for a different distribution 
of Hg allowances by contract, Hg allowances and proceeds of 
transactions involving Hg allowances will be deemed to be held or 
distributed in accordance with the contract.''
    (5) The signature of the Hg designated representative and any 
alternate Hg designated representative and the dates signed.
    (b) Unless otherwise required by the permitting authority or the 
Administrator, documents of agreement referred to in the certificate of 
representation shall not be submitted to the permitting authority or 
the Administrator. Neither the permitting authority nor the 
Administrator shall be under any obligation to review or evaluate the 
sufficiency of such documents, if submitted.

Sec.  62.15914  Objections concerning Hg designated representative.

    (a) Once a complete certificate of representation under Sec.  
62.15913 has been submitted and received, the permitting authority and 
the Administrator will rely on the certificate of representation unless 
and until a superseding complete certificate of representation under 
Sec.  62.15913 is received by the Administrator.
    (b) Except as provided in Sec.  62.15912(a) or (b), no objection or 
other communication submitted to the permitting authority or the 
Administrator concerning the authorization, or any representation, 
action, inaction, or submission, of the Hg designated representative 
shall affect any representation, action, inaction, or submission of the 
Hg designated representative or the finality of any decision or order 
by the permitting authority or the Administrator under the Hg Budget 
Trading Program.
    (c) Neither the permitting authority nor the Administrator will 
adjudicate any private legal dispute concerning the authorization or 
any representation, action, inaction, or submission of any Hg 
designated representative, including private legal disputes concerning 
the proceeds of Hg allowance transfers.

Sec.  62.15915  Delegation by Hg designated representative and 
alternate Hg designated representative.

    (a) A Hg designated representative may delegate, to one or more 
natural persons, his or her authority to make an electronic submission 
to the Administrator provided for or required under this subpart.
    (b) An alternate Hg designated representative may delegate, to one 
or more natural persons, his or her authority to make an electronic 
submission to the Administrator provided for or required under this 
subpart.
    (c) In order to delegate authority to make an electronic submission 
to the Administrator in accordance with paragraph (a) or (b) of this 
section, the Hg designated representative or alternate Hg designated 
representative, as appropriate, must submit to the Administrator a 
notice of delegation, in a format prescribed by the Administrator, that 
includes the following elements:
    (1) The name, address, e-mail address, telephone number, and 
facsimile transmission number (if any) of such Hg designated 
representative or alternate Hg designated representative;
    (2) The name, address, e-mail address, telephone number, and 
facsimile transmission number (if any) of each such natural person 
(referred to as an ``agent'');
    (3) For each such natural person, a list of the type or types of 
electronic submissions under paragraph (a) or (b) of this section for 
which authority is delegated to him or her; and
    (4) The following certification statements by such Hg designated 
representative or alternate Hg designated representative:
    (i) ``I agree that any electronic submission to the Administrator 
that is by an agent identified in this notice of delegation and of a 
type listed for such agent in this notice of delegation and that is 
made when I am a Hg designated representative or alternate Hg 
designated representative, as appropriate, and before this notice of 
delegation is superseded by another notice of delegation under 40 CFR 
62.15915(d) shall be deemed to be an electronic submission by me.''
    (ii) ``Until this notice of delegation is superseded by another 
notice of delegation under 40 CFR 62.15915(d), I agree to maintain an 
e-mail account and to notify the Administrator immediately of any 
change in my e-mail address, unless all delegation of authority by me 
under 40 CFR 62.15915 is terminated.''
    (d) A notice of delegation submitted under paragraph (c) of this 
section shall be effective, with regard to the Hg designated 
representative or alternate Hg designated representative identified in 
such notice, upon receipt of such notice by the Administrator and until 
receipt by the Administrator of a superseding notice of delegation 
submitted by such Hg designated representative or alternate Hg 
designated representative, as appropriate. The superseding notice of 
delegation may replace any previously identified agent, add a new 
agent, or eliminate entirely any delegation of authority.
    (e) Any electronic submission covered by the certification in 
paragraph (c)(4)(i) of this section and made in accordance with a 
notice of delegation effective under paragraph (d) of this section 
shall be deemed to be an electronic submission by the Hg designated 
representative or alternate Hg designated representative submitting 
such notice of delegation.

Permits

Sec.  62.15920  General Hg budget trading program permit requirements.

    (a) For each Hg Budget source required to have a title V operating 
permit, such permit shall include a Hg Budget permit administered by 
the permitting authority for the title V operating permit. The Hg 
Budget portion of the title V permit shall be administered in 
accordance with the permitting authority's title V operating permits 
regulations promulgated under part 70 or 71 of this chapter, except as 
provided otherwise by paragraph (b) of this section, Sec.  62.15905, 
and Sec. Sec.  62.15921 through 62.15924.
    (b) Each Hg Budget permit shall contain, with regard to the Hg 
Budget source and the Hg Budget units at the source covered by the Hg 
Budget permit, all applicable Hg Budget Trading Program requirements 
and shall be a complete and separable portion of the title V operating 
permit.

Sec.  62.15921  Submission of Hg budget permit applications.

    (a) Duty to apply. The Hg designated representative of any Hg 
Budget source required to have a title V operating permit shall submit 
to the permitting authority a complete Hg Budget permit application 
under Sec.  62.15922 for the source covering each Hg Budget unit at the 
source at least 18 months (or such lesser time provided by the 
permitting authority) before the later of January 1, 2010 or the date 
on which the Hg

[[Page 77137]]

Budget unit commences commercial operation.
    (b) Duty to reapply. For a Hg Budget source required to have a 
title V operating permit, the Hg designated representative shall submit 
a complete Hg Budget permit application under Sec.  62.15922 for the 
source covering each Hg Budget unit at the source to renew the Hg 
Budget permit in accordance with the permitting authority's title V 
operating permits regulations addressing permit renewal.

Sec.  62.15922  Information requirements for Hg budget permit 
applications.

    A complete Hg Budget permit application shall include the following 
elements concerning the Hg Budget source for which the application is 
submitted, in a format prescribed by the permitting authority:
    (a) Identification of the Hg Budget source;
    (b) Identification of each Hg Budget unit at the Hg Budget source; 
and
    (c) The standard requirements under Sec.  62.15906.

Sec.  62.15923  Hg budget permit contents and term.

    (a) Each Hg Budget permit will contain, in a format prescribed by 
the permitting authority, all elements required for a complete Hg 
Budget permit application under Sec.  62.15922.
    (b) Each Hg Budget permit is deemed to incorporate automatically 
the definitions of terms under Sec.  62.15902 and, upon recordation by 
the Administrator under Sec. Sec.  62.15940 through 62.15962, every 
allocation, transfer, or deduction of a Hg allowance to or from the 
compliance account of the Hg Budget source covered by the permit.
    (c) The term of the Hg Budget permit will be set by the permitting 
authority, as necessary to facilitate coordination of the renewal of 
the Hg Budget permit with issuance, revision, or renewal of the Hg 
Budget source's title V operating permit.

Sec.  62.15924  Hg budget permit revisions.

    Except as provided in Sec.  62.15923(b), the permitting authority 
will revise the Hg Budget permit, as necessary, in accordance with the 
permitting authority's title V operating permits regulations addressing 
permit revisions.

Sec.  62.15930  [Reserved].

Hg Allowance Allocations

Sec.  62.15940  State trading budgets.

    The State trading budgets for annual allocations of Hg allowances 
for the control periods in 2010 through 2017 and in 2018 and thereafter 
are respectively as follows:

------------------------------------------------------------------------
                                         State trading budget (tons)
                                   -------------------------------------
               State                                        2018 and
                                        2010-2017          thereafter
------------------------------------------------------------------------
Alaska............................              0.010              0.004
Alabama...........................              1.289              0.509
Arkansas..........................              0.516              0.204
Arizona...........................              0.454              0.179
California........................              0.041              0.016
Colorado..........................              0.706              0.279
Connecticut.......................              0.053              0.021
Delaware..........................              0.072              0.028
District of Columbia..............              0                  0
Florida...........................              1.232              0.487
Georgia...........................              1.227              0.484
Hawaii............................              0.024              0.009
Idaho.............................              0                  0
Iowa..............................              0.727              0.287
Illinois..........................              1.594              0.629
Indiana...........................              2.097              0.828
Kansas............................              0.723              0.285
Kentucky..........................              1.525              0.602
Louisiana.........................              0.601              0.237
Massachusetts.....................              0.172              0.068
Maryland..........................              0.49               0.193
Maine.............................              0.001              0.001
Michigan..........................              1.303              0.514
Minnesota.........................              0.695              0.274
Missouri..........................              1.393              0.550
Mississippi.......................              0.291              0.115
Montana...........................              0.377              0.149
Navajo Nation Indian Country......              0.600              0.237
North Carolina....................              1.133              0.447
North Dakota......................              1.564              0.617
Nebraska..........................              0.421              0.166
New Hampshire.....................              0.063              0.025
New Jersey........................              0.153              0.060
New Mexico........................              0.299              0.118
Nevada............................              0.285              0.112
New York..........................              0.393              0.155
Ohio..............................              2.057              0.812
Oklahoma..........................              0.721              0.285
Oregon............................              0.076              0.030
Pennsylvania......................              1.779              0.702
Rhode Island......................              0                  0
South Carolina....................              0.58               0.229
South Dakota......................              0.072              0.029
Tennessee.........................              0.944              0.373

[[Page 77138]]

Texas.............................              4.656              1.838
Utah..............................              0.506              0.200
Ute Indian Tribe Reservation                    0.060              0.024
 Indian Country...................
Virginia..........................              0.592              0.234
Vermont...........................              0                  0
Washington........................              0.198              0.078
Wisconsin.........................              0.89               0.351
West Virginia.....................              1.394              0.550
Wyoming...........................              0.952              0.376
------------------------------------------------------------------------

Sec.  62.15941  Timing requirements for Hg allowance allocations.

    (a) The Administrator will determine by order the Hg allowance 
allocations, in accordance with Sec.  62.15942(a) and (b), for the 
control periods in 2010, 2011, 2012, 2013, and 2014.
    (b) By July 31, 2011 and July 31 of each year thereafter, the 
Administrator will determine by order the Hg allowance allocations, in 
accordance with Sec.  62.15942(a) and (b), for the control period in 
the fourth year after the year of the applicable deadline for 
determination under this paragraph.
    (c) By July 31, 2010 and July 31 of each year thereafter, the 
Administrator will determine by order the Hg allowance allocations, in 
accordance with Sec.  62.15942(a), (c), and (d), for the control period 
in the year of the applicable deadline for determination under this 
paragraph.
    (d) The Administrator will make available to the public each 
determination of Hg allowances under paragraph (a), (b), or (c) of this 
section and will provide an opportunity for submission of objections to 
the determination. Objections shall be limited to addressing whether 
the determination is in accordance with Sec.  62.15942. Based on any 
such objections, the Administrator will adjust each determination to 
the extent necessary to ensure that it is in accordance with Sec.  
62.15942.

Sec.  62.15942  Hg allowance allocations.

    (a)(1) The baseline heat input (in MMBtu) used with respect to Hg 
allowance allocations under paragraph (b) of this section for each Hg 
Budget unit will be:
    (i) For units commencing operation before January 1, 2001, the 
average of the three highest amounts of the unit's adjusted control 
period heat input for 2000 through 2004, with the adjusted control 
period heat input for each year calculated as the sum of the following:
    (A) Any portion of the unit's control period heat input for the 
year that results from the unit's combustion of lignite, multiplied by 
3.0;
    (B) Any portion of the unit's control period heat input for the 
year that results from the unit's combustion of subbituminous coal, 
multiplied by 1.25; and
    (C) Any portion of the unit's control period heat input for the 
year that is not covered by paragraph (a)(1)(i)(A) or (B) of this 
section, multiplied by 1.0.
    (ii) For units commencing operation on or after January 1, 2001 and 
operating each calendar year during a period of 5 or more consecutive 
calendar years, the average of the 3 highest amounts of the unit's 
total converted control period heat input over the first such 5 years.
    (2)(i) A unit's control period heat input for a calendar year under 
paragraph (a)(1)(i) of this section, and a unit's total ounces of Hg 
emissions during a calendar year under paragraph (c)(3) of this 
section, will be determined in accordance with part 75 of this chapter, 
to the extent the unit was otherwise subject to the requirements of 
part 75 of this chapter for the year, or will be based on the best 
available data reported to the Administrator for the unit, to the 
extent the unit was not otherwise subject to the requirements of part 
75 of this chapter for the year. The unit's types and amounts of fuel 
combusted, under paragraph (a)(1)(i) of this section, will be based on 
the best available data reported to the Administrator for the unit.
    (ii) A unit's converted control period heat input for a calendar 
year specified under paragraph (a)(1)(ii) of this section equals:
    (A) Except as provided in paragraph (a)(2)(ii)(B) or (C) of this 
section, the control period gross electrical output of the generator or 
generators served by the unit multiplied by 7,900 Btu/kWh and divided 
by 1,000,000 Btu/MMBtu, provided that if a generator is served by 2 or 
more units, then the gross electrical output of the generator will be 
attributed to each unit in proportion to the unit's share of the total 
control period heat input of such units for the year;
    (B) For a unit that is a boiler and has equipment used to produce 
electricity and useful thermal energy for industrial, commercial, 
heating, or cooling purposes through the sequential use of energy, the 
total heat energy (in Btu) of the steam produced by the boiler during 
the control period, divided by 0.8 and by 1,000,000 Btu/MMBtu; or
    (C) For a unit that is a combustion turbine and has equipment used 
to produce electricity and useful thermal energy for industrial, 
commercial, heating, or cooling purposes through the sequential use of 
energy, the control period gross electrical output of the enclosed 
device comprising the compressor, combustor, and turbine multiplied by 
3,413 Btu/kWh, plus the total heat energy (in Btu) of the steam 
produced by any associated heat recovery steam generator during the 
control period divided by 0.8, and with the sum divided by 1,000,000 
Btu/MMBtu.
    (iii) Gross electrical output and total heat energy under paragraph 
(a)(2)(ii) of this section will be determined based on the best 
available data reported to the Administrator.
    (3) The Administrator will determine what data are the best 
available data under paragraph (a)(2) of this section by weighing the 
likelihood that data are accurate and reliable and giving greater 
weight to data submitted to a governmental entity in compliance with 
legal requirements or substantiated by an independent entity.
    (b)(1) For each control period in 2010 and thereafter, the 
Administrator will allocate to all Hg Budget units in a State that have 
a baseline heat input (as determined under paragraph (a) of this 
section) a total amount of Hg allowances equal to 95 percent for a 
control period in 2010 through 2014, and 97 percent for a control 
period in 2015 and thereafter, of the amount of ounces (i.e., tons 
multiplied by 32,000 ounces/ton)

[[Page 77139]]

of Hg emissions in the applicable State trading budget under Sec.  
62.15940 (except as provided in paragraph (d) of this section).
    (2) The Administrator will allocate Hg allowances to each Hg Budget 
unit under paragraph (b)(1) of this section in an amount determined by 
multiplying the total amount of Hg allowances allocated under paragraph 
(b)(1) of this section by the ratio of the baseline heat input of such 
Hg Budget unit to the total amount of baseline heat input of all such 
Hg Budget units in the State and rounding to the nearest whole 
allowance as appropriate.
    (c) For each control period in 2009 and thereafter, the 
Administrator will allocate Hg allowances to Hg Budget units in a State 
that are not allocated Hg allowances under paragraph (b) of this 
section because the units do not yet have a baseline heat input under 
paragraph (a) of this section or because the units have a baseline heat 
input but all Hg allowances available under paragraph (b) of this 
section for the control period are already allocated, in accordance 
with the following procedures:
    (1) The Administrator will establish a separate new unit set-aside 
for each control period. Each new unit set-aside will be allocated Hg 
allowances equal to 5 percent for a control period in 2010 through 
2014, and 3 percent for a control period in 2015 and thereafter, of the 
amount of ounces (i.e., tons multiplied by 32,000 ounces/ton) of Hg 
emissions in the applicable State trading budget under Sec.  62.15940.
    (2) The Hg designated representative of such a Hg Budget unit may 
submit to the Administrator a request, in a format specified by the 
Administrator, to be allocated Hg allowances, starting with the later 
of the control period in 2010 or the first control period after the 
control period in which the Hg Budget unit commences commercial 
operation and until the first control period for which the unit is 
allocated Hg allowances under paragraph (b) of this section. A separate 
Hg allowance allocation request for each control period for which Hg 
allowances are sought must be submitted on or before May 1 of such 
control period and after the date on which the Hg Budget unit commences 
commercial operation.
    (3) In a Hg allowance allocation request under paragraph (c)(2) of 
this section, the Hg designated representative may request for a 
control period Hg allowances in an amount not exceeding the Hg Budget 
unit's total ounces of Hg emissions during the calendar year 
immediately before such control period.
    (4) The Administrator will review each Hg allowance allocation 
request under paragraph (c)(2) of this section and will allocate Hg 
allowances for each control period pursuant to such request as follows:
    (i) The Administrator will accept an allowance allocation request 
only if the request meets, or is adjusted by the Administrator as 
necessary to meet, the requirements of paragraphs (c)(2) and (3) of 
this section.
    (ii) On or after May 1 of the control period, the Administrator 
will determine the sum of the Hg allowances requested (as adjusted 
under paragraph (c)(4)(i) of this section) in all allowance allocation 
requests accepted under paragraph (c)(4)(i) of this section for the 
control period.
    (iii) If the amount of Hg allowances in the new unit set-aside for 
the control period is greater than or equal to the sum under paragraph 
(c)(4)(ii) of this section, then the Administrator will allocate the 
amount of Hg allowances requested (as adjusted under paragraph 
(c)(4)(i) of this section) to each Hg Budget unit covered by an 
allowance allocation request accepted under paragraph (c)(4)(i) of this 
section.
    (iv) If the amount of Hg allowances in the new unit set-aside for 
the control period is less than the sum under paragraph (c)(4)(ii) of 
this section, then the Administrator will allocate to each Hg Budget 
unit covered by an allowance allocation request accepted under 
paragraph (c)(4)(i) of this section the amount of the Hg allowances 
requested (as adjusted under paragraph (c)(4)(i) of this section), 
multiplied by the amount of Hg allowances in the new unit set-aside for 
the control period, divided by the sum determined under paragraph 
(c)(4)(ii) of this section, and rounded to the nearest whole allowance 
as appropriate.
    (v) The Administrator will notify each Hg designated representative 
that submitted an allowance allocation request of the amount of Hg 
allowances (if any) allocated for the control period to the Hg Budget 
unit covered by the request.
    (d) If, after completion of the procedures under paragraph (c)(4) 
of this section for a control period, any unallocated Hg allowances 
remain in the new unit set-aside under paragraph (c) for a State for 
the control period, the Administrator will allocate to each Hg Budget 
unit that was allocated Hg allowances under paragraph (b) of this 
section in the State an amount of Hg allowances equal to the total 
amount of such remaining unallocated Hg allowances, multiplied by the 
unit's allocation under paragraph (b) of this section, divided by 95 
percent for a control period in 2010 through 2014, and 97 percent for a 
control period in 2015 and thereafter, of the amount of ounces (i.e., 
tons multiplied by 32,000 ounces/ton) of Hg emissions in the applicable 
State trading budget under Sec.  62.15940, and rounded to the nearest 
whole allowance as appropriate.
    (e) If the Administrator determines that Hg allowances were 
allocated under paragraphs (a) and (b) of this section, paragraphs (a) 
and (c) of this section, or paragraph (d) of this section for a control 
period and that the recipient of the allocation is not actually a Hg 
Budget unit under Sec.  62.15904 in such control period, then the 
Administrator will notify the Hg designated representative and will act 
in accordance with the following procedures:
    (1) Except as provided in paragraph (e)(2) or (3) of this section, 
the Administrator will not record such Hg allowances under Sec.  
62.15953.
    (2) If the Administrator already recorded such Hg allowances under 
Sec.  62.15953 and if the Administrator makes such determination before 
making deductions for the source that includes such recipient under 
Sec.  62.15954(b) for the control period, then the Administrator will 
deduct from the account in which such Hg allowances were recorded under 
Sec.  62.15953 an amount of Hg allowances allocated for the same or a 
prior control period equal to the amount of such already recorded Hg 
allowances. The Hg authorized account representative shall ensure that 
there are sufficient Hg allowances in such account for completion of 
the deduction.
    (3) If the Administrator already recorded such Hg allowances under 
Sec.  62.15953 and if the Administrator makes such determination after 
making deductions for the source that includes such recipient under 
Sec.  62.15954(b) for the control period, then the Administrator will 
apply paragraph (e)(1) or (2) of this section, as appropriate, to any 
subsequent control period for which Hg allowances were allocated to 
such recipient.
    (4) The Administrator will transfer the Hg allowances that are not 
recorded, or that are deducted, in accordance with paragraphs (e)(1), 
(2), and (3) of this section to a new unit set-aside for the State in 
which such recipient is located.

Sec.  62.15943  Alternative of allocation of Hg allowances by 
permitting authority.

    (a) Notwithstanding Sec. Sec.  62.15941, 62.15942, and 62.15953 if 
a State submits, and the Administrator approves, a State allocation

[[Page 77140]]

methodology in accordance with Sec.  60.24(h)(9) of this chapter 
providing for allocation of Hg allowances for any control period by the 
permitting authority, then, for each such control period:
    (1) The permitting authority shall make such allocations in 
accordance with such approved State allocation methodology;
    (2) The Administrator will not make allocations under Sec. Sec.  
62.15941 and 62.15942 for the Hg Budget units in the State; and
    (3) Under Sec.  62.15953, the Administrator will record the 
allocations made under such approved State allocation methodology 
instead of allocations under Sec. Sec.  62.15941 and 62.15942.
    (b) In implementing paragraph (a) of this section and Sec. Sec.  
62.15941, 62.15942, and 62.15953, the Administrator will ensure that 
the total amount of Hg allowances allocated, under such provisions and 
under a State's State allocation methodology approved in accordance 
with Sec.  60.24(h)(9) of this chapter, for a control period for Hg 
Budget sources in the State or for other entities specified by the 
permitting authority will not exceed the State's State trading budget 
for the year of the control period.

Hg Allowance Tracking System

Sec.  62.15950  [Reserved]

Sec.  62.15951  Establishment of accounts.

    (a) Compliance accounts. Upon receipt of a complete certificate of 
representation under Sec.  62.15913, the Administrator will establish a 
compliance account for the Hg Budget source for which the certificate 
of representation was submitted unless the source already has a 
compliance account.
    (b) General accounts.
    (1) Application for general account.
    (i) Any person may apply to open a general account for the purpose 
of holding and transferring Hg allowances. An application for a general 
account may designate one and only one Hg authorized account 
representative and one and only one alternate Hg authorized account 
representative who may act on behalf of the Hg authorized account 
representative. The agreement by which the alternate Hg authorized 
account representative is selected shall include a procedure for 
authorizing the alternate Hg authorized account representative to act 
in lieu of the Hg authorized account representative.
    (ii) A complete application for a general account shall be 
submitted to the Administrator and shall include the following elements 
in a format prescribed by the Administrator:
    (A) Name, mailing address, e-mail address (if any), telephone 
number, and facsimile transmission number (if any) of the Hg authorized 
account representative and any alternate Hg authorized account 
representative;
    (B) Organization name and type of organization, if applicable;
    (C) A list of all persons subject to a binding agreement for the Hg 
authorized account representative and any alternate Hg authorized 
account representative to represent their ownership interest with 
respect to the Hg allowances held in the general account;
    (D) The following certification statement by the Hg authorized 
account representative and any alternate Hg authorized account 
representative: ``I certify that I was selected as the Hg authorized 
account representative or the alternate Hg authorized account 
representative, as applicable, by an agreement that is binding on all 
persons who have an ownership interest with respect to Hg allowances 
held in the general account. I certify that I have all the necessary 
authority to carry out my duties and responsibilities under the Hg 
Budget Trading Program on behalf of such persons and that each such 
person shall be fully bound by my representations, actions, inactions, 
or submissions and by any order or decision issued to me by the 
Administrator or a court regarding the general account.''
    (E) The signature of the Hg authorized account representative and 
any alternate Hg authorized account representative and the dates 
signed.
    (iii) Unless otherwise required by the permitting authority or the 
Administrator, documents of agreement referred to in the application 
for a general account shall not be submitted to the permitting 
authority or the Administrator. Neither the permitting authority nor 
the Administrator shall be under any obligation to review or evaluate 
the sufficiency of such documents, if submitted.
    (2) Authorization of Hg authorized account representative and 
alternate Hg authorized account representative.
    (i) Upon receipt by the Administrator of a complete application for 
a general account under paragraph (b)(1) of this section:
    (A) The Administrator will establish a general account for the 
person or persons for whom the application is submitted.
    (B) The Hg authorized account representative and any alternate Hg 
authorized account representative for the general account shall 
represent and, by his or her representations, actions, inactions, or 
submissions, legally bind each person who has an ownership interest 
with respect to Hg allowances held in the general account in all 
matters pertaining to the Hg Budget Trading Program, notwithstanding 
any agreement between the Hg authorized account representative or any 
alternate Hg authorized account representative and such person. Any 
such person shall be bound by any order or decision issued to the Hg 
authorized account representative or any alternate Hg authorized 
account representative by the Administrator or a court regarding the 
general account.
    (C) Any representation, action, inaction, or submission by any 
alternate Hg authorized account representative shall be deemed to be a 
representation, action, inaction, or submission by the Hg authorized 
account representative.
    (ii) Each submission concerning the general account shall be 
submitted, signed, and certified by the Hg authorized account 
representative or any alternate Hg authorized account representative 
for the persons having an ownership interest with respect to Hg 
allowances held in the general account. Each such submission shall 
include the following certification statement by the Hg authorized 
account representative or any alternate Hg authorized account 
representative: ``I am authorized to make this submission on behalf of 
the persons having an ownership interest with respect to the Hg 
allowances held in the general account. I certify under penalty of law 
that I have personally examined, and am familiar with, the statements 
and information submitted in this document and all its attachments. 
Based on my inquiry of those individuals with primary responsibility 
for obtaining the information, I certify that the statements and 
information are to the best of my knowledge and belief true, accurate, 
and complete. I am aware that there are significant penalties for 
submitting false statements and information or omitting required 
statements and information, including the possibility of fine or 
imprisonment.''
    (iii) The Administrator will accept or act on a submission 
concerning the general account only if the submission has been made, 
signed, and certified in accordance with paragraph (b)(2)(ii) of this 
section.
    (3) Changing Hg authorized account representative and alternate Hg 
authorized account representative; changes in persons with ownership 
interest.
    (i) The Hg authorized account representative for a general account 
may

[[Page 77141]]

be changed at any time upon receipt by the Administrator of a 
superseding complete application for a general account under paragraph 
(b)(1) of this section. Notwithstanding any such change, all 
representations, actions, inactions, and submissions by the previous Hg 
authorized account representative before the time and date when the 
Administrator receives the superseding application for a general 
account shall be binding on the new Hg authorized account 
representative and the persons with an ownership interest with respect 
to the Hg allowances in the general account.
    (ii) The alternate Hg authorized account representative for a 
general account may be changed at any time upon receipt by the 
Administrator of a superseding complete application for a general 
account under paragraph (b)(1) of this section. Notwithstanding any 
such change, all representations, actions, inactions, and submissions 
by the previous alternate Hg authorized account representative before 
the time and date when the Administrator receives the superseding 
application for a general account shall be binding on the new alternate 
Hg authorized account representative and the persons with an ownership 
interest with respect to the Hg allowances in the general account.
    (iii)(A) In the event a person having an ownership interest with 
respect to Hg allowances in the general account is not included in the 
list of such persons in the application for a general account, such 
person shall be deemed to be subject to and bound by the application 
for a general account, the representation, actions, inactions, and 
submissions of the Hg authorized account representative and any 
alternate Hg authorized account representative of the account, and the 
decisions and orders of the Administrator or a court, as if the person 
were included in such list.
    (B) Within 30 days following any change in the persons having an 
ownership interest with respect to Hg allowances in the general 
account, including the addition of a new person, the Hg authorized 
account representative or any alternate Hg authorized account 
representative shall submit a revision to the application for a general 
account amending the list of persons having an ownership interest with 
respect to the Hg allowances in the general account to include the 
change.
    (4) Objections concerning Hg authorized account representative and 
alternate Hg authorized account representative.
    (i) Once a complete application for a general account under 
paragraph (b)(1) of this section has been submitted and received, the 
Administrator will rely on the application unless and until a 
superseding complete application for a general account under paragraph 
(b)(1) of this section is received by the Administrator.
    (ii) Except as provided in paragraph (b)(3)(i) or (ii) of this 
section, no objection or other communication submitted to the 
Administrator concerning the authorization, or any representation, 
action, inaction, or submission of the Hg authorized account 
representative or any alternate Hg authorized account representative 
for a general account shall affect any representation, action, 
inaction, or submission of the Hg authorized account representative or 
any alternate Hg authorized account representative or the finality of 
any decision or order by the Administrator under the Hg Budget Trading 
Program.
    (iii) The Administrator will not adjudicate any private legal 
dispute concerning the authorization or any representation, action, 
inaction, or submission of the Hg authorized account representative or 
any alternate Hg authorized account representative for a general 
account, including private legal disputes concerning the proceeds of Hg 
allowance transfers.
    (5) Delegation by Hg authorized account representative and 
alternate Hg authorized account representative.
    (i) A Hg authorized account representative may delegate, to one or 
more natural persons, his or her authority to make an electronic 
submission to the Administrator provided for or required under this 
section and Sec. Sec.  62.15952 through 62.15962.
    (ii) An alternate Hg authorized account representative may 
delegate, to one or more natural persons, his or her authority to make 
an electronic submission to the Administrator provided for or required 
under this section and Sec. Sec.  62.15952 through 62.15962.
    (iii) In order to delegate authority to make an electronic 
submission to the Administrator in accordance with paragraph (b)(5)(i) 
or (ii) of this section, the Hg authorized account representative or 
alternate Hg authorized account representative, as appropriate, must 
submit to the Administrator a notice of delegation, in a format 
prescribed by the Administrator, that includes the following elements:
    (A) The name, address, e-mail address, telephone number, and 
facsimile transmission number (if any) of such Hg authorized account 
representative or alternate Hg authorized account representative;
    (B) The name, address, e-mail address, telephone number, and, 
facsimile transmission number (if any) of each such natural person 
(referred to as an ``agent'');
    (C) For each such natural person, a list of the type or types of 
electronic submissions under paragraph (b)(5)(i) or (ii) of this 
section for which authority is delegated to him or her;
    (D) The following certification statement by such Hg authorized 
account representative or alternate Hg authorized account 
representative: ``I agree that any electronic submission to the 
Administrator that is by an agent identified in this notice of 
delegation and of a type listed for such agent in this notice of 
delegation and that is made when I am a Hg authorized account 
representative or alternate Hg authorized representative, as 
appropriate, and before this notice of delegation is superseded by 
another notice of delegation under 40 CFR 62.15951(b)(5)(iv) shall be 
deemed to be an electronic submission by me.''; and
    (E) The following certification statement by such Hg authorized 
account representative or alternate Hg authorized account 
representative: ``Until this notice of delegation is superseded by 
another notice of delegation under 40 CFR 62.15951 (b)(5)(iv), I agree 
to maintain an e-mail account and to notify the Administrator 
immediately of any change in my e-mail address unless all delegation of 
authority under 40 CFR 62.15951(b)(5) is terminated.''
    (iv) A notice of delegation submitted under paragraph (b)(5)(iii) 
of this section shall be effective, with regard to the Hg authorized 
account representative or alternate Hg authorized account 
representative identified in such notice, upon receipt of such notice 
by the Administrator and until receipt by the Administrator of a 
superseding notice of delegation submitted by such Hg authorized 
account representative or alternate Hg authorized account 
representative, as appropriate. The superseding notice of delegation 
may replace any previously identified agent, add a new agent, or 
eliminate entirely any delegation of authority.
    (v) Any electronic submission covered by the certification in 
paragraph (b)(5(iii)(D) of this section and made in accordance with a 
notice of delegation effective under paragraph (b)(5)(iv) of this 
section shall be deemed to be an electronic submission by the Hg 
designated representative or alternate

[[Page 77142]]

Hg designated representative submitting such notice of delegation.
    (c) Account identification. The Administrator will assign a unique 
identifying number to each account established under paragraph (a) or 
(b) of this section.

Sec.  62.15952  Responsibilities of Hg authorized account 
representative.

    Following the establishment of a Hg Allowance Tracking System 
account, all submissions to the Administrator pertaining to the 
account, including, but not limited to, submissions concerning the 
deduction or transfer of Hg allowances in the account, shall be made 
only by the Hg authorized account representative for the account.

Sec.  62.15953  Recordation of Hg allowance allocations.

    (a) By December 1, 2007, the Administrator will record in the Hg 
Budget source's compliance account the Hg allowances allocated for the 
Hg Budget units at the source in accordance with Sec.  62.15942(a) and 
(b) for the control period in 2010.
    (b) By December 1, 2008, the Administrator will record in the Hg 
Budget source's compliance account the Hg allowances allocated for the 
Hg Budget units at the source in accordance with Sec.  62.15942(a) and 
(b) for the control period in 2011.
    (c) By December 1, 2009, the Administrator will record in the Hg 
Budget source's compliance account the Hg allowances allocated for the 
Hg Budget units at the source in accordance with Sec.  62.15942(a) and 
(b) for the control periods in 2012 and 2013.
    (d) By December 1, 2010 and December 1 of each year thereafter, the 
Administrator will record in the Hg Budget source's compliance account 
the Hg allowances allocated for the Hg Budget units at the source in 
accordance with Sec.  62.15942(a) and (b) for the control period in the 
fourth year after the year of the applicable deadline for recordation 
under this paragraph.
    (e) By December 1, 2009 and December 1 of each year thereafter, the 
Administrator will record in the Hg Budget source's compliance account 
the Hg allowances allocated for the Hg Budget units at the source in 
accordance with Sec.  62.15942(a) and (c) for the control period in the 
year of the applicable deadline for recordation under this paragraph.
    (f) Serial numbers for allocated Hg allowances. When recording the 
allocation of Hg allowances for a Hg Budget unit in a compliance 
account, the Administrator will assign each Hg allowance a unique 
identification number that will include digits identifying the year of 
the control period for which the Hg allowance is allocated.

Sec.  62.15954  Compliance with Hg Budget emissions limitation.

    (a) Allowance transfer deadline. The Hg allowances are available to 
be deducted for compliance with a source's Hg Budget emissions 
limitation for a control period in a given calendar year only if the Hg 
allowances:
    (1) Were allocated for the control period in the year or a prior 
year; and
    (2) Are held in the compliance account as of the allowance transfer 
deadline for the control period or are transferred into the compliance 
account by a Hg allowance transfer correctly submitted for recordation 
under Sec. Sec.  62.15960 and 62.15961 by the allowance transfer 
deadline for the control period.
    (b) Deductions for compliance. Following the recordation, in 
accordance with Sec.  62.15961, of Hg allowance transfers submitted for 
recordation in a source's compliance account by the allowance transfer 
deadline for a control period, the Administrator will deduct from the 
compliance account Hg allowances available under paragraph (a) of this 
section in order to determine whether the source meets the Hg Budget 
emissions limitation for the control period, as follows:
    (1) Until the amount of Hg allowances deducted equals the number of 
ounces of total Hg emissions, determined in accordance with Sec. Sec.  
62.15970 through 62.15975, from all Hg Budget units at the source for 
the control period; or
    (2) If there are insufficient Hg allowances to complete the 
deductions in paragraph (b)(1) of this section, until no more Hg 
allowances available under paragraph (a) of this section remain in the 
compliance account.
    (c)(1) Identification of Hg allowances by serial number. The Hg 
authorized account representative for a source's compliance account may 
request that specific Hg allowances, identified by serial number, in 
the compliance account be deducted for emissions or excess emissions 
for a control period in accordance with paragraph (b) or (d) of this 
section. Such request shall be submitted to the Administrator by the 
allowance transfer deadline for the control period and include, in a 
format prescribed by the Administrator, the identification of the Hg 
Budget source and the appropriate serial numbers.
    (2) First-in, first-out. The Administrator will deduct Hg 
allowances under paragraph (b) or (d) of this section from the source's 
compliance account, in the absence of an identification or in the case 
of a partial identification of Hg allowances by serial number under 
paragraph (c)(1) of this section, on a first-in, first-out (FIFO) 
accounting basis in the following order:
    (i) Any Hg allowances that were allocated to the units at the 
source, in the order of recordation; and then
    (ii) Any Hg allowances that were allocated to any entity and 
transferred and recorded in the compliance account pursuant to 
Sec. Sec.  62.15960 through 62.15962, in the order of recordation.
    (d) Deductions for excess emissions.
    (1) After making the deductions for compliance under paragraph (b) 
of this section for a control period in a calendar year in which the Hg 
Budget source has excess emissions, the Administrator will deduct from 
the source's compliance account an amount of Hg allowances, allocated 
for the control period in the immediately following calendar year, 
equal to 3 times the number of ounces of the source's excess emissions.
    (2) Any allowance deduction required under paragraph (d)(1) of this 
section shall not affect the liability of the owners and operators of 
the Hg Budget source or the Hg Budget units at the source for any fine, 
penalty, or assessment, or their obligation to comply with any other 
remedy, for the same violations, as ordered under the Clean Air Act or 
applicable State law.
    (e) Recordation of deductions. The Administrator will record in the 
appropriate compliance account all deductions from such an account 
under paragraph (b) and (d) of this section.
    (f) Administrator's action on submissions.
    (1) The Administrator may review and conduct independent audits 
concerning any submission under the Hg Budget Trading Program and make 
appropriate adjustments of the information in the submissions.
    (2) The Administrator may deduct Hg allowances from or transfer Hg 
allowances to a source's compliance account based on the information in 
the submissions, as adjusted under paragraph (f)(1) of this section, 
and record such deductions and transfers.

Sec.  62.15955  Banking.

    (a) Hg allowances may be banked for future use or transfer in a 
compliance account or a general account in accordance with paragraph 
(b) of this section.
    (b) Any Hg allowance that is held in a compliance account or a 
general account will remain in such account unless and until the Hg 
allowance is

[[Page 77143]]

deducted or transferred under Sec.  62.15942, Sec.  62.15954, Sec.  
62.15956, or Sec. Sec.  62.15960 through 62.15962.

Sec.  62.15956  Account error.

    The Administrator may, at his or her sole discretion and on his or 
her own motion, correct any error in any Hg Allowance Tracking System 
account. Within 10 business days of making such correction, the 
Administrator will notify the Hg authorized account representative for 
the account.

Sec.  62.15957  Closing of general accounts.

    (a) The Hg authorized account representative of a general account 
may submit to the Administrator a request to close the account, which 
shall include a correctly submitted allowance transfer under Sec. Sec.  
62.15960 and 62.15961 for any Hg allowances in the account to one or 
more other Hg Allowance Tracking System accounts.
    (b) If a general account has no allowance transfers in or out of 
the account for a 12-month period or longer and does not contain any Hg 
allowances, the Administrator may notify the Hg authorized account 
representative for the account that the account will be closed 
following 20 business days after the notice is sent. The account will 
be closed after the 20-day period unless, before the end of the 20-day 
period, the Administrator receives a correctly submitted transfer of Hg 
allowances into the account under Sec. Sec.  62.15960 and 62.15961 or a 
statement submitted by the Hg authorized account representative 
demonstrating to the satisfaction of the Administrator good cause as to 
why the account should not be closed.

Hg Allowance Transfers

Sec.  62.15960  Submission of Hg allowance transfers.

    An Hg authorized account representative seeking recordation of a Hg 
allowance transfer shall submit the transfer to the Administrator. To 
be considered correctly submitted, the Hg allowance transfer shall 
include the following elements, in a format specified by the 
Administrator:
    (a) The account numbers for both the transferor and transferee 
accounts;
    (b) The serial number of each Hg allowance that is in the 
transferor account and is to be transferred; and
    (c) The name and signature of the Hg authorized account 
representative of the transferor account and the date signed.

Sec.  62.15961  EPA recordation.

    (a) Within 5 business days (except as provided in paragraph (b) of 
this section) of receiving a Hg allowance transfer, the Administrator 
will record a Hg allowance transfer by moving each Hg allowance from 
the transferor account to the transferee account as specified by the 
request, provided that:
    (1) The transfer is correctly submitted under Sec.  62.15960; and
    (2) The transferor account includes each Hg allowance identified by 
serial number in the transfer.
    (b) A Hg allowance transfer that is submitted for recordation after 
the allowance transfer deadline for a control period and that includes 
any Hg allowances allocated for any control period before such 
allowance transfer deadline will not be recorded until after the 
Administrator completes the deductions under Sec.  62.15954 for the 
control period immediately before such allowance transfer deadline.
    (c) Where a Hg allowance transfer submitted for recordation fails 
to meet the requirements of paragraph (a) of this section, the 
Administrator will not record such transfer.

Sec.  62.15962  Notification.

    (a) Notification of recordation. Within 5 business days of 
recordation of a Hg allowance transfer under Sec.  62.15961, the 
Administrator will notify the Hg authorized account representatives of 
both the transferor and transferee accounts.
    (b) Notification of non-recordation. Within 10 business days of 
receipt of a Hg allowance transfer that fails to meet the requirements 
of Sec.  62.15961(a), the Administrator will notify the Hg authorized 
account representatives of both accounts subject to the transfer of:
    (1) A decision not to record the transfer, and
    (2) The reasons for such non-recordation.
    (c) Nothing in this section shall preclude the submission of a Hg 
allowance transfer for recordation following notification of non-
recordation.

Monitoring and Reporting

Sec.  62.15970  General requirements.

    The owners and operators, and to the extent applicable, the Hg 
designated representative, of a Hg Budget unit, shall comply with the 
monitoring, recordkeeping, and reporting requirements as provided in 
this section, Sec. Sec.  62.15971 through 62.15975, and subpart I of 
part 75 of this chapter. For purposes of complying with such 
requirements, the definitions in Sec.  62.15902 and in Sec.  72.2 of 
this chapter shall apply, and the terms ``affected unit,'' ``designated 
representative,'' and ``continuous emission monitoring system'' (or 
``CEMS'') in part 75 of this chapter shall be deemed to refer to the 
terms ``Hg Budget unit,'' ``Hg designated representative,'' and 
``continuous emission monitoring system'' (or ``CEMS'') respectively, 
as defined in Sec.  62.15902. The owner or operator of a unit that is 
not a Hg Budget unit but that is monitored under Sec.  75.82(b)(2)(i) 
of this chapter shall comply with the same monitoring, recordkeeping, 
and reporting requirements as a Hg Budget unit.
    (a) Requirements for installation, certification, and data 
accounting. The owner or operator of each Hg Budget unit shall:
    (1) Install all monitoring systems required under this section and 
Sec. Sec.  62.15971 through 62.15975 for monitoring Hg mass emissions 
and individual unit heat input (including all systems required to 
monitor Hg concentration, stack gas moisture content, stack gas flow 
rate, and CO2 or O2 concentration, as applicable, 
in accordance with Sec. Sec.  75.81 and 75.82 of this chapter);
    (2) Successfully complete all certification tests required under 
Sec.  62.15971 and meet all other requirements of this section, 
Sec. Sec.  62.15971 through 62.15975, and subpart I of part 75 of this 
chapter applicable to the monitoring systems under paragraph (a)(1) of 
this section; and
    (3) Record, report, and quality-assure the data from the monitoring 
systems under paragraph (a)(1) of this section.
    (b) Compliance deadlines. Except as provided in paragraph (e) of 
this section, the owner or operator shall meet the monitoring system 
certification and other requirements of paragraphs (a)(1) and (2) of 
this section on or before the following dates. The owner or operator 
shall record, report, and quality-assure the data from the monitoring 
systems under paragraph (a)(1) of this section on and after the 
following dates.
    (1) For the owner or operator of a Hg Budget unit that commences 
commercial operation before July 1, 2008, by January 1, 2009.
    (2) For the owner or operator of a Hg Budget unit that commences 
commercial operation on or after July 1, 2008, by the later of the 
following dates:
    (i) January 1, 2009; or
    (ii) 90 unit operating days or 180 calendar days, whichever occurs 
first, after the date on which the unit commences commercial operation.
    (3) For the owner or operator of a Hg Budget unit for which 
construction of a new stack or flue or installation of add-on Hg 
emission controls, a flue gas desulfurization system, a selective

[[Page 77144]]

catalytic reduction system, or a compact hybrid particulate collector 
system is completed after the applicable deadline under paragraph 
(b)(1) or (2) of this section, by 90 unit operating days or 180 
calendar days, whichever occurs first, after the date on which 
emissions first exit to the atmosphere through the new stack or flue, 
add-on Hg emissions controls, flue gas desulfurization system, 
selective catalytic reduction system, or compact hybrid particulate 
collector system.
    (c) Reporting data. The owner or operator of a Hg Budget unit that 
does not meet the applicable compliance date set forth in paragraph (b) 
of this section for any monitoring system under paragraph (a)(1) of 
this section shall, for each such monitoring system, determine, record, 
and report maximum potential (or, as appropriate, minimum potential) 
values for Hg concentration, stack gas flow rate, stack gas moisture 
content, and any other parameters required to determine Hg mass 
emissions and heat input in accordance with Sec.  75.80(g) of this 
chapter.
    (d) Prohibitions.
    (1) No owner or operator of a Hg Budget unit shall use any 
alternative monitoring system, alternative reference method, or any 
other alternative to any requirement of this section and Sec. Sec.  
62.15971 through 62.15974 without having obtained prior written 
approval in accordance with Sec.  62.15975.
    (2) No owner or operator of a Hg Budget unit shall operate the unit 
so as to discharge, or allow to be discharged, Hg emissions to the 
atmosphere without accounting for all such emissions in accordance with 
the applicable provisions of this section, Sec. Sec.  62.15971 through 
62.15975, and subpart I of part 75 of this chapter.
    (3) No owner or operator of a Hg Budget unit shall disrupt the 
continuous emission monitoring system, any portion thereof, or any 
other approved emission monitoring method, and thereby avoid monitoring 
and recording Hg mass emissions discharged into the atmosphere or heat 
input, except for periods of recertification or periods when 
calibration, quality assurance testing, or maintenance is performed in 
accordance with the applicable provisions of this section, Sec. Sec.  
62.15971 through 62.15975, and subpart I of part 75 of this chapter.
    (4) No owner or operator of a Hg Budget unit shall retire or 
permanently discontinue use of the continuous emission monitoring 
system, any component thereof, or any other approved monitoring system 
under this section and Sec. Sec.  62.15971 through 62.15975, except 
under any one of the following circumstances:
    (i) During the period that the unit is covered by an exemption 
under Sec.  62.15905 that is in effect;
    (ii) The owner or operator is monitoring emissions from the unit 
with another certified monitoring system approved, in accordance with 
the applicable provisions of this section, Sec. Sec.  62.15971 through 
62.15975, and subpart I of part 75 of this chapter, by the 
Administrator for use at that unit that provides emission data for the 
same pollutant or parameter as the retired or discontinued monitoring 
system; or
    (iii) The Hg designated representative submits notification of the 
date of certification testing of a replacement monitoring system for 
the retired or discontinued monitoring system in accordance with Sec.  
62.15971(c)(3)(i).
    (e) Long-term cold storage. The owner or operator of a Hg Budget 
unit is subject to the applicable provisions of part 75 of this chapter 
concerning units in long-term cold storage.

Sec.  62.15971  Initial certification and recertification procedures.

    (a) The owner or operator of a Hg Budget unit shall be exempt from 
the initial certification requirements of this section for a monitoring 
system under Sec.  62.15970(a)(1) if the following conditions are met:
    (1) The monitoring system has been previously certified in 
accordance with part 75 of this chapter; and
    (2) The applicable quality-assurance and quality-control 
requirements of Sec.  75.21 of this chapter and appendix B to part 75 
of this chapter are fully met for the certified monitoring system 
described in paragraph (a)(1) of this section.
    (b) The recertification provisions of this section shall apply to a 
monitoring system under Sec.  62.15970(a)(1) exempt from initial 
certification requirements under paragraph (a) of this section.
    (c) Except as provided in paragraph (a) of this section, the owner 
or operator of a Hg Budget unit shall comply with the following initial 
certification and recertification procedures for a continuous 
monitoring system (i.e., a continuous emission monitoring system and an 
excepted monitoring system (sorbent trap monitoring system) under Sec.  
75.15) under Sec.  62.15970(a)(1). The owner or operator of a unit that 
qualifies to use the Hg low mass emissions excepted monitoring 
methodology under Sec.  75.81(b) of this chapter or that qualifies to 
use an alternative monitoring system under subpart E of part 75 of this 
chapter shall comply with the procedures in paragraph (d) or (e) of 
this section respectively.
    (1) Requirements for initial certification. The owner or operator 
shall ensure that each continuous monitoring system under Sec.  
62.15970(a)(1) (including the automated data acquisition and handling 
system) successfully completes all of the initial certification testing 
required under Sec.  75.20 of this chapter by the applicable deadline 
in Sec.  62.15970(b). In addition, whenever the owner or operator 
installs a monitoring system to meet the requirements of this subpart 
in a location where no such monitoring system was previously installed, 
initial certification in accordance with Sec.  75.20 of this chapter is 
required.
    (2) Requirements for recertification. Whenever the owner or 
operator makes a replacement, modification, or change in any certified 
continuous emission monitoring system, or an excepted monitoring system 
(sorbent trap monitoring system) under Sec.  75.15, under Sec.  
62.15970(a)(1) that may significantly affect the ability of the system 
to accurately measure or record Hg mass emissions or heat input rate or 
to meet the quality-assurance and quality-control requirements of Sec.  
75.21 of this chapter or appendix B to part 75 of this chapter, the 
owner or operator shall recertify the monitoring system in accordance 
with Sec.  75.20(b) of this chapter. Furthermore, whenever the owner or 
operator makes a replacement, modification, or change to the flue gas 
handling system or the unit's operation that may significantly change 
the stack flow or concentration profile, the owner or operator shall 
recertify each continuous emission monitoring system, and each excepted 
monitoring system (sorbent trap monitoring system) under Sec.  75.15, 
whose accuracy is potentially affected by the change, in accordance 
with Sec.  75.20(b) of this chapter. Examples of changes to a 
continuous emission monitoring system that require recertification 
include replacement of the analyzer, complete replacement of an 
existing continuous emission monitoring system, or change in location 
or orientation of the sampling probe or site.
    (3) Approval process for initial certification and recertification. 
Paragraphs (c)(3)(i) through (iv) of this section apply to both initial 
certification and recertification of a continuous monitoring system 
under Sec.  62.15970(a)(1). For recertifications, replace the words 
``certification'' and ``initial certification'' with the word 
``recertification'', replace the word ``certified'' with the word 
``recertified'',

[[Page 77145]]

and follow the procedures in Sec.  75.20(b)(5) of this chapter in lieu 
of the procedures in paragraph (c)(3)(v) of this section.
    (i) Notification of certification. The Hg designated representative 
shall submit to the Administrator and the appropriate EPA Regional 
Office written notice of the dates of certification testing, in 
accordance with Sec.  62.15973.
    (ii) Certification application. The Hg designated representative 
shall submit to the Administrator a certification application for each 
monitoring system. A complete certification application shall include 
the information specified in Sec.  75.63 of this chapter.
    (iii) Provisional certification date. The provisional certification 
date for a monitoring system shall be determined in accordance with 
Sec.  75.20(a)(3) of this chapter. A provisionally certified monitoring 
system may be used under the Hg Budget Trading Program for a period not 
to exceed 120 days after receipt by the Administrator of the complete 
certification application for the monitoring system under paragraph 
(c)(3)(ii) of this section. Data measured and recorded by the 
provisionally certified monitoring system, in accordance with the 
requirements of part 75 of this chapter, will be considered valid 
quality-assured data (retroactive to the date and time of provisional 
certification), provided that the Administrator does not invalidate the 
provisional certification by issuing a notice of disapproval within 120 
days of the date of receipt of the complete certification application 
by the Administrator.
    (iv) Certification application approval process. The Administrator 
will issue a written notice of approval or disapproval of the 
certification application to the owner or operator within 120 days of 
receipt of the complete certification application under paragraph 
(c)(3)(ii) of this section. In the event the Administrator does not 
issue such a notice within such 120-day period, each monitoring system 
that meets the applicable performance requirements of part 75 of this 
chapter and is included in the certification application will be deemed 
certified for use under the Hg Budget Trading Program.
    (A) Approval notice. If the certification application is complete 
and shows that each monitoring system meets the applicable performance 
requirements of part 75 of this chapter, then the Administrator will 
issue a written notice of approval of the certification application 
within 120 days of receipt.
    (B) Incomplete application notice. If the certification application 
is not complete, then the Administrator will issue a written notice of 
incompleteness that sets a reasonable date by which the Hg designated 
representative must submit the additional information required to 
complete the certification application. If the Hg designated 
representative does not comply with the notice of incompleteness by the 
specified date, then the Administrator may issue a notice of 
disapproval under paragraph (c)(3)(iv)(C) of this section. The 120-day 
review period shall not begin before receipt of a complete 
certification application.
    (C) Disapproval notice. If the certification application shows that 
any monitoring system does not meet the performance requirements of 
part 75 of this chapter or if the certification application is 
incomplete and the requirement for disapproval under paragraph 
(c)(3)(iv)(B) of this section is met, then the Administrator will issue 
a written notice of disapproval of the certification application. Upon 
issuance of such notice of disapproval, the provisional certification 
is invalidated by the Administrator and the data measured and recorded 
by each uncertified monitoring system shall not be considered valid 
quality-assured data beginning with the date and hour of provisional 
certification (as defined under Sec.  75.20(a)(3) of this chapter). The 
owner or operator shall follow the procedures for loss of certification 
in paragraph (c)(3)(v) of this section for each monitoring system that 
is disapproved for initial certification.
    (D) Audit decertification. The Administrator may issue a notice of 
disapproval of the certification status of a monitor in accordance with 
Sec.  62.15972(b).
    (v) Procedures for loss of certification. If the Administrator 
issues a notice of disapproval of a certification application under 
paragraph (c)(3)(iv)(C) of this section or a notice of disapproval of 
certification status under paragraph (c)(3)(iv)(D) of this section, 
then:
    (A) The owner or operator shall substitute the following values, 
for each disapproved monitoring system, for each hour of unit operation 
during the period of invalid data specified under Sec.  
75.20(a)(4)(iii) or Sec.  75.21(e) of this chapter and continuing until 
the applicable date and hour specified under Sec.  75.20(a)(5)(i) of 
this chapter:
    (1) For a disapproved Hg pollutant concentration monitors and 
disapproved flow monitor, respectively, the maximum potential 
concentration of Hg and the maximum potential flow rate, as defined in 
sections 2.1.7.1 and 2.1.4.1 of appendix A to part 75 of this chapter.
    (2) For a disapproved moisture monitoring system and disapproved 
diluent gas monitoring system, respectively, the minimum potential 
moisture percentage and either the maximum potential CO2 
concentration or the minimum potential O2 concentration (as 
applicable), as defined in sections 2.1.5, 2.1.3.1, and 2.1.3.2 of 
appendix A to part 75 of this chapter.
    (3) For a disapproved excepted monitoring system (sorbent trap 
monitoring system) under Sec.  75.15 and disapproved flow monitor, 
respectively, the maximum potential concentration of Hg and maximum 
potential flow rate, as defined in sections 2.1.7.1 and 2.1.4.1 of 
appendix A to part 75 of this chapter.
    (B) The Hg designated representative shall submit a notification of 
certification retest dates and a new certification application in 
accordance with paragraphs (c)(3)(i) and (ii) of this section.
    (C) The owner or operator shall repeat all certification tests or 
other requirements that were failed by the monitoring system, as 
indicated in the Administrator's notice of disapproval, no later than 
30 unit operating days after the date of issuance of the notice of 
disapproval.
    (d) Initial certification and recertification procedures for units 
using the Hg low mass emission excepted methodology under Sec.  
75.81(b) of this chapter. The owner or operator of a unit qualified to 
use the Hg low mass emissions (HgLME) excepted methodology under Sec.  
75.81(b) of this chapter shall meet the applicable certification and 
recertification requirements in Sec.  75.81(c) through (f) of this 
chapter.
    (e) Certification/recertification procedures for alternative 
monitoring systems. The Hg designated representative of each unit for 
which the owner or operator intends to use an alternative monitoring 
system approved by the Administrator under subpart E of part 75 of this 
chapter shall comply with the applicable notification and application 
procedures of Sec.  75.20(f) of this chapter.

Sec.  62.15972  Out of control periods.

    (a) Whenever any monitoring system fails to meet the quality-
assurance and quality-control requirements or data validation 
requirements of part 75 of this chapter, data shall be substituted 
using the applicable missing data procedures in subpart D of part 75 of 
this chapter.
    (b) Audit decertification. Whenever both an audit of a monitoring 
system

[[Page 77146]]

and a review of the initial certification or recertification 
application reveal that any monitoring system should not have been 
certified or recertified because it did not meet a particular 
performance specification or other requirement under Sec.  62.15971 or 
the applicable provisions of part 75 of this chapter, both at the time 
of the initial certification or recertification application submission 
and at the time of the audit, the Administrator will issue a notice of 
disapproval of the certification status of such monitoring system. For 
the purposes of this paragraph, an audit shall be either a field audit 
or an audit of any information submitted to the permitting authority or 
the Administrator. By issuing the notice of disapproval, the 
Administrator revokes prospectively the certification status of the 
monitoring system. The data measured and recorded by the monitoring 
system shall not be considered valid quality-assured data from the date 
of issuance of the notification of the revoked certification status 
until the date and time that the owner or operator completes 
subsequently approved initial certification or recertification tests 
for the monitoring system. The owner or operator shall follow the 
applicable initial certification or recertification procedures in Sec.  
62.15971 for each disapproved monitoring system.

Sec.  62.15973  Notifications.

    The Hg designated representative for a Hg Budget unit shall submit 
written notice to the Administrator in accordance with Sec.  75.61 of 
this chapter.

Sec.  62.15974  Recordkeeping and reporting.

    (a) General provisions. The Hg designated representative shall 
comply with all recordkeeping and reporting requirements in this 
section, the applicable recordkeeping and reporting requirements of 
Sec.  75.84 of this chapter, and the requirements of Sec.  
62.15910(e)(1).
    (b) Monitoring plans. The owner or operator of a Hg Budget unit 
shall comply with requirements of Sec.  75.84(e) of this chapter.
    (c) Certification applications. The Hg designated representative 
shall submit an application to the Administrator within 45 days after 
completing all initial certification or recertification tests required 
under Sec.  62.15971, including the information required under Sec.  
75.63 of this chapter.
    (d) Quarterly reports. The Hg designated representative shall 
submit quarterly reports, as follows:
    (1) The Hg designated representative shall report the Hg mass 
emissions data and heat input data for the Hg Budget unit, in an 
electronic quarterly report in a format prescribed by the 
Administrator, for each calendar quarter beginning with:
    (i) For a unit that commences commercial operation before July 1, 
2008, the calendar quarter covering January 1, 2009 through March 31, 
2009; or
    (ii) For a unit that commences commercial operation on or after 
July 1, 2008, the calendar quarter corresponding to the earlier of the 
date of provisional certification or the applicable deadline for 
initial certification under Sec.  62.15970(b), unless that quarter is 
the third or fourth quarter of 2008, in which case reporting shall 
commence in the quarter covering January 1, 2009 through March 31, 
2009.
    (2) The Hg designated representative shall submit each quarterly 
report to the Administrator within 30 days following the end of the 
calendar quarter covered by the report. Quarterly reports shall be 
submitted in the manner specified in Sec.  75.84(f) of this chapter.
    (3) For Hg Budget units that are also subject to an Acid Rain 
emissions limitation or the CAIR NOX Annual Trading Program, 
CAIR SO2 Trading Program, or CAIR NOX Ozone 
Season Trading Program, quarterly reports shall include the applicable 
data and information required by subparts F through H of part 75 of 
this chapter as applicable, in addition to the Hg mass emission data, 
heat input data, and other information required by this section, 
Sec. Sec.  62.15970 through 62.15973, and Sec.  62.15975.
    (e) Compliance certification. The Hg designated representative 
shall submit to the Administrator a compliance certification (in a 
format prescribed by the Administrator) in support of each quarterly 
report based on reasonable inquiry of those persons with primary 
responsibility for ensuring that all of the unit's emissions are 
correctly and fully monitored. The certification shall state that:
    (1) The monitoring data submitted were recorded in accordance with 
the applicable requirements by this section, Sec. Sec.  62.15970 
through 62.15973, Sec.  62.15975, and part 75 of this chapter, 
including the quality assurance procedures and specifications; and
    (2) For a unit with add-on Hg emission controls, a flue gas 
desulfurization system, a selective catalytic reduction system, or a 
compact hybrid particulate collector system and for all hours where Hg 
data are substituted in accordance with Sec.  75.34(a)(1) of this 
chapter,
    (i)(A) The Hg add-on emission controls, flue gas desulfurization 
system, selective catalytic reduction system, or compact hybrid 
particulate collector system were operating within the range of 
parameters listed in the quality assurance/quality control program 
under appendix B to part 75 of this chapter, or
    (B) With regard to a flue gas desulfurization system or a selective 
catalytic reduction system, quality-assured SO2 emission 
data recorded in accordance with part 75 of this chapter document that 
the flue gas desulfurization system was operating properly or quality-
assured NOX emission data recorded in accordance with part 
75 of this chapter document that the selective catalytic reduction 
system was operating properly, as applicable, and
    (ii) The substitute data values do not systematically underestimate 
Hg emissions.

Sec.  62.15975  Petitions.

    The Hg designated representative of a Hg Budget unit may submit a 
petition under Sec.  75.66 of this chapter to the Administrator 
requesting approval to apply an alternative to any requirement of 
Sec. Sec.  62.15970 through 62.15974. Application of an alternative to 
any requirement of Sec. Sec.  62.15970 through 62.15974 is in 
accordance with this section and Sec. Sec.  62.15970 through 62.15974 
only to the extent that the petition is approved in writing by the 
Administrator, in consultation with the permitting authority.

Appendix A to Subpart LLL of Part 62--States With Approved State 
Allocation Methodology

    The following States have a State allocation methodology under 
Sec.  52.24(h)(9) of this chapter approved by the Administrator and 
providing for allocation of Hg allowances by the permitting authority 
under Sec.  62.15943(a):
    [Reserved]

PART 72--PERMITS REGULATION

    33. The authority citation for part 72 continues to read as 
follows:

    Authority: 42 U.S.C. 7601 and 7651, et seq.

Sec.  72.22  [Amended]

    34. Section 72.22 is amended as follows:
    a. In paragraph (b), by revising the words ``an action, 
representation, or failure to act'' to read ``a representation, action, 
inaction, or submission''; and
    b. Removing paragraph (e).

[[Page 77147]]

PART 78--APPEAL PROCEDURES

    35. The authority citation for part 78 is revised to read as 
follows:

    Authority: 42 U.S.C. 7401, 7403, 7410, 7411, 7426, 7601, and 
7651, et seq.

    36. Section 78.1 is amended as follows:
    a. In paragraph (a)(1), revising the words ``under part 72'' to 
read ``under subpart HHHH of part 60 of this chapter or State 
regulations approved under Sec.  60.24(h)(6) of this chapter, subpart 
LLL of part 62 of this chapter, parts 72''; and
    b. Adding new paragraphs (b)(13) and (b)(14) to read as follows:

Sec.  78.1  Purpose and scope.

* * * * *
    (b) * * *
    (13) Under subpart HHHH of part 60 of this chapter,
    (i) The decision on the allocation of Hg allowances under 
Sec. Sec.  60.4140 through 60.4142 of this chapter.
    (ii) The decision on the deduction of Hg allowances, and the 
adjustment of the information in a submission and the decision on the 
deduction or transfer of Hg allowances based on the information as 
adjusted, under Sec.  60.4154 of this chapter;
    (iii) The correction of an error in a Hg Allowance Tracking System 
account under Sec.  60.4156 of this chapter;
    (iv) The decision on the transfer of Hg allowances under Sec.  
60.4161 of this chapter;
    (v) The finalization of control period emissions data, including 
retroactive adjustment based on audit;
    (vi) The approval or disapproval of a petition under Sec.  60.4175 
of this chapter.
    (14) Under subpart LLL of part 62 of this chapter,
    (i) The decision on the allocation of Hg allowances under 
Sec. Sec.  62.15940 through 62.15942 of part 62 of this chapter.
    (ii) The decision on the deduction of Hg allowances, and the 
adjustment of the information in a submission and the decision on the 
deduction or transfer of Hg allowances based on the information as 
adjusted, under Sec.  62.15954 of this chapter;
    (iii) The correction of an error in a Hg Allowance Tracking System 
account under Sec.  62.15956 of this chapter;
    (iv) The decision on the transfer of Hg allowances under Sec.  
62.15961;
    (v) The finalization of control period emissions data, including 
retroactive adjustment based on audit;
    (vi) The approval or disapproval of a petition under Sec.  62.15975 
of this chapter.
* * * * *
    37. Section 78.3 is amended as follows:
    a. By adding new paragraphs (a)(10), (a)(11), (d)(11), and (d)(12);
    b. In paragraph (b)(3)(i), by adding the words ``or the Hg 
designated representative or Hg authorized account representative under 
paragraph (a)(10) or (11) of this section (unless the Hg designated 
representative or Hg authorized account representative is the 
petitioner) after the words ``(unless the CAIR designated 
representative or CAIR authorized account representative is the 
petitioner)'';
    c. In paragraph (d)(3), by adding the words ``or a certificate of 
representation submitted by a Hg designated representative or an 
application of a general account submitted by a Hg authorized account 
representative under subpart HHHH of part 60 of this chapter or subpart 
LLL of part 62 of this chapter'' after the words ``subparts AAAA 
through IIII of part 96 of this chapter, or under part 97 of this 
chapter'':

Sec.  78.3  Petition for administrative review and request for 
evidentiary hearing.

    (a) * * *
    (10) The following persons may petition for administrative review 
of a decision of the Administrator that is made under subpart HHHH of 
part 60 of this chapter and that is appealable under Sec.  78.1(a):
    (i) The Hg designated representative for a unit or source, or the 
Hg authorized account representative for any Hg Allowance Tracking 
System account, covered by the decision; or
    (ii) Any interested person.
    (11) The following persons may petition for administrative review 
of a decision of the Administrator that is made under subpart LLL of 
part 62 and that is appealable under Sec.  78.1(a):
    (i) The Hg designated representative for a unit or source, or the 
Hg authorized account representative for any Hg Allowance Tracking 
System account, covered by the decision; or
    (ii) Any interested person.
* * * * *
    (d) * * *
    (11) Any provision or requirement of subpart HHHH of part 60 of 
this chapter, including the standard requirements under Sec.  60.4106 
of this chapter and any emission monitoring or reporting requirements.
    (12) Any provision or requirement of subpart LLL of part 62 of this 
chapter, including the standard requirements under Sec.  97.206 of this 
chapter and any emission monitoring or reporting requirements.

[FR Doc. E6-21573 Filed 12-21-06; 8:45 am]

BILLING CODE 6560-50-P