Document ID: EPA-HQ-OAR-2015-0500-0583
Agency: epa
Document Type: Rule
Title: Cross-State Air Pollution Rule Update for the 2008 Ozone National Ambient Air Quality Standards
Posted Date: 2016-10-26T04:00Z

[Federal Register Volume 81, Number 207 (Wednesday, October 26, 2016)]
[Rules and Regulations]
[Pages 74504-74650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-22240]

[[Page 74503]]

Vol. 81

Wednesday,

No. 207

October 26, 2016

Part II

Environmental Protection Agency

-----------------------------------------------------------------------

40 CFR Parts 52, 78, and 97

Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS; Final 
Rule

  Federal Register / Vol. 81, No. 207 / Wednesday, October 26, 2016 / 
Rules and Regulations  

[[Page 74504]]

-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52, 78, and 97

[EPA-HQ-OAR-2015-0500; FRL-9950-30-OAR]
RIN 2060-AS05

Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Environmental Protection Agency (EPA) published the 
original Cross-State Air Pollution Rule (original CSAPR) on August 8, 
2011, to address interstate transport of ozone pollution under the 1997 
ozone National Ambient Air Quality Standards (NAAQS) and interstate 
transport of fine particulate matter (PM2.5) pollution under 
the 1997 and 2006 PM2.5 NAAQS. The EPA is finalizing this 
Cross-State Air Pollution Rule Update (CSAPR Update) to address 
interstate transport of ozone pollution with respect to the 2008 ozone 
NAAQS. This final rule will benefit human health and welfare by 
reducing ground-level ozone pollution. In particular, it will reduce 
ozone season emissions of oxides of nitrogen (NOX) in 22 
eastern states that can be transported downwind as NOX or, 
after transformation in the atmosphere, as ozone, and can negatively 
affect air quality and public health in downwind areas.
    For these 22 eastern states, the EPA is issuing Federal 
Implementation Plans (FIPs) that generally provide updated CSAPR 
NOX ozone season emission budgets for the electric 
generating units (EGUs) within these states, and that implement these 
budgets via modifications to the CSAPR NOX ozone season 
allowance trading program that was established under the original 
CSAPR. The EPA is finalizing these new or revised FIP requirements only 
for certain states that have failed to submit an approvable State 
Implementation Plan (SIP) addressing interstate emission transport for 
the 2008 ozone NAAQS. The FIPs require affected EGUs in each covered 
state to reduce emissions to comply with program requirements beginning 
with the 2017 ozone season (May 1 through September 30). This final 
rule partially addresses the EPA's obligation under the Clean Air Act 
to promulgate FIPs to address interstate emission transport for the 
2008 ozone NAAQS. In conjunction with other federal and state actions 
to reduce ozone pollution, these requirements will assist downwind 
states in the eastern United States with attaining and maintaining the 
2008 ozone NAAQS.
    This CSAPR Update also is intended to address the July 28, 2015 
remand by the United States Court of Appeals for the District of 
Columbia Circuit of certain states' original CSAPR phase 2 ozone season 
NOX emission budgets. In addition, this rule updates the 
status of certain states' outstanding interstate ozone transport 
obligations with respect to the 1997 ozone NAAQS, for which the 
original CSAPR provided a partial remedy.

DATES: This final rule is effective on December 27, 2016.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2015-0500. All documents in the docket are 
listed on the www.regulations.gov Web site. Although listed in the 
index, some information is not publicly available, e.g., 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 through 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Mr. David Risley, Clean Air Markets 
Division, Office of Atmospheric Programs (Mail Code 6204M), 
Environmental Protection Agency, 1200 Pennsylvania Avenue NW., 
Washington, DC 20460; telephone number: (202) 343-9177; email address: 
Risley.David@epa.gov.

SUPPLEMENTARY INFORMATION: 

Preamble Glossary of Terms and Abbreviations

    The following are abbreviations of terms used in the preamble.

CAA or Act Clean Air Act
CAIR Clean Air Interstate Rule
CAMx Comprehensive Air Quality Model With Extensions
CBI Confidential Business Information
CEMS Continuous Emission Monitoring Systems
CFR Code of Federal Regulations
CSAPR Cross-State Air Pollution Rule
EGU Electric Generating Unit
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
GWh Gigawatt Hours
ICR Information Collection Request
IPM Integrated Planning Model
Km Kilometer
lb/mmBtu Pounds per Million British Thermal Unit
LNB Low-NOX Burners
mmBtu Million British Thermal Unit
MOVES Motor Vehicle Emission Simulator
NAAQS National Ambient Air Quality Standard
NBP NOX Budget Trading Program
NEI National Emission Inventory
NOX Nitrogen Oxides
NODA Notice of Data Availability
NSPS New Source Performance Standard
OFA Overfire Air
PM2.5 Fine Particulate Matter
PPB Parts Per Billion
RIA Regulatory Impact Analysis
SC-CO2 Social Cost of Carbon
SCR Selective Catalytic Reduction
SIP State Implementation Plan
SMOKE Sparse Matrix Operator Kernel Emissions
SNCR Selective Non-Catalytic Reduction
SO2 Sulfur Dioxide
TSD Technical Support Document

Table of Contents

I. Executive Summary
    A. Purpose of Regulatory Action
    B. Major Provisions
    C. Benefits and Costs
II. General Information
    A. To whom does this final action apply?
III. Legal Authority
    A. The EPA's Statutory Authority for the Final Rule
    B. FIP Authority for Each State Covered by the Final Rule
IV. Air Quality Issues Addressed and Overall Approach for the Final 
Rule
    A. The Interstate Transport Challenge Under the 2008 Ozone 
Standard
    1. Background on the Nature of the Interstate Ozone Transport 
Problem
    2. Events Affecting Application of the Good Neighbor Provision 
for the 2008 Ozone NAAQS
    B. Approach To Address Ozone Transport Under the 2008 Ozone 
NAAQS via FIPS
    1. Requiring Emission Reductions From Upwind States
    2. Focusing on 2017 for Analysis and Implementation
    3. The CSAPR Framework
    4. Partial Versus Full Resolution of Transport Obligation
    5. Why Focus on Eastern States
    6. Short-Term NOX Emissions
    C. Responding to the Remand of CSAPR NOX Ozone Season 
Emission Budgets
    D. Addressing Outstanding Transport Obligations for the 1997 
Ozone NAAQS
V. Analyzing Downwind Air Quality and Upwind State Contributions
    A. Overview of Air Quality Modeling Platform
    B. Emission Inventories
    1. Foundation Emission Inventory Data Sets
    2. Development of Emission Inventories for EGUs
    3. Development of Emission Inventories for Non-EGU Point Sources
    4. Development of Emission Inventories for Onroad Mobile Sources
    5. Development of Emission Inventories for Commercial Marine 
Category 3 (Vessel)
    6. Development of Emission Inventories for Other Nonroad Mobile 
Sources
    7. Development of Emission Inventories for Nonpoint Sources

[[Page 74505]]

    C. Definition of Nonattainment and Maintenance Receptors
    D. Air Quality Modeling To Identify Nonattainment and 
Maintenance Receptors
    E. Pollutant Transport From Upwind States
    1. Air Quality Modeling To Quantify Upwind State Contributions
    2. Application of Screening Threshold
    3. Update to EGU Modeling for Quantifying Emission Budgets
VI. Quantifying Upwind State EGU NOX Emission Budgets To 
Reduce Interstate Ozone Transport for the 2008 NAAQS
    A. Introduction
    B. Levels of Uniform Control Stringency
    1. EGU NOX Mitigation Strategies
    2. Non-EGU NOX Mitigation Strategies and Feasibility 
for the 2017 Ozone Season
    3. Summary of EGU Uniform Control Stringency Represented by 
Marginal Cost of Reduction (Dollar per Ton)
    C. EGU NOX Reductions and Corresponding Emission 
Budgets
    1. Evaluating EGU NOX Reduction Potential
    2. Quantifying Emission Budgets
    D. Multi-Factor Test Considering Costs, EGU NOX 
Reductions, and Downwind Air Quality Impacts
VII. Implementation Using the Existing CSAPR NOX Ozone 
Season Allowance Trading Program and Relationship to Other Rules
    A. Introduction
    B. New and Revised FIPs
    C. Updates to CSAPR NOX Ozone Season Trading Program 
Requirements
    1. Relationship of Allowances and Compliance for CSAPR Update 
States and States With Ongoing Original CSAPR Requirements
    2. Use of Banked Vintage 2015 and 2016 CSAPR NOX 
Ozone Season Trading Program Allowances for Compliance in CSAPR 
Update States
    D. Feasibility of Compliance
    E. FIP Requirements and Key Elements of the CSAPR Trading 
Programs
    1. Applicability
    2. State Budgets
    3. Allocations of Emission Allowances
    4. Variability Limits, Assurance Levels, and Penalties
    5. Compliance Deadlines
    6. Monitoring and Reporting and the Allowance Management System
    7. Recordation of Allowances
    F. Submitting a SIP
    1. 2018 SIP Option
    2. 2019 and Beyond SIP Option
    3. SIP Revisions That Do Not Use the CSAPR Trading Program
    4. Submitting a SIP To Participate in CSAPR for States Not 
Included in This Rule
    G. Title V Permitting
    H. Relationship to Other Emission Trading and Ozone Transport 
Programs
    1. Interactions With Existing CSAPR Annual Programs, Title IV 
Acid Rain Program, NOX SIP Call, and Other State 
Implementation Plans
    2. Other Federal Rulemakings
VIII. Costs, Benefits, and Other Impacts of the Final Rule
IX. Summary of Changes to the Regulatory Text for the CSAPR FIPs and 
CSAPR Trading Programs
X. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act (CRA)
    L. Judicial Review and Determinations Under Section 307(b)(1) 
and (d)

I. Executive Summary

    The EPA published the original Cross-State Air Pollution Rule 
(original CSAPR) \1\ on August 8, 2011 to address the interstate 
transport of emissions with respect to the 1997 ozone National Ambient 
Air Quality Standards (NAAQS) and the 1997 and 2006 fine particulate 
matter (PM2.5) NAAQS.\2\ The EPA is finalizing this Cross-
State Air Pollution Rule Update for the 2008 Ozone NAAQS (CSAPR Update) 
to address the interstate transport of emissions with respect to the 
2008 ozone NAAQS. The 2008 ozone NAAQS is an 8-hour standard that was 
set at 75 parts per billion (ppb).\3\ The EPA proposed the CSAPR Update 
with respect to the 2008 ozone NAAQS on December 3, 2015 (80 FR 75706), 
and solicited comment on that action. The EPA provided an additional 
opportunity to comment on the air quality modeling platform and air 
quality modeling results that were used for the proposed CSAPR Update, 
through an August 4, 2015 Notice of Data Availability (NODA) (80 FR 
46271) requesting comment on these data. This final rule is informed by 
comments received on the NODA and proposed CSAPR Update. This CSAPR 
Update also is intended to address the remand by the United States 
Court of Appeals for the District of Columbia Circuit of certain 
states' original CSAPR NOX ozone season phase 2 emission 
budgets. Additionally, this rule updates the status of outstanding 
interstate ozone transport obligations for states that the original 
CSAPR provided a partial remedy with respect to the 1997 ozone NAAQS.
---------------------------------------------------------------------------

    \1\ See 76 FR 48208 (August 8, 2011).
    \2\ The original CSAPR did not evaluate the 2008 ozone standard 
because the 2008 ozone NAAQS was under reconsideration during the 
analytic work for the rule.
    \3\ See 73 FR 16436 (March 27, 2008).
---------------------------------------------------------------------------

A. Purpose of Regulatory Action

    The purpose of this rulemaking is to protect public health and 
welfare by reducing interstate emission transport that significantly 
contributes to nonattainment, or interferes with maintenance, of the 
2008 ozone NAAQS in the eastern U.S. Ground-level ozone causes a 
variety of negative effects on human health, vegetation, and 
ecosystems. In humans, acute and chronic exposure to ozone is 
associated with premature mortality and a number of morbidity effects, 
such as asthma exacerbation. Ozone exposure can also negatively impact 
ecosystems, for example, by limiting tree growth.
    Studies have established that ozone occurs on a regional scale 
(i.e., hundreds of miles) over much of the eastern U.S., with elevated 
concentrations occurring in rural as well as metropolitan 
areas.4 5 To reduce this regional-scale ozone transport, 
assessments of ozone control approaches have concluded that 
NOX control strategies are effective. Further, studies have 
found that EGU NOX emission reductions can be effective in 
reducing ozone pollution--specifically 8-hour peak concentrations, 
which is the form of the 2008 ozone standard. For example, studies have 
shown EGU NOX reductions achieved under one of the EPA's 
prior interstate transport rulemakings known as the NOX SIP 
Call \6\ were effective in reducing 8-hour peak ozone concentrations 
during the ozone season.\7\
---------------------------------------------------------------------------

    \4\ Bergin, M.S. et al. (2007) Regional air quality: Local and 
interstate impacts of NOX and SO2 emissions on 
ozone and fine particulate matter in the eastern United States. 
Environmental Sci & Tech. 41: 4677-4689.
    \5\ Liao, K. et al. (2013) Impacts of interstate transport of 
pollutants on high ozone events over the Mid-Atlantic United States. 
Atmospheric Environment 84, 100-112.
    \6\ 63 FR 57356 (October 27, 1998).
    \7\ G[eacute]go et al. (2007) Observation-based assessment of 
the impact of nitrogen oxides emissions reductions on O3 
air quality over the eastern United States. J. of Applied 
Meteorology and Climatology 46: 994-1008.
---------------------------------------------------------------------------

    Clean Air Act (CAA or the Act) section 110(a)(2)(D)(i)(I), 
sometimes called the ``good neighbor provision,''

[[Page 74506]]

requires states \8\ to prohibit emissions that will contribute 
significantly to nonattainment or interfere with maintenance in any 
other state with respect to any primary or secondary NAAQS. The statute 
vests states with the primary responsibility to address interstate 
emission transport through the development of good neighbor State 
Implementation Plans (SIPs). The EPA supports state efforts to submit 
good neighbor SIPs for the 2008 ozone NAAQS and has shared information 
with states to facilitate such SIP submittals. However, the CAA also 
requires the EPA to fill a backstop role by issuing Federal 
Implementation Plans (FIPs) where states fail to submit good neighbor 
SIPs or the EPA disapproves a submitted good neighbor SIP.
---------------------------------------------------------------------------

    \8\ The term ``state'' has the same meaning as provided in CAA 
section 302(d) which specifically includes the District of Columbia.
---------------------------------------------------------------------------

    On July 13, 2015, the EPA published a rule finding that 24 states 
\9\ failed to make complete submissions that address the requirements 
of section 110(a)(2)(D)(i)(I) related to the interstate transport of 
pollution as to the 2008 ozone NAAQS. See 80 FR 39961 (July 13, 2015) 
(effective August 12, 2015). This CSAPR Update finalizes FIPs for 13 of 
these states (Alabama, Arkansas, Illinois, Iowa, Kansas, Michigan, 
Mississippi, Missouri, Oklahoma, Pennsylvania, Tennessee, Virginia, and 
West Virginia). On June 15, 2016 and July 20, 2016, the EPA published 
additional rules finding that New Jersey and Maryland, respectively, 
also failed to submit transport SIPs for the 2008 ozone NAAQS. See 81 
FR 38963 (June 15, 2016) (effective July 15, 2016); 81 FR 47040 (July 
20, 2016) (Maryland, effective August 19, 2016). This final CSAPR 
Update also finalizes FIPs addressing the good neighbor provision for 
these two states. Additionally, the EPA is finalizing FIPs for seven 
states for which it finalized disapproval of the states' good neighbor 
SIPs for the 2008 ozone NAAQS: Indiana, Kentucky, Louisiana, New York, 
Ohio, Texas, and Wisconsin. The FIPs being promulgated partially 
address the EPA's outstanding CAA obligations to prohibit interstate 
transport of air pollution which will contribute significantly to 
nonattainment in, or interfere with maintenance by, any other state 
with respect to the 2008 ozone NAAQS. The EPA also determines that it 
has fully satisfied its FIP obligation as to 9 states (Florida, 
Georgia, Maine, Massachusetts, Minnesota, New Hampshire, North 
Carolina, South Carolina, and Vermont), which the EPA has determined do 
not contribute significantly to nonattainment in, or interfere with 
maintenance by, any other state with respect to the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \9\ The states included in this finding of failure to submit 
are: Alabama, Arkansas, California, Florida, Georgia, Illinois, 
Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, 
Mississippi, Missouri, New Hampshire, New Mexico, North Carolina, 
Oklahoma, Pennsylvania, South Carolina, Tennessee, Vermont, 
Virginia, and West Virginia.
---------------------------------------------------------------------------

    The EPA is finalizing a FIP for each of the 22 states subject to 
this rule, having found that they failed to submit a complete good 
neighbor SIP (15 states) or having issued a final rule disapproving 
their good neighbor SIP (7 states). However, even after these FIPs take 
effect, any state included in this rule can submit a good neighbor SIP 
at any time that, if approved by the EPA, could replace the FIP for 
that state. Additionally, CSAPR provides states with the option to 
submit abbreviated SIPs to customize the methodology for allocating 
CSAPR NOX ozone season allowances while participating in the 
ozone season trading program and the EPA is extending that approach in 
this rule.
    The 22 states for which the EPA is promulgating FIPs to reduce 
interstate ozone transport as to the 2008 ozone NAAQS are listed in 
Table I.A-1.

 Table I.A-1--List of 22 Covered States for the 2008 8-Hour Ozone NAAQS
------------------------------------------------------------------------
                               State name
-------------------------------------------------------------------------
Alabama
Arkansas
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maryland
Michigan
Mississippi
Missouri
New Jersey
New York
Ohio
Oklahoma
Pennsylvania
Tennessee
Texas
Virginia
West Virginia
Wisconsin
------------------------------------------------------------------------

    The final CSAPR Update addresses collective contributions of ozone 
pollution from states in the eastern U.S. and builds on previous 
eastern-focused efforts to address collective contributions to 
interstate transport, including the NOX SIP Call, the Clean 
Air Interstate Rule,\10\ and the original CSAPR rules. The EPA is not 
finalizing FIPs to address interstate emission transport for western 
states, where there may be additional factors to consider in the EPA's 
and state's evaluations.
---------------------------------------------------------------------------

    \10\ 70 FR 25162 (May 12, 2005).
---------------------------------------------------------------------------

    The EPA finds, in the final air quality modeling on which this rule 
is based, one state for which the EPA proposed a FIP in the proposed 
CSAPR Update rule, North Carolina, is not linked to any downwind 
nonattainment or maintenance receptors. Therefore, the EPA is not 
finalizing a FIP for North Carolina.
    For 14 of the eastern states evaluated in this rule (Connecticut, 
Florida, Georgia, Maine, Massachusetts, Minnesota, Nebraska, New 
Hampshire, North Carolina, North Dakota, Rhode Island, South Carolina, 
South Dakota, and Vermont), the EPA has determined that emissions from 
those states do not significantly contribute to nonattainment or 
interfere with maintenance of the 2008 ozone NAAQS in downwind states. 
Accordingly, the EPA has determined that it need not require further 
emission reductions from sources in these states to address the good 
neighbor provision as to the 2008 ozone NAAQS.
    Of the 22 states covered in this CSAPR Update, 21 states \11\ have 
original CSAPR NOX ozone season FIP requirements with 
respect to the 1997 ozone NAAQS. One state, Kansas, has newly added 
CSAPR NOX ozone season FIP requirements in this action. For 
the 22 states affected by one of the FIPs finalized in this action, the 
EPA is promulgating new FIPs with EGU NOX ozone season 
emission budgets to reduce interstate transport for the 2008 ozone 
NAAQS.
---------------------------------------------------------------------------

    \11\ Alabama, Arkansas, Illinois, Indiana, Iowa, Kentucky, 
Louisiana, Maryland, Michigan, Mississippi, Missouri, New Jersey, 
New York, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Virginia, 
West Virginia, and Wisconsin.
---------------------------------------------------------------------------

    One state, Georgia, has an ongoing original CSAPR NOX 
ozone season FIP requirement with respect to the 1997 ozone NAAQS, but 
the EPA has found that is does not contribute to interstate transport 
with respect to the 2008 ozone NAAQS. The EPA did not reopen comment on 
Georgia's interstate transport obligation with respect to the 1997 
ozone NAAQS in this rulemaking, so Georgia's original CSAPR 
NOX ozone season requirements (including its emission 
budget) continue unchanged.
    In addition to reducing interstate ozone transport with respect to 
the 2008 ozone NAAQS, this rule also addresses the status of 
outstanding interstate ozone transport obligations with respect

[[Page 74507]]

to the 1997 ozone NAAQS. In the original CSAPR, the EPA promulgated 
FIPs for 25 states to address ozone transport with respect to the 1997 
NAAQS. For 11 of these states,\12\ the original CSAPR rulemakings 
quantified ozone season NOX emission reductions that were 
not necessarily sufficient to eliminate all significant contribution to 
downwind nonattainment or interference with downwind maintenance of the 
1997 ozone NAAQS. Relying on modeling completed for this final rule, 
this action finds that, with implementation of the original CSAPR 
NOX ozone season emission budgets, emissions from ten of 
these states no longer significantly contribute to downwind 
nonattainment or interference with maintenance for the 1997 ozone 
NAAQS. The EPA further finds that, with implementation of the CSAPR 
Update NOX ozone season emission budgets, emissions from 
these ten states also no longer significantly contribute to downwind 
nonattainment or interference with maintenance for the 1997 ozone 
NAAQS. With respect to Texas, the modeling shows that emissions from 
within the state no longer significantly contribute to downwind 
nonattainment or interference with maintenance for the 1997 ozone NAAQS 
even without implementation of the original CSAPR NOX ozone 
season emission budget. Accordingly, sources in Texas will no longer be 
subject to the emissions budget calculated to address the 1997 ozone 
NAAQS. However, as described earlier, this rule finalizes a new 
emissions budget for Texas designed to address interstate transport 
with respect to the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \12\ Alabama, Arkansas, Georgia, Illinois, Indiana, Kentucky, 
Louisiana, Mississippi, Missouri, Tennessee, and Texas. (See CSAPR 
Final Rule, 76 FR at 48220, and the CSAPR Supplemental Rule, 76 FR 
at 80760, December 27, 2011).
---------------------------------------------------------------------------

    This action is also intended to address the portion of the July 28, 
2015 opinion of the United States Court of Appeals for the District of 
Columbia (D.C. Circuit) remanding without vacatur 11 states' CSAPR 
phase 2 NOX ozone season emission budgets. EME Homer City 
Generation, L.P., v. EPA, No. 795 F.3d 118, 129-30, 138 (EME Homer City 
II). This action promulgates new NOX ozone season budgets 
addressing interstate transport with respect to the 2008 ozone NAAQS 
that take effect in 2017, which replace the invalidated phase 2 budgets 
for 8 states, and also removes the remaining three states from the 
CSAPR NOX ozone season trading program as a result of the 
EPA's finding that these three states do not significantly contribute 
to downwind nonattainment or interference with maintenance for the 2008 
standard.\13\
---------------------------------------------------------------------------

    \13\ The EPA is promulgating new emission budgets that would 
replace the invalidated CSAPR phase 2 NOX ozone season 
budgets for Iowa, Maryland, Michigan, New Jersey, New York, Ohio, 
Oklahoma, Pennsylvania, Texas, Virginia, West Virginia, and 
Wisconsin. The EPA is removing Florida, North Carolina, and South 
Carolina from the CSAPR ozone season NOX trading program.
---------------------------------------------------------------------------

    The EPA acknowledges that, in EME Homer City II, the D.C. Circuit 
also remanded without vacatur the CSAPR phase 2 SO2 emission 
budgets as to four states. 795 F.3d at 129, 138. This final rule does 
not address the remand of these CSAPR phase 2 SO2 annual 
emission budgets. On June 27, 2016, the EPA released a memorandum 
outlining the agency's approach for responding to the D.C. Circuit's 
July 2015 remand of the CSAPR phase 2 SO2 annual emission 
budgets for Alabama, Georgia, South Carolina and Texas. The memorandum 
can be found at https://www3.epa.gov/airtransport/CSAPR/pdfs/CSAPR_SO2_Remand_Memo.pdf.
    On October 1, 2015, the EPA strengthened the ground-level ozone 
NAAQS, based on extensive scientific evidence about ozone's effects on 
public health and welfare.\14\ While reductions achieved by this final 
rule will aid in attainment and maintenance of the 2015 standard, the 
CSAPR Update rule to reduce interstate emission transport with respect 
to the 2008 ozone NAAQS is a separate and distinct regulatory action 
and is not meant to address the CAA's good neighbor provision with 
respect to the 2015 ozone NAAQS final rule.
---------------------------------------------------------------------------

    \14\ 80 FR 65291 (October 26, 2015).
---------------------------------------------------------------------------

    The EPA notes that the level of the annual PM2.5 NAAQS 
was also revised after CSAPR was promulgated (78 FR 3086, January 15, 
2013). However, this final rule does not address the 2012 
PM2.5 standard.\15\
---------------------------------------------------------------------------

    \15\ The EPA issued a memo addressing CAA section 
110(a)(2)(D)(i)(I) requirements for the 2012 PM2.5 NAAQS, 
see ``Information on the Interstate Transport `Good Neighbor' 
Provision for the 2012 Fine Particulate Matter National Ambient Air 
Quality Standards under Clean Air Act section 110(a)(2)(D)(i)(I),'' 
March 17, 2016.
---------------------------------------------------------------------------

B. Major Provisions

    To reduce interstate emission transport under the authority 
provided in CAA section 110(a)(2)(D)(i)(I), this rule further limits 
ozone season (May 1 through September 30) NOX emissions from 
electric generating units (EGUs) in 22 eastern states using the same 
framework used by the EPA in developing the original CSAPR. The CSAPR 
framework provides a 4-step process to address the requirements of the 
good neighbor provision for ambient ozone or PM2.5 
standards: (1) Identifying downwind receptors that are expected to have 
problems attaining or maintaining clean air standards (i.e., NAAQS); 
(2) determining which upwind states contribute to these identified 
problems in amounts sufficient to ``link'' them to the downwind air 
quality problems; (3) for states linked to downwind air quality 
problems, identifying upwind emissions that significantly contribute to 
downwind nonattainment or interfere with downwind maintenance of a 
standard; and (4) for states that are found to have emissions that 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS downwind, reducing the identified upwind emissions via 
regional emission allowance trading programs. Each time the relevant 
NAAQS are revised, this process can be applied for the new NAAQS. In 
this final action, the EPA applies this 4-step CSAPR framework to 
update CSAPR with respect to the 2008 ozone NAAQS.
    The EPA is aligning implementation of this rule with relevant 
attainment dates for the 2008 ozone NAAQS, as required by the D.C. 
Circuit's decision in North Carolina v. EPA.\16\ The EPA's final 2008 
Ozone NAAQS SIP Requirements Rule \17\ established the attainment 
deadline of July 20, 2018 for ozone nonattainment areas currently 
designated as Moderate. Because the attainment date falls during the 
2018 ozone season, the 2017 ozone season will be the last full season 
from which data can be used to determine attainment of the NAAQS by the 
July 20, 2018 attainment date. Therefore, consistent with the court's 
instruction in North Carolina, the EPA establishes emission budgets and 
implementation of these emission budgets starting with the 2017 ozone 
season.
---------------------------------------------------------------------------

    \16\ 531 F.3d 896, 911-12 (D.C. Cir. 2008) (holding that the EPA 
must coordinate interstate transport compliance deadlines with 
downwind attainment deadlines).
    \17\ 80 FR 12264, 12268; 40 CFR 51.1103.
---------------------------------------------------------------------------

    In order to apply the first and second steps of the CSAPR 4-step 
framework to interstate transport for the 2008 ozone NAAQS, the EPA 
used air quality modeling to project ozone concentrations at air 
quality monitoring sites to 2017. The EPA updated this modeling for the 
final rule, using the most current complete dataset available, taking 
into account comments submitted on the August 2015 Air Quality Modeling 
NODA and on the CSAPR Update rule proposal. For the final rule, the EPA 
evaluated modeling

[[Page 74508]]

projections for air quality monitoring sites and considered current 
ozone monitoring data at these sites to identify receptors that are 
anticipated to have problems attaining or maintaining the 2008 ozone 
NAAQS. The EPA then uses air quality modeling to assess contributions 
from upwind states to these downwind receptors and evaluates these 
contributions relative to a screening threshold of 1 percent of the 
NAAQS. States with contributions that equal or exceed 1 percent of the 
NAAQS are identified as warranting further analysis for significant 
contribution to nonattainment or interference with maintenance. States 
with contributions below 1 percent of the NAAQS are considered to not 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS in downwind states.\18\
---------------------------------------------------------------------------

    \18\ As discussed further in section V, EPA's modeling showed 
that the following eastern states contribute below the 1 percent 
contribution threshold to downwind nonattainment or maintenance 
receptors: Connecticut, Florida, Georgia, Maine, Massachusetts, 
Minnesota, Nebraska, New Hampshire, North Carolina, North Dakota, 
Rhode Island, South Carolina, South Dakota, and Vermont.
---------------------------------------------------------------------------

    To apply the third step of the 4-step CSAPR framework, the EPA 
quantified emission budgets that limit allowable emissions and 
represent the emission levels that remain after each state makes EGU 
NOX emission reductions that are necessary to reduce 
interstate ozone transport for the 2008 NAAQS. To establish the CSAPR 
Update emission budgets, the EPA evaluated levels of uniform 
NOX control stringency, represented by an estimated marginal 
cost per ton of NOX reduced. The EPA applied the CSAPR 
multi-factor test to evaluate cost, available emission reductions, and 
downwind air quality impacts to determine the appropriate level of 
uniform NOX control stringency that addresses the impacts of 
interstate transport on downwind nonattainment or maintenance 
receptors. The EPA used this multi-factor assessment to gauge the 
extent to which emission reductions are needed, and to ensure those 
reductions do not represent over-control.
    The multi-factor test generates a ``knee in the curve'' at a point 
where emission budgets reflect a control stringency with an estimated 
marginal cost of $1,400 per ton. This level of stringency in emission 
budgets represents the level at which incremental EGU NOX 
reduction potential and corresponding downwind ozone air quality 
improvements are maximized with respect to marginal cost. That is, the 
ratio of emission reductions to marginal cost and the ratio of ozone 
improvements to marginal cost are maximized relative to the other 
emission budget levels evaluated. The EPA finds that very cost-
effective EGU NOX reductions can make meaningful and timely 
improvements in downwind ozone air quality to address interstate ozone 
transport for the 2008 ozone NAAQS for the 2017 ozone season. Further, 
this evaluation shows that emission budgets reflecting the $1,400 per 
ton cost threshold do not over-control upwind states' emissions 
relative to either the downwind air quality problems to which they are 
linked or the 1 percent contribution threshold that triggered further 
evaluation. As a result, the EPA is finalizing EGU NOX ozone 
season emission budgets developed using uniform control stringency 
represented by $1,400 per ton. The emission budgets that the EPA is 
finalizing in FIPs for the CSAPR Update rule are summarized in table 
I.B-1.

  Table I.B-1--Final 2017 EGU NOX Ozone Season Emission Budgets for the
                            CSAPR Update Rule
                         [Ozone season NOX tons]
------------------------------------------------------------------------
                                                          CSAPR update
                         State                             rule 2017 *
                                                        emission budgets
------------------------------------------------------------------------
Alabama...............................................            13,211
Arkansas..............................................      12,048/9,210
Illinois..............................................            14,601
Indiana...............................................            23,303
Iowa..................................................            11,272
Kansas................................................             8,027
Kentucky..............................................            21,115
Louisiana.............................................            18,639
Maryland..............................................             3,828
Michigan..............................................            17,023
Mississippi...........................................             6,315
Missouri..............................................            15,780
New Jersey............................................             2,062
New York..............................................             5,135
Ohio..................................................            19,522
Oklahoma..............................................            11,641
Pennsylvania..........................................            17,952
Tennessee.............................................             7,736
Texas.................................................            52,301
Virginia..............................................             9,223
West Virginia.........................................            17,815
Wisconsin.............................................             7,915
22 State Region.......................................   316,464/313,626
------------------------------------------------------------------------
* The EPA is finalizing CSAPR EGU NOX ozone season emission budgets for
  Arkansas of 12,048 tons for 2017 and 9,210 tons for 2018 and
  subsequent control periods.

    Our analysis shows that there is uncertainty regarding whether or 
not meaningful, cost-effective non-EGU emission reductions are 
achievable for the 2017 ozone season. Therefore, non-EGU reductions are 
not included in the final rule.
    For most states, the EGU NOX ozone season emission 
budgets finalized in this action represent a partial remedy to address 
interstate emission transport for the 2008 ozone NAAQS.\19\ However, as 
stated in the proposal, the EPA believes that it is beneficial to 
implement, without further delay, EGU NOX reductions that 
are achievable in the near term, particularly before the Moderate area 
attainment date of 2018. Generally, notwithstanding that additional 
reductions may be required to fully address the states' interstate 
transport obligations, the EGU NOX emission reductions 
implemented by this final rule are needed for upwind states to 
eliminate their significant contribution to nonattainment or 
interference with maintenance of the 2008 ozone NAAQS and for downwind 
states with ozone nonattainment areas that are required to attain the 
standard by July 20, 2018.
---------------------------------------------------------------------------

    \19\ The requirements for one state, Tennessee, will fully 
eliminate that state's significant contribution to downwind 
nonattainment and interference with maintenance of the 2008 ozone 
NAAQS.
---------------------------------------------------------------------------

    To meet the fourth step of the four-step CSAPR framework (i.e., 
implementation), the FIPs contain enforceable measures necessary to 
achieve the emission reductions in each state. The FIPs contained in 
this CSAPR Update require power plants in covered states (i.e., states 
that significantly contribute to ozone nonattainment or interfere with 
maintenance of the ozone standard in the east) to participate in a 
CSAPR NOX ozone season Group 2 allowance trading program. 
CSAPR's trading programs and the EPA's prior emission trading programs 
(e.g., CAIR and the NOX SIP Call) provide a proven 
implementation framework for achieving emission reductions. In addition 
to providing environmental certainty (i.e., a cap on emissions), these 
programs also provide regulated sources with flexibility in choosing 
compliance strategies. By using the CSAPR allowance trading programs, 
the EPA is applying an implementation framework that was shaped by 
notice and comment in previous rulemakings and reflects the evolution 
of these programs in response to court decisions and practical 
experience gained by states, industry and the EPA. Further, this 
program is familiar to the EGUs that will be regulated under this rule, 
which means that monitoring, reporting, and compliance will continue as 
they are already conducted under CSAPR's current ozone season and 
annual programs.\20\
---------------------------------------------------------------------------

    \20\ One state, Kansas, will have a new CSAPR ozone season 
requirement. EGUs located in Kansas currently participate in the 
CSAPR NOX and SO2 annual programs. The 
remaining 22 states were included in the original CSAPR ozone season 
program as to the 1997 ozone NAAQS.

---------------------------------------------------------------------------

[[Page 74509]]

    The CSAPR Update establishes two trading groups within the CSAPR 
NOX ozone season allowance trading program--Group 1 for 
Georgia and Group 2 for the 22 CSAPR Update states. At this time, 
Georgia is the only state included in the CSAPR NOX ozone 
season Group 1 trading program. The EPA will issue distinct allowances 
for these trading groups; CSAPR NOX ozone season Group 1 
allowances and CSAPR NOX ozone season Group 2 allowances. 
Covered entities demonstrate compliance by holding and surrendering one 
allowance for each ton of NOX emitted during the ozone 
season. In order to ensure that the CSAPR NOX ozone season 
trading program implements emission reductions needed to meet the Clean 
Air Act's good neighbor requirements for the CSAPR Update states, the 
EPA finalizes a prohibition on allowance usage between Georgia and the 
CSAPR Update states. However, the EPA provides an option for Georgia to 
voluntarily adopt via SIP an emission budget that is commensurate with 
CSAPR Update emission budgets that could include Georgia in the Group 2 
trading program with the CSAPR Update states. Implementation of Group 1 
and Group 2 trading programs is substantially the same as the original 
CSAPR NOX ozone season trading program. For states with 
continuing obligations to address interstate transport with respect to 
the 1997 ozone NAAQS as well as obligations under this rule with 
respect to the 2008 ozone NAAQS,\21\ the EPA is coordinating the FIP 
requirements for the two NAAQS by providing that compliance with the 
2008 ozone NAAQS FIP requirements simultaneously satisfies the state's 
transport obligations with respect to the less stringent 1997 ozone 
NAAQS. These states will therefore only be required to comply with the 
CSAPR NOX ozone season Group 2 requirements.
---------------------------------------------------------------------------

    \21\ Alabama, Arkansas, Illinois, Indiana, Kentucky, Louisiana, 
Mississippi, Missouri, and Tennessee.
---------------------------------------------------------------------------

    For this CSAPR Update, the EPA considered whether, and to what 
extent, banked \22\ 2015 and 2016 CSAPR NOX ozone season 
allowances should be eligible for compliance in the CSAPR Update rule 
states. As proposed, the CSAPR Update finalizes a limit on the number 
of banked allowances carried over based on the need to assure that the 
CAA objective of the CSAPR Update is achieved. This approach 
transitions some allowances for compliance to further ensure 
feasibility of implementing the CSAPR Update rule. The EPA proposed to 
use turn-in ratios calculated using a formula--essentially the same 
formula that the EPA is finalizing in this rule. Specifically, the 
final rule establishes a one-time allowance conversion that transitions 
a limited number of banked vintage 2015 and 2016 allowances for 
compliance use in CSAPR Update states. This allowance conversion limits 
the number of banked allowances to 1.5 years of states' aggregated 
CSAPR variability limits (approximately 99,700 allowances) in order to 
ensure that implementation of the trading program will result in 
NOX emission reductions sufficient to address significant 
contribution to nonattainment or interference with maintenance of 
downwind pollution with respect to the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \22\ Allowances that were not used for compliance and were saved 
for use in a later compliance period.
---------------------------------------------------------------------------

    The compliance requirements of this final rule are in addition to 
existing, on-the-books EPA and state environmental regulations. To the 
extent that new, unplanned actions may also reduce EGU NOX 
emissions within a state included in the CSAPR Update, whether for 
compliance with other environmental requirements or for other reasons, 
such actions would help the state comply with its good neighbor 
requirements. The final FIP compliance requirements begin with the 2017 
ozone season and will continue for subsequent ozone seasons to ensure 
that upwind states included in this rule meet their Clean Air Act 
obligation to address interstate emission transport with respect to the 
2008 ozone NAAQS for 2017 and future years. Even after the attainment 
deadline has passed, areas are required to continue to attain and 
maintain the NAAQS, and these good neighbor emission limits will ensure 
that future emissions are consistent with states' ongoing good neighbor 
obligations.
    The EPA is finalizing revisions to the Code of Federal Regulations 
(CFR), specifically: 40 CFR part 97, subparts BBBBB and EEEEE (federal 
CSAPR NOX ozone season trading programs); 40 CFR 52.38(b) 
(CSAPR NOX ozone season FIP requirements and rules on 
replacing or modifying the FIP requirements through a SIP revision); 
state-specific subparts of 40 CFR part 52 for 25 states (descriptions 
for these states of FIP requirements and consequences of SIP revisions 
related to ozone season NOX emissions); and 40 CFR part 78 
(provisions addressing the scope of coverage of the administrative 
appeal procedures) to address interstate transport for the 2008 ozone 
NAAQS. In addition, as proposed, various minor corrections are being 
finalized to these CFR sections and other sections of parts 52, 78, and 
97 relating to the CSAPR ozone season and annual trading programs.
    The remainder of this preamble is organized as follows: Section III 
describes the EPA's legal authority for this action; section IV 
describes the human health and environmental context, the EPA's overall 
approach for addressing interstate transport through use of the CSAPR 
framework, and the EPA's response to the remand of certain CSAPR 
NOX ozone season emission budgets; section V describes the 
air quality modeling platform and emission inventories that the EPA 
used in its assessment of downwind receptors of concern and upwind 
state ozone contributions to those receptors for the final rule; 
section VI describes the EPA's approach to quantify upwind state 
obligations in the form of final EGU NOX emission budgets; 
section VII details the implementation requirements including key 
elements of the CSAPR allowance trading program and deadlines for 
compliance; section VIII describes the expected costs, benefits, and 
other impacts of this rule; section IX discusses changes to the 
existing regulatory text for the CSAPR FIPs and the CSAPR trading 
programs; and section X discusses the statutes and executive orders 
affecting this rulemaking. The preamble sections include certain 
significant comments and responses to comments as they pertain to the 
topic covered in each section.

C. Benefits and Costs

    The rule will achieve near-term emission reductions from the power 
sector, lowering ozone season NOX in 2017 by 61,000 tons, 
compared to 2017 projections without the rule.
    Consistent with Executive Order 13563, ``Improving Regulation and 
Regulatory Review,'' the EPA has estimated the costs and benefits of 
the rule. Estimates here are subject to uncertainties discussed further 
in the Regulatory Impact Analysis (RIA) in the docket. The estimated 
net benefits of the rule at 3 percent and 7 percent discount rates are 
$460 million to $810 million and $450 million to $790 million (2011$), 
respectively. The non-monetized benefits include reduced ecosystem 
impacts and improved visibility. Discussion of the rule's costs and 
benefits is provided in preamble section VIII and in the RIA, which is 
found in the docket for this final rule. The EPA's estimate of the 
rule's costs

[[Page 74510]]

and quantified benefits is summarized in Table I.C-1.

    Table I.C-1--Summary of Compliance Costs, Monetized Benefits, and
            Monetized Net Benefits of the Final Rule for 2017
                                 [2011$]
------------------------------------------------------------------------
                                                      Impacts  (benefits
                                  Impacts  (benefits    at 7% discount
           Description              at 3% discount         rate)  ($
                                  rate) ($ millions)       millions)
------------------------------------------------------------------------
Annualized Compliance Costs \a\.  68................  68
Monetized benefits \b\..........  530 to 880........  520 to 860
Monetized Net benefits (benefits- 460 to 810........  450 to 790
 costs).
------------------------------------------------------------------------
\a\ The annualized compliance costs estimate is used as a proxy for the
  total annualized social costs. These costs are determined using the
  4.77% percent discount rate from the electricity sector model used for
  this analysis and are rounded to two significant figures. The
  annualized compliance costs presented here reflect the cost to the
  electricity sector of complying with the FIPs. These costs do not
  include monitoring, recordkeeping, and reporting costs, which are
  reported separately. See Chapter 4 of the RIA for this final rule for
  details and explanation.
\b\ Total monetized health benefits are estimated at 3 percent and 7
  percent discount rates and are rounded to two significant figures. The
  total monetized benefits reflect the human health benefits associated
  with reducing exposure to ozone and PM2.5. It is important to note
  that the monetized benefits and co-benefits include many but not all
  health effects associated with pollution exposure. Benefits are shown
  as a range reflecting studies from Krewski et al. (2009) with Smith et
  al. (2009) to Lepeule et al. (2012) with Zanobetti and Schwartz
  (2008).

II. General Information

A. To whom does this final action apply?

    This rule affects EGUs, and regulates the following groups:

------------------------------------------------------------------------
                     Industry group                          NAICS *
------------------------------------------------------------------------
Fossil fuel-fired electric power generation............          221112
------------------------------------------------------------------------
* North American Industry Classification System.

    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 the types of entities that the EPA is now 
aware will be regulated by this action. Other types of entities not 
listed in the table could also be regulated. To determine whether your 
entity is regulated by this action, you should carefully examine the 
applicability criteria found in 40 CFR 97.504 and 97.804. If you have 
questions regarding the applicability of this action to a particular 
entity, consult the person listed in the FOR FURTHER INFORMATION 
CONTACT section.

III. Legal Authority

A. The EPA's Statutory Authority for the Final Rule

    The statutory authority for this final action is provided by the 
CAA as amended (42 U.S.C. 7401 et seq.). Specifically, sections 110 and 
301 of the CAA provide the primary statutory underpinnings for this 
rule. The most relevant portions of section 110 are subsections 
110(a)(1), 110(a)(2), and 110(a)(2)(D)(i)(I), and 110(c)(1).
    Section 110(a)(1) provides that states must make SIP submissions 
``within 3 years (or such shorter period as the Administrator may 
prescribe) after the promulgation of a national primary ambient air 
quality standard (or any revision thereof),'' and that these SIP 
submissions are to provide for the ``implementation, maintenance, and 
enforcement'' of such NAAQS.\23\ The statute directly imposes on states 
the duty to make these SIP submissions, and the requirement to make the 
submissions is not conditioned upon the EPA taking any action other 
than promulgating a new or revised NAAQS.\24\
---------------------------------------------------------------------------

    \23\ 42 U.S.C. 7410(a)(1).
    \24\ See EPA v. EME Homer City Generation, L.P., 134 S. Ct. 
1584, 1601 (2014).
---------------------------------------------------------------------------

    The EPA has historically referred to SIP submissions made for the 
purpose of satisfying the applicable requirements of CAA sections 
110(a)(1) and 110(a)(2) as ``infrastructure SIP'' submissions. Section 
110(a)(1) addresses the timing and general requirements for 
infrastructure SIP submissions, and section 110(a)(2) provides more 
details concerning the required content of these submissions. It 
includes a list of specific elements that ``[e]ach such plan'' 
submission must address.\25\ All states, regardless of whether the 
state includes areas designated as nonattainment for the relevant 
NAAQS, must have SIPs that meet the applicable requirements of section 
110(a)(2), including provisions of section 110(a)(2)(D)(i)(I) described 
later and that are the focus of this rule.
---------------------------------------------------------------------------

    \25\ The EPA's general approach to infrastructure SIP 
submissions is explained in greater detail in individual notices 
acting or proposing to act on state infrastructure SIP submissions 
and in guidance. See, e.g., Guidance on Infrastructure State 
Implementation Plan (SIP) Elements under Clean Air Act Sections 
110(a)(1) and 110(a)(2) (Sept. 2013).
---------------------------------------------------------------------------

    Section 110(c)(1) requires the Administrator to promulgate a FIP at 
any time within 2 years after the Administrator: (1) Finds that a state 
has failed to make a required SIP submission, (2) finds a SIP 
submission to be incomplete pursuant to CAA section 110(k)(1)(C), or 
(3) disapproves a SIP submission, unless the state corrects the 
deficiency through a SIP revision that the Administrator approves 
before the FIP is promulgated.\26\
---------------------------------------------------------------------------

    \26\ 42 U.S.C. 7410(c)(1).
---------------------------------------------------------------------------

    Section 110(a)(2)(D)(i)(I), also known as the ``good neighbor 
provision,'' provides the basis for this action. It requires that each 
state SIP shall include provisions sufficient to ``prohibit[] . . . any 
source or other type of emissions activity within the State from 
emitting any air pollutants in amounts which will--(I) contribute 
significantly to nonattainment in, or interfere with maintenance by, 
any other State with respect to any [NAAQS].'' \27\
---------------------------------------------------------------------------

    \27\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
---------------------------------------------------------------------------

    The EPA has previously issued three rules interpreting and 
clarifying the requirements of section 110(a)(2)(D)(i)(I) for states in 
the eastern half of the United States. These rules, and the associated 
court decisions addressing these rules, provide important guidance 
regarding the requirements of section 110(a)(2)(D)(i)(I).
    The NOX SIP Call, promulgated in 1998, addressed the 
good neighbor provision for the 1979 1-hour ozone NAAQS and the 1997 8-
hour ozone NAAQS.\28\ The rule required 22 states and the District of 
Columbia to amend their SIPs and limit NOX emissions that 
contribute to ozone nonattainment. The EPA set a NOX ozone 
season budget for each covered state, essentially a cap on ozone season 
NOX emissions in the state. Sources in the covered states 
were given the option to participate in a regional cap-and-trade 
program, known as the NOX Budget Trading Program (NBP). The 
NOX SIP Call was largely upheld by the D.C. Circuit in 
Michigan

[[Page 74511]]

v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert. denied, 532 U.S. 904 
(2001).
---------------------------------------------------------------------------

    \28\ 63 FR 57356 (Oct. 27, 1998).
---------------------------------------------------------------------------

    The Clean Air Interstate Rule (CAIR), promulgated in 2005, 
addressed both the 1997 PM2.5 and the 1997 ozone standards 
under the good neighbor provision.\29\ CAIR required SIP revisions in 
28 states and the District of Columbia to ensure that certain emissions 
of sulfur dioxide (SO2) and/or NOX--important 
precursors of regionally transported PM2.5 (SO2 
and NOX) and ozone (NOX)--were prohibited. Like 
the NOX SIP Call, states were given the option to 
participate in a regional cap-and-trade program to satisfy their SIP 
obligations. When the EPA promulgated the final CAIR in May 2005, the 
EPA also issued a national rule finding that states had failed to 
submit SIPs to address the requirements of CAA section 110(a)(2)(D)(i) 
with respect to the 1997 PM2.5 and the 1997 ozone NAAQS. 
Those states were required by the CAA to have submitted good neighbor 
SIPs for those standards by July 2000.\30\ These findings of failure to 
submit triggered a 2-year clock for the EPA to issue FIPs to address 
interstate transport, and on March 15, 2006, the EPA promulgated FIPs 
to ensure that the emission reductions required by CAIR would be 
achieved on schedule.\31\ CAIR was remanded to the EPA by the D.C. 
Circuit in North Carolina, 531 F.3d 896 (D.C. Cir. 2008), modified on 
reh'g, 550 F.3d 1176. For more information on the legal considerations 
of CAIR and the D.C. Circuit holding in North Carolina, refer to the 
preamble of the original CSAPR rule.\32\
---------------------------------------------------------------------------

    \29\ 70 FR 25162 (May 12, 2005).
    \30\ 70 FR 21147 (May 12, 2005).
    \31\ 71 FR 25328 (April 28, 2006).
    \32\ 76 FR 48208, 48217 (Aug. 8, 2011).
---------------------------------------------------------------------------

    In 2011, the EPA promulgated the original CSAPR to address the 
issues raised by the remand of CAIR and additionally to address the 
good neighbor provision for the 2006 PM2.5 NAAQS.\33\ CSAPR 
requires 28 states to reduce SO2 emissions, annual 
NOX emissions, and/or ozone season NOX emissions 
that significantly contribute to other states' nonattainment or 
interfere with other states' abilities to maintain these air quality 
standards. To accomplish implementation aligned with the applicable 
attainment deadlines, the EPA promulgated FIPs for each of the 28 
states covered by CSAPR. The FIPs implement regional cap-and-trade 
programs to achieve the necessary emission reductions. States can 
submit good neighbor SIPs at any time that, if approved by the EPA, 
would replace the CSAPR FIP for that state.\34\ As discussed later, 
CSAPR was the subject of decisions by both the D.C. Circuit and the 
Supreme Court, which largely upheld the rule.
---------------------------------------------------------------------------

    \33\ 76 FR 48208.
    \34\ Alabama has submitted, and EPA has approved, a SIP revision 
that replaces the CSAPR FIPs for the annual trading programs in 
Alabama. 81 FR 59869 (Aug. 31, 2016).
---------------------------------------------------------------------------

    On August 21, 2012, the D.C. Circuit issued a decision in EME Homer 
City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012), vacating 
CSAPR and holding, among other things, that states had no obligation to 
submit good neighbor SIPs until the EPA had first quantified each 
state's good neighbor obligation.\35\ The implication of this decision 
was that the EPA did not have authority to promulgate the CSAPR FIPs as 
a result of states' failure to submit or the EPA's disapproval of good 
neighbor SIPs. The D.C. Circuit also held that the EPA erred in 
apportioning upwind emission reduction obligations using uniform cost 
thresholds, and that such approach may result in unnecessary over-
control.\36\ The EPA sought review, first with the D.C. Circuit en banc 
and then with the Supreme Court. While the D.C. Circuit declined to 
consider the EPA's appeal en banc,\37\ on January 23, 2013, the Supreme 
Court granted the EPA's petition for certiorari.\38\
---------------------------------------------------------------------------

    \35\ EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 31 
(D.C. Cir. 2012) (EME Homer City I).
    \36\ Id. at 23-27.
    \37\ EME Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. 
Cir. January 24, 2013), ECF No. 1417012 (denying the EPA's motion 
for rehearing en banc).
    \38\ EPA v. EME Homer City Generation, L.P., 133 S. Ct. 2857 
(2013) (granting the EPA's and other parties' petitions for 
certiorari).
---------------------------------------------------------------------------

    On April 29, 2014, the Supreme Court issued a decision reversing 
the D.C. Circuit's EME Homer City opinion on CSAPR and held, among 
other things, that under the plain language of the CAA, states must 
submit SIPs addressing the good neighbor provision within 3 years of 
promulgation of a new or revised NAAQS, regardless of whether the EPA 
first provides guidance, technical data or rulemaking to quantify the 
state's obligation.\39\ Thus, the Supreme Court affirmed that states 
have an obligation in the first instance to address the good neighbor 
provision after promulgation of a new or revised NAAQS, a holding that 
also applies to states' obligation to address interstate transport for 
the 2008 ozone NAAQS. The Court also reversed the D.C. Circuit's 
holding that the EPA's use of cost to apportion upwind states' emission 
reduction obligations was impermissible, finding that the EPA's 
approach was a ``permissible construction of the statute.'' \40\ The 
Supreme Court remanded the litigation to the D.C. Circuit for further 
proceedings.
---------------------------------------------------------------------------

    \39\ EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 
1600-01 (2014).
    \40\ Id. at 1606-07.
---------------------------------------------------------------------------

    Finally, on July 28, 2015, the D.C. Circuit issued its opinion on 
CSAPR regarding the remaining legal issues raised by the petitioners on 
remand from the Supreme Court, EME Homer City II, 795 F.3d 118. This 
decision largely upheld the EPA's approach to addressing interstate 
transport in CSAPR, leaving the rule in place and affirming the EPA's 
interpretation of various statutory provisions and the EPA's technical 
decisions. The decision also remanded the rule without vacatur for 
reconsideration of the EPA's emission budgets for certain states. In 
particular and as discussed in section IV, the court declared invalid 
the CSAPR phase 2 NOX ozone season emission budgets of 11 
states, holding that those budgets over-control with respect to the 
downwind air quality problems to which those states were linked for the 
1997 ozone NAAQS. The court's decision explicitly applies to 11 states: 
Florida, Maryland, New Jersey, New York, North Carolina, Ohio, 
Pennsylvania, South Carolina, Texas, Virginia, and West Virginia. Id. 
at 129-30, 138. The court also remanded without vacatur the CSAPR phase 
2 SO2 annual emission budgets for four states (Alabama, 
Georgia, South Carolina, and Texas) for reconsideration. Id. at 129, 
138. The court instructed the EPA to act ``promptly'' in addressing 
these issues on remand. Id. at 132.\41\
---------------------------------------------------------------------------

    \41\ In 2011, EPA finalized a supplemental rule that added five 
states to the CSAPR NOX ozone season trading program, 76 
FR 80760 (Dec. 27, 2011). In 2012, the EPA also finalized two rules 
making certain revisions to CSAPR. 77 FR 10324 (Feb. 21, 2012); 77 
FR 34830 (June 12, 2012). Various petitioners filed legal challenges 
to these rules in the D.C. Circuit. See Public Service Company of 
Oklahoma v. EPA, No. 12-1023 (D.C. Cir., filed Jan. 13, 2012); 
Wisconsin Public Service Corp. v. EPA, No. 12-1163 (D.C. Cir., filed 
Apr. 6, 2012); Utility Air Regulatory Group v. EPA, No. 12-1346 
(D.C. Cir., filed Aug. 9, 2012). These cases were held in abeyance 
during the pendency of the litigation in EME Homer City, and remain 
pending in the D.C. Circuit as of the date of signature of this 
rule.
---------------------------------------------------------------------------

    Section 301(a)(1) of the CAA also gives the Administrator of the 
EPA general authority to prescribe such regulations as are necessary to 
carry out her functions under the Act.\42\ Pursuant to this section, 
the EPA has authority to clarify the applicability of CAA requirements. 
In this action, among other things, the EPA is clarifying the 
applicability of section 110(a)(2)(D)(i)(I) by identifying 
NOX emissions in certain states that must be prohibited 
pursuant

[[Page 74512]]

to this section with respect to the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \42\ 42 U.S.C. 7601(a)(1).
---------------------------------------------------------------------------

    In particular, the EPA is using its authority under sections 110 
and 301 to promulgate FIPs that establish or revise EGU NOX 
ozone season emission budgets for 22 eastern states to mitigate their 
significant contribution to nonattainment or interference with 
maintenance of the 2008 ozone NAAQS in another state.\43\ The EPA is 
also responding to the court's remand in EME Homer City II with respect 
to the remanded NOX ozone season emission budgets.
---------------------------------------------------------------------------

    \43\ One state, Kansas, will have a new CSAPR ozone season 
requirement under this final rule. The remaining 21 states were 
included in the original CSAPR ozone season program as to the 1997 
ozone NAAQS.
---------------------------------------------------------------------------

B. FIP Authority for Each State Covered by the Final Rule

    As discussed previously, all states have an obligation to submit 
SIPs that address the applicable requirements of CAA section 110(a)(2) 
within 3 years of promulgation of a new or revised NAAQS. With respect 
to the 2008 ozone NAAQS, states were required to submit SIPs addressing 
the good neighbor provision by March 12, 2011. If the EPA finds that a 
state has failed to submit a SIP to meet its statutory obligation to 
address section 110(a)(2)(D)(i)(I) or if the EPA disapproves a good 
neighbor SIP, then the EPA has not only the authority but the 
obligation, pursuant to section 110(c)(1), to promulgate a FIP to 
address the CAA requirement no later than 2 years after the finding or 
disapproval.
    On July 13, 2015, the EPA published a rule finding that 24 states 
failed to make complete submissions that address the requirements of 
section 110(a)(2)(D)(i)(I) related to the interstate transport of 
pollution as to the 2008 ozone NAAQS. See 80 FR 39961 (July 13, 2015) 
(effective August 12, 2015). The finding action triggered a 2-year 
deadline for the EPA to issue FIPs to address the good neighbor 
provision for these states by August 12, 2017. The states included in 
this finding of failure to submit are: Alabama, Arkansas, California, 
Florida, Georgia, Illinois, Iowa, Kansas, Maine, Massachusetts, 
Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Mexico, 
North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, 
Vermont, Virginia, and West Virginia.
    Several additional eastern states--Connecticut, Delaware, Indiana, 
Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North 
Dakota, Ohio, Rhode Island, South Dakota, Texas, Wisconsin, and the 
District of Columbia--had previously submitted SIPs to address the 
requirements of section 110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS. 
Since the EPA issued the findings notice, the agency has also received 
a SIP submission addressing the good neighbor provision for the 2008 
ozone NAAQS from the states of Maine, New Hampshire, North Carolina, 
and Vermont. Maryland and New Jersey subsequently withdrew their good 
neighbor SIP submittals addressing the 2008 ozone standard. The EPA 
issued separate notices finding that Maryland and New Jersey failed to 
make complete submissions that address the requirements of section 
110(a)(2)(D)(i)(I) related to the interstate transport of pollution as 
to the 2008 ozone NAAQS. See 81 FR 47040 (July 20, 2016) (Maryland, 
effective August 19, 2016); 81 FR 38963 (June 15, 2016) (New Jersey, 
effective July 15, 2016). The finding actions triggered a 2-year 
deadline for the EPA to issue FIPs to address the good neighbor 
provision for Maryland by August 19, 2018 and New Jersey by July 15, 
2018.
    To the extent that the EPA had not finalized action on these SIPs 
at proposal, the states were encouraged to evaluate their submissions 
in light of the information provided in the proposal with respect to 
interstate ozone transport for the 2008 ozone NAAQS. The EPA has 
finalized disapproval or partial disapproval of the good neighbor SIPs 
from Indiana, Kentucky, Louisiana, New York, Ohio, Texas and 
Wisconsin,\44\ triggering the EPA's authority and obligation to 
promulgate FIPs that implement the requirements of the good neighbor 
provision for those states. The EPA has approved good neighbor SIPs 
addressing the 2008 ozone standard submitted by Nebraska, North Dakota, 
and South Dakota. The EPA has not yet taken final action to approve or 
disapprove the SIPs submitted by Connecticut, Delaware, the District of 
Columbia, Maine, New Hampshire, North Carolina, Rhode Island, and 
Vermont. However, the EPA is not finalizing FIPs as to these states in 
this action. The EPA will review and act upon these states' SIPs in 
separate, future actions.
---------------------------------------------------------------------------

    \44\ The EPA has finalized a partial disapproval of the good 
neighbor SIP from the state of Wisconsin. The EPA partially approved 
Wisconsin's SIP as to the state's significant contribution to 
nonattainment and partially disapproved as to the state's 
interference with maintenance of the 2008 ozone NAAQS. See 81 FR 
53309 (August 12, 2013).
---------------------------------------------------------------------------

    Comment: Some commenters have questioned the EPA's authority to 
propose FIPs for certain states before the EPA has either issued 
findings of failure to submit good neighbor SIPs or taken final action 
to approve or disapprove pending good neighbor SIPs submitted by those 
states. Commenters state that the EPA's development of FIPs prior to 
taking those actions upsets the balance of state and federal authority. 
Some commenters state that this approach is inconsistent with the 
sequencing of events envisioned by Congress in CAA section 110(c). 
Another commenter contends that the CAA contemplates that states should 
have an opportunity to correct any problems with its SIP in a timely 
fashion and avoid imposition of a FIP. The commenter states that, until 
the EPA proposes to disapprove a state's SIP, the state does not know 
what corrections would be necessary.
    One commenter states that the Supreme Court's decision in EPA v. 
EME Homer City Generation means that the EPA may issue a FIP if more 
than two years have elapsed since the EPA found the state's SIP was 
inadequate. The commenter suggests that states should be given the 
opportunity to submit a SIP after the EPA establishes a state budget 
before a FIP is implemented. The commenter states that the EPA adhered 
to the CAA in prior transport rulemakings like the NOX SIP 
Call and CAIR by allowing states to decide how to meet budgets 
quantified by the EPA.
    Response: The EPA disagrees with commenters' contention that we 
cannot propose a FIP for a state prior to taking final action on the 
state's SIP. CAA section 110(c) provides that the EPA ``shall 
promulgate a [FIP] at any time within two years after'' the EPA either 
finds that a state has failed to make a required submission or 
disapproves a SIP, in whole or in part. As the Supreme Court confirmed 
in EPA v. EME Homer City Generation, ``EPA is not obliged to wait two 
years or postpone its action even a single day: The Act empowers the 
Agency to promulgate a FIP `at any time' within the two-year limit.'' 
134 S. Ct. at 1601.
    The EPA's proposal was not the ``promulgation'' of a FIP. Rather, 
the EPA is only finalizing FIPs for those states for which the EPA has 
either made a finding of failure to submit a SIP addressing the state's 
good neighbor obligation as to the 2008 ozone NAAQS or for which the 
EPA disapproved the state's good neighbor SIP. Accordingly, consistent 
with section 110(c), the EPA is only promulgating FIPs for those states 
that the EPA found have failed to address the statutory SIP obligation.
    The EPA also disagrees that it was required to provide states with 
an opportunity to submit a SIP addressing the budgets calculated in 
this rule

[[Page 74513]]

before promulgating a FIP. The Supreme Court clearly held that the Act 
does not ``condition the duty to promulgate a FIP on EPA's having first 
quantified an upwind State's good neighbor obligations.'' 134 S. Ct. at 
1601. Nor does the Act ``require EPA to furnish upwind States with 
information of any kind about their good neighbor obligations before a 
FIP issues.'' Id. While the EPA has taken a different approach in some 
prior rulemakings by providing states with an opportunity to submit a 
SIP after the EPA quantified the states' budgets, the circumstances of 
this rule require a different approach. As discussed in more detail 
earlier, it is important for the EPA to assure that emission reductions 
are achieved, to the extent feasible, by the 2017 ozone season in order 
to assist downwind areas with meeting the July 20, 2018 attainment 
deadline for Moderate nonattainment areas. If the EPA were to permit 
states an opportunity to develop and submit state plans to address the 
emission reductions required by this rule before imposing a federal 
plan, the EPA could not ensure that these emission reductions would be 
achieved in a timely manner. However, states may submit SIPs to replace 
the FIPs promulgated in this final rule at any time. Some types of SIPs 
that a state might consider are outlined in more detail later in 
section VII.
    In addition to the agency's general FIP authority and the comments 
received on that issue, there is a unique issue related to the EPA's 
FIP obligation for Kentucky. On March 7, 2013, the EPA finalized action 
on the State of Kentucky's SIP submission addressing, among other 
things, the good neighbor provision requirements for the 2008 ozone 
NAAQS.\45\ The EPA disapproved the submission as to the good neighbor 
requirements. In the notice, the EPA explained that the disapproval of 
the good neighbor portion of the state's infrastructure SIP submission 
did not trigger a mandatory duty for the EPA to promulgate a FIP to 
address these requirements.\46\ Citing the D.C. Circuit's decision EME 
Homer City I, the EPA explained that the court concluded states have no 
obligation to make a SIP submission to address the good neighbor 
provision for a new or revised NAAQS until the EPA first defines a 
state's obligations pursuant to that section.\47\ Therefore, because a 
good neighbor SIP addressing the 2008 ozone standard was not at that 
time required, the EPA indicated that its disapproval action would not 
trigger an obligation for the EPA to promulgate a FIP to address the 
interstate transport requirements.\48\
---------------------------------------------------------------------------

    \45\ 78 FR 14681 (March 7, 2013).
    \46\ Id. at 14683.
    \47\ Id.
    \48\ Id.
---------------------------------------------------------------------------

    On April 30, 2013, the Sierra Club filed a petition for review of 
the EPA's action in the United States Court of Appeals for the Sixth 
Circuit based on the agency's conclusion that the FIP clock was not 
triggered by the disapproval of Kentucky's good neighbor SIP.\49\ 
Subsequently, on April 29, 2014, the Supreme Court issued a decision 
reversing and vacating the D.C. Circuit's decision in EME Homer City. 
Following the Supreme Court decision, the EPA requested, and the Sixth 
Circuit granted, vacatur and remand of the portion of the EPA's final 
action on Kentucky's good neighbor SIP that determined that the FIP 
obligation was not triggered by the disapproval.\50\
---------------------------------------------------------------------------

    \49\ Sierra Club v. EPA, Case No. 13-3546 (6th Cir., filed Apr. 
30, 2013).
    \50\ Order, Sierra Club v. EPA, Case No. 13-3546, Document No. 
74-1 (Mar. 13, 2015).
---------------------------------------------------------------------------

    In this document, the EPA is correcting the portion of the Kentucky 
disapproval notice indicating that the FIP clock would not be triggered 
by the SIP disapproval. The EPA believes that the EPA's obligation to 
develop a FIP was triggered on the date of the judgment issued by the 
Supreme Court in EPA v. EME Homer City Generation, June 2, 2014, and 
the EPA is obligated to issue a FIP at any time within two years of 
that date. The EPA does not believe that the FIP obligation was 
triggered as of the date of the SIP disapproval because the controlling 
law as of that date was the D.C. Circuit decision in EME Homer City I, 
which held that states had no obligation to submit a SIP and the EPA 
had no authority to issue a FIP until the EPA first quantified each 
state's emission reduction obligation under the good neighbor 
provision. Accordingly, the most reasonable conclusion is that the 
EPA's FIP obligation was triggered when the Supreme Court clarified the 
state and federal obligations with respect to the good neighbor 
provision. Thus, the EPA finds that the FIP obligation was triggered as 
of June 2, 2014, and that the EPA was obligated to promulgate a FIP 
that corrects the deficiency by June 2, 2016.

IV. Air Quality Issues Addressed and Overall Approach for the Final 
Rule

A. The Interstate Transport Challenge Under the 2008 Ozone Standard

1. Background on the Nature of the Interstate Ozone Transport Problem
    Interstate transport of NOX emissions poses significant 
challenges with respect to attaining the 2008 ozone NAAQS in the 
eastern U.S. and thus presents a threat to public health and welfare. 
The following sections discuss the nature and sources of ozone, how 
ozone is transported in the atmosphere and across state boundaries, and 
ozone's impacts on human health and the environment.
    a. Nature of ozone and the Ozone NAAQS. Ground-level ozone is not 
emitted directly into the air, but is a secondary air pollutant created 
by chemical reactions between oxides of nitrogen (NOX), 
carbon monoxide (CO), methane (CH4), and non-methane 
volatile organic compounds (VOCs) in the presence of sunlight. 
Emissions from electric utilities, industrial facilities, motor 
vehicles, gasoline vapors, and chemical solvents are some of the major 
anthropogenic sources of ozone precursors. The potential for ground-
level ozone formation increases during periods with warmer temperatures 
and stagnant air masses; therefore ozone levels are generally higher 
during the summer months.\51\ Ground-level ozone concentrations and 
temperature are highly correlated in the eastern U.S. with observed 
ozone increases of 2-3 ppb per degree Celsius reported.\52\ Increased 
temperatures may also increase emissions of volatile man-made and 
biogenic organics and can indirectly increase anthropogenic 
NOX emissions as well (e.g., increased electricity 
generation to power air conditioning).
---------------------------------------------------------------------------

    \51\ Rasmussen, D.J. et al. (2011) Ground-level ozone-
temperature relationships in the eastern US: A monthly climatology 
for evaluating chemistry-climate models. Atmospheric Environment 47: 
142-153.
    \52\ Bloomer, B.J., J.W. Stehr, C.A. Piety, R.J. Salawitch, and 
R.R. Dickerson (2009), Observed relationships of ozone air pollution 
with temperature and emissions, Geophys. Res. Lett., 36, L09803.
---------------------------------------------------------------------------

    The 2008 primary and secondary ozone standards are both 75 ppb as 
an 8-hour maximum level. Specifically, the standards require that an 
area may not exceed 75 ppb using the 3-year average of the fourth 
highest 24-hour maximum 8-hour rolling average ozone concentration.
    b. Ozone transport. Precursor emissions can be transported downwind 
directly or, after transformation in the atmosphere, as ozone. Studies 
have

[[Page 74514]]

established that ozone formation, atmospheric residence, and transport 
occurs on a regional scale (i.e., hundreds of miles) over much of the 
eastern U.S., with elevated concentrations occurring in rural as well 
as metropolitan areas. As a result of ozone transport, in any given 
location, ozone pollution levels are impacted by a combination of local 
emissions and emissions from upwind sources. The transport of ozone 
pollution across state borders compounds the difficulty for downwind 
states in meeting health-based air quality standards (i.e., NAAQS). 
Numerous observational studies have demonstrated the transport of ozone 
and its precursors and the impact of upwind emissions on high 
concentrations of ozone pollution. Bergin et al., for example, examined 
the impacts of statewide emissions of NOX, SO2, 
and VOCs on concentrations of ozone and fine particulate matter in the 
eastern U.S. They found on average 77 percent of each state's ground-
level ozone is produced by precursor emissions from upwind states.\53\ 
Liao et al., showed the impacts of interstate transport of 
anthropogenic NOX and VOC emissions on peak ozone formation 
in 2007 in the Mid-Atlantic U.S. Results suggest reductions in 
anthropogenic NOX emissions from EGU and non-EGU sources 
from the Great Lakes region as well as northeastern and southeastern 
U.S. would be effective for decreasing area-mean peak ozone 
concentrations in the Mid-Atlantic.\54\
---------------------------------------------------------------------------

    \53\ Bergin, M.S. et al. (2007) Regional air quality: local and 
interstate impacts of NOX and SO2 emissions on 
ozone and fine particulate matter in the eastern United States. 
Environmental Sci & Tech. 41: 4677-4689.
    \54\ Liao, K. et al. (2013) Impacts of interstate transport of 
pollutants on high ozone events over the Mid-Atlantic United States. 
Atmospheric Environment 84, 100-112.
---------------------------------------------------------------------------

    The EPA has previously concluded in the NOX SIP Call, 
CAIR, and CSAPR that, for reducing regional-scale ozone transport, a 
NOX control strategy is effective. While substantial 
progress has been made in reducing ozone in many urban areas, regional-
scale ozone transport is still an important component of peak ozone 
concentrations during the summer ozone season. Model assessments have 
looked at impacts on peak ozone concentrations after potential emission 
reduction scenarios for NOX and VOCs for NOX-
limited and VOC-limited areas. For example, Jiang and Fast concluded 
that NOX emission reductions strategies would be effective 
in lowering ozone mixing ratios in urban areas and Liao et al. showed 
NOX reductions would reduce peak ozone concentrations in 
non-attainment areas in the Mid-Atlantic (i.e. a 10 percent reduction 
in EGU and non-EGU NOX emissions would result in 
approximately a 6 ppb reduction in peak ozone concentrations in 
Washington, DC).\55\ Assessments of ozone conducted for the October 
2015 Regulatory Impact Analysis of the Final Revisions to the National 
Ambient Air Quality Standards for Ground-Level Ozone (EPA-452/R-15-007) 
also show the importance of NOX emissions on ozone 
transport. This analysis is in the docket for this rule and also can be 
found in the docket for the 2015 ozone NAAQS, Docket No. EPA-HQ-OAR-
2013-0169-0057.
---------------------------------------------------------------------------

    \55\ Jiang, G.; Fast, J.D. (2004) Modeling the effects of VOC 
and NOX emission sources on ozone formation in Houston 
during the TexAQS 2000 field campaign. Atmospheric Environment 38: 
5071-5085.
---------------------------------------------------------------------------

    Further, studies have found that EGU NOX emission 
reductions, particularly, can be effective in reducing ozone pollution 
as quantified by the form of the 2008 ozone standard, 8-hour peak 
concentrations. Specifically, studies have found that EGU 
NOX emission reductions can be effective in reducing the 
upper end of the cumulative ozone distribution in the summer on a 
regional scale.\56\ Analysis of air quality monitoring data trends 
shows reductions in summertime ozone concurrent with implementation of 
EGU NOX reduction programs.\57\ Gilliland et al. presented 
reductions in observed versus modeled ozone concentrations in the 
eastern U.S. downwind from major NOX sources. The results 
showed significant reductions in ozone concentrations (10-25 percent) 
from observed measurements (CASTNET and AQS) \58\ between 2002 and 
2005, linking reductions in EGU NOX emissions from upwind 
states with ozone reductions downwind of the major source areas.\59\ 
Another study shows that EGU NOX emissions can contribute 
between 5 ppb and 25 ppb to average 8-hour peak
---------------------------------------------------------------------------

    \56\ Hidy, G.M. and Blanchard C.L. (2015) Precursor reductions 
and ground-level ozone in the Continental United States. J. of Air & 
Waste Management Assn. 65, 10.
    \57\ Simon, H. et al. (2015) Ozone trends across the United 
States over a period of decreasing NOX and VOC emissions. 
Environmental Science & Technology 49, 186-195.
    \58\ CASTNET is the EPA's Clean Air Status and Trends Network. 
AQS is the EPA's Air Quality System.
    \59\ Gilliland, A.B. et al. (2008) Dynamic evaluation of 
regional air quality models: Assessing changes in O3 
stemming from changes in emissions and meteorology. Atmospheric 
Environment 42: 5110-5123.
---------------------------------------------------------------------------

ozone concentrations in Mid-Atlantic metropolitan statistical 
areas.\60\ Additionally, G[eacute]go et al. showed that ground-level 
ozone concentrations were significantly reduced after the 
NOX SIP Call in regions downwind of major EGUs in the Ohio 
River Valley.\61\
---------------------------------------------------------------------------

    \60\ Summertime Zero-Out Contributions of regional 
NOX and VOC emissions to modeled 8-hour ozone 
concentrations in the Washington, DC, Philadelphia, PA, and New York 
City MSAs.
    \61\ G[eacute]go et al. (2007) Observation-based assessment of 
the impact of nitrogen oxides emissions reductions on O3 
air quality over the eastern United States. J. of Applied 
Meteorology and Climatology 46: 994-1008.
---------------------------------------------------------------------------

    Previous regional ozone transport efforts, including the 
NOX SIP Call, CAIR, and CSAPR, required ozone season 
NOX reductions from EGUs to address interstate transport of 
ozone. The EPA has taken comment on regulating EGU NOX 
emissions to address interstate ozone transport in the notice-and-
comment process for these rulemakings. The EPA received no significant 
adverse comments in any of these earlier proposals regarding the rules' 
focus on ozone season EGU NOX reductions to address 
interstate ozone transport. Further, many comments received on the 
proposed CSAPR Update encouraged the EPA to seek further EGU 
NOX reductions to address interstate transport for the 2008 
ozone NAAQS. As described later in this document, the EPA's analysis 
finds that the power sector continues to be capable of making 
NOX reductions that reduce interstate transport with respect 
to ground-level ozone.
    c. Health and environmental effects. Exposure to ambient ozone 
causes a variety of negative effects on human health, vegetation, and 
ecosystems. In humans, acute and chronic exposure to ozone is 
associated with premature mortality and a number of morbidity effects, 
such as asthma exacerbation. In ecosystems, ozone exposure causes 
visible foliar injury, decreases plant growth, and affects ecosystem 
community composition. For more information on the human health and 
welfare and ecosystem effects associated with ambient ozone exposure, 
see the EPA's October 2015 Regulatory Impact Analysis of the Final 
Revisions to the National Ambient Air Quality Standards for Ground-
Level Ozone (EPA-452/R-15-007) in the docket for this rule and can be 
also found in the docket for the 2015 ozone NAAQS, Docket No. EPA-HQ-
OAR-2013-0169-0057.

[[Page 74515]]

2. Events Affecting Application of the Good Neighbor Provision for the 
2008 Ozone NAAQS
    On March 12, 2008, the EPA promulgated a revision to the NAAQS, 
lowering both the primary and secondary standards to 75 ppb. See 
National Ambient Air Quality Standards for Ozone, Final Rule, 73 FR 
16436 (March 27, 2008). These revisions of the NAAQS, in turn, 
triggered a 3-year deadline of March 12, 2011, for states to submit SIP 
revisions addressing infrastructure requirements under CAA sections 
110(a)(1) and 110(a)(2), including the good neighbor provision. During 
this 3-year SIP development period, on September 16, 2009, the EPA 
announced \62\ that it would reconsider the 2008 ozone NAAQS. To reduce 
the workload for states during the interim period of reconsideration, 
the EPA also announced its intention to propose staying implementation 
of the 2008 standards with respect to a number of the requirements. On 
January 6, 2010, the EPA proposed to revise the 2008 NAAQS for ozone 
from 75 ppb to a level within the range of 60 to 70 ppb. See 75 FR 2938 
(January 19, 2010). The EPA indicated its intent to issue final 
standards based upon the reconsideration by summer 2011.
---------------------------------------------------------------------------

    \62\ Fact Sheet. The EPA to reconsider Ozone Pollution 
Standards. http://www.epa.gov/groundlevelozone/pdfs/O3_Reconsideration_FACT%20SHEET_091609.pdf.
---------------------------------------------------------------------------

    On August 8, 2011, the EPA published the original CSAPR, in 
response to the D.C. Circuit's remand of the EPA's prior federal 
transport rule, CAIR. See 76 FR 48208 (August 8, 2011). The original 
CSAPR addressed ozone transport under the 1997 ozone NAAQS, but did not 
address the 2008 ozone standard, because the 2008 ozone NAAQS was under 
reconsideration when CSAPR was finalized.
    On September 2, 2011, consistent with the direction of the 
President, the Administrator of the Office of Information and 
Regulatory Affairs of the Office of Management and Budget returned the 
draft final 2008 ozone rule the EPA had developed upon reconsideration 
to the agency for further consideration.\63\ In view of that action and 
the timing of the agency's ongoing periodic review of the ozone NAAQS 
required under CAA section 109 (as announced on September 29, 2008), 
the EPA decided to coordinate further proceedings on its voluntary 
reconsideration of the 2008 ozone standards with its ongoing periodic 
review of the ozone NAAQS.\64\ Implementation for the original 2008 
ozone standards was renewed. However, a number of legal developments 
pertaining to the EPA's promulgation of the original CSAPR created 
uncertainty surrounding the EPA's statutory interpretation and 
implementation of the good neighbor provision.
---------------------------------------------------------------------------

    \63\ See Letter from Cass R. Sunstein, Administrator, Office of 
Information and Regulatory Affairs, to Lisa Jackson, Administrator, 
U.S. Environmental Protection Agency (Sept. 2, 2011), available at 
http://www.reginfo.gov/public/return/EPA_Return_Letter_9-2-2011.pdf.
    \64\ Id.
---------------------------------------------------------------------------

    On August 21, 2012, the D.C. Circuit issued a decision in EME Homer 
City Generation, L.P. v. EPA addressing several legal challenges to 
CSAPR and holding, among other things, that states had no obligation to 
submit good neighbor SIPs until the EPA had first quantified each 
state's good neighbor obligation.\65\ According to that decision, the 
submission deadline for good neighbor SIPs under the CAA would not 
necessarily be tied to the promulgation of a new or revised NAAQS. 
While the EPA disagreed with this interpretation of the statute and 
sought review of the decision in the D.C. Circuit and the U.S. Supreme 
Court, the EPA complied with the D.C. Circuit's ruling during the 
pendency of its appeal. In particular, the EPA indicated that, 
consistent with the D.C. Circuit's opinion, it would not at that time 
issue findings that states had failed to submit good neighbor SIPs for 
the 2008 ozone NAAQS.\66\
---------------------------------------------------------------------------

    \65\ EME Homer City I, 696 F.3d at 31.
    \66\ See, e.g., Memorandum from the Office of Air and Radiation 
former Assistant Administrator Gina McCarthy to the EPA Regions, 
``Next Steps for Pending Redesignation Requests and State 
Implementation Plan Actions Affected by the Recent Court Decision 
Vacating the 2011 Cross-State Air Pollution Rule,'' November 19, 
2012; 78 FR 65559 (November 1, 2013) (final action on Florida 
infrastructure SIP submission for 2008 8-hour ozone NAAQS); 78 FR 
14450 (March 6, 2013) (final action on Tennessee infrastructure SIP 
submissions for 2008 8-hour ozone NAAQS); Final Rule, Findings of 
Failure To Submit a Complete State Implementation Plan for section 
110(a) Pertaining to the 2008 Ozone National Ambient Air Quality 
Standard, 78 FR 2884 (January 15, 2013).
---------------------------------------------------------------------------

    On January 23, 2013, the Supreme Court granted the EPA's petition 
for certiorari.\67\ On April 29, 2014, the Supreme Court reversed the 
D.C. Circuit's EME Homer City opinion on CSAPR and held, among other 
things, that under the plain language of the CAA, states must submit 
SIPs addressing the good neighbor provision within 3 years of 
promulgation of a new or revised NAAQS, regardless of whether the EPA 
first provides guidance, technical data, or rulemaking to quantify the 
state's obligation.\68\ Thus, the Supreme Court affirmed that states 
have an obligation in the first instance to address the good neighbor 
provision after promulgation of a new or revised NAAQS, a holding that 
also applies to the states' obligation to address transport for the 
2008 ozone NAAQS.
---------------------------------------------------------------------------

    \67\ EPA v. EME Homer City Generation, L.P., 133 S. Ct. 2857 
(2013) (granting the EPA's and other parties' petitions for 
certiorari).
    \68\ EPA v. EME Homer City Generation, L.P., 134 S. Ct. at 1600-
01.
---------------------------------------------------------------------------

    States were therefore required to submit SIPs addressing the good 
neighbor provision with respect to the 2008 ozone NAAQS by March 12, 
2011. Under the Supreme Court's holding, to the extent that states have 
failed to submit SIPs to meet this statutory obligation or the EPA has 
disapproved SIPs, then the EPA has not only the authority, but the 
obligation, to promulgate FIPs to address the CAA requirement.

B. Approach To Address Ozone Transport Under the 2008 Ozone NAAQS via 
FIPs

1. Requiring Emission Reductions From Upwind States
    As described in section IV.A.1.b, the EPA finds that upwind EGU 
emission reductions are generally effective at reducing interstate 
transport of ozone pollution. And as described in section VI, with 
respect to this rule, the EPA finds that upwind emission reductions are 
achievable and will result in important and meaningful decreases in 
harmful downwind ozone pollution.
    At the same time, the EPA also notes that section 
110(a)(2)(D)(i)(I) of the CAA only requires upwind states to prohibit 
emissions that will significantly contribute to nonattainment or 
interfere with maintenance of the NAAQS in other states. It does not 
shift to upwind states the full responsibility for ensuring that all 
areas in downwind states attain and maintain the NAAQS. Downwind states 
also have control responsibilities because, among other things, the Act 
requires each state to adopt enforceable plans (i.e., State 
Implementation Plans) to attain and maintain air quality standards. The 
requirements established for upwind states through this final rule will 
supplement downwind states' local emission control strategies. The 
downwind states' local control strategies, in conjunction with the 
emission reductions from upwind states that this rule will provide, 
promote attainment and maintenance of the 2008 ozone NAAQS.
    The Clean Air Act's good neighbor provision requires states and the 
EPA to address interstate transport of air pollution that affects 
downwind states' ability to attain and maintain NAAQS. Other provisions 
of the CAA, namely sections 179B and 319(b), are available

[[Page 74516]]

to deal with NAAQS exceedances not attributable to the interstate 
transport of pollution covered by the good neighbor provisions but 
caused by emission sources outside the control of a downwind state. 
These provisions address international transport and exceptional 
events, respectively.69 70
---------------------------------------------------------------------------

    \69\ The EPA recognizes that both in-state and upwind wildfires 
may contribute to monitored ozone concentrations. The EPA encourages 
all states to consider how the appropriate use of prescribed fire 
may benefit public safety and health by resulting in fewer ozone 
exceedances for both the affected state and their neighboring 
states.
    \70\ The CAA and the EPA's implementing regulations, 
specifically the Exceptional Events Rule at 40 CFR 50.14, allow for 
the exclusion of air quality monitoring data from regulatory 
determinations when events, including wildland fires, contribute to 
NAAQS exceedances or violations if they meet certain requirements, 
including the criterion that the event be not reasonably 
controllable or preventable. Wildland fires can be of two types: 
Wildfire (unplanned) and prescribed fire (planned). Under the 
Exceptional Events Rule, unless there is evidence to the contrary, 
wildfires are considered, by their nature, to be not reasonably 
controllable or preventable. Because prescribed fires on wildland 
are intentionally ignited for resource management purposes, to meet 
the not reasonably controllable or preventable criterion, they must 
be conducted under a certified Smoke Management Program or employ 
basic smoke management practices. Both types of wildland fire must 
also satisfy the other rule criteria for influenced air quality 
monitoring data to be excluded under the Exceptional Events Rule. In 
November 2015, the EPA proposed revisions to the Exceptional Events 
Rule and released a draft guidance document, which applies the 
proposed rule revisions to wildfire events that could influence 
ozone concentrations. These actions, which the EPA intends to 
finalize in the summer of 2016, further clarify the treatment of 
wildland fires under the Exceptional Events Rule.
---------------------------------------------------------------------------

    Comment: Some commenters claimed that local measures should be 
evaluated first, before requiring upwind emission reductions, in terms 
of efforts to attain and maintain the 2008 ozone NAAQS. Commenters also 
claimed that the EPA failed to adequately evaluate local measures to 
reduce ozone concentrations at identified nonattainment and maintenance 
receptors.
    Response: The EPA disagrees with these comments. First, the Clean 
Air Act makes no reference to considering local measures before upwind 
measures in planning for attainment and maintenance of a NAAQS. In 
fact, the EPA notes that commenters' local-first argument is at 
opposition with the NAAQS implementation schedule provided in the CAA. 
Specifically, the Clean Air Act requires upwind states to submit 
infrastructure SIPs, including requirements to address interstate 
transport, within three years of promulgation of a new or revised 
NAAQS. Submission of interstate transport SIP requirements is one of 
the first chronological actions in NAAQS implementation. States are 
required to submit attainment plans for Moderate ozone nonattainment 
areas within 3 years of nonattainment designation, which normally comes 
two to three years after promulgation of a new or revised NAAQS. 
Marginal ozone nonattainment areas that fail to meet their attainment 
deadlines and are reclassified as Moderate areas may be provided a new 
deadline upon reclassification to submit Moderate area plans. See CAA 
section 182(i). Depending on the designations schedule, Moderate area 
attainment plans would be due approximately 5 years after promulgation 
of a new or revised standards, i.e., 2 years after interstate transport 
SIPs, and plans for reclassified areas would follow even later. 
Commenters' request that the EPA not evaluate upwind obligations until 
downwind controls have been evaluated is therefore unavailing under the 
statutory structure. If states or the EPA waited until Moderate area 
attainment plans were due before requiring upwind reductions, then 
these upwind reductions would be delayed several years beyond the 
mandatory CAA schedule. Further, the CAA implementation timeline 
implies that requiring local reductions first would place an 
inequitable burden on downwind areas by requiring them to plan for 
attainment and maintenance without any upwind actions. Adhering to the 
CAA schedule provides that downwind areas are able to plan for 
attainment and maintenance while accounting for previously determined 
and quantified upwind actions.
    Further, the commenters are incorrect in asserting that the EPA has 
not considered any local controls obligations at downwind receptors 
when quantifying upwind state emission reductions. As described further 
in section VI, when evaluating air quality improvements at each level 
of control stringency, the EPA assumed that the downwind state home to 
an identified receptor would make emission reductions at an equivalent 
level of control stringency. While this final rule does not mandate any 
particular level of reductions in downwind states, the analysis to 
quantify upwind state reductions assumes that downwind states share 
responsibility for addressing identified air quality problems with the 
upwind states.
2. Focusing on 2017 for Analysis and Implementation
    The EPA is aligning the analysis and implementation of this final 
rulemaking with the 2017 ozone season (May 1-September 30) in order to 
assist downwind states with timely attainment of the 2008 ozone NAAQS. 
On March 6, 2015, the EPA's final 2008 Ozone NAAQS SIP Requirements 
Rule \71\ revised the attainment deadline for ozone nonattainment areas 
currently designated as Moderate to July 20, 2018. The EPA established 
this deadline in the 2015 Ozone SIP Requirements Rule after previously 
establishing a deadline of December 31, 2018, which was vacated by the 
D.C. Circuit Court in Natural Resources Defense Council v. EPA. \72\ In 
order to demonstrate attainment by this deadline, states will need to 
rely on design values calculated using ozone season data from 2015 
through 2017, since the July 20, 2018 deadline does not afford enough 
time for measured data of the full 2018 ozone season. Therefore, 
consistent with the court's instruction in North Carolina, the EPA has 
identified achievable upwind emissions reductions and aligned 
implementation of these reductions, to the extent possible, for the 
2017 ozone season. These 2017 reductions can positively influence air 
quality that would be used to demonstrate attainment. To the extent 
that ozone improvements in 2017 yield the 4th highest daily maximum 8-
hour average concentrations for all monitors in the area that are below 
the level of the 2008 ozone NAAQS, states can request a 1-year 
attainment date extension under CAA section 181(a)(5), as interpreted 
in 40 CFR 51.1107.
---------------------------------------------------------------------------

    \71\ 80 FR 12264, 12268 (Mar. 6, 2015); 40 CFR 51.1103.
    \72\ 777 F.3d 456 (D.C. Cir. 2014).
---------------------------------------------------------------------------

    The EPA has therefore conducted its analyses of downwind air 
quality problems and upwind state contributions based on projections to 
the 2017 ozone season. The EPA also limits its assessment of 
NOX mitigation potential to those strategies that are 
feasible for the 2017 ozone season. This rulemaking also finalizes the 
2017 ozone season as the initial control period for the finalized FIPs.
    Comment: Several comments claimed that requiring reductions 
beginning with the 2017 ozone season does not provide sufficient time 
to implement emission reductions for compliance with this rulemaking's 
limitations on emissions.
    Response: The EPA disagrees with these comments. In establishing 
its limitations on emissions (i.e., emission budgets and corresponding 
assurance levels), under the CSAPR Update rule the EPA explicitly took 
into account the fact that only certain emission reduction strategies 
can be implemented for the 2017 ozone season. Specifically, the

[[Page 74517]]

agency considered activities that may be implemented quickly, such as 
turning on and optimizing existing SCR at power plants. The emission 
budgets are thus calculated to reflect only those activities that can 
be implemented by the 2017 ozone season.\73\ Further, the CSAPR Update 
rule provides regulated entities the ability to comply by means of the 
CSAPR limited interstate trading program, which gives flexibility in 
compliance and does not require any specific action for compliance at 
any specific facility, other than holding allowances to cover emitted 
tons of pollution. Within this allowance trading program, the EPA also 
facilitates compliance by carrying over some banked allowances that can 
be used for compliance with the CSAPR Update, starting in 2017. More 
information about compliance feasibility is provided in section VII. 
Additionally, the EPA provides an EGU NOX Mitigation 
Strategies Final Rule TSD, which is found in the docket for this final 
rule that further discusses the feasibility of complying with this 
rule's emissions requirements.
---------------------------------------------------------------------------

    \73\ This is true with one exception. The EPA finds that for 
Arkansas it is reasonable to delay EGU NOX reduction 
potential for certain new combustion controls until 2018 and 
therefore gives Arkansas a 2017 budget that does not reflect these 
controls and a 2018 budget that does reflect these controls. This 
issue is discussed further in Section VI.
---------------------------------------------------------------------------

3. The CSAPR Framework
    The original CSAPR used a four-step framework to address the 
requirements of the good neighbor provision for the 1997 ozone NAAQS 
and the 1997 and 2006 PM2.5 NAAQS.\74\ The EPA is following 
the same CSAPR framework in this CSAPR Update to identify and address 
the requirements of the good neighbor provision with respect to the 
newer 2008 ozone NAAQS. By applying the CSAPR framework with respect to 
the newer 2008 ozone NAAQS, the EPA is using an approach that is 
informed by public comment on the original CSAPR rulemaking and has 
been reviewed in litigation by the D.C. Circuit Court of Appeals and 
the Supreme Court. The four steps are: (1) Identifying downwind 
receptors that are expected to have problems attaining or maintaining 
clean air standards \75\ (i.e., NAAQS); (2) determining which upwind 
states contribute to these identified problems in amounts sufficient to 
``link'' them to the downwind air quality problems; (3) for states 
linked to downwind air quality problems, identifying upwind emissions 
that significantly contribute to nonattainment or interfere with 
maintenance of a standard; and (4) for states that are found to have 
emissions that significantly contribute to nonattainment or interfere 
with maintenance of the NAAQS downwind, reducing the identified upwind 
emissions through regional emission allowance trading programs. The 
following subsections include summaries of the four steps and comments 
and responses on the application of the CSAPR framework from the 
proposal.
---------------------------------------------------------------------------

    \74\ See CSAPR, Final Rule, 76 FR 48208 (August 8, 2011).
    \75\ As noted in section IV, the term maintenance used under the 
CSAPR framework is distinct from the term as applied the plan 
required of nonattainment areas redesignated to attainment.
---------------------------------------------------------------------------

    a. Step 1. In the original CSAPR, downwind air quality problems 
were assessed using modeled future air quality concentrations for a 
year aligned with attainment deadlines for the NAAQS considered in that 
rulemaking. The assessment of future air quality conditions generally 
accounts for on-the-books emission reductions \76\ and the most up-to-
date forecast of future emissions in the absence of the transport 
policy being evaluated (i.e., base case conditions). The locations of 
downwind air quality problems are identified as those with monitors 
that are projected to be unable to attain (i.e., nonattainment 
receptor) or maintain (i.e., maintenance receptor) the standard. This 
final rule follows this same general approach. However, in this rule, 
the EPA also considers current monitored air quality data to further 
inform the projected identification of downwind air quality problems 
for this final rule. The proposed CSAPR Update put forward this change 
from the original CSAPR approach and commenters generally supported 
consideration of monitoring data. Further details and application of 
step one are described in section V of this rulemaking.
---------------------------------------------------------------------------

    \76\ Since CSAPR was designed to replace CAIR, CAIR emissions 
reductions were not considered ``on-the-books.''
---------------------------------------------------------------------------

    Comment: Some commenters challenged the methodology proposed by the 
EPA to identify maintenance receptors in the step 1 analysis. 
Commenters contend that maintenance receptors for purposes of the CSAPR 
Update analysis should only be identified as those areas that were 
previously designated nonattainment. The commenters explain that the 
proposed methodology for identifying maintenance receptors is 
inconsistent with how the statute defines maintenance areas in section 
175A of the CAA. Other commenters contend that the EPA should not 
identify an area as a maintenance receptor where the area currently 
measures clean data. The commenters are concerned that it is arbitrary 
and capricious to treat clean data differently with respect to 
identifying nonattainment receptors and maintenance receptors.
    Response: The EPA does not agree with the commenters' contention 
that it may only identify maintenance receptors as those areas that 
were once designated nonattainment. Such an interpretation would be 
contrary to the statutory process for SIP development. Area 
designations occur two to three years after promulgation of a new or 
revised NAAQS pursuant to CAA section 107(d)(1)(B)(i). State SIP 
submissions pursuant to CAA section 110(a)(1) and (2), including good 
neighbor SIPs, are also due three years after promulgation of a new or 
revised NAAQS. Attainment plans for those areas designated 
nonattainment are due between 18 months and 4 years after designation, 
depending on the pollutant, pursuant to the requirements of subpart D 
of title I of the CAA. Re-designations, including application of the 
requirements of CAA section 175A to develop a maintenance plan, by 
definition, occur after the initial designation and frequently well 
after the development and submission of the state's attainment plan.
    Given that the statutory timeframe for development of the good 
neighbor SIP requires submission before the downwind state's 
development of an attainment plan, before an area is likely to be re-
designated from nonattainment to attainment (with the attendant 
maintenance plan obligations), and in some cases before or at the same 
time designations for a new or revised standard might be finalized, the 
EPA does not believe it is reasonable to interpret the good neighbor 
provision to make states' emission reduction obligations dependent on 
either current or prior designations of downwind areas with potential 
air quality problems in other states. While circumstances related to 
implementation of the 2008 ozone NAAQS (described in more detail 
earlier) led many states to delay submission of good neighbor SIPs 
addressing that standard and while the EPA is, in this case, addressing 
its FIP obligation many years after designations were finalized, these 
circumstantial factors do not revise the Congressional intent inherent 
in the statutory structure just described.
    Moreover, section 110(a)(1) instructs states to submit plans that 
provide for the ``implementation, maintenance, and enforcement'' of the 
NAAQS. Nothing in the provision indicates that states need only address 
maintenance of air quality

[[Page 74518]]

in those areas that were once formally designated nonattainment as to a 
particular NAAQS. Therefore, where CAA section 110(a)(2)(D)(i)(I) 
instructs state plans to prohibit emissions activity within the state 
which will ``interfere with maintenance'' of the NAAQS in any other 
state, this provision is logically read consistent with section 
110(a)(1) to require upwind states to address the maintenance of the 
NAAQS in all areas downwind. In this respect, the EPA does not agree 
with commenters that its identification of maintenance receptors for 
purposes of the good neighbor provision is constrained by the 
applicability of the provisions in CAA section 175A. Although the 
statute invokes the word ``maintenance'' in that provision to describe 
the requirements for maintenance plans that apply in areas that have 
been re-designated from nonattainment to attainment, the good neighbor 
provision neither implicitly nor explicitly indicates that a state's 
evaluation of whether it interferes with maintenance in another state 
should be limited to evaluation of areas subject to the requirements of 
section 175A.
    Regardless of designation, any area may violate the NAAQS if 
emissions affecting air quality in that area are not adequately 
controlled. The court in North Carolina was specifically concerned with 
such areas when it rejected the view that ``a state can never 
`interfere with maintenance' unless the EPA determines that at one 
point it `contribute[d] significantly to nonattainment.' '' 531 F.3d at 
910. The court pointed out that areas barely attaining the standard due 
in part to emissions from upwind sources would have ``no recourse'' 
pursuant to such an interpretation. Id. Accordingly, the court 
instructed the EPA to give ``independent significance'' to the 
maintenance prong of CAA section 110(a)(2)(D)(i)(I) by separately 
identifying such downwind areas for purposes of defining states' 
obligations pursuant to the good neighbor provision.
    In areas that are currently measuring clean data with respect to 
the 2008 ozone NAAQS, these measurements can be driven by a number of 
factors, including recent meteorology that is not conducive to ozone 
formation. Due to the variable nature of meteorology, the fact that 
such areas are currently attaining the standard does not address 
whether the areas might struggle to maintain the standard in the 
future, which was precisely the issue raised in North Carolina. The 
EPA's approach to defining maintenance receptors directly responds to 
these concerns raised by the D.C. Circuit in North Carolina. Thus, 
although the EPA has considered recent monitored data for purposes of 
identifying nonattainment receptors in this rulemaking, it does not 
believe the data should inform the agency's identification of 
maintenance receptors.
    b. Step 2. The original CSAPR used a screening threshold of one 
percent of the NAAQS \77\ to identify upwind states that were 
``linked'' to downwind air pollution problems. States were identified 
as needing further evaluation for actions to address transport if their 
air quality impact was greater than or equal to one percent of the 
NAAQS for at least one downwind problem receptor (i.e., nonattainment 
or maintenance receptor identified in step 1). For ozone, the impacts 
include those from total emissions within the state of anthropogenic 
volatile organic compounds (VOC) and NOX from all sectors. 
The EPA evaluated a given state's contribution based on the average 
relative downwind impact calculated over multiple days. States whose 
air quality impacts to all downwind problem receptors were below this 
threshold did not require further evaluation for actions to address 
transport--that is, these states were determined to make insignificant 
contributions to downwind air quality problems and therefore have no 
emission reduction obligations under the good neighbor provision. The 
EPA used this threshold because it determined that much of the ozone 
nonattainment problem in the eastern half of the United States results 
from collective impacts of relatively small contributions from a number 
of upwind states. Use of the one percent threshold for CSAPR is 
discussed in the preambles to the proposed and final CSAPR rules. See 
75 FR 45237 (Aug. 2, 2010); 76 FR 48238 (Aug. 8, 2011).
---------------------------------------------------------------------------

    \77\ See section IV.B for a discussion of the Supreme Court's 
consideration of the one percent threshold.
---------------------------------------------------------------------------

    The EPA is using the same approach for identifying states that are 
linked to downwind nonattainment and maintenance receptors in this 
final rule because the EPA's analysis shows that much of the ozone 
nonattainment problem being addressed by this rule is still the result 
of the collective impacts of relatively small contributions from many 
upwind states. Therefore, application of a uniform threshold helps the 
EPA to identify those upwind states that should share responsibility 
for addressing the downwind nonattainment and maintenance problem to 
which they collectively contribute. Continuing to use one percent of 
the NAAQS as the screening metric to evaluate collective contribution 
from many upwind states also allows the EPA (and states) to apply a 
consistent framework to evaluate interstate emission transport under 
the ``good neighbor'' provision from one NAAQS to the next. 
Accordingly, the EPA has applied an air quality screening threshold 
calculated as one percent of the 2008 ozone NAAQS, 0.75 ppb, to 
identify those states ``linked'' to downwind nonattainment and 
maintenance receptors with respect to the 2008 ozone NAAQS which 
require further analysis to identify potential emission reductions. 
Consistent with the EPA's findings in the original CSAPR, the agency 
has determined that states with contributions to all downwind 
nonattainment and maintenance receptors below this threshold make 
insignificant contributions to downwind air quality problems and 
therefore have no emission reduction obligations under the good 
neighbor provision with respect to the 2008 ozone NAAQS. Application of 
step 2 is described in section V.
    Comment: Some commenters supported the continued use of an air 
quality screening threshold of one percent of the NAAQS to identify 
upwind states requiring further analysis. However, some commenters 
opposed the use of the proposed one percent threshold because the 
commenters claim that the EPA had not technically demonstrated that 
continued use of the one percent screening metric is appropriate for 
linking an upwind state to a downwind nonattainment or maintenance 
receptor with respect to the 2008 ozone NAAQS. Some commenters believed 
that use of the one percent threshold was too stringent given that the 
proposed rule only focuses on emission reductions from one sector, 
EGUs. Other commenters believed that one percent (0.75 ppb) was not 
stringent enough, and they recommended using a lower value such as 0.5 
ppb.
    Response: The EPA continues to believe that it is appropriate to 
use a threshold of one percent of the NAAQS for identifying states 
which merit further analysis to determine if emission reductions may be 
warranted. The EPA has consistently determined in past analyses 
conducted for the NOX SIP Call, CAIR, and CSAPR that ozone 
nonattainment problems generally result from relatively small 
contributions from many upwind states, along with contributions from 
in-state sources and in some cases, substantially larger

[[Page 74519]]

contributions from a subset of particular upwind states.\78\
---------------------------------------------------------------------------

    \78\ See NOX SIP Call, 63 FR 57356, 57375-377 
(October 27, 1998); CAIR, 70 FR 25162, 25172 & 25186 (May 12, 2005); 
CSAPR, 76 FR 48208, 48236-237 (August 8, 2011).
---------------------------------------------------------------------------

    The EPA determined that it is appropriate to use a low air quality 
threshold when analyzing states' collective contributions to downwind 
nonattainment and maintenance for ozone as well as PM2.5.
    To further support the EPA's evaluation of the appropriate 
screening threshold to use for this purpose, the EPA compiled the 
contribution modeling results from the air quality modeling conducted 
for this rule in order to analyze the impact of different possible 
thresholds. The EPA notes that similar contribution modeling data were 
available for comment in the docket for the proposed CSAPR Update. This 
compiled analysis demonstrates the reasonableness of continuing to use 
one percent as an air quality threshold to account for the combined 
impact of relatively small contributions from many upwind states. See 
the Air Quality Modeling Technical Support Document for the Final 
Cross-State Air Pollution Rule Update (AQM TSD). For each of the ozone 
receptors identified in the final CSAPR Update rule analysis, the EPA 
identified: (1) The total upwind state contributions, and (2) the 
amount of the total upwind state contribution that is captured at one 
percent, five percent, and half (0.5) percent of the NAAQS. The EPA 
continues to find that the total collective contribution from upwind 
states' sources represent a significant portion of the ozone 
concentrations at downwind nonattainment and maintenance receptor 
locations. This analysis shows that the one percent threshold generally 
captures a substantial percentage of the total pollution transport 
affecting downwind states without also implicating states that 
contribute insignificant amounts.
    In response to commenters who advocated for a lower threshold, the 
EPA observes that the analysis shows that a lower threshold would 
result in relatively modest increases in the overall percentage of 
ozone pollution transport captured relative to the amounts captured at 
the one percent level at a majority of the receptors. A lower percent 
threshold could lead to emission reduction responsibilities in 
additional states that individually have a relatively small impact on 
those receptors, compared to other upwind states -- an indicator that 
emission controls in those states are likely to have a smaller air 
quality impact at the downwind receptor.
    In response to commenters who advocated for a higher threshold, the 
EPA observes that the analysis of a 5 percent threshold shows that a 
higher threshold would result in a relatively large reduction in the 
overall percentage of ozone pollution transport captured relative to 
the amounts captured at the one percent level at a majority of the 
receptors. In fact, at a 5 percent threshold there would not be any 
upwind states linked to the nonattainment and maintenance receptors in 
Texas.
    As a result of our analyses of higher and lower thresholds, as 
described in the AQM TSD, the agency is not convinced that selecting a 
threshold below one percent or above one percent is necessary or 
desirable.
    Comment: Some commenters suggested more specifically that a 0.5 ppb 
threshold would be more appropriate for upwind states contributing to 
downwind receptors in Texas. The commenters note that the lower 
threshold will add more states in the rule and address more of the 
maximum combined upwind state impacts to Texas' receptors.
    Response: The EPA agrees that a lower threshold of 0.5 ppb would 
capture more of the upwind states that contribute to Texas receptors. 
However, the contribution of upwind state interstate transport to 
receptors in Texas is less than the upwind state interstate transport 
contribution identified for other downwind nonattainment and 
maintenance receptors in this rule. Therefore, the potential ozone 
reductions that would result from including additional upwind states 
are relatively small. The EPA believes it is therefore reasonable to 
use a uniform threshold for all states included in this rule.
    c. Step 3. For states that are linked in step 2 to downwind air 
quality problems, the original CSAPR evaluated emission reductions 
available in upwind states by application of uniform levels of control 
stringency, represented by cost. The EPA evaluated NOX 
reductions that were available in upwind states by applying uniform 
levels of control stringency to entities in these states. For each 
uniform level of control stringency evaluated, the EPA used a multi-
factor test to evaluate cost, NOX reduction potential, and 
downwind air quality impacts. This multi-factor test was used to select 
a uniform level of control stringency on the remaining allowable 
emissions--those available after reducing significant contribution to 
nonattainment or interference with maintenance of a NAAQS downwind. The 
use of uniform control stringency also reasonably apportions upwind 
responsibility among linked upwind states. This approach was upheld by 
the Supreme Court in EPA v. EME Homer City Generation.\79\
---------------------------------------------------------------------------

    \79\ EPA v. EME Homer City Generation, L.P., 134 S. Ct. at 1606-
07.
---------------------------------------------------------------------------

    In this final rule, the EPA applies this approach to establish EGU 
NOX emission budgets that reflect NOX reductions 
necessary to reduce interstate ozone transport for the 2008 NAAQS. In 
this process, the EPA also explicitly evaluates whether the budget 
quantified for each state would result in over-control, as required by 
the Supreme Court and the D.C. Circuit.\80\ Specifically, the multi-
factor test is used to evaluate whether an upwind state is linked 
solely to downwind air quality problems that are resolved at a given 
uniform control stringency, or if upwind states reduce their emissions 
at a given uniform control stringency such that contributions from 
sources in the state no longer meet or exceed the one percent air 
quality contribution threshold. This evaluation of cost, NOX 
reductions, and air quality improvements, including consideration of 
potential over-control, results in the EPA's quantification of upwind 
emissions that significantly contribute to nonattainment or interfere 
with maintenance of the 2008 ozone NAAQS downwind. The EPA's assessment 
of significant contribution to nonattainment or interference with 
maintenance of the 2008 ozone NAAQS and our development of EGU 
NOX ozone season emission budgets is described in section VI 
of this document.
---------------------------------------------------------------------------

    \80\ Id. at 1608; EME Homer City II, 795 F.3d at 127.
---------------------------------------------------------------------------

    Comment: Some commenters claim that the CSAPR framework requires 
the same remedy for states linked solely to maintenance receptors as it 
does for states linked to nonattainment receptors and these commenters 
suggested that states linked solely to maintenance problems should have 
a different, less stringent requirement. These commenters contend that, 
as a result, the EPA has failed to given independent significance to 
the ``interfere with maintenance'' clause of CAA section 
110(a)(2)(D)(i)(I) as compared to the ``significant contribution'' 
clause of that provision. The commenters contend that it constitutes 
over-control to impose budgets based on the same uniform control 
stringency to address both states that interfere with maintenance of 
the NAAQS in downwind states and those

[[Page 74520]]

that significantly contribute to nonattainment in downwind states. The 
commenters cite the Supreme Court's opinion in EPA v. EME Homer City 
Generation, explaining that the EPA may only limit emissions ``by just 
enough to permit an already-attaining State to maintain satisfactory 
air quality.'' 134 S. Ct. at 1604 n.18.
    Response: The EPA disagrees with these comments. The CSAPR 
framework gives independent meaning to the ``maintenance'' prong of CAA 
section 110(a)(2)(D)(i)(I) as required by D.C. Circuit's decision in 
North Carolina. By identifying those downwind areas that are at risk of 
exceeding the NAAQS if historical meteorology conducive to ozone 
formation occurs again, the EPA thereby defines upwind states linked to 
these areas as having a transport obligation.\81\ In its decision, on 
remand from the Supreme Court, the D.C. Circuit confirmed that the 
EPA's approach to identifying maintenance receptors in CSAPR comported 
with the court's prior instruction to give independent meaning to the 
``interfere with maintenance'' prong in the good neighbor provision. 
EME Homer City II, 795 F.3d at 136. The EPA's analysis indicates that 
the maintenance receptors identified in this rulemaking are at risk of 
NAAQS violations and therefore should be afforded protection.
---------------------------------------------------------------------------

    \81\ 531 F.3d 896, 910-911 (D.C. Cir. 2008) (noting that the 
EPA's failure to separately address maintenance problems under CAIR 
``unlawfully nullifies that aspect of the statute and provides no 
protection for downwind areas that, despite the EPA's predictions, 
still find themselves struggling to meet NAAQS due to upwind 
interference'').
---------------------------------------------------------------------------

    CAA section 110(a)(2)(D)(i)(I) requires that state implementation 
plans, or the EPA where such plans are insufficient, prohibit emissions 
which will interfere with maintenance of the NAAQS in downwind states. 
Once the EPA identifies maintenance receptors, the EPA is compelled by 
the CAA to prohibit emissions that would jeopardize the ability of 
these receptors to maintain the standard. Put another way, it would be 
inconsistent with the CAA for the EPA to identify receptors that are at 
risk of NAAQS violations given certain conditions due to transported 
upwind emissions and then not prohibit the emissions that place the 
receptor at risk.
    Moreover, the Supreme Court has acknowledged that the ``interfere 
with maintenance'' clause of the good neighbor provision is ambiguous 
with respect to how the EPA should quantify and allocate the emission 
reduction obligations for states linked to downwind maintenance 
concerns. The Supreme Court clearly stated that ``[n]othing in either 
clause of the Good Neighbor Provision provides the criteria by which 
EPA is meant to apportion responsibility.'' EPA v. EME Homer City 
Generation, L.P., 134 S. Ct. at 1604 n.18 (emphasis in original). Thus, 
the EPA is afforded deference to develop an appropriate application of 
this requirement so long as it is a ``permissible construction of the 
statute.'' Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 843, 104 
S. Ct. 2778, 2782 (1984). The Supreme Court held that it was a 
permissible interpretation of the statute to apportion responsibility 
for states linked to nonattainment receptors considering ``both the 
magnitude of upwind States' contributions and the cost associated with 
eliminating them.'' EPA v. EME Homer City Generation, L.P., 134 S. Ct. 
at 1606. It is equally reasonable and permissible to use these factors 
to apportion responsibility among upwind states linked to maintenance 
receptors because the goal in both instances is to prohibit the 
``amounts'' of pollution that will either significantly contribute to 
nonattainment or interfere with maintenance of the NAAQS downwind. The 
EPA's contribution analysis demonstrates that the amounts of pollution 
prohibited through implementation of the budgets finalized in this rule 
will, under certain projected conditions, otherwise contribute to 
downwind nonattainment and interfere with maintenance of the 2008 ozone 
NAAQS in downwind states.
    All of that being said, contrary to the commenters' contention, the 
CSAPR framework does not necessarily dictate that upwind states linked 
solely to maintenance receptors be subject to the same level of 
NOX control stringency as upwind states linked to 
nonattainment receptors. Rather, the selection of NOX 
control stringency is in part informed by the difficulty of resolving 
the identified downwind air quality problem to which each state is 
linked. (See the components, including air quality considerations, of 
the multi-factor test described in section VI.D.)The data and analysis 
for the CSAPR Update show that the maintenance-only receptors generally 
represent less severe air quality problems than the nonattainment 
receptors. Specifically, in the final CSAPR Update modeling, 
maintenance-only receptors have an average maximum design value that is 
1.9 ppb above the 2008 ozone NAAQS while nonattainment receptors have 
an average maximum design value that is 3.1 ppb above the NAAQS. As 
described in section VI.D, the specific emission reduction obligation 
for each state is limited by the amount of air quality improvement 
needed to either attain or maintain the NAAQS at the particular 
receptor to which the state's emissions are linked. These data 
therefore demonstrate that states linked to maintenance-only receptors 
would generally have a lesser emission reduction obligation than states 
linked to nonattainment receptors, but for the partial nature of this 
rule.
    The original CSAPR rulemaking provides an example of this 
differentiation of control stringency based on the severity of downwind 
air quality problems. In that rulemaking, some states reduced their 
significant contribution of SO2 for purposes of addressing 
downwind PM2.5 nonattainment and maintenance problems at a 
lower uniform cost control stringency, while other states needed to 
comply with budgets calculated at a higher uniform control stringency 
in order to resolve their transport obligations.\82\
---------------------------------------------------------------------------

    \82\ 76 FR at 48257-259.
---------------------------------------------------------------------------

    In the case of a full solution, which EPA is not promulgating in 
this action, a similar differentiation in the level of control 
stringency may emerge between the upwind states linked solely to 
maintenance and the upwind states linked to nonattainment. However, 
given the unique circumstances of this rulemaking and the need to 
obtain emission reductions on a tight timeframe in order to assist 
downwind states with meeting the downwind 2018 attainment deadline, the 
EPA is only quantifying a subset of each state's emission reduction 
obligation pursuant to the good neighbor provision. The EPA's analysis 
shows that even when all the emission reductions required by this rule 
are in place, both attainment and maintenance problems at downwind 
receptors may remain, and the EPA will need to evaluate whether the 
upwind states' emission reduction obligations should be more stringent 
considering other factors not addressed by this rule, including control 
strategies that can be implemented on a longer timeframe or by other 
source categories. Thus, the commenters are incorrect to state that the 
EPA is necessarily imposing the same remedy (in the form of the same 
level of control stringency) for states linked only to maintenance-only 
receptors as those linked to nonattainment receptors by way of applying 
the CSAPR framework. It is only due to the partial nature of the remedy 
provided by this rule that the EPA is finalizing a single uniform level 
of control stringency for all CSAPR Update states.

[[Page 74521]]

    d. Step 4. Finally, the original CSAPR used allowance trading 
programs to implement the necessary emission reductions represented by 
the emission budgets identified in step 3. Emission allowances were 
issued to units covered by the trading program, and each covered unit 
can then retain and/or acquire however many allowances are needed to 
cover its ozone season NOX emissions over the course of each 
control period; however, because the total number of allowances issued 
in each period is limited to the sum of the states' emission budgets, 
total emissions across all affected EGUs are similarly limited such 
that overall emissions are controlled. Additionally, the original CSAPR 
included variability limits, which define the amount by which 
collective emissions within a state may exceed the level of that 
state's budget in a given control period to account for variability in 
EGU operations while still ensuring that the necessary emission 
reductions are achieved in each state. The variability limits for the 
CSAPR NOX ozone season trading program is 21 percent of each 
state's budget. CSAPR set assurance levels equal to the sum of each 
state's emission budget plus its variability limit. The original CSAPR 
included assurance provisions that would require additional allowance 
surrenders in the instance that emissions in the state exceed the 
state's assurance level. This limited interstate trading approach is 
responsive to previous court decisions.\83\ See discussion in section 
VII of this preamble. The EPA is applying this same approach to 
implement reductions in interstate transport for the 2008 ozone NAAQS 
in the CSAPR Update. Implementation of the CSAPR Update allowance 
trading program (CSAPR NOX ozone season Group 2) is 
described in section VII of this final rule. This new program is 
substantially similar to the existing CSAPR NOX ozone season 
program.
---------------------------------------------------------------------------

    \83\ North Carolina, 531 F.3d at 907-08 (EPA ``must include some 
assurance that it achieves something measurable towards the goal of 
prohibiting sources `within the State' from contributing to 
nonattainment or interfering with maintenance in `any other 
State'.'').
---------------------------------------------------------------------------

    Comment: Some stakeholders have observed that a subset of existing 
post-combustion EGU NOX controls (e.g., SCR) may not have 
operated in recent years because CAIR or CSAPR allowance prices were 
below the operating costs of the controls. These commenters suggest 
that, accordingly, CAIR or CSAPR did not achieve optimal environmental 
protection, as identified by requiring existing controls to operate.
    Response: Regional allowance trading programs set a limit on the 
overall amount of allowable emissions. This limit reflects a reduction 
from uncontrolled emission levels and compliance is demonstrated 
through an allowance trading program that allows regulated entities the 
flexibility to determine their own compliance path. In states that 
participated in both CAIR and CSAPR ozone season programs, summer 
NOX emissions dropped by 20 percent from 2009 to 2015, and 
compliance was demonstrated nearly 100 percent of the time due to 
rigorous emissions monitoring and allowance tracking. These outcomes, 
combined with air quality improvements, demonstrate the environmental 
achievements of these programs. The EPA notes that the allowance prices 
were low because of significant emission reductions that took place by 
other means (e.g., new low-emitting generating capacity coming online 
that replaced older, higher emitting generation as well as EGU 
retirements). These other means significantly reduced emissions and 
helped the power sector meet the CAIR and CSAPR emission budgets 
without relying on the use of allowances. In light of these and other 
dramatic reductions in power sector pollution, the supply of CAIR and 
CSAPR allowances rose and their prices fell. In this case, certain 
utilities appear to have turned off their emission controls, relying 
instead on purchased allowances. The EPA notes, however, that in this 
case, the overall net effect of these activities has been a significant 
reduction in emissions. The EPA expects that certain aspects of this 
final rule will alleviate some of these concerns about allowance 
prices. In particular, this action establishes new emission budgets to 
address the more stringent 2008 ozone NAAQS that are calculated based 
on a uniform cost that is reflective of, among other things, operating 
existing controls. See section VI in this preamble on EGU 
NOX reductions and emission budgets.
4. Partial Versus Full Resolution of Transport Obligation
    Given the unique circumstances surrounding the implementation of 
the 2008 ozone standard that have delayed state and the EPA's efforts 
to address interstate transport, at this time the EPA is focusing its 
efforts on the immediately available and cost-effective emission 
reductions that are achievable by the 2017 ozone season.
    This rulemaking establishes (or revises currently established) FIPs 
for 22 eastern states under the good neighbor provision of the CAA. 
These FIPs contain requirements for EGUs in these states to reduce 
ozone season NOX emissions beginning with the 2017 ozone 
season. As noted in section VI, the EPA has identified important EGU 
emission reductions that are cost-effective and achievable by the 2017 
ozone season in the covered states through actions such as turning on 
and operating existing pollution controls. These readily available 
emission reductions will assist downwind states in attaining and 
maintaining the 2008 ozone NAAQS and will provide human health and 
welfare benefits through reduced exposure to ground-level ozone 
pollution.
    While these reductions are necessary to assist downwind states in 
attaining and maintaining the 2008 ozone NAAQS, and are necessary to 
address good neighbor obligations for these states, the EPA 
acknowledges that they may not be sufficient to fully address these 
states' good neighbor obligations.\84\ With respect to the 2008 ozone 
standard, the EPA has generally not attempted to quantify the ozone 
season NOX reductions that may be necessary to eliminate all 
significant contribution to nonattainment or interference with 
maintenance in other states. Given the time constraints for 
implementing NOX reduction strategies, the EPA believes that 
implementation of a full remedy that includes emission reductions from 
EGUs as well as other sectors may not be achievable for 2017. However, 
a partial remedy is achievable for 2017 and therefore this rule focuses 
on these more immediately available reductions.
---------------------------------------------------------------------------

    \84\ The requirements for one state, Tennessee, will fully 
eliminate that state's significant contribution to downwind air 
quality problems.
---------------------------------------------------------------------------

    To evaluate full elimination of a state's significant contribution 
to nonattainment or interference with maintenance, non-EGU ozone season 
NOX reductions and further EGU reductions that are 
achievable after 2017 should be considered. The EPA did not quantify 
non-EGU emissions reductions to address interstate ozone transport for 
the 2008 ozone NAAQS at this time because: (1) There is greater 
uncertainty in the non-EGU emission inventory estimates than for EGUs; 
and (2) based on current knowledge, there appear to be few non-EGU 
reductions that could be accomplished by the beginning of the 2017 
ozone season. This is discussed further in section VI. Commenters 
generally agreed with the EPA that non-EGU emission reductions are not 
readily available for the 2017 ozone season but advocated that such 
reductions should

[[Page 74522]]

be included as appropriate in future mitigation actions.
    Because the reductions in this action are EGU-only and because the 
EPA has focused the policy analysis for this action on reductions 
available by the beginning of the 2017 ozone season, CSAPR update 
reductions will represent, for most states, a first, partial step to 
addressing a given upwind state's significant contribution to downwind 
air quality impacts for the 2008 ozone NAAQS. Generally, a final 
determination of whether the EGU NOX reductions quantified 
in this rule represent a full or partial elimination of a state's good 
neighbor obligation for the 2008 NAAQS is subject to an evaluation of 
the contribution to interstate transport from non-EGUs and further EGU 
reductions that are achievable after 2017. However, the EPA believes 
that it is beneficial to implement, without further delay, EGU 
NOX reductions that are achievable in the near term. The 
NOX emission reductions in this final rule are needed 
(although they may not be all that is needed) for these states to 
eliminate their significant contribution to nonattainment or 
interference with maintenance of the 2008 ozone NAAQS.
    Comment: Several commenters questioned whether the CAA authorizes 
the EPA to implement a ``partial'' remedy, and also suggested that the 
partial nature of the proposed rule might ``circumvent'' prior courts' 
instructions regarding over-control. Those commenters note that the 
statute does not describe a process for issuing a partial FIP, and 
suggest that the EPA may only issue a FIP that fully eliminates 
transported contribution from upwind States. These commenters also 
imply that the Supreme Court's approval of the EPA's use of costs in 
defining ``significant contribution'' in EME Homer City does not apply 
to the agency's approach in this rule because the commenters claim that 
``CSAPR was a transport rule that developed comprehensive state budgets 
[and][t]his proposed rule only addresses EGUs.''
    Other commenters were concerned that the EPA is not meeting its 
statutory obligation to develop federal implementation plans that fully 
resolve downwind transport problems. These commenters argue that the 
EPA's own delay in preparing a rule to resolve interstate transport 
with respect to the 2008 ozone NAAQS caused the tight timeline now 
faced by the agency, and cannot be used as an excuse for failing to 
promulgate a full remedy by 2017. In the alternative, commenters argue 
that even if time constraints only allow the EPA to impose a partial 
remedy by the 2017 ozone season, the agency must provide a plan now for 
how it will achieve the rest of the necessary reductions in the future, 
and suggests the agency could do so by implementing a second 
implementation phase to go into effect after the 2017 ozone season.
    Response: The EPA disagrees with commenters who suggest that the 
agency lacks authority to promulgate a partial FIP. As described in 
section III, the EPA's current statutory deadlines to promulgate FIPs 
extend until 2017 and 2018 for most states, and the EPA will remain 
mindful of those deadlines as it evaluates what further steps may be 
necessary to fully address interstate transport for the 2008 ozone 
NAAQS.
    Nothing in section 110(c)(1) of the CAA suggests that the agency is 
barred from taking a partial step at this time (before its FIP deadline 
has passed), nor does the statutory text indicate Congress' intent to 
preclude the EPA from tackling this problem in a step-wise process. The 
D.C. Circuit has held on numerous occasions that agencies have the 
authority to tackle problems in an incremental fashion, particularly 
where a lack of resources or technical expertise make it difficult to 
immediately achieve the statute's full mandate. See, e.g., Grand Canyon 
Air Tour Coal. v. FAA, 154 F.3d 455, 478 (D.C. Cir. 1998); City of Las 
Vegas v. Lujan, 891 F.2d 927, 935 (D.C. Cir. 1989) (```[A]gencies have 
great discretion to treat a problem partially . . .' [and a] court will 
not strike down agency action `if it were a first step toward a 
complete solution.'''); Gen'l Am. Transp. Corp. v. ICC, 872 F.2d 1048, 
1059 (D.C. Cir. 1989); Nat'l Ass'n of Broadcasters v. FCC, 740 F.2d 
1190, 1209-14 (D.C. Cir. 1984).
    As explained previously, the EPA expects that a full resolution of 
upwind transport obligations would require emission reductions from 
sectors besides EGUs, including non-EGUs, and further EGU reductions 
that are achievable after 2017. Given the approaching July 2018 
attainment deadline for the 2008 ozone NAAQS, developing a rule that 
would have covered additional sectors and emission reductions on longer 
compliance schedules would have required more of the EPA's resources 
over a longer rulemaking schedule to fully address. As discussed 
earlier in this document, the EPA is still in the process of developing 
information regarding available emission reductions from non-EGUs. Had 
the EPA waited to promulgate FIPs until that information was fully 
developed, we could not have assured emission reductions by 2017, in 
time to assist downwind states to meet the July 2018 attainment 
deadline. Accordingly, the EPA reasonably concluded that it was most 
prudent to promulgate a first step to address interstate transport for 
the 2008 ozone NAAQS that achieves those immediate reductions while 
addressing any remaining obligation that might be achievable on a 
longer timeframe in a separate rulemaking. The EPA intends to continue 
to collect information and undertake analyses for potential future 
emission reductions at non-EGUs that may be necessary to fully quantify 
states' interstate transport obligations in a future action.
    The EPA further disagrees with commenters that its partial step 
here runs afoul of the Supreme Court and D.C. Circuit's instructions to 
avoid unnecessary over-control of upwind state emissions. As 
acknowledged by these commenters, due to its limited nature, this final 
action does not generally fully resolve downwind air quality problems, 
much less result in over-control of upwind state emissions relative to 
those air quality problems. See section VI for further discussion of 
the EPA's over-control analysis applied to address these courts' 
concerns. To the extent the EPA determines that it must require 
additional emission reductions in a later rulemaking to address 
interstate transport with respect to the 2008 ozone NAAQS, the EPA will 
also confirm that such reductions do not result in unnecessary over-
control, consistent with the courts' instructions.
    The EPA also disagrees that the Supreme Court's affirmation of its 
use of uniform control stringency to define significant contribution 
does not apply equally to this action. The commenters are mistaken 
insofar as they suggest that the original CSAPR regulated sources other 
than EGUs. This rule is identical to the original CSAPR rule in terms 
of the form of its remedy--an emission budget issued to each state, 
with allowances allocated to EGUs within the state. As in the original 
CSAPR, each state is free to submit a SIP to replace the FIP indicating 
that it will meet its emission budget via reductions from other 
sectors.
    Furthermore, the EPA took a similar partial approach in quantifying 
interstate transport obligations with respect to the 1997 ozone NAAQS 
in the original CSAPR rulemaking. In that rule, the EPA's modeling 
indicated that there would be persistent nonattainment and maintenance 
problems at some receptors even after imposition of CSAPR's emission 
reductions. The EPA stated that, because additional emission reductions 
may be available at higher cost thresholds and from other sectors, such 
as non-EGUs, the emission

[[Page 74523]]

reductions quantified in the rule did not necessarily fully quantify 
certain states' interstate transport obligation with respect to the 
1997 ozone NAAQS.\85\ Therefore, for states linked to those receptors, 
the agency concluded that its FIP provided a partial remedy, and that 
more emission reductions might be required in order to fully satisfy 
the states' transport obligations. As discussed later, this action now 
concludes that the EPA has fulfilled its FIP obligation with respect to 
the 1997 ozone NAAQS.
---------------------------------------------------------------------------

    \85\ 76 FR 48208, 48256-57 (August 8, 2011).
---------------------------------------------------------------------------

    Finally, the EPA disagrees with commenters who suggest that the 
agency's ``own delay'' in implementing a transport rule to address the 
2008 ozone NAAQS led to the current circumstances the states and the 
EPA now face. Until mid-2014 when the Supreme Court reversed the D.C. 
Circuit's original vacatur of CSAPR, the governing judicial holding was 
that the EPA lacked legal authority to promulgate any FIP addressing 
2008 ozone transport obligations until the agency first quantified each 
state's emission reduction obligation, allowed states time to submit 
SIPs, and acted on those SIPs.\86\ In July 2015, the D.C. Circuit 
issued its final decision generally upholding CSAPR, albeit subject to 
remand without vacatur of certain state budgets for reconsideration. 
The agency then proceeded on an expedited basis to issue a proposal to 
address its FIP obligation with respect to the 2008 ozone NAAQS in the 
fall of 2015. While commenters and the EPA may agree that it would be 
best if a full remedy could be possible by the 2017 ozone season such 
that downwind areas would receive those benefits in time for their 
Moderate area attainment deadlines, such a remedy simply is not 
feasible in the existing timeframe.
---------------------------------------------------------------------------

    \86\ EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 31 
(D.C. Cir. 2012).
---------------------------------------------------------------------------

    As noted previously, CAA section 110(c)(1) directs the EPA to 
promulgate a FIP ``at any time within two years'' of its disapproval or 
finding of failure to submit. For the majority of states affected, that 
timeframe will not end until 2017 or later, and as mentioned 
previously, North Carolina compels the EPA to identify upwind 
reductions and implementation programs to achieve these reductions by 
the 2017 ozone season. As the EPA has explained, it believes that 
reductions from other sectors besides EGUs should be evaluated in 
developing a full remedy, and the agency does not have sufficient 
information at this time to promulgate such a rule. Therefore, given 
these circumstances, the agency maintains that only requiring at this 
time necessary and achievable reductions by the 2017 ozone season is 
reasonable.
5. Why Focus on Eastern States
    The final CSAPR Update focuses on collective contributions of ozone 
pollution from states in the east. In this action, the EPA is not 
addressing interstate emission transport in this action for the 11 
western contiguous United States.\87\ The CSAPR framework builds on 
previous eastern-focused efforts to address collective contributions to 
interstate transport, including the NOX Budget Trading 
Program, CAIR, and the original CSAPR rulemaking. However, for western 
states, the EPA believes that there may be geographically specific 
factors to consider in evaluating interstate ozone pollution transport. 
Accordingly, given the need for near-term 2017 analysis and 
implementation of the CSAPR Update FIPs, the EPA focused this 
rulemaking on eastern states where the CSAPR method for assessing 
collective contribution has proven effective.
---------------------------------------------------------------------------

    \87\ For purposes of this action, the western U.S. (or the West) 
consists of the 11 western contiguous states of Arizona, California, 
Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, 
Washington, and Wyoming.
---------------------------------------------------------------------------

    The EPA did not propose CSAPR Update FIPs to address interstate 
emission transport for western states and it is not finalizing FIPs for 
any of these states. However, the EPA notes that western states are not 
relieved of their statutory obligation to address interstate transport 
under the section 110(a)(2)(D)(i)(I). The EPA and western states, 
working together, are continuing to evaluate interstate transport 
obligations on a case-by-case basis. The EPA will fulfill its backstop 
role with respect to issuing FIPs for western states if and when that 
becomes necessary. The EPA notes that a 2-year FIP clock has started 
for New Mexico and California following the July 13, 2015 finding of 
failure to submit. The EPA notes that analyses developed to support 
this rule, including air quality modeling and the EPA's assessment of 
EGU NOX mitigation potential, contain data that can be 
useful for western states in developing SIPs. The data from these 
analyses are available in the docket for this rulemaking.\88\
    The proposed CSAPR Update solicited comment on whether to 
promulgate FIPs to address interstate ozone transport for the 2008 
ozone NAAQS for western states, either in this rulemaking or in a 
subsequent rulemaking. Most commenters generally agreed with the EPA's 
proposal to exclude western states in this rule given that there may be 
geographically specific factors to consider in evaluating western 
states' interstate transport requirements.
6. Short-Term NOX Emissions
    In eastern states, the highest measured ozone days tend to occur 
within the hottest days or weeks of the summer. There tends to be a 
higher demand for electricity (for instance, to power air conditioners) 
on hotter days and with this increased power demand, ozone formation 
can increase causing peak ozone days. In discussions with 
representatives and officials of eastern states in April 2013 and April 
2015, and in several letters to the EPA, officials from states that are 
part of the Ozone Transport Region (OTR) \89\ states suggested that EGU 
emissions transported from upwind states may disproportionally affect 
downwind ozone concentrations on peak ozone days in the eastern U.S. 
These representatives asked that the EPA consider additional peak day 
limits on EGU NOX emissions.
---------------------------------------------------------------------------

    \89\ The OTR was established by the CAA amendments of 1990 to 
facilitate addressing the ozone problem on a regional basis and 
consists of the following states, or portions thereof: Connecticut, 
Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, 
New York, Pennsylvania, Rhode Island, Vermont, the District of 
Columbia and northern Virginia. 42 U.S.C. 7511c, CAA section 184.
---------------------------------------------------------------------------

    Comment: The proposed CSAPR Update took comment on whether or not 
short-term (e.g., peak-day) EGU NOX emissions 
disproportionately impact downwind ozone concentrations and, if they 
do, what EGU emission limits would be reasonable complements to the 
seasonal CSAPR requirement. Most commenters requested that the EPA not 
impose a short-term limit at this time.
    Response: As noted previously,\90\ the EPA finds that 
NOX ozone season trading programs are effective at reducing 
peak ozone concentrations, and the agency is therefore continuing with 
a seasonal approach in this final rule. The EPA will continue to look 
at this matter with an eye towards future rulemakings.
---------------------------------------------------------------------------

    \90\ See Section IV.A.1.
---------------------------------------------------------------------------

C. Responding to the Remand of CSAPR NOX Ozone Season Emission Budgets

    As noted previously, in EME Homer City II, the D.C. Circuit 
declared invalid the CSAPR phase 2 NOX ozone season emission 
budgets of 11 states, holding that those budgets over-control with 
respect to the downwind air quality problems to which those states were 
linked for the 1997 ozone NAAQS. 795 F.3d at 129-30, 138. As to ten of 
these

[[Page 74524]]

states, the court held that the EPA's 2014 modeling conducted to 
support the RIA for CSAPR demonstrated that air quality problems at the 
downwind locations to which those states were linked would resolve by 
phase 2 of the CSAPR program without further transport regulation 
(either CAIR or CSAPR). Id. at 129-30. With respect to Texas, the court 
held that the record reflected that the ozone air quality problems to 
which the state was linked could be resolved at a lower cost threshold. 
Id. The court therefore remanded those budgets to the EPA for 
reconsideration consistent with the court's opinion. Id. at 138. The 
court instructed the EPA to act ``promptly'' in addressing these issues 
on remand. Id. at 132.
    The court's decision explicitly applies to 11 state budgets 
involved in that litigation: Florida, Maryland, New Jersey, New York, 
North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, 
and West Virginia. Id. at 129-30, 138. The EPA is finalizing FIPs for 
eight of those states to address interstate transport with respect to 
the 2008 ozone NAAQS: Maryland, New Jersey, New York, Ohio, 
Pennsylvania, Texas, Virginia, and West Virginia. The FIPs incorporate 
revised emission budgets that replace the budgets promulgated in the 
CSAPR rule to address the 1997 ozone NAAQS, the same budgets remanded 
by the D.C. Circuit for reconsideration. Further, in this rule, these 
budgets will be effective for the 2017 ozone season, the same period in 
which the phase 2 budgets that were invalidated by the court are 
currently scheduled to become effective. Therefore, this action 
provides an appropriate and timely response to the court's remand by 
replacing the phase 2 budgets promulgated in the CSAPR to address the 
1997 ozone NAAQS, which were declared invalid by the D.C. Circuit, with 
budgets developed to address the revised and more stringent 2008 ozone 
NAAQS.\91\
---------------------------------------------------------------------------

    \91\ The methodology for developing the budgets to address the 
2008 ozone NAAQS is described in more detail in Sections VI and VII 
in this preamble. Section VI also includes an evaluation, as 
instructed by the court in EME Homer City II, to affirm that the 
budgets do not over-control with respect to downwind air quality 
problems identified in this rule. 795 F.3d at 127-28.
---------------------------------------------------------------------------

    For the three remaining original CSAPR ozone season states affected 
by this portion of the EME Homer City II decision, Florida, North 
Carolina, and South Carolina, the EPA is not finalizing FIPs because 
the EPA's analysis performed to support the final rule does not 
indicate that these states are linked to any identified downwind 
nonattainment or maintenance receptors with respect to the 2008 ozone 
standard. Because the 2008 ozone NAAQS is more stringent than the 1997 
ozone NAAQS, this modeling necessarily indicates that Florida, North 
Carolina, and South Carolina are also not linked to any remaining air 
quality concerns with respect to the 1997 ozone standard for which the 
states were regulated in the original CSAPR. Accordingly, in order to 
address the Court's remand with respect to these three states' 
interstate transport responsibility under the 1997 ozone standard, the 
EPA is removing these states from the CSAPR ozone season trading 
program beginning in 2017 when the phase 2 ozone season emission 
budgets were scheduled to be implemented.\92\
---------------------------------------------------------------------------

    \92\ One other state from the original CSAPR rulemaking, 
Georgia, was also not linked to any identified downwind 
nonattainment or maintenance receptors with respect to the 2008 
ozone standard. However, when EPA promulgated the original CSAPR 
rulemaking, Georgia remained linked to an ongoing air quality 
problem with respect to the 1997 standard even after implementation 
of the emissions budget quantified in that rulemaking. Therefore, 
unlike Florida, North Carolina, and South Carolina, Georgia's budget 
was not subject to the same record issues identified by the D.C. 
Circuit related to the EPA's 2014 modeling and was not subject to 
remand for reconsideration. As Georgia remained linked to a 
continued air quality problem with respect to the 1997 ozone NAAQS 
in the original CSAPR analysis, the EPA retained this budget as a 
constraint in its analysis for this rule. Assuming compliance with 
that budget, the EPA determined that Georgia does not significantly 
contribute to nonattainment or interfere with maintenance of the 
2008 ozone NAAQS downwind. The EPA has also concluded, as discussed 
in section IV.D, that compliance with that budget is sufficient to 
fully address Georgia's interstate transport obligation with respect 
to the 1997 NAAQS.
---------------------------------------------------------------------------

    Comment: Some commenters contend that the D.C. Circuit's remand of 
the phase 2 ozone season emission budgets in EME Homer City II requires 
the EPA to calculate new budgets to address the states' transport 
obligations with respect to the 1997 ozone NAAQS. These commenters 
contend that the EPA has not fully responded to the court's remand 
until it quantifies new budgets.
    Response: As described earlier, the D.C. Circuit remanded 10 of 
CSAPR's ozone season NOX budgets because the EPA's 2014 
modeling conducted to support the RIA for CSAPR demonstrated that air 
quality problems at the downwind locations to which those states were 
linked would resolve by phase 2 of the CSAPR program without further 
transport regulation. The court essentially found that, by phase 2 of 
the CSAPR program, the CSAPR record did not support the EPA's authority 
to require emission reductions from these 10 states in order to address 
the 1997 ozone NAAQS. Thus, absent any new analysis demonstrating that 
these states are linked to downwind air quality problems with respect 
to the 1997 ozone NAAQS, the EPA does not have the authority to subject 
these states to the CSAPR NOX ozone season emissions program 
beginning in 2017 and therefore does not have the authority to 
calculate new emission budgets for these states to address that 
standard. For Florida, North Carolina, and South Carolina, the EPA is 
therefore relieving sources in the states from the obligation to comply 
with the NOX ozone season trading program in response to the 
remand. For the remaining seven states, sources located in these states 
will no longer be subject to the phase 2 NOX ozone season 
budgets calculated to address the 1997 standard; however, because these 
states are linked to downwind air quality problems with respect to the 
2008 ozone NAAQS, the EPA is promulgating new ozone season 
NOX emission budgets at 40 CFR 97.810(a). See also 40 CFR 
52.38(b)(2)(ii) (relieving sources in all ten of these states of the 
obligation to comply with the remanded phase 2 NOX ozone 
season emission budgets after 2016).
    With respect to Texas, because the court determined that the phase 
2 ozone season budget was more stringent than necessary to address 
Texas' interstate transport obligation with respect to the 1997 ozone 
NAAQS, the EPA removed Texas's budget as a constraint in the 2017 air 
quality modeling. Even in the absence of this constraint, the updated 
2017 air quality modeling shows that the predicted average DVs and 
maximum DVs are below the level of the 1997 ozone NAAQS for the 
downwind receptors of concern to which Texas was linked in the original 
CSAPR rulemaking with respect the 1997 ozone NAAQS. Accordingly, the 
EPA has concluded that it need not require additional emission 
reductions from sources in Texas in order to address the state's 
interstate transport obligation. Thus, sources in Texas will no longer 
be subject to the phase 2 NOX ozone season budget calculated 
to address the 1997 standard; however, because Texas is linked to 
downwind air quality problems with respect to the 2008 ozone NAAQS, the 
EPA is promulgating a new ozone season NOX emission budget 
to address that standard at 40 CFR 97.810(a). See also 40 CFR 
52.38(b)(2)(ii) (relieving sources in Texas of the obligation to comply 
with the remanded phase 2 NOX ozone season emission budgets 
after 2016).
    Separately, various petitioners filed legal challenges in the D.C. 
Circuit to an EPA supplemental rule that added five

[[Page 74525]]

states to the CSAPR ozone season trading program, 76 FR 80760 (Dec. 27, 
2011). See Public Service Company of Oklahoma v. EPA, No. 12-1023 (D.C. 
Cir., filed Jan. 13, 2012). The case was held in abeyance during the 
pendency of the litigation in EME Homer City. The case remains pending 
in the D.C. Circuit as of the date of signature of this rule.\93\ The 
EPA notes that this rulemaking also promulgates FIPs for all five 
states added to CSAPR in the supplemental rule: Iowa, Michigan, 
Missouri, Oklahoma, and Wisconsin. These FIPs incorporate revised 
emission budgets that replace the budgets promulgated in the 
supplemental CSAPR rule to address the 1997 ozone NAAQS for these five 
states and will be effective for the 2017 ozone season. In light of the 
court's decision in EME Homer City II, the EPA examined the record 
supporting the CSAPR rulemaking and determined that, like the 10 states 
discussed earlier, the EPA's 2014 modeling conducted to support the RIA 
for CSAPR demonstrated that air quality problems at the downwind 
locations to which four of the states added to CSAPR in the 
supplemental rule, Iowa, Michigan, Oklahoma, and Wisconsin, were linked 
would resolve by phase 2 of the CSAPR program without further transport 
regulation (either CAIR or CSAPR). Accordingly, sources in these states 
will no longer be subject to the phase 2 NOX ozone season 
budgets calculated to address the 1997 standard; however, because these 
states are linked to downwind air quality problems with respect to the 
2008 ozone NAAQS, the EPA is promulgating new ozone season 
NOX emission budgets at 40 CFR 97.810(a). See also 40 CFR 
52.38(b)(2)(ii) (relieving sources in these four states of the 
obligation to comply with the original phase 2 NOX ozone 
season emission budgets after 2016).
---------------------------------------------------------------------------

    \93\ In 2012, the EPA also finalized two rules making certain 
revisions to CSAPR. 77 FR 10324 (Feb. 21, 2012); 77 FR 34830 (June 
12, 2012). Various petitioners filed legal challenges to these rules 
in the D.C. Circuit, and the cases were also held in abeyance 
pending the litigation in EME Homer City. See Wisconsin Public 
Service Corp. v. EPA, No. 12-1163 (D.C. Cir., filed Apr. 6, 2012); 
Utility Air Regulatory Group v. EPA, No. 12-1346 (D.C. Cir., filed 
Aug. 9, 2012). The cases currently remain pending in the D.C. 
Circuit.
---------------------------------------------------------------------------

    The D.C. Circuit also remanded without vacatur the CSAPR phase 2 
SO2 annual emission budgets for four states (Alabama, 
Georgia, South Carolina, and Texas) for reconsideration. 795 F.3d at 
129, 138. This final rule does not address the remand of these CSAPR 
phase 2 SO2 annual emission budgets. On June 27, 2016, the 
EPA released a memorandum outlining the agency's approach for 
responding to the D.C. Circuit's July 2015 remand of the CSAPR phase 2 
SO2 annual emission budgets for Alabama, Georgia, South 
Carolina, and Texas. The memorandum can be found at https://www3.epa.gov/airtransport/CSAPR/pdfs/CSAPR_SO2_Remand_Memo.pdf.

D. Addressing Outstanding Transport Obligations for the 1997 Ozone 
NAAQS

    In the original CSAPR, the EPA noted that the reductions for 11 
states may not be sufficient to fully eliminate all significant 
contribution to nonattainment or interference with maintenance for 
certain downwind areas with respect to the 1997 ozone NAAQS.\94\ The 11 
states are: Alabama, Arkansas, Georgia, Illinois, Indiana, Kentucky, 
Louisiana, Mississippi, Missouri, Tennessee, and Texas. In the original 
CSAPR, the EPA did not require EGU NOX reductions 
represented by costs that exceeded $500 per ton because it noted that, 
at cost thresholds higher than $500 per ton, non-EGU reductions should 
also be considered. Additionally, the EPA's analysis projected 
continued nonattainment and maintenance problems at downwind receptors 
to which these upwind states were linked after implementation of the 
CSAPR trading programs. Specifically, persistent ozone problems were 
expected in Baton Rouge, Louisiana; Houston, Texas; and Allegan, 
Michigan according to the remedy case modeling conducted for the final 
rule. At that time the EPA did not quantify further ozone season EGU or 
non-EGU NOX reductions that would be needed in these states 
to fully resolve the good neighbor obligation under the CAA with 
respect to the 1997 ozone NAAQS.
---------------------------------------------------------------------------

    \94\ See CSAPR Final Rule, 76 FR at 48220, and the CSAPR 
Supplemental Rule, 76 FR at 80760, December 27, 2011.
---------------------------------------------------------------------------

    To evaluate whether additional emission reductions would be needed 
in these 11 states to address the states' full good neighbor obligation 
for the 1997 ozone NAAQS, the EPA reviewed the 2017 air quality 
modeling conducted for this rule, which includes emission reductions 
associated with the CSAPR phase 2 ozone season budgets that were not 
remanded. The modeling included the phase 2 ozone season budgets for 10 
of the states listed above--all but Texas. For each of these states, 
the updated 2017 air quality modeling shows that the predicted average 
DVs and maximum DVs for 2017 are below the level of the 1997 ozone 
NAAQS for the downwind receptors of concern to which the 11 states were 
linked in the original CSAPR rulemaking with respect the 1997 ozone 
NAAQS, meaning that these receptors no longer qualify as either 
nonattainment or maintenance receptors for that NAAQS. The 2017 air 
quality modeling also shows that there are no other nonattainment or 
maintenance receptors to which these states would be linked with 
respect to the 1997 ozone NAAQS. Thus, the EPA finds that, with 
implementation of the original CSAPR NOX ozone season 
emission budgets in the states not subject to the remand, emissions 
within these ten states no longer significantly contribute to downwind 
nonattainment or interference with maintenance for the 1997 ozone 
NAAQS. Thus, the promulgation of the CSAPR NOX ozone season 
budgets in those states satisfied the EPA's FIP obligation pertaining 
to the good neighbor provision for the 1997 ozone NAAQS. The EPA 
further finds that, with implementation of the CSAPR Update 
NOX ozone season emission budgets, emissions from these ten 
states also no longer significantly contribute to downwind 
nonattainment or interference with maintenance for the 1997 ozone 
NAAQS.
    Despite the EPA's conclusion in CSAPR that the 1997 ozone transport 
problems to which Texas was linked were not fully resolved, the court 
concluded in EME Homer City II that the ozone season emission budget 
finalized for Texas resulted in over-control as to the ozone air 
quality problems to which the state was linked. 795 F.3d at 129-30. As 
described earlier, in response to this determination, the EPA removed 
Texas's phase 2 ozone season budget as a constraint in the 2017 air 
quality modeling. Even in the absence of this constraint, the updated 
2017 air quality modeling shows that the predicted average DVs and 
maximum DVs are below the level of the 1997 ozone NAAQS for the 
downwind receptors of concern to which Texas was linked in the original 
CSAPR rulemaking with respect the 1997 ozone NAAQS. Accordingly, the 
EPA has concluded that it need not require additional emission 
reductions from sources in Texas in order to address the states' 
interstate transport obligation with respect to the 1997 standard, and 
that the EPA has therefore fully addressed its FIP obligation with 
respect to Texas. Texas remains subject to the CSAPR Update in this 
final rulemaking with respect to the 2008 ozone NAAQS.
    No Texas emissions were linked to expected ozone problems in Baton 
Rouge, Louisiana, and Allegan, Michigan. As noted previously receptors 
for these areas are no longer a concern for the 1997 ozone NAAQS. The 
EPA finds that Texas emissions no longer contribute significantly to

[[Page 74526]]

nonattainment in, or interfere with maintenance by, any other state 
with respect to the 1997 ozone NAAQS. Thus, the EPA no longer has a FIP 
obligation pertaining to Texas emissions and the good neighbor 
provision for the 1997 ozone NAAQS.

V. Analyzing Downwind Air Quality and Upwind State Contributions

    In this section, the agency describes the air quality modeling 
performed consistent with steps 1 and 2 of the CSAPR framework 
described earlier in order to (1) identify locations where it expects 
nonattainment or maintenance problems with respect to the 2008 ozone 
NAAQS for the 2017 analytic year chosen for this final rule, and (2) 
quantify the contributions from anthropogenic emissions from upwind 
states to downwind ozone concentrations at monitoring sites projected 
to be in nonattainment or have maintenance problems for the 2008 ozone 
NAAQS in 2017.
    This section includes information on the air quality modeling 
platform used in support of the final rule with a focus on the base 
year and future base case emission inventories. The EPA also provides 
the projection of 2017 ozone concentrations and the interstate 
contributions for 8-hour ozone. The Final Rule AQM TSD in the docket 
for this rule contains more detailed information on the air quality 
modeling aspects of this rulemaking.
    The EPA provided two separate opportunities to comment on the air 
quality modeling platform and air quality modeling results that were 
used for the proposed CSAPR Update. On August 4, 2015, the EPA 
published a Notice of Data Availability (80 FR 46271) requesting 
comment on these data. Specifically, in the NODA, the EPA requested 
comment on the data and methodologies related to the 2011 and 2017 
emissions and the air quality modeling to project 2017 concentrations 
and contributions. In addition to the comments received via the NODA, 
the EPA also received comments on emissions inventories and air quality 
modeling in response to the proposed CSAPR Update. Comments on both the 
NODA and proposed rule were considered for this final rule.

A. Overview of Air Quality Modeling Platform

    For the proposed rule, the EPA performed air quality modeling for 
three emissions scenarios: A 2011 base year, a 2017 baseline, and a 
2017 control case that reflects the emission reductions expected from 
the rule.\95\
---------------------------------------------------------------------------

    \95\ The 2017 control case is relevant to the EPA's policy 
analysis discussed in section VI and to the benefits and costs 
assessment discussed in section VIII of this preamble. It is not 
used to identify nonattainment or maintenance receptors or quantify 
the contributions from upwind states to these receptors.
---------------------------------------------------------------------------

    The EPA selected 2011 as the base year to reflect the most recent 
National Emissions Inventory (NEI). In addition, the meteorological 
conditions during the summer of 2011 were generally conducive for ozone 
formation across much of the U.S., particularly the eastern U.S. As 
described in the AQM TSD, the EPA's guidance for ozone attainment 
demonstration modeling, hereafter referred to as the modeling guidance, 
recommends modeling a time period with meteorology conducive to ozone 
formation for purposes of projecting future year design values \96\. 
The EPA therefore believes that meteorological conditions and emissions 
during the summer of 2011 provide an appropriate basis for projecting 
2017 ozone concentrations in contributions.
---------------------------------------------------------------------------

    \96\ U.S. Environmental Protection Agency, 2014. Modeling 
Guidance for Demonstrating Attainment of Air Quality Goals for 
Ozone, PM2.5, and Regional Haze, Research Triangle Park, 
NC. (http://www.epa.gov/ttn/scram/guidance/guide/Draft_O3-PM-RH_Modeling_Guidance-2014.pdf).
---------------------------------------------------------------------------

    As noted in section IV, the EPA selected 2017 as the projected 
analysis year to coincide with the attainment deadline for Moderate 
areas under the 2008 ozone NAAQS. The agency used the 2017 baseline 
emissions in its air quality modeling to identify future nonattainment 
and maintenance locations and to quantify the contributions of 
emissions from upwind states to 8-hour ozone concentrations at downwind 
locations. The air quality modeling of the 2017 baseline and 2017 
illustrative control case emissions are used to inform the agency's 
assessment of the air quality impacts resulting from this rule.
    For the final rule modeling, the EPA used the Comprehensive Air 
Quality Model with Extensions (CAMx) version 6.20 \97\ to simulate 
pollutant concentrations for the 2011 base year and the 2017 future 
year scenarios. This version of CAMx was the most recent, publicly 
available version of this model at the time that the EPA performed air 
quality modeling for this rule. CAMx is a grid cell-based, multi-
pollutant photochemical model that simulates the formation and fate of 
ozone and fine particles in the atmosphere. The CAMx model applications 
were performed for a modeling region (i.e., modeling domain) that 
covers the contiguous 48 United States, the District of Columbia, and 
adjacent portions of Canada and Mexico using a horizontal resolution of 
12 x 12 km. A map of the air quality modeling domain is provided in the 
AQM TSD.
---------------------------------------------------------------------------

    \97\ Comprehensive Air Quality Model with Extensions Version 
6.20 User's Guide. ENVIRON International Corporation, Novato, CA, 
March 2015.
---------------------------------------------------------------------------

    The 2011-based air quality modeling platform includes 2011 base 
year emissions, 2017 future year projections of these emissions, and 
2011 meteorology for air quality modeling with CAMx. In the remainder 
of this section, the EPA provides an overview of (1) the 2011 and 2017 
emissions inventories, (2) the methods for identifying nonattainment 
and maintenance receptors along with a list of 2017 baseline 
nonattainment and maintenance receptors in the eastern U.S., (3) the 
approach to developing metrics to measure interstate contributions to 
8-hour ozone, and (4) the predicted interstate contributions of upwind 
states to downwind nonattainment and maintenance in the eastern U.S. 
The EPA also identifies which predicted interstate contributions are at 
or above the screening threshold described in section IV, which the 
agency applies in step 2 of the CSAPR framework for purposes of 
identifying those upwind states that are linked to downwind air quality 
problems and which merit further analysis with respect to regulation of 
interstate transport of ozone for purposes of the 2008 ozone standard.
    The EPA conducted an operational model performance evaluation of 
the 2011 modeling platform by comparing the 8-hour daily maximum ozone 
concentrations predicted during the May through September ``ozone 
season'' to the corresponding measured concentrations. This evaluation 
generally followed the approach described in the modeling guidance. 
Details of the model performance evaluation are described in the AQM 
TSD. The model performance results indicate that the 8-hour daily 
maximum ozone concentrations predicted by the 2011 CAMx modeling 
platform reflect the corresponding 8-hour observed ozone concentrations 
in the 12-km U.S. modeling domain. As recommended in the modeling 
guidance, the acceptability of model performance was judged by 
considering the 2011 CAMx performance results in light of the range of 
performance found in recent regional ozone model applications. These 
other modeling studies represent a wide range of modeling analyses that 
cover various models, model configurations, domains, years and/or 
episodes, and chemical mechanisms. Overall, the ozone model

[[Page 74527]]

performance results for the 2011 CAMx simulations are within the range 
found in other recent peer-reviewed and regulatory applications. The 
model performance results, as described in the AQM TSD, demonstrate 
that the predictions from the 2011 modeling platform correspond to 
measured data in terms of the magnitude, temporal fluctuations, and 
spatial differences for 8-hour daily maximum ozone. These results 
provide confidence in the ability of the modeling platform to provide a 
reasonable projection of expected future year ozone concentrations and 
contributions.
    Comment: The EPA received comments that model performance should be 
evaluated for the individual days that were used in calculating 
projected 2017 ozone design values and projected 2017 ozone 
contributions. Commenters said that, in cases where model performance 
on these individual days is poor, the impact of the poor performance on 
projected concentrations and contributions must be investigated and 
considered in the final results by removing or adjusting these days to 
account for model bias.
    Response: The EPA is using air quality modeling to provide data for 
a set of representative days with meteorological conditions conducive 
for ozone formation and transport for use in projecting ozone design 
values and for calculating the average contribution metric. As 
described in sections V.D and V.E of this preamble, EPA is using air 
quality model predictions in a relative sense for estimating 2017 ozone 
design values and contributions. In this regard, the approach for 
projecting future design values is ``anchored'' by measured 
concentrations. As stated in the modeling guidance, it is reasoned that 
factors causing bias (either under or over-predictions) in the base 
year will also affect the future case. While good model performance 
remains a prerequisite for use of a model, problems posed by imperfect 
model performance on individual days are expected to be reduced when 
using the relative approach. Moreover, there are no universally 
accepted, generally applicable numerical bright-line criteria for 
determining which days might be candidates to exclude or adjust based 
on model performance for specific days at individual sites, as in the 
approach suggested by the commenter. Thus, the EPA disagrees that such 
an approach is necessary or appropriate for determining the sets of 
days used to provide data for projecting 2017 design values and for 
calculating the average contribution metric.
    The results of the model performance evaluation, as described 
previously and in the AQM TSD, indicate that ozone predictions from the 
modeling platform correspond to measured data in terms of the 
magnitude, temporal fluctuations, and spatial differences for 8-hour 
daily maximum ozone. Prior court rulings are deferential to modeling 
choices in this regard. The D.C. Circuit has declined to ``invalidate 
EPA's predictions solely because there might be discrepancies between 
those predictions and the real world.'' \98\ The fact that a ``model 
does not fit every application perfectly is not criticism; a model is 
meant to simplify reality in order to make it tractable.'' \99\ The 
court has held that ``it is only when the model bears no rational 
relationship to the characteristics of the data to which it is applied 
that we will hold that the use of the model was arbitrary and 
capricious.'' \100\ As demonstrated by the EPA's model performance 
evaluation, the modeling platform used in this rulemaking provides 
reasonable projections of expected future year ozone concentrations and 
contributions, and is thus an appropriate basis on which to base the 
findings made in this action.
---------------------------------------------------------------------------

    \98\ EME Homer City II, 795 F.3d at 135-36.
    \99\ Chemical Manufacturers Association v. EPA, 28 F.3d 1259, 
1264 (D.C. Cir. 1994).
    \100\ Appalachian Power Co. v. EPA, 135 F.3d 791, 802 (D.C. Cir. 
1998).
---------------------------------------------------------------------------

B. Emission Inventories

    The EPA developed emission inventories for this rule including 
emission estimates for EGUs, non-EGU point sources, stationary nonpoint 
sources, onroad mobile sources, nonroad mobile sources, wild fires, 
prescribed fires, and for biogenic emissions that are not the result of 
human activities. The EPA's air quality modeling relies on this 
comprehensive set of emission inventories because emissions from 
multiple source categories are needed to model ambient air quality and 
to facilitate comparison of model outputs with ambient measurements.
    To prepare the emission inventories for air quality modeling, the 
EPA processed the emission inventories using the Sparse Matrix Operator 
Kernel Emissions (SMOKE) Modeling System version 3.7 to produce the 
gridded, hourly, speciated, model-ready emissions for input to the CAMx 
air quality model. Additional information on the development of the 
emission inventories and on data sets used during the emissions 
modeling process for the final rule are provided in the TSD 
``Preparation of Emissions Inventories for the Version 6.3, 2011 
Emissions Modeling Platform,'' hereafter known as the ``Final Rule 
Emissions Modeling TSD.'' This TSD is available in the docket for this 
rule and at www.epa.gov/air-emissions-modeling/2011-version-6-air-emissions-modeling-platforms.
    The emission inventories, methodologies, and data used for the 
proposal air quality modeling were provided for public comment in the 
August 4, 2015 NODA. Comments received on this NODA and on the proposal 
were considered for the final rule and the resulting data and 
procedures are documented in the Final Rule Emissions Modeling TSD.
1. Foundation Emission Inventory Data Sets
    The EPA developed emission data representing the year 2011 to 
support air quality modeling of a base year from which future air 
quality could be forecasted. The primary basis for the 2011 inventories 
used in air quality modeling was the 2011 National Emission Inventory 
(NEI) version 2 (2011NEIv2), released in March 2015. Documentation on 
the 2011NEIv2 is available in the 2011 National Emissions Inventory, 
version 2 TSD available in the docket for this rule and at www.epa.gov/air-emissions-inventories/2011-national-emissions-inventory-nei-documentation. Updates to the 2011NEIv2 were incorporated between the 
proposed and the final rule in response to comments received on the 
NODA and on the proposal. The future base case scenario modeled for 
2017 includes a representation of changes in activity data and of 
predicted emission reductions from on-the-books actions, including 
planned emission control installations and promulgated federal measures 
that affect anthropogenic emissions.\101\ The emission inventories for 
air quality modeling include sources that are held constant between the 
base and future years, such as biogenic emissions and emissions from 
agricultural, wild and prescribed fires. The land use data used for the 
computation of the biogenic emissions were updated from those used in 
the proposal modeling to use the 2011 National Land Cover Database 
(NLCD) along with other updated data sets related to forest species, 
elevation, and cropland data in response to comments received on the 
NODA. The

[[Page 74528]]

base and future year emissions for Canada used for the proposed rule 
were held constant at 2010 levels. For the final rule, the 2010 
inventories were updated to reflect closures of EGUs and reductions to 
onroad and nonroad mobile source emissions in 2017. Emissions for 
Mexico represent the year 2018 and were unchanged from the proposed 
rule inventories.
---------------------------------------------------------------------------

    \101\ Biogenic emissions and emissions from wild fires and 
prescribed fires were held constant between 2011 and 2017 since (1) 
these emissions are tied to the 2011 meteorological conditions and 
(2) the focus of this rule is on the contribution from anthropogenic 
emissions to projected ozone nonattainment and maintenance.
---------------------------------------------------------------------------

2. Development of Emission Inventories for EGUs
    Annual NOX and SO2 emissions for EGUs in the 
2011NEIv2 are based primarily on data from continuous emission 
monitoring systems (CEMS), with other EGU pollutants estimated using 
emission factors and annual heat input data reported to the EPA. For 
EGUs without CEMS, the EPA used data submitted to the NEI by the 
states. The final rule inventories include some updates to 2011 EGU 
stack parameters and emissions made in response to comments on the NODA 
and proposal. Between proposal and final, additional point sources in 
the inventory were identified as small EGUs. This resulted in increases 
to EGU NOX emissions that were offset by equivalent 
reductions in non-EGU point source NOX emissions in 
Arkansas, California, Florida, Idaho, Louisiana, Mississippi, New 
Hampshire, Oregon, and Texas. For more information on the details of 
how the 2011 EGU emissions were developed and prepared for air quality 
modeling, see the Final Rule Emissions Modeling TSD.
    The EPA projected future 2017 baseline EGU emissions using version 
5.15 of the Integrated Planning Model (IPM) (www.epa.gov/airmarkets/power-sector-modeling). IPM, developed by ICF Consulting, is a state-
of-the-art, peer-reviewed, multi-regional, dynamic, deterministic 
linear programming model of the contiguous U.S. electric power sector. 
It provides forecasts of least cost capacity expansion, electricity 
dispatch, and emission control strategies while meeting energy demand 
and environmental, transmission, dispatch, and reliability constraints. 
The EPA has used IPM for over two decades to better understand power 
sector behavior under future business-as-usual conditions and to 
evaluate the economic and emission impacts of prospective environmental 
policies. The model is designed to reflect electricity markets as 
accurately as possible. The EPA uses the best available information 
from utilities, industry experts, gas and coal market experts, 
financial institutions, and government statistics as the basis for the 
detailed power sector modeling in IPM. The model documentation provides 
additional information on the assumptions discussed here as well as all 
other model assumptions and inputs.\102\
---------------------------------------------------------------------------

    \102\ Detailed information and documentation of the EPA's Base 
Case, including all the underlying assumptions, data sources, and 
architecture parameters can be found on the EPA's Web site at: 
www.epa.gov/airmarkets/power-sector-modeling.
---------------------------------------------------------------------------

    To project future 2017 baseline EGU emissions for the CSAPR Update, 
the EPA adjusted the 2018 IPM version 5.15 base case results to account 
for three categories of differences between 2017 and 2018.\103\ The 
categories are: (1) Adjusting NOX emissions for units with 
SCRs in 2018 but that are assumed not to operate or be installed in 
2017; (2) adding NOX emissions for units that are retiring 
in 2018 but are projected to operate in 2017; and (3) adjusting 
NOX emissions for coal-fired units that are projected to 
convert to natural gas (i.e., ``coal-to-gas'') in 2018, but are still 
projected to burn coal in 2017. These adjustments are discussed in 
greater detail in the IPM documentation found in the docket for this 
final rule.
---------------------------------------------------------------------------

    \103\ The EPA uses this approach to project 2017 data because 
2017 is not a direct IPM run year.
---------------------------------------------------------------------------

    The IPM version 5.15 base case accounts for comments received as a 
result of the NODAs released in 2013, 2014, and 2015. This base case 
also accounts for comments received on the proposed CSAPR Update as 
well as updated environmental regulations. Unlike the modeling for the 
proposed rule, which was conducted prior to the D.C. Circuit's issuance 
of EME Homer City II,\104\ this projected base case accounts for 
compliance with the original CSAPR by including as constraints all 
original CSAPR emission budgets with the exception of remanded phase 2 
NOX ozone season emission budgets for 11 states and phase 2 
NOX ozone season emission budgets for four additional states 
that were finalized in the original CSAPR supplemental rule.\105 106\ 
Specifically, to reflect original CSAPR ozone season NOX 
requirements, the modeling includes as constraints the original CSAPR 
NOX ozone season emission budgets for 10 states--Alabama, 
Arkansas, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, 
Missouri, and Tennessee.
---------------------------------------------------------------------------

    \104\ EME Homer City Generation, L.P., v. EPA, No. 795 F.3d 118 
(D.C. Cir. 2015).
    \105\ In EME Homer City II, the D.C. Circuit declared invalid 
the CSAPR phase 2 NOX ozone season emission budgets of 11 
states: Florida, Maryland, New Jersey, New York, North Carolina, 
Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West 
Virginia. Id. 795 F.3d at 129-30, 138. The court remanded those 
budgets to the EPA for reconsideration. Id. at 138. As a result, the 
EPA removed the original CSAPR phase 2 NOX ozone season 
emission budgets as constraints for these 11 states in the 2017 IPM 
modeling.
    \106\ The EPA acknowledges that the CSAPR NOX ozone 
season emission budgets for Iowa, Michigan, Oklahoma, and 
Wisconsin--which were finalized in the original CSAPR Supplemental 
Rule (76 FR 80760, December 27, 2011)--were linked to the same 
receptors that lead to the remand of other states' NOX 
ozone season emission budgets in EME Homer City II.
---------------------------------------------------------------------------

    The IPM projected base case also accounts for the effects of the 
finalized and effective MATS,\107\ New Source Review settlements, and 
on-the-books state rules through February 1, 2016 \108\ impacting 
SO2, NOX, directly emitted particulate matter, 
and CO2, and final actions the EPA has taken to implement 
the Regional Haze Rule.\109\ The EPA's IPM base case also includes two 
federal non-air rules affecting EGUs: The Cooling Water Intake 
Structure (Clean Water Act section 316(b)) rule and the Coal Combustion 
Residuals (CCR) rule. The IPM modeling performed for the final CSAPR 
Update does not include the final Clean Power Plan (CPP). Documentation 
of IPM version 5.15 is in the docket and available online at 
www.epa.gov/airmarkets/power-sector-modeling.
---------------------------------------------------------------------------

    \107\ In Michigan v. EPA, the Supreme Court reversed on narrow 
grounds a portion of the D.C. Circuit decision upholding the MATS 
rule, finding that the EPA erred by not considering cost when 
determining that regulation of EGUs was ``appropriate'' pursuant to 
CAA section 112(n)(1). 135 S. Ct. 192 (2015). On remand, the D.C. 
Circuit left the MATS rule in place pending the EPA's completion of 
its cost consideration in accordance with the Supreme Court's 
decision. White Stallion Energy Ctr. v. EPA, No. 12-1100 (Dec. 15, 
2015) (order remanding MATS rule without vacatur). The EPA finalized 
its supplemental action responding to the Supreme Court's Michigan 
decision on April 14, 2016. 81 FR 24420 (April 25, 2016). The MATS 
rule is currently in place.
    \108\ For any specific version of IPM there is a cutoff date 
after which it is no longer possible to incorporate updates into the 
input databases.
    \109\ The EPA did not include the federal Regional Haze Plans 
for Texas and Oklahoma, published January 5, 2016, in IPM for this 
rule. These Regional Haze Plans do not require significant emission 
reductions for three to five years from the effective date of the 
rule, see 81 FR 296, 305. Also, the Fifth Circuit has since stayed 
those requirements pending judicial review, Texas v. EPA, 2016 U.S. 
App. LEXIS 13058 (5th Cir. July 15, 2016).
---------------------------------------------------------------------------

    Comment: Many comments requested that the agency not include the 
CPP in the 2017 projections informing policy decisions in this rule. 
This was in response to our discussion of this topic and request for 
comment in the proposal preamble and a memorandum to the docket 
(hereinafter referred to as the ``Harvey Memo'').\110\ Commenters cited 
discrete CPP-related outputs in the 2017 modeling results, such as the 
retirement of model plants, for the proposed CSAPR Update and provided

[[Page 74529]]

information indicating that retirements of the actual plants 
represented in the model were not expected to occur by 2017. Commenters 
specifically requested that EPA should not include the CPP in the base 
case modeling.
---------------------------------------------------------------------------

    \110\ Reid Harvey, Dir., Clean Air Markets Div., Memorandum to 
the Docket, Inclusion of the Clean Power Plan in the baseline for 
the proposed Cross-State Air Pollution Rule Update for the 2008 
Ozone NAAQS (Dec. 2, 2015) (hereinafter ``Harvey Memo'').
---------------------------------------------------------------------------

    Response: We agree that the CPP should not be included in the base 
case modeling for this rule.
    The EPA recognizes that, in general, including the illustrative 
modeling of the CPP, as a promulgated rule, in the baseline of the 
CSAPR Update would accord with typical practice. This typical practice 
is one common approach for ensuring that all power sector and air 
quality impacts evaluated in the CSAPR Update analysis are fully 
incremental to and independent of the impacts of preceding rules. 
However, the CSAPR requirements will be implemented at least five years 
before any requirements are applied to sources under the CPP, and there 
should be no meaningful impact of the CPP on power sector dispatch 
decisions in the timeframe of the CSAPR requirements, as analyzed 
here.\111\
---------------------------------------------------------------------------

    \111\ On February 9, 2016, after the close of the public comment 
period for the CSAPR Update rule, the Supreme Court granted 
applications to stay the Clean Power Plan, pending judicial review 
of the rule in the D.C. Circuit, including any subsequent review by 
the Supreme Court. West Virginia et al. v. EPA, No. 15A773 (U.S. 
Feb. 9, 2016). The concerns discussed here predated and are 
unrelated to the stay. It is currently unclear what adjustments, if 
any, will need to be made to implementation timing in light of the 
stay. The Supreme Court's orders granting the stay did not discuss 
the parties' differing views of whether and how the stay would 
affect the CPP's compliance deadlines, and they did not expressly 
resolve that issue. In this context, the question of whether and to 
what extent tolling is appropriate will need to be resolved once the 
validity of the CPP is finally adjudicated.
---------------------------------------------------------------------------

    In the Harvey Memo prepared for the CSAPR Update proposal, we 
identified several key factors and uncertainties associated with 
measuring the effects of the CPP in 2017. We identified simplifying 
assumptions in the CPP modeling regarding the types of plans states may 
develop, and noted that the CPP does not have any pre-2022 requirements 
for sources and provides states and utilities with ample options to 
minimize near-term impacts. Harvey Memo, at 11-13. Therefore, we 
observed that in the context of the CPP, the model projected impacts in 
2016-2018 are likely overstated due to the modeling structure's perfect 
foresight of future prices and market conditions that don't reflect 
real-world uncertainty. Id. at 6. We also noted the likelihood that 
states would choose implementation pathways that would completely avoid 
the actions that were forecast in the model to occur by 2018. For these 
reasons, the modeling results prior to 2020 were not relied upon for 
the CPP RIA. Id. at 13.
    Commenters, particularly the regulated utilities, by and large 
agreed that these considerations were significant and atypical and 
urged the agency to exclude the CPP from the CSAPR Update modeling. 
Thus, while the EPA continues to believe that the modeling analysis for 
the CPP in the final CPP RIA was useful and reliable with respect to 
the model years analyzed for that rule (i.e., 2020, 2025, and 2030), we 
are excluding the CPP from the base case in this action.
    For further discussion of the CPP, see discussion below at Section 
VII.H.2; see also Harvey Memo, at 5-11.
3. Development of Emission Inventories for Non-EGU Point Sources
    The 2011 non-EGU point sources in the 2011 base case inventory 
match those in the proposal modeling, except for those sources that 
were updated as a result of comments including sources in Georgia, 
Illinois, North Carolina, and Oklahoma. Most changes were a result of 
the reclassification of sources as EGUs and amount to less than 2 
percent of the non-EGU point NOX emissions in each state. 
The largest change in terms of overall tonnage was 2,800 tons of 
reduction in Texas, 1,300 of which were offset by increases to the EGU 
sector and 1,500 tons of which were reductions of railroad equipment 
emissions based on a comment from the Texas Commission on Environmental 
Quality. In addition to comments related to emissions, some comments on 
stack parameters were received and incorporated. Details on the 
development of the 2011 emission inventories can be found in the Final 
Rule Emissions Modeling TSD and the 2011NEIv2 TSD.
    Prior to air quality modeling, the emission inventories must be 
processed into a format that is appropriate for the air quality model 
to use. Details on the processing of the emissions for 2011 and on the 
development of the 2017 non-EGU emission inventories are available in 
the Final Rule Emissions Modeling TSD.
    Projection factors and percent reductions in this rule reflect 
comments received as a result of the August 4, 2015 NODA and the 
proposed CSAPR Update. Non-EGU emissions for 2017 also changed from the 
proposal due to a correction to the order of precedence for the 
application of control programs. The largest tonnage change from the 
projected 2017 NOX emissions in the proposal was a 2,200 ton 
increase in Wisconsin, an 8 percent increase. The largest percentage 
change to 2017 non-EGU point emissions was a 1,300 ton reduction in 
Oregon equivalent to 9 percent of non-EGU point emissions in the state 
and offset by an increase in EGU emissions. The 2017 non-EGU point 
emissions reflect emission reductions due to national and local rules, 
control programs, plant closures, consent decrees and settlements. 
Reductions from several Maximum Achievable Control Technology (MACT) 
and National Emission Standards for Hazardous Air Pollutants (NESHAP) 
standards are included. Projection approaches for corn ethanol and 
biodiesel plants, refineries and upstream impacts represent 
requirements pursuant to the Energy Independence and Security Act of 
2007 (EISA).
    For aircraft emissions at airports, the EPA developed projection 
factors based on activity growth projected by the Federal Aviation 
Administration Terminal Area Forecast (TAF) system, published in March 
2013.
    Point source and nonpoint oil and gas emissions are projected to 
2018 \112\ using regional projection factors by product type using 
Annual Energy Outlook (AEO) 2014 projections to year 2018, the year for 
which all data sources needed to develop the projections were 
available. NOX and VOC reductions that are co-benefits to 
the NESHAP and New Source Performance Standards (NSPS) for Stationary 
Reciprocating Internal Combustion Engines (RICE) are reflected for 
select source categories. In addition, Natural Gas Turbines and Process 
Heaters NSPS NOX controls and NSPS Oil and Gas VOC controls 
are reflected for select source categories. The projection approach for 
oil and gas emissions was unchanged from that used for the proposal 
inventories, with the exception of changes incorporated in response to 
comments in Colorado, Oklahoma, Texas and Utah and due the correction 
of an error in the projection factors that had been applied at proposal 
to oil and gas emissions in Kansas. There were modest changes to 
NOX emissions in New Mexico and North Dakota as a result of 
the correction to the order of precedence in the application of control 
programs. Details on the development of the projected point and 
nonpoint oil and gas emission inventories are available in the Final 
Rule Emissions Modeling TSD.
---------------------------------------------------------------------------

    \112\ Developing oil and gas sector projections was a very 
complex process that combined data from many different sources. Not 
all of the same data was available for 2017, so the projected 
emissions were retained at 2018 levels as they had been prepared for 
proposal, but were adjusted based on comments.

---------------------------------------------------------------------------

[[Page 74530]]

4. Development of Emission Inventories for Onroad Mobile Sources
    The EPA developed the onroad mobile source emissions for states 
other than California using the EPA's Motor Vehicle Emissions 
Simulator, version 2014a (MOVES2014a), a newer version of MOVES than 
was used in the proposal modeling. The agency computed the emissions 
within SMOKE by multiplying the MOVES-based emission factors with the 
appropriate activity data. The agency also used MOVES emission factors 
to estimate emissions from refueling. Both 2011 and 2017 onroad mobile 
source activity data and model databases were updated for Ohio, New 
Jersey, North Carolina, and Texas in response to comments received on 
the NODA and on the proposed rule. Additional information on the 
approach for generating the onroad mobile source emissions is available 
in the Final Rule Emissions Modeling TSD. Onroad mobile source 
emissions for California were updated from the proposal using emissions 
submitted by the state in response to comments on the NODA.
    In the future-year modeling for mobile sources, the EPA included 
all national measures known at the time of modeling. The future 
scenarios for mobile sources reflect projected changes to fuel usage 
and onroad mobile control programs finalized as of the date of the 
model run. In response to comments on the NODA, the EPA developed 
future year onroad mobile source emission factors and activity data for 
the final rule modeling that directly represented the year 2017, 
whereas in the proposal modeling the 2017 emissions were based on 
adjustments to 2018 emissions. Finalized rules that are incorporated 
into the mobile source emissions include: Tier 3 Standards (March 
2014), the Light-Duty Greenhouse Gas Rule (March 2013), Heavy (and 
Medium)-Duty Greenhouse Gas Rule (August 2011), the Renewable Fuel 
Standard (February 2010), the Light Duty Greenhouse Gas Rule (April 
2010), the Corporate-Average Fuel Economy standards for 2008-2011 
(April 2010), the 2007 Onroad Heavy-Duty Rule (February 2009), and the 
Final Mobile Source Air Toxics Rule (MSAT2) (February 2007). Impacts of 
rules that were in effect in 2011 are reflected in the 2011 base year 
emissions at a level that corresponds to the extent to which each rule 
had penetrated into the fleet and fuel supply by the year 2011. Local 
control programs such as the California LEV III program are included in 
the onroad mobile source emissions. Activity data for onroad mobile 
sources was projected using AEO 2014. Updated onroad mobile source 
emissions in California for the final rule modeling of the year 2017 
were provided by the California Air Resources Board.
5. Development of Emission Inventories for Commercial Marine Category 3 
(Vessel)
    The commercial marine category 3 vessel (``C3 marine'') emissions 
in the 2011 base case emission inventory for this rule are consistent 
with those in the proposal modeling and are equivalent to those in the 
2011NEIv2. These emissions reflect reductions associated with the 
Emissions Control Area proposal to the International Maritime 
Organization control strategy (EPA-420-F-10-041, August 2010); 
reductions of NOX, VOC, and CO emissions for new C3 engines 
that went into effect in 2011; and fuel sulfur limits that went into 
effect as early as 2010. The cumulative impacts of these rules through 
2017 are incorporated in the 2017 projected emissions for C3 marine 
sources.
6. Development of Emission Inventories for Other Nonroad Mobile Sources
    To develop the nonroad mobile source emission inventories other 
than C3 marine for the modeling platform, the EPA used monthly, county, 
and process level emissions output from the National Mobile Inventory 
Model (NMIM) (http://www.epa.gov/otaq/nmim.htm). State-submitted 
emissions data for nonroad sources were used for Texas and California. 
For Texas, these emissions are consistent with those in the 2011NEIv2, 
while the California emissions were consistent with those used in the 
proposal modeling. Locomotive emissions in Texas and North Carolina in 
the final rule modeling incorporated updates in response to comments 
received on the NODA.
    In response to comments received on the NODA and the proposal, the 
EPA used NMIM to project nonroad mobile emissions directly to 2017, as 
opposed to adjusting 2018 emissions back to 2017 as was done for the 
proposal modeling. The nonroad mobile emission control programs include 
reductions to locomotives, diesel engines and marine engines, along 
with standards for fuel sulfur content and evaporative emissions. A 
comprehensive list of control programs included for mobile sources is 
available in the Final Rule Emissions Modeling TSD.
7. Development of Emission Inventories for Nonpoint Sources
    The emissions for stationary nonpoint sources in the 2011 base case 
emission inventory are largely consistent with those in the proposal 
modeling and in the 2011NEIv2, although some updates to Connecticut, 
Massachusetts, North Carolina, Texas and also to portable fuel 
container emissions were made in response to comments on the NODA and 
the proposal. For more information on the nonpoint sources in the 2011 
base case inventory, see the Final Rule Emissions Modeling TSD and the 
2011NEIv2 TSD.
    Where states provided the EPA with information about projected 
control measures or changes in nonpoint source emissions, the EPA 
incorporated those inputs in its projections. Updates to nonpoint 
emissions in North Carolina, Connecticut, Massachusetts, and Texas were 
incorporated in response to comments received on the NODA. The EPA 
included adjustments for state fuel sulfur content rules for fuel oil 
in the Northeast. Projected emissions for portable fuel containers 
reflect the impact of projection factors required by the final Mobile 
Source Air Toxics (MSAT2) rule and the EISA, including updates to 
cellulosic ethanol plants, ethanol transport working losses, and 
ethanol distribution vapor losses.
    For the final rule, emissions for nonpoint oil and gas sources were 
updated in Colorado, Texas, and Oklahoma in response to comments 
received on the 2015 NODA, and an error was corrected in the 
projections for Kansas. The EPA developed regional projection factors 
for nonpoint oil and gas sources by product type based on Annual Energy 
Outlook (AEO) 2014 projections to year 2018. The agency reflected 
criteria air pollutant (CAP) co-benefit reductions resulting from the 
National Emission Standards for Hazardous Air Pollutants (NESHAP) for 
Reciprocating Internal Combustion Engines (RICE) and NSPS rules and Oil 
and Gas NSPS VOC controls for select source categories. Additional 
details on the projections are available in the Final Rule Emissions 
Modeling TSD.

C. Definition of Nonattainment and Maintenance Receptors

    In this section, the EPA describes how it determines locations 
where nonattainment or maintenance problems are expected for the 2008 
8-hour ozone NAAQS in the 2017 analytic future year chosen for this 
rule. The EPA then describes how it factored current monitored data 
into the identification of sites as having either nonattainment or 
maintenance concerns for the purposes of this rulemaking. These sites 
are used as the ``receptors'' for quantifying the contributions of 
emissions in upwind states to nonattainment and

[[Page 74531]]

maintenance concerns in downwind locations.
    In this rule, the EPA is relying on the CSAPR approach (as 
described below) to identify separate nonattainment and maintenance 
receptors in order to give independent effect to both the ``contribute 
significantly to nonattainment'' and the ``interfere with maintenance'' 
prongs of section 110(a)(2)(D)(i)(I), consistent with the D.C. 
Circuit's direction in North Carolina.\113\ In its decision on remand 
from the Supreme Court, the D.C. Circuit confirmed that the EPA's 
approach to identifying maintenance receptors in CSAPR comported with 
the court's prior instruction to give independent meaning to the 
``interfere with maintenance'' prong in the good neighbor provision. 
EME Homer City II, 795 F.3d at 136.
---------------------------------------------------------------------------

    \113\ 531 F.3d at 910-911 (holding that the EPA must give 
``independent significance'' to each prong of CAA section 
110(a)(2)(D)(i)(I)).
---------------------------------------------------------------------------

    In CSAPR, the EPA identified nonattainment receptors as those 
monitoring sites that are projected to have average design values that 
exceed the NAAQS. The EPA separately identified maintenance receptors 
as those receptors that would have difficulty maintaining the relevant 
NAAQS in a scenario that takes into account historical variability in 
air quality at that receptor. The original CSAPR approach for 
identifying nonattainment and maintenance receptors relied only upon 
air quality model projections of measured design values. In the 
original CSAPR, if the average design value in the analysis year was 
projected to exceed the NAAQS, then the monitoring site was identified 
as a nonattainment receptor without consideration of whether the 
monitoring site is currently measuring ``clean data'' (i.e., design 
values below the NAAQS based on the most recent three years of measured 
data). In prior transport rulemakings, such as the NOX SIP 
Call and CAIR, the EPA defined nonattainment receptors as those areas 
that both currently monitor nonattainment and that the EPA projects 
will be in nonattainment in the future compliance year.\114\ The EPA 
explained that it had the most confidence in its projections of 
nonattainment for those counties that also measure nonattainment for 
the most recent period of available ambient data. In the original 
CSAPR, the EPA was compelled to deviate from this practice of 
incorporating monitored data into its evaluation of projected 
nonattainment receptors because the most recent monitoring data then 
available reflected large emission reductions from CAIR, which the 
original CSAPR was designed to replace. As recently affirmed by the 
D.C. Circuit, it was therefore reasonable for the EPA to decide not to 
compare monitored data reflecting CAIR emissions reductions to its 
modeling projections that instead excluded CAIR from its baseline.\115\
---------------------------------------------------------------------------

    \114\ 63 FR at 57375, 57377 (Oct. 27, 1998); 70 FR at 25241 (May 
12, 2005). See also North Carolina, 531 F.3d at 913-914 (affirming 
as reasonable the EPA's approach to defining nonattainment in CAIR).
    \115\ EME Homer City II, 795 F.3d at 135-36; see also 76 FR 
48208 at 48230-31 (August 8, 2011).
---------------------------------------------------------------------------

    As the EPA is not replacing an existing transport program in this 
CSAPR Update, the agency proposed to once again consider current 
monitored data as part of the process for identifying projected 
nonattainment receptors for this rulemaking. The agency received 
comments supporting the consideration of current monitored data for 
identifying projected nonattainment receptors. Thus, for the final 
CSAPR Update the EPA is identifying as nonattainment receptors those 
monitors that both currently measure nonattainment and that the EPA 
projects will be in nonattainment in 2017.
    As noted previously, in the original CSAPR, the EPA identified 
maintenance receptors as those receptors that would have difficulty 
maintaining the relevant NAAQS in a scenario that takes into account 
historical variability in air quality at that receptor. The variability 
in air quality was determined by evaluating the ``maximum'' future 
design value at each receptor based on a projection of the maximum 
measured design value over the relevant base year period.
    The EPA interprets the projected maximum future design value to be 
a potential future air quality outcome consistent with the meteorology 
that yielded maximum measured concentrations in the ambient data set 
analyzed for that receptor. The EPA also recognizes that previously 
experienced meteorological conditions (e.g., dominant wind direction, 
temperatures, air mass patterns) promoting ozone formation that led to 
maximum concentrations in the measured data may reoccur in the future. 
Therefore, the maximum design value gives a reasonable projection of 
future air quality at the receptor under a scenario in which such 
conditions do, in fact, reoccur. The projected maximum design value is 
used to identify upwind states whose emissions, under those 
circumstances, could interfere with the downwind area's ability to 
maintain the NAAQS.
    For the final CSAPR Update, the EPA assesses the magnitude of the 
maximum projected design value for 2017 at each receptor in relation to 
the 2008 ozone NAAQS and, where such a value exceeds the NAAQS, the EPA 
determines that receptor to be a ``maintenance'' receptor for purposes 
of defining interference with maintenance, consistent with the method 
used in CSAPR and upheld by the D.C. Circuit in EME Homer City II.\116\ 
That is, monitoring sites with a maximum projected design value that 
exceeds the NAAQS are projected to have a maintenance problem in 2017.
---------------------------------------------------------------------------

    \116\ See 795 F.3d at 136.
---------------------------------------------------------------------------

    In addition, those sites that are currently measuring clean data, 
but are projected to be nonattainment based on the average design value 
(and that, by definition, are projected to have a maximum design value 
above the standard) are also identified as maintenance-only receptors. 
Unlike nonattainment receptors, current clean monitored data does not 
disqualify a receptor from being identified as a maintenance receptor 
because the possibility of failing to maintain the NAAQS in the future, 
even in the face of current attainment of the NAAQS, is exactly what 
the maintenance prong of the good neighbor provision is designed to 
guard against.
    Comment: The agency received comments that the EPA should not 
include as a downwind receptor any site that is currently measuring 
clean data. Commenters also raise concerns with the EPA's reliance on 
the projected maximum design value to determine whether an area should 
be identified as a maintenance receptor, particularly where the 
projected average design value is below the NAAQS. The commenters 
contend that this approach does not take into account the nationwide 
trend toward decreasing ozone design values and improving ozone air 
quality.
    Response: The EPA disagrees with this comment based on several 
factors. First, current (i.e., 2013-2015) ozone design values in many 
portions of the eastern U.S. may be lower than what might otherwise 
have been expected due to cooler than normal temperatures during the 
summers of 2013, 2014, and 2015 which led to meteorological conditions 
which were generally unfavorable for the formation of high ozone 
concentrations. An examination of historical inter-annual variability 
in summer meteorological conditions in the East indicates that in spite 
of the

[[Page 74532]]

relatively non-conducive meteorological conditions seen in the last 3 
years, conditions more favorable to ozone formation have often occurred 
in the past and are likely to reoccur in the future, therefore leading 
to the risk of a violation of the NAAQS. See the AQM TSD for more 
details.
    Second, ambient monitoring data for maintenance sites that are 
currently measuring attainment suggest that these sites are at risk of 
violating the NAAQS. Table V.D-3 provides the 2013-2015 design values 
and the 4th highest annual 8-hour daily maximum ozone concentrations 
used to calculate these design values for each of the maintenance 
receptors that are currently measuring attainment. The data in Table 
V.D-3 indicate (1) seven of the nine sites had measured 4th high values 
\117\ which exceed the level of the NAAQS in at least one of the years 
during this 3-year time period and (2) 4th high ozone concentration 
increased from 2014 to 2015 at all but one of these sites. There were 
increases in measured 4th high values between 2013 and 2015 at all but 
one of these sites (with the highest increase of 22 ppb occurring in 
Harris County TX), despite the fact that ozone precursor emissions are 
continuing to trend downward.\118\ In addition, preliminary monitoring 
for 2016 also indicates that ozone has increased, based on 4th high 
values, in 2016 compared to the concentrations that were measured in 
2014 at most of the receptor sites.\119\ This shows that the influence 
of meteorology on measured ozone values can overwhelm the general 
downward trend in emissions. Thus, given the variability of 
meteorological conditions, there is every reason to believe that these 
maintenance sites that are currently measuring attainment are at risk 
of violating the NAAQS in 2017, as projected by the EPA's modeling.
---------------------------------------------------------------------------

    \117\ Ozone season measured daily 4th high 8-hour average ozone 
concentrations are used to calculate design values. The design value 
is a 3 year average of the 4th high values. See 40 CFR part 50, 
Appendix P to Part 50.
    \118\ See the AQM TSD.
    \119\ This is based on preliminary 2016 data available from the 
Air Quality System (AQS) and AirNow as of August 23, 2016, which 
represents only a portion of the ozone season. This data has not 
been certified by state agencies.
---------------------------------------------------------------------------

    The EPA believes it is therefore appropriate and reasonable to use 
the maximum design value to identify receptors that may have 
maintenance problems in the future. This approach uses measured data in 
order to establish potential air quality outcomes at each receptor that 
take into account the variable meteorological conditions present across 
the entire period of measured data (2009 to 2013). The EPA interprets 
the maximum future design value to be a potential future air quality 
outcome consistent with the meteorology that yielded maximum measured 
concentrations in the ambient data set analyzed for that receptor. The 
EPA construes the average design value at a receptor to be a reasonable 
projection of future air quality in that area under ``average'' 
conditions. However, the EPA also recognizes that previously 
experienced meteorological conditions (e.g., dominant wind direction, 
temperatures, air mass patterns) that promote ozone formation, may 
recur in the future. The maximum design value gives a reasonable 
projection of future air quality at the receptor under a scenario in 
which such conditions do, in fact, recur. It also identifies upwind 
emissions that under those circumstances could interfere with the 
downwind area's ability to maintain the NAAQS.

D. Air Quality Modeling To Identify Nonattainment and Maintenance 
Receptors

    The following is a brief summary of the procedures for projecting 
future-year 8-hour ozone average and maximum design values to 2017 to 
determine nonattainment and maintenance receptors. Consistent with the 
EPA's modeling guidance the agency uses the air quality modeling 
results in a ``relative'' sense to project future concentrations. That 
is, the ratios of future year model predictions to base year model 
predictions are used to adjust ambient ozone design values \120\ up or 
down depending on the relative (percent) change in model predictions 
for each location. The modeling guidance recommends using measured 
ozone concentrations for the 5-year period centered on the base year as 
the air quality data starting point for future year projections. This 
average design value is used to dampen the effects of inter-annual 
variability in meteorology on ozone concentrations and to provide a 
reasonable projection of future air quality at the receptor under 
``average'' conditions. Because the base year for this rule is 2011, 
the EPA is using the base period 2009-2013 ambient ozone design value 
data in order to project 2017 average design values in a manner 
consistent with the modeling guidance.
---------------------------------------------------------------------------

    \120\ The ozone design value at a particular monitoring site is 
the 3-year average of the annual 4th highest daily maximum 8-hour 
ozone concentration at that site. See 40 CFR part 50, Appendix P to 
Part 50.
---------------------------------------------------------------------------

    The approach for projecting future ozone design values involved the 
projection of an average of up to 3 design value periods, which include 
the years 2009-2013 (design values for 2009-2011, 2010-2012, and 2011-
2013). The 2009-2011, 2010-2012, and 2011-2013 design values are 
accessible at www.epa.gov/airtrends/values.html. The average of the 3 
design values creates a ``5-year weighted average'' value. The 5-year 
weighted average values were then projected to 2017. To project 8-hour 
ozone design values, the agency used the 2011 base year and 2017 future 
base-case model-predicted ozone concentrations to calculate relative 
response factors (RRFs) for the location of each monitoring site. The 
RRFs were applied to the 2009-2013 average ozone design values and the 
individual design values for 2009-2011, 2010-2012, and 2011-2013. 
Details of this approach are provided in the AQM TSD.
    Projected design values that are greater than or equal to 76.0 ppb 
are considered to be violating the NAAQS in 2017. As noted previously, 
nonattainment receptors are those sites that are violating the NAAQS 
based on the most recent measured air quality data and also have 
projected average design values of 76.0 ppb or greater. Therefore, as 
an additional step, for those sites that are projected to be violating 
the NAAQS based on the average design values in 2017, the EPA examined 
the most recent measured design value data to determine if the site was 
currently violating the NAAQS. For the final rule, the agency examined 
ambient data for the 2013-2015 period, which is the most recent 
available measured design values at the time of this rule.
    Maintenance-only receptors therefore include both (1) those sites 
with projected average design values above the NAAQS that are currently 
measuring clean data, and (2) those sites with projected average design 
values below the level of the NAAQS, but with projected maximum design 
values of 76.0 ppb or greater. The EPA notes that the 2017 ozone 
nonattainment receptors are inclusive of areas that, in addition to 
having projected nonattainment, may have maintenance issues in the 
future, since the maximum design values for each of these sites is 
always greater than or equal to the average design value.
    Table V.D-1 contains the ambient 2009-2013 base period average and 
maximum 8-hour ozone design values, the 2017 projected baseline average 
and maximum design values, and the ambient 2013-2015 design values for 
the 6 sites in the eastern U.S. projected to be 2017 nonattainment 
receptors. Table V.D-2 contains this same information for the 13 
maintenance-only sites in the eastern U.S. The design

[[Page 74533]]

values for all monitoring sites in the U.S. are provided in docket.

  Table V.D-1--Average and Maximum 2009-2013 and 2017 Baseline 8-Hour Ozone Design Values and 2013-2015 Design Values (ppb) at Projected Nonattainment
                                                                Sites in the Eastern U.S.
                                                                [Nonattainment receptors]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average         Maximum         Average         Maximum
      Monitor ID                 State                    County           design value    design value    design value    design value      2013-2015
                                                                             2009-2013       2009-2013         2017            2017        design value
--------------------------------------------------------------------------------------------------------------------------------------------------------
090019003.............  Connecticut............  Fairfield..............            83.7              87            76.5            79.5              84
090099002.............  Connecticut............  New Haven..............            85.7              89            76.2            79.2              78
480391004.............  Texas..................  Brazoria...............            88.0              89            79.9            80.8              80
484392003.............  Texas..................  Tarrant................            87.3              90            77.3            79.7              76
484393009.............  Texas..................  Tarrant................            86.0              86            76.4            76.4              78
551170006.............  Wisconsin..............  Sheboygan..............            84.3              87            76.2            78.7              77
--------------------------------------------------------------------------------------------------------------------------------------------------------

 Table V.D-2--Average and Maximum 2009-2013 and 2017 Baseline 8-Hour Ozone Design Values and 2013-2015 Design Values (ppb) at Sites in the Eastern U.S.
                                                      That Are Projected Maintenance-Only Receptors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average         Maximum         Average         Maximum
      Monitor ID                 State                    County           design value    design value    design value    design value      2013-2015
                                                                             2009-2013       2009-2013         2017            2017        design value
--------------------------------------------------------------------------------------------------------------------------------------------------------
090010017.............  Connecticut............  Fairfield..............            80.3              83            74.1            76.6              81
090013007.............  Connecticut............  Fairfield..............            84.3              89            75.5            79.7              83
211110067.............  Kentucky...............  Jefferson..............            85.0              85            76.9            76.9       \121\ N/A
240251001.............  Maryland...............  Harford................            90.0              93            78.8            81.4              71
260050003.............  Michigan...............  Allegan................            82.7              86            74.7            77.7              75
360850067.............  New York...............  Richmond...............            81.3              83            75.8            77.4              74
361030002.............  New York...............  Suffolk................            83.3              85            76.8            78.4              72
390610006.............  Ohio...................  Hamilton...............            82.0              85            74.6            77.4              70
421010024.............  Pennsylvania...........  Philadelphia...........            83.3              87            73.6            76.9              73
481210034.............  Texas..................  Denton.................            84.3              87            75.0            77.4              83
482010024.............  Texas..................  Harris.................            80.3              83            75.4            77.9              79
482011034.............  Texas..................  Harris.................            81.0              82            75.7            76.6              74
482011039.............  Texas..................  Harris.................            82.0              84            76.9            78.8              69
--------------------------------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------

    \121\ The 2013-2015 design value at this site is not valid due 
to incomplete data for 2013. There are valid 4th high measured 
concentrations for 2014 and 2015 and therefore the site may have 
valid design value data when the 2014-2016 data is complete. The 
2014 4th high value at this site was 70 ppb and the 2015 4th high 
value at this site was 76 ppb. In addition, there is one other 
monitoring site in Jefferson County KY which has a valid 2013-2015 
design value of 66 ppb. There is one other site in the Louisville 
CBSA which has a slightly higher 2013-2015 design value of 68 ppb 
(site 211850004 in Oldham County KY). Since there is no valid design 
value data that indicates that the Jefferson County receptor or any 
other monitoring site in Jefferson County or the Louisville 
metropolitan area is currently exceeding the 2008 NAAQS, for the 
purposes of this final rule, the Jefferson County KY receptor will 
be considered a maintenance receptor.''

      Table V.D-3--Ambient Ozone Design Values for 2013-2015 and the 4th Highest 8-Hour Daily Maximum Ozone
         Concentrations (ppb) for Each Maintenance-Only Receptor That Is Currently Measuring Attainment
----------------------------------------------------------------------------------------------------------------
                                                     2013-2015       2013  4th       2014  4th       2015  4th
  Monitor ID         State            County       design value   highest  value  highest  value  highest  value
----------------------------------------------------------------------------------------------------------------
211110067.....  Kentucky.......  Jefferson......             N/A             N/A              70            * 76
240251001.....  Maryland.......  Harford........              71              72              67              74
260050003.....  Michigan.......  Allegan........              75            * 78            * 77              72
360850067.....  New York.......  Richmond.......              74              69              68            * 77
361030002.....  New York.......  Suffolk........              72              72              66            * 78
390610006.....  Ohio...........  Hamilton.......              70              69              70              72
421010024.....  Pennsylvania...  Philadelphia...              73              68              72            * 79
482011034.....  Texas..........  Harris.........              74              69              66            * 88
482011039.....  Texas..........  Harris.........              69              69              63            * 77
----------------------------------------------------------------------------------------------------------------
* Indicates 4th highest values that exceed the NAAQS.

    Comment: The EPA received comments on the approach for projecting 
future year design values for monitoring sites located in certain 
coastal areas (i.e., monitoring sites located in southern Connecticut 
along Long Island Sound, in Wisconsin and Michigan along Lake Michigan 
and in Maryland along the Chesapeake Bay).

[[Page 74534]]

Some commenters said that the relative response factors for coastal 
sites should be based on modeled ozone in the grid cell containing the 
monitoring site or ``land'' cells only, rather than the grid cell with 
the highest 2011 base case modeled value from among the 3 by 3 matrix 
of grid cells surrounding the monitoring site (i.e., the 3 x 3 matrix 
approach). Some commenters said that using the 3 x 3 approach for 
coastal sites can result in the use of modeled data from grid cells 
over water, which the commenters claim are not representative of the 
location of the monitor. These commenters contend that modeled values 
from ``over water'' cells are biased high and will overstate projected 
2017 design values at coastal sites. In this regard, the commenters 
said EPA should consider using the modeled data in the grid cell 
containing the monitoring site or use the highest value in ``over 
land'' grid cells adjacent to the monitoring site.
    Commenters examined model performance in the grid cell that 
contained the monitor and also compared these measured values to the 
``highest'' modeled value in the 3 x 3 grid cell matrix surrounding the 
monitoring site. They contend that higher modeled ozone concentrations 
from the 3 x 3 matrix overstate concentrations measured at the 
monitoring site and, as a result, commenters claim that using the 3 x 3 
modeled values will lead to inaccurate future model projections.
    Response: EPA first notes that the modeling guidance recommends 
calculating relative response factors based on the highest values in 
the vicinity of the monitoring site (i.e., the 3 x 3 matrix approach) 
in part because limitations in the inputs and model physics can affect 
model precision at the grid cell level. Allowing some leeway in the 
precision of the predicted location of daily maximum ozone 
concentrations can help assure that possibly artificial, fine scale 
variations do not inadvertently impact an assessment of modeled ozone 
response. In addition, monitors are sometimes located very close to the 
border of two or more grid cells. For both of these reasons, choosing 
to calculate the model response from the nearby grid cell with the 
highest modeled ozone value is likely to be most representative of 
model response during high measured ozone conditions. In addition, 
coastal sites by the nature of their location near large water bodies 
often measure ozone concentrations in air from over the water when 
winds are blowing from the water to the land. Such wind flows can occur 
as part of a broader ``synoptic scale'' wind pattern and/or during more 
local scale onshore wind flows associated with a ``sea breeze'', 
``sound breeze'', ``lake breeze'', or ``bay breeze'' depending on the 
nature of the adjacent body of water. Thus, it is appropriate to 
consider modeled values from both ``over water'' and ``over land'' grid 
cells to represent ozone concentrations which may impact monitoring 
sites in coastal areas.
    The commenters also compared measured ozone values at monitoring 
locations to the highest modeled concentrations in the 3 x 3 grid cells 
surrounding the monitor and found that modeled ozone in grid cells over 
the water (where there are no monitoring sites) often ``over 
predicted'' the measured values at the monitors. The commenters claim 
that this will lead to an overstatement of future year design values 
and inaccurate future year values. The EPA finds no basis for this 
conclusion. First, the components of the modeling system used for this 
final rule, (i.e., the photochemical grid model, the meteorological 
model, emissions models, and input data) are based on state-of-the-
science methods and data that are designed to represent the physical 
and chemical processes associated with the formation, transport, and 
fate of ozone and precursor pollutants. The intent of the model 
evaluation is to use available measurements to gain confidence in the 
use of the modeling system not only to predict concentrations for times 
and locations where there are measurements, but also to provide 
credible estimates of base year concentrations in other locations which 
can be used to project future year concentrations. Second, the EPA is 
not using the absolute modeled concentrations to determine future year 
(2017) design values. As described in the preamble and the AQM TSD, the 
EPA projects future year design values based on the percent change 
(i.e., relative response) in ozone using predictions from a model 
simulation for 2011 and predictions from a corresponding model 
simulation for 2017. The relative response factors based on the modeled 
data from the 3 x 3 matrix approach are applied to measured ozone 
design value.
    For the final rule, the EPA performed an analysis that compared the 
2017 projected design values based on applying the 3 x 3 matrix 
approach recommended in EPA's modeling guidance to an approach that 
relies exclusively on modeled values in the grid cell containing the 
monitoring (i.e., monitor-cell approach). This analysis was performed 
for ozone monitoring sites nationwide including the coastal sites of 
concern to commenters. A data file with the projected 2017 design 
values using the 3 x 3 matrix approach and the monitor-cell approach at 
individual monitoring sites can be found in the docket.
    In our analysis we examined the data separately for each of four 
groupings of monitoring sites: (1) All sites nationwide, (2) all sites 
in the East, (3) all nonattainment and maintenance receptors identified 
in this rule, and (4) the set of coastal sites of particular concern to 
the commenters together with a coastal site in Harford Co., MD that is 
also receptor for this final rule. The specific set of 8 coastal sites 
analyzed as a separate group include Fairfield Co., CT sites 090010017, 
090013007, and 090019003, New Haven Co., CT 090093002, Baltimore Co., 
MD 240053001, Harford Co., MD 240251001, Allegan Co., MI, 260050003, 
and Sheboygan Co, WI 551170006. Note that all of these sites, except 
for the site in Baltimore Co., MD are receptors for this final rule. 
The results indicate that the 3 x 3 approach results in lower or 
equivalent projected 2017 design values compared to the monitor-cell 
approach at 76 percent of the monitoring sites nationwide. That is, at 
a majority of the monitoring sites, the 3 x 3 approach which relies on 
the highest base year concentrations in the vicinity of the monitoring 
site tends to be more responsive to emissions reductions than only 
using data from the grid cell containing the monitor. For the Eastern 
U.S., 75 percent of the monitoring sites had lower projected 2017 
design values with the 3 x 3 approach, compared to the monitor-cell 
approach. At 14 of the 19 nonattainment and maintenance receptors for 
this rule, the 3 x 3 approach design value is either lower or within 
0.5 ppb \122\ of the corresponding value from the monitor-cell 
approach. Finally, for the 8 coastal sites, the 3 x 3 approach on 
balance does not result in an overall notable bias compared to the 
monitor-cell approach. Specifically, at half of these sites the 3 x 3 
approach design value is lower or within 0.5 ppb of the corresponding 
value from the monitor-cell approach. EPA does not believe that it 
would be appropriate to use the 3 x 3 approach for some coastal 
receptors and the single monitor-cell approach for other coastal 
receptors, depending solely on the outcome as to which approach yields 
lower future design value at an individual receptor site. Based on the 
results of this analysis

[[Page 74535]]

the EPA continues to believe that the 3 x 3 approach is appropriate for 
projecting design values for this rule and provides for regional 
consistency in the projection methodology across all sites.
---------------------------------------------------------------------------

    \122\ ``In this analysis ``within 0.5 ppb'' includes values that 
greater than or equal to -0.5 ppb and also less than or equal to 0.5 
ppb.
---------------------------------------------------------------------------

    Comment: Commenters contend that the EPA is not appropriately 
considering international emissions in the process of identifying 
downwind nonattainment and maintenance receptors. The commenters cite 
CAA section 179B and contend that it requires the Administrator to 
approve plans that would be sufficient to attain or maintain the NAAQS 
but for emissions emanating from outside of the U.S. They therefore 
contend that, where a receptor in the EPA's modeling would attain or 
maintain the standard when international emissions are accounted for, 
the EPA has no authority to require emissions from upwind states 
pursuant to section 110(a)(2)(D)(i)(I). Commenters state that such 
reduction requirements would constitute the over-control of emissions 
from upwind states.
    The commenters explicitly recommend that the EPA exclude the 
projected contributions from Canada and Mexico from the projected 
design values before comparing the projections to the NAAQS for 
purposes of identifying receptors. Commenters further recommend that 
the EPA exclude a ``conservatively calculated'' 5 percent of EPA-
estimated contributions attributable to the anthropogenic fraction of 
boundary concentrations. The commenters propose that this approach 
would result in fewer receptors and relieve upwind states of the 
obligation to make emission reductions associated with these receptors.
    Response: The EPA disagrees with commenters that section 179B of 
the Clean Air Act obviates the good neighbor obligations imposed upon 
states by section 110(a)(2)(D)(i)(I) of the Act.
    First, commenters misunderstand the provisions of section 179B. 
Section 179B permits the EPA to approve an attainment plan or plan 
revision for areas that could attain the relevant NAAQS by the 
statutory attainment date ``but for'' emissions emanating from outside 
the U.S. When applicable, this CAA provision relieves states from 
imposing control measures on emissions sources in the state's 
jurisdiction beyond those necessary to address reasonably controllable 
emissions from within the U.S. Specifically, CAA section 179B(a) 
provides that the EPA shall approve a plan for such an area if: (i) The 
plan meets all other applicable requirements of the CAA, and (ii) the 
submitting state can satisfactorily demonstrate that ``but for 
emissions emanating from outside the United States,'' the area would 
attain and maintain the relevant NAAQS. In addition, CAA section 
179B(b) applies specifically to the ozone NAAQS and provides that if a 
state demonstrates that an ozone nonattainment area would have timely 
attained the NAAQS by the applicable attainment date ``but for 
emissions emanating from outside of the United States,'' then the area 
can avoid extension of the ozone attainment dates pursuant to CAA 
section 181(a)(5), the application of fee provisions of CAA section 
185, and the mandatory reclassification provisions under CAA section 
181(b)(2) for areas that fail to attain the ozone NAAQS by the 
applicable attainment date.
    Commenters fail to acknowledge that, even if an area is impacted by 
emissions from outside the U.S., CAA section 179B does not affect the 
designations process. The designations process is meant to protect 
public health and welfare. Designating an area nonattainment for a 
particular NAAQS ensures that the public is informed that the air 
quality in a specific area exceeds the standard. Congress determined 
that in nonattainment areas, there should be adequate safeguards to 
protect public health and welfare. For example Congress required such 
areas to have nonattainment new source review permitting programs, to 
ensure that air quality is not further degraded. Accordingly, areas 
with design values above the NAAQS are designated nonattainment and 
classified with a classification as indicated by actual ambient air 
quality. As a result of designation and classification, the state is 
subject to the applicable requirements, including nonattainment new 
source review, conformity, and other measures prescribed for 
nonattainment areas by the CAA. Section 179B of the CAA does not 
provide for any relaxation of mandatory emissions control measures 
(including contingency measures) or the prescribed emissions 
reductions; it only eliminates the obligation for an attainment 
demonstration that demonstrates attainment and maintenance of the 
NAAQS, which is conditioned upon the state meeting all other attainment 
plan requirements, and voids certain consequences of an area's failure 
to attain, including mandatory reclassifications.
    CAA section 179B also does not alter the CAA's general construct 
expressed in subpart 1 of part D that states with nonattainment areas 
are expected to adopt reasonable emissions controls to lessen emissions 
of criteria pollutants to promote citizen health protection. The 
construct ensures that states will take reasonable actions to mitigate 
the public health impacts of exposure to ambient levels of pollution 
that violate the NAAQS by imposing reasonable control measures on the 
sources that are within the jurisdiction of the state regardless of 
impacts from interstate or international emissions. The primary purpose 
of part D of Title I of the CAA is to achieve emission reductions so 
that people living in a nonattainment area receive the public health 
protection intended by the NAAQS.
    In sum, section 179B provides an important tool that provides 
states relief from the requirement to demonstrate attainment--and from 
the more stringent planning requirements that would result from failure 
to attain--in areas where, even though the air agency has taken 
appropriate measures to address air quality in the influenced area, 
emissions from outside of the U.S. prevent attainment. The provision 
does not absolve states of the obligation to impose reasonable emission 
controls even where states can demonstrate that the area would attain 
``but for'' the impact of international emissions. The commenters do 
not explain why, given the obligation of downwind states with 
designated nonattainment areas to impose reasonable controls on 
emissions, upwind states should not also be subject to a similar 
obligation to take certain reasonable steps to reduce emissions 
impacting those downwind areas.
    The commenters have not explained why the terms of section 179B 
require its application to EPA's evaluation of upwind state's 
interstate transport obligations. Section 179B is located in subpart D 
of title I, which addresses plan requirements for designated 
nonattainment areas. As just described, the specific terms of section 
179B outline which nonattainment area requirements will and will not 
apply upon approval of a section 179B demonstration, none of which 
apply directly to upwind states via section 110(a)(2)(D)(i)(I). In 
particular, the good neighbor provision does not require upwind areas 
to ``demonstrate attainment and maintenance'' of the NAAQS. Rather, the 
statute requires upwind states to prohibit emissions which will 
``contribute significantly to nonattainment'' or ``interfere with 
maintenance'' of a NAAQS. As discussed further in section IV.B.1, while 
upwind states must address their fair share of downwind air quality 
problems, the EPA has not interpreted this provision to hold upwind 
areas

[[Page 74536]]

responsible for bringing downwind areas into attainment. Therefore, the 
relief provided by section 179B(a) and (b) from the obligation to 
demonstrate attainment, extension of the attainment date, and mandatory 
reclassifications, is simply not applicable to downwind states.
    Even if section 179B were in some manner applicable to upwind 
states' transport obligations, the EPA does not believe that the 
contribution of international emissions should impact EPA's 
identification of downwind nonattainment and maintenance receptors 
affected by the interstate transport of emissions. These receptors 
represent areas that the EPA projects will have difficulty attaining 
and maintaining the NAAQS, and which therefore require adequate 
safeguards to protect public health and welfare. The EPA therefore does 
not agree that, when identifying downwind air quality problems for 
purposes of interstate transport, section 179B requires that we 
subtract the contributions of international emissions from the 
projected design values. This would be inconsistent with EPA's approach 
to area designations and is simply not required by the plain language 
of the statute. Moreover, such an interpretation would allow downwind 
and upwind areas to make no efforts to address clear violations of the 
NAAQS, leaving the area's citizens to suffer the health and 
environmental consequences of such inaction.
    Moreover, just as any state with a nonattainment area--including 
downwind states--must take reasonable steps to control emissions even 
where an area is impacted by international emissions, the EPA believes 
that it is appropriate for upwind states to also adopt reasonable 
emissions controls to lessen the impact of emissions generated in their 
state and subsequently transported to downwind areas. As noted in 
Section IV of the preamble, the EPA does not view the obligation under 
the good neighbor provision as a requirement for upwind states to bear 
all of the burden for resolving downwind air quality problems. Rather, 
it is an obligation that upwind and downwind states share 
responsibility for addressing air quality problems. If, after 
implementation of reasonable emissions reductions by an upwind state, a 
downwind air quality problem persists, whether due to international 
emissions or emissions originating within the downwind state, the EPA 
can relieve the upwind state of the obligation to make additional 
reductions to address that air quality problem. But the statute does 
not absolve the upwind state of the obligation to make reasonable 
reductions in the first instance.
    The EPA took just such an approach in the original CSAPR rulemaking 
when calculating annual SO2 emissions budgets for states 
linked to downwind PM2.5 air quality problems. There, the 
EPA imposed budgets based on a level of control stringency equivalent 
to $2,300 per ton of SO2 emissions. Despite the persistence 
of downwind air quality problems to which certain upwind states were 
linked, the EPA concluded that this level of control stringency 
represented the upwind states' full transport obligation with respect 
to the PM2.5 standards and additional controls were not 
reasonable because significant reductions could not be achieved at 
higher costs. 76 FR 48208, 48257-259.
    Accordingly, the EPA also does not agree that imposing emission 
reductions on upwind states linked to areas affected by international 
emissions based on the implementation of reasonable control measures 
would result in over-control. As discussed in section VII.D of the 
preamble, the emissions reductions required by this rulemaking are 
based on relatively modest investments in turning on and optimizing 
already existing SCRS and installing a limited amount of combustion 
controls, which is feasibly and reasonably achieved by the 2017 ozone 
season. Moreover, the emissions reductions required by this rulemaking 
do not fully resolve most of the air quality problems identified in 
this rule. As discussed further in section VI.D, the D.C. Circuit has 
identified those circumstances that would constitute over-control 
pursuant to CAA section 110(a)(2)(D)(i)(I), and those circumstances are 
not present here.

E. Pollutant Transport From Upwind States

1. Air Quality Modeling To Quantify Upwind State Contributions
    This section documents the procedures the EPA used to quantify the 
impact of emissions from specific upwind states on 2017 8-hour design 
values for identified downwind nonattainment and maintenance receptors. 
The EPA used CAMx photochemical source apportionment modeling to 
quantify the impact of emissions in specific upwind states on downwind 
nonattainment and maintenance receptors for 8-hour ozone. CAMx employs 
enhanced source apportionment techniques that track the formation and 
transport of ozone from specific emissions sources and calculates the 
contribution of sources and precursors (NOX and VOC) to 
ozone for individual receptor locations. The strength of the 
photochemical model source apportionment technique is that all modeled 
ozone at a given receptor location in the modeling domain is tracked 
back to specific sources of emissions and boundary conditions to fully 
characterize culpable sources.
    The EPA performed nationwide, state-level ozone source 
apportionment modeling using the CAMx Ozone Source Apportionment 
Technology/Anthropogenic Precursor Culpability Analysis (OSAT/APCA) 
technique \123\ to quantify the contribution of 2017 baseline 
NOX and VOC emissions from all sources in each state to 
projected 2017 ozone concentrations at air quality monitoring sites. 
The EPA continues to believe that the OSAT/APCA tool is the most 
appropriate source apportionment technique for quantifying 
contributions for the purposes of this rule because it is constructed 
to provide source culpability data to inform the design of emissions 
control strategies.\124\ In the source apportionment model run, the EPA 
tracked the ozone formed from each of the following contribution 
categories (i.e., ``tags''):
---------------------------------------------------------------------------

    \123\ As part of this technique, ozone formed from reactions 
between biogenic VOC and NOX with anthropogenic 
NOX and VOC are assigned to the anthropogenic emissions.
    \124\ Comprehensive Air Quality Model with Extensions Version 
6.20 User's Guide. ENVIRON International Corporation, Novato, CA, 
March 2015.
---------------------------------------------------------------------------

     States--anthropogenic NOX and VOC emissions 
from each state tracked individually (emissions from all anthropogenic 
sectors in a given state were combined);
     Biogenics--biogenic NOX and VOC emissions 
domain-wide (i.e., not by state);
     Boundary Concentrations--concentrations transported into 
the modeling domain;
     Tribes--the emissions from those tribal lands with point 
source inventory data in the 2011 NEI (contributions from individual 
tribes were not modeled);
     Canada and Mexico--anthropogenic emissions from sources in 
the portions of Canada and Mexico included in the modeling domain 
(contributions from Canada and Mexico were not modeled separately);
     Fires--combined emissions from wild and prescribed fires 
domain-wide (i.e., not by state); and
     Offshore--combined emissions from offshore marine vessels 
and offshore drilling platforms (i.e., not by state).
    The contribution modeling provided contributions to ozone from 
anthropogenic NOX and VOC emissions

[[Page 74537]]

in each state, individually. The contributions to ozone from chemical 
reactions between biogenic NOX and VOC emissions were 
modeled and assigned to the ``biogenic'' category. The contributions 
from wild fire and prescribed fire NOX and VOC emissions 
were modeled and assigned to the ``fires'' category. The contributions 
from the ``biogenic'', ``offshore'', and ``fires'' categories are not 
assigned to individual states nor are they included in the state 
contributions.
    The CAMx OSAT/APCA model run was performed for the period May 1 
through September 30 using the projected 2017 baseline emissions and 
2011 meteorology for this time period. The hourly contributions \125\ 
from each tag were processed to obtain the 8-hour average contributions 
corresponding to the time period of the 8-hour daily maximum 
concentration on each day in the 2017 model simulation. This step was 
performed for those model grid cells containing monitoring sites in 
order to obtain 8-hour average contributions for each day at the 
location of each site. The model-predicted contributions on the days 
with high modeled concentrations in 2017 were then applied in a 
relative sense to quantify the contributions to the 2017 average design 
value at each site. The resulting 2017 average contributions from each 
tag to each monitoring site in the eastern and western U.S. along with 
additional details on the source apportionment modeling and the 
procedures for calculating contributions can be found in the AQM TSD.
---------------------------------------------------------------------------

    \125\ Contributions from anthropogenic emissions under 
``NOX-limited'' and ``VOC-limited'' chemical regimes were 
combined to obtain the net contribution from NOX and VOC 
anthropogenic emissions in each state.
---------------------------------------------------------------------------

    The average contribution metric is intended to provide a reasonable 
representation of the contribution from individual states to the 
projected 2017 design value, based on modeled transport patterns and 
other meteorological conditions generally associated with modeled high 
ozone concentrations at the receptor. An average contribution metric 
constructed in this manner is beneficial since the magnitude of the 
contributions is directly related to the magnitude of the design value 
at each site.
    The largest contribution from each state in the East to any single 
8-hour ozone nonattainment receptor in a downwind state is provided in 
Table V.E-1. The largest contribution from each state in the East to 
any single 8-hour ozone maintenance-only receptor in a downwind state 
is also provided in Table V.E-1.

Table V.E-1--Largest Contribution to Downwind 8-Hour Ozone Nonattainment
      and Maintenance Receptors for Each State in the Eastern U.S.
------------------------------------------------------------------------
                                              Largest         Largest
                                             downwind        downwind
                                           contribution    contribution
              Upwind state                      to              to
                                           nonattainment    maintenance
                                             receptors       receptors
                                               (ppb)           (ppb)
------------------------------------------------------------------------
AL......................................            0.99            0.73
AR......................................            1.00            2.07
CT......................................            0.00            0.46
DE......................................            0.38            1.32
DC......................................            0.07            0.86
FL......................................            0.71            0.75
GA......................................            0.60            0.62
IL......................................           17.90           23.61
IN......................................            6.49           12.32
IA......................................            0.58            0.81
KS......................................            1.13            1.22
KY......................................            0.68           10.88
LA......................................            3.01            3.20
ME......................................            0.00            0.01
MD......................................            2.12            5.22
MA......................................            0.12            0.06
MI......................................            2.62            1.27
MN......................................            0.40            0.36
MS......................................            0.81            0.79
MO......................................            1.67            3.78
NE......................................            0.35            0.27
NH......................................            0.02            0.02
NJ......................................            9.52           11.90
NY......................................           18.50           18.81
NC......................................            0.51            0.50
ND......................................            0.06            0.22
OH......................................            1.83            3.78
OK......................................            2.24            1.62
PA......................................            9.28           14.61
RI......................................            0.03            0.01
SC......................................            0.15            0.30
SD......................................            0.08            0.12
TN......................................            0.50            1.82
TX......................................            2.18            2.64
VT......................................            0.01            0.01
VA......................................            1.92            5.21
WV......................................            1.04            3.31
WI......................................            0.33            2.52
------------------------------------------------------------------------

2. Application of Screening Threshold
    Once the EPA has quantified the magnitude of the contributions from 
each upwind state to downwind nonattainment and maintenance receptors, 
it then uses an air quality screening threshold to identify upwind 
states that contribute to downwind ozone concentrations in amounts 
sufficient to ``link'' them to the downwind nonattainment and 
maintenance receptors and justify further analysis of potential 
emission reductions to address significant contribution to 
nonattainment and interference with maintenance of the 2008 ozone NAAQS 
in other states. As discussed previously in section IV, the EPA is 
establishing an air quality screening threshold calculated as one 
percent of the 2008 ozone NAAQS. Specifically, the agency has 
calculated an 8-hour ozone value for this air quality threshold of 0.75 
ppb.
    States in the East \126\ whose contributions to a specific receptor 
meet or exceed the screening threshold are considered linked to that 
receptor; those states' ozone contributions and emissions (and 
available emission reductions) are analyzed further, as described in 
section VI, to determine whether and what emissions reductions might be 
required from each state. States in the East whose contributions are 
below the threshold are not included in the rule and are considered to 
make insignificant contributions to projected downwind air quality 
problems. Accordingly, as discussed in section IV, the EPA has 
determined that sources in these states need not make any further 
emissions reductions in order to address the good neighbor provision 
with respect to the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \126\ As discussed in section IV, the EPA's assessment shows 
that there are problem receptors in the West where western states 
contribute amounts greater than or equal to the screening threshold 
used to evaluate eastern states (i.e., 1 percent of the NAAQS), but 
for a number of reasons the EPA is not addressing transport in the 
West in this rulemaking.
---------------------------------------------------------------------------

    Based on the maximum downwind contributions identified in Table 
V.E-1, the following states contribute at or above the 0.75 ppb 
threshold to downwind nonattainment receptors: Alabama, Arkansas, 
Illinois, Indiana, Kansas, Louisiana, Maryland, Michigan, Mississippi, 
Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, 
Virginia, and West Virginia. Based on the maximum downwind 
contributions in Table V.D-1, the following states contribute at or 
above the 0.75 ppb threshold to downwind maintenance-only receptors: 
Arkansas, Delaware, District of Columbia, Florida, Illinois, Indiana, 
Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, 
Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, 
Tennessee, Texas, Virginia, West Virginia, and Wisconsin. In the 
proposed rule North Carolina was linked to a maintenance receptor in 
Baltimore Co., MD (site 240053001). North Carolina was not linked to 
any other receptor in the proposal. In the final rule modeling, this 
site is no longer projected to be a receptor because the 2017 average 
and maximum design values for this site are projected to be below the 
level of the NAAQS, and North Carolina is not linked to any other

[[Page 74538]]

nonattainment or maintenance receptor, based on the final rule 
modeling.
    Comment: The EPA received comments that the version of CAMx used 
for the proposal modeling (CAMx v6.11) did not include the most recent 
halogen chemistry that would affect ozone concentrations in saltwater 
marine atmospheres and transport of ozone from Florida to receptors in 
Texas. The commenter said that the EPA should include this chemistry in 
modeling for the final rule.
    Response: In the EPA's 2017 modeling for the final rule, Florida is 
modeled to have an average contribution at the 0.75 ppb threshold to 
the 2017 design values at two receptors in Houston (i.e., Harris County 
sites 482010024 and 482011034). A report by the CAMx model developer on 
the impact of modeling with the latest CAMx halogen chemistry indicates 
that the updated chemistry results in lower modeled ozone in air 
transported over saltwater marine environments for multiple days. 
Specifically, the report notes that on days with multi-day transport 
across the Gulf of Mexico, modeling with the updated chemistry could 
lower 8-hour daily maximum ozone concentrations by up to 2 to 4 ppb in 
locations in eastern Texas, including Houston. Air parcel trajectories 
for individual days used in the EPA's calculation of the contribution 
from Florida to the Houston receptors confirm that on days with high 
modeled transport from Florida to the receptors in Houston, air travels 
for multiple days over the Gulf of Mexico from Florida before reaching 
the receptors in Houston (see the AQM TSD for more details).
    In the final rule modeling, the EPA was not able to explicitly 
account for the updated chemistry because this chemistry had not yet 
been included by the model developer in the source apportionment tool 
in CAMx at the time the modeling was performed for this rule. However, 
because Florida's maximum contribution to receptors in Houston is 
exactly at the 0.75 ppb threshold, the agency believes that if it had 
performed the final rule modeling with the updated halogen chemistry, 
Florida's contribution would likely be below this threshold. Therefore, 
the EPA is not including Florida in the final rule because it finds 
that Florida's contribution to downwind nonattainment and maintenance 
receptors is insignificant when this updated halogen chemistry is 
considered. As described in the AQM TSD, the source-receptor transport 
pattern between Florida and Houston involving multi-day transport over 
the Gulf of Mexico is unique such that modeling with the updated 
halogen chemistry would not be expected to affect linkages from other 
upwind states to receptors in Houston or any other linkages from upwind 
states to downwind nonattainment and maintenance receptors for this 
final rule.
    Based on the EPA's application of the 0.75 ppb threshold, the 
linkages between each upwind state and downwind nonattainment receptors 
and maintenance-only receptors in the eastern U.S. are provided in 
Table V.E-2 and Table V.E-3, respectively.

      Table V.E-2--Linkages Between Each Upwind State and Downwind
                         Nonattainment Receptors
                           in the Eastern U.S.
------------------------------------------------------------------------
         Upwind state               Downwind nonattainment receptors
------------------------------------------------------------------------
AL............................  Tarrant Co, TX (484392003); Tarrant Co,
                                 TX (484393009).
AR............................  Brazoria Co, TX (480391004).
IL............................  Brazoria Co, TX (480391004); Sheboygan
                                 Co, WI (551170006).
IN............................  Fairfield Co, CT (090019003); Sheboygan
                                 Co, WI (551170006).
KS............................  Tarrant Co, TX (484392003); Sheboygan
                                 Co, WI (551170006).
LA............................  Brazoria Co, TX (480391004); Tarrant Co,
                                 TX (484392003); Tarrant Co, TX
                                 (484393009); Sheboygan Co, WI
                                 (551170006).
MD............................  Fairfield Co, CT (090019003); New Haven
                                 Co, CT (090099002).
MI............................  Fairfield Co, CT (090019003); Sheboygan
                                 Co, WI (551170006).
MS............................  Brazoria Co, TX (480391004).
MO............................  Brazoria Co, TX (480391004); Sheboygan
                                 Co, WI (551170006).
NJ............................  Fairfield Co, CT (090019003); New Haven
                                 Co, CT (090099002).
NY............................  Fairfield Co, CT (090019003); New Haven
                                 Co, CT (090099002).
OH............................  Fairfield Co, CT (090019003); New Haven
                                 Co, CT (090099002).
OK............................  Tarrant Co, TX (484392003); Tarrant Co,
                                 TX (484393009); Sheboygan Co, WI
                                 (551170006).
PA............................  Fairfield Co, CT (090019003); New Haven
                                 Co, CT (090099002).
TX............................  Sheboygan Co, WI (551170006).
VA............................  Fairfield Co, CT (090019003); New Haven
                                 Co, CT (090099002).
WV............................  Fairfield Co, CT (090019003).
------------------------------------------------------------------------

      Table V.E-3--Linkages Between Each Upwind States and Downwind
                       Maintenance-Only Receptors
                           in the Eastern U.S.
------------------------------------------------------------------------
         Upwind state                Downwind maintenance receptors
------------------------------------------------------------------------
AR............................  Allegan Co, MI (260050003); Harris Co,
                                 TX (482011039).
DE............................  Philadelphia Co, PA (421010024).
DC............................  Harford Co, MD (240251001).
IL............................  Jefferson Co, KY (211110067); Harford
                                 Co, MD (240251001); Allegan Co, MI
                                 (260050003); Suffolk Co, NY
                                 (361030002); Hamilton Co, OH
                                 (390610006); Philadelphia Co, PA
                                 (421010024); Harris Co, TX (482011039).
IN............................  Fairfield Co, CT (090013007); Jefferson
                                 Co, KY (211110067); Harford Co, MD
                                 (240251001); Allegan Co, MI
                                 (260050003); Richmond Co, NY
                                 (360850067); Suffolk Co, NY
                                 (361030002); Hamilton Co, OH
                                 (390610006); Philadelphia Co, PA
                                 (421010024).
IA............................  Allegan Co, MI (260050003).
KS............................  Allegan Co, MI (260050003).
KY............................  Harford Co, MD (240251001); Richmond Co,
                                 NY (360850067); Hamilton Co, OH
                                 (390610006); Philadelphia Co, PA
                                 (421010024).
LA............................  Denton Co, TX (481210034); Harris Co, TX
                                 (482010024); Harris Co, TX (482011034);
                                 Harris Co, TX (482011039).

[[Page 74539]]

 
MD............................  Fairfield Co, CT (090010017); Fairfield
                                 Co, CT (090013007); Richmond Co, NY
                                 (360850067); Suffolk Co, NY
                                 (361030002); Philadelphia Co, PA
                                 (421010024).
MI............................  Fairfield Co, CT (090013007); Jefferson
                                 Co, KY (211110067); Harford Co, MD
                                 (240251001); Suffolk Co, NY
                                 (361030002); Hamilton Co, OH
                                 (390610006).
MS............................  Harris Co, TX (482011039).
MO............................  Allegan Co, MI (260050003); Hamilton Co,
                                 OH (390610006); Harris Co, TX
                                 (482011034); Harris Co, TX (482011039).
NJ............................  Fairfield Co, CT (090010017); Fairfield
                                 Co, CT (090013007); Richmond Co, NY
                                 (360850067); Suffolk Co, NY
                                 (361030002); Philadelphia Co, PA
                                 (421010024).
NY............................  Fairfield Co, CT (090010017); Fairfield
                                 Co, CT (090013007).
OH............................  Fairfield Co, CT (090010017); Fairfield
                                 Co, CT (090013007); Jefferson Co, KY
                                 (211110067); Harford Co, MD
                                 (240251001); Richmond Co, NY
                                 (360850067); Suffolk Co, NY
                                 (361030002); Philadelphia Co, PA
                                 (421010024).
OK............................  Allegan Co, MI (260050003); Denton Co,
                                 TX (481210034); Harris Co, TX
                                 (482011034); Harris Co, TX (482011039).
PA............................  Fairfield Co, CT (090010017); Fairfield
                                 Co, CT (090013007); Harford Co, MD
                                 (240251001); Richmond Co, NY
                                 (360850067); Suffolk Co, NY
                                 (361030002).
TN............................  Hamilton Co, OH (390610006);
                                 Philadelphia Co, PA (421010024).
TX............................  Harford Co, MD (240251001); Allegan Co,
                                 MI (260050003); Hamilton Co, OH
                                 (390610006); Philadelphia Co, PA
                                 (421010024).
VA............................  Fairfield Co, CT (090010017); Fairfield
                                 Co, CT (090013007); Harford Co, MD
                                 (240251001); Richmond Co, NY
                                 (360850067); Suffolk Co, NY
                                 (361030002); Philadelphia Co, PA
                                 (421010024).
WV............................  Fairfield Co, CT (090010017); Fairfield
                                 Co, CT (090013007); Harford Co, MD
                                 (240251001); Richmond Co, NY
                                 (360850067); Suffolk Co, NY
                                 (361030002); Hamilton Co, OH
                                 (390610006); Philadelphia Co, PA
                                 (421010024).
WI............................  Allegan Co, MI (260050003).
------------------------------------------------------------------------

    The EPA's modeling to quantify upwind state EGU NOX 
emission budgets, described in section VI, used a more recent IPM 
version 5.15 base case projection as compared to the IPM projection 
used for air quality modeling described here in section V. This more 
recent IPM base case reflects minor updates to IPM model inputs. 
Because this more recent IPM base case projection was not used for the 
air quality modeling for the final rule, the aforementioned results do 
not account for updates which are subsequently included in the budget-
setting analysis. In order to ensure that the budget-setting base case 
projection would not change any conclusions drawn from the air quality 
modeling, the EPA performed an assessment of the budget-setting base 
case using a method that relied on the EPA's air quality modeling 
contribution data as well as projected ozone concentrations from the 
EPA's 2017 illustrative policy case developed for the Regulatory Impact 
Analysis. For more information about these methods, refer to the Ozone 
Transport Policy Analysis Final Rule TSD. This assessment shows no 
change in the set of nonattainment or maintenance receptors identified 
here in section V. In addition to evaluating the status of downwind 
receptors identified for the rule, the EPA evaluated whether the 
budget-setting base case would reduce ozone contributions from upwind 
states to the extent that a previously linked state would have a 
maximum contribution less than the one percent threshold. This 
assessment shows that with the budget-setting base case, all previously 
identified states are expected to remain linked (i.e., contribute 
greater than or equal to one percent of the NAAQS) to at least one 
downwind nonattainment or maintenance receptor. Therefore, using the 
budget-setting base case for the final rule does not impact the scope 
of states linked to downwind nonattainment or maintenance receptors 
relative to the modeled base case.
    Additionally, after the emissions and air quality modeling for the 
final rule were already underway, Pennsylvania published a new RACT 
rule \127\ that would require EGU and non-EGU NOX reductions 
starting on January 1, 2017. The EPA recognizes that the implementation 
of this final state rule will precede the first control period for the 
final CSAPR Update rule. The agency believes it is reasonable to 
evaluate the potential influence of the Pennsylvania RACT rule on 
downwind receptors and state linkages identified for this final rule 
prior to evaluating any further EGU NOX reductions for the 
CSAPR Update rule. Therefore, because Pennsylvania's new RACT rule was 
not represented explicitly in the emission inventory and air quality 
modeling already underway, the EPA first added an evaluation of 
emissions and air quality impacts expected to result from 
Pennsylvania's RACT rule \128\ before then evaluating air quality 
impacts of the further reductions that might be required under the 
CSAPR Update rule at each uniform control stringency identified. The 
EPA estimates that, for the adjusted historical emission level 
including Pennsylvania RACT, no nonattainment or maintenance receptors 
identified in section V dropped below 76 ppb and Pennsylvania's 
contribution to downwind ozone problems did not drop below one percent 
of the NAAQS. Therefore, the identified receptors and linked upwind 
states in section V remain unchanged.
---------------------------------------------------------------------------

    \127\ Published April 23, 2017 (http://www.pabulletin.com/secure/data/vol46/46-17/694.html).
    \128\ For more information about the EPA's assessment of 
Pennsylvania's RACT rule, see the Pennsylvania RACT memo to the 
docket for this rulemaking.
---------------------------------------------------------------------------

VI. Quantifying Upwind State EGU NOX Emission Budgets To 
Reduce Interstate Ozone Transport for the 2008 NAAQS

A. Introduction

    This section describes the EPA's methodology for quantifying 
emission budgets to reduce interstate emission transport for the 2008 
ozone NAAQS. The CSAPR Update emission budgets limit allowable 
emissions and represent the emission levels that remain after each 
state makes EGU NOX emission reductions that are necessary 
to reduce interstate ozone transport for the 2008 NAAQS. The EPA's 
assessment of upwind state emission budgets in this rule reflects 
analysis of uniform NOX

[[Page 74540]]

emission control stringency. Each level of uniform NOX 
control stringency represents an estimated marginal cost per ton of 
NOX reduced and is characterized by a set of pollution 
control measures. The EPA applies a multi-factor test, the same multi-
factor test that was used in the original CSAPR,\129\ to evaluate 
increasing levels of uniform NOX control stringency. The 
multi-factor test considers cost, available emission reductions, and 
downwind air quality impacts to determine the appropriate level of 
uniform NOX control stringency that addresses the impacts of 
interstate transport on downwind nonattainment or maintenance 
receptors. The uniform NOX emission control stringency, 
represented by marginal cost, also serves to apportion the reduction 
responsibility among collectively-contributing upwind states. This 
approach to quantifying upwind state emission reduction obligations 
using uniform cost was reviewed by the Supreme Court in EPA v. EME 
Homer City Generation, which held that using such an approach to 
apportion emission reduction responsibilities among upwind states that 
are collectively responsible for downwind air quality impacts ``is an 
efficient and equitable solution to the allocation problem the Good 
Neighbor Provision requires the Agency to address.'' 134 S. Ct. at 
1607.
---------------------------------------------------------------------------

    \129\ See CSAPR, Final Rule, 76 FR 48208 (August 8, 2011).
---------------------------------------------------------------------------

    There are four stages in developing the multi-factor test to 
quantify upwind state emission budgets as to the 2008 ozone NAAQS: (1) 
Identify levels of uniform NOX control stringency 
(represented by an estimated marginal cost of control that is applied 
across linked upwind states); (2) evaluate NOX emission 
reductions and corresponding NOX emission budgets (i.e., 
remaining allowable emissions after reductions are made) at each 
identified level of uniform control stringency; (3) assess air quality 
improvements resulting at each level of control; and (4) select a level 
of control stringency by applying the multi-factor test to consider 
cost, available emission reductions, and downwind air quality impacts, 
including ensuring that the budgets do not unnecessarily over-control 
relative to the contribution threshold or downwind air quality.
    The multi-factor evaluation informs the EPA's determination of 
appropriate EGU NOX ozone season emission budgets necessary 
to reduce emissions that significantly contribute to nonattainment or 
interfere with maintenance of the 2008 ozone NAAQS for the 2017 ozone 
season and subsequent control periods. For most CSAPR Update states, 
the emission reductions achieved through implementation of these 
budgets will partially satisfy the EPA's good neighbor FIP obligation 
to fully prohibit emissions that contribute to downwind air quality 
problems with respect to the 2008 ozone NAAQS pursuant to CAA section 
110 (a)(2)(D)(i)(I).\130\ For one state, Tennessee, the emission 
reductions achieved through implementation of its emission budget will 
fully satisfy the EPA's good neighbor FIP obligation for the 2008 ozone 
NAAQS. Section VII describes the EPA's approach to implementing these 
emission budgets through updates to the CSAPR NOX ozone 
season trading program.
---------------------------------------------------------------------------

    \130\ See section IV.B.4 for further discussion of this partial 
remedy.
---------------------------------------------------------------------------

B. Levels of Uniform Control Stringency

    The following subsections describe the EPA's analysis to establish 
levels of uniform control stringency for EGU and non-EGU point sources. 
Each level of uniform NOX control stringency is 
characterized by a set of pollution control measures and represents an 
estimated marginal cost per ton of NOX reduced. This section 
summarizes the EPA's findings when assessing NOX reduction 
strategies and cost.
    As described in section IV of this preamble, the EPA is quantifying 
near-term ozone season NOX emission reductions to reduce 
interstate emission transport for the 2008 ozone NAAQS in order to 
assist downwind states with meeting the impending July 20, 2018 
Moderate area attainment date. Although this final rule does not 
require or impose any specific technology standards on affected 
sources, the EPA limited its analysis of potential NOX 
reductions in each upwind state to those that could be feasibly 
implemented for the 2017 ozone season, which is the last full ozone 
season prior to the July 20, 2018 attainment date. This approach 
ensures that the emission budgets are achievable for the 2017 ozone 
season. The EPA did not further analyze potential NOX 
reductions from strategies that were deemed infeasible to implement for 
the 2017 ozone season for purposes of quantifying upwind state emission 
budgets, but the EPA anticipates considering those controls in any 
future action that may be necessary to address upwind states' full 
emission reduction obligations with respect to the 2008 ozone standard. 
For more details on these assessments, refer to the EGU NOX 
Mitigation Strategies Final Rule TSD and the Assessment of Non-EGU 
NOX Emission Controls, Cost of Controls, and Time for 
Compliance Final Rule TSD in the docket for this rule.
1. EGU NOX Mitigation Strategies
    In developing levels of uniform control stringency, the EPA 
considered all NOX control strategies that are widely in use 
by EGUs: Fully operating existing Selective Catalytic Reduction (SCR), 
including both optimizing NOX removal by existing, 
operational SCRs and turning on and optimizing existing idled SCRs; 
turning on existing idled SNCRs; installing state-of-the-art 
NOX combustion controls; shifting generation to existing 
units with lower-NOX emission rates within the same state; 
and installing new SCRs and SNCRs. For the reasons explained in the EGU 
NOX Mitigation Strategies Final Rule TSD, the EPA determined 
that these EGU NOX mitigation strategies are feasible for 
the 2017 ozone season, with the exception of installing new SCRs or 
SNCRs.
    The following subsections describe the EPA's identification of 
uniform levels of NOX emission control stringency. Each 
level of uniform NOX control stringency represents an 
estimated marginal cost per ton of NOX reduced and is 
characterized by a set of pollution control measures. The levels of 
NOX control stringency identified are used in the EPA's 
multi-factor test described later on.
    a. $800 per ton, representing optimizing existing and operating 
SCRs. Optimizing NOX removal for existing and operating SCRs 
can significantly reduce EGU NOX emissions quickly, using 
investments in pollution control technologies that have already been 
made. SCRs can achieve up to 90 percent reduction in EGU NOX 
with sufficient reagent and installed catalyst. These controls are in 
widespread use across the U.S. power sector. In the 22 state CSAPR 
Update region, approximately 53 percent of coal-fired EGU capacity and 
76 percent of natural gas combined cycle (NGCC) EGU capacity is 
equipped with SCR. Recent power sector data reveal that some SCR 
controls are being underused. In some cases, SCR controls are not fully 
operating (i.e., the controls could be operated at a greater 
NOX removal rate).\131\ As described later on in this 
preamble, the EPA finds that optimizing existing and operating SCRs is 
a readily

[[Page 74541]]

available approach for EGUs to reduce NOX emissions.
---------------------------------------------------------------------------

    \131\ This assessment is available in the EGU NOX 
Mitigation Strategies Final Rule TSD.
---------------------------------------------------------------------------

    The EPA identifies $800 per ton as a level of uniform control 
stringency that represents optimizing existing SCR controls that are 
already operating to some extent. The EPA's final analysis for the 
CSAPR Update rule is informed by comment on the proposal.\132\ This 
cost level is premised on variable costs, specifically additional 
reagent (i.e., ammonia or urea) and additional catalyst, being the 
primary costs incurred for optimizing an existing SCR unit that is 
already operating to some extent. More information about this analysis 
is available in the EGU NOX Mitigation Strategies Final Rule 
TSD.
---------------------------------------------------------------------------

    \132\ The EPA proposed that $500 per ton was a level of uniform 
control stringency that represented optimizing existing SCR controls 
that are already operating to some extent. The EPA received comments 
suggesting that its cost estimates should be revised. Details of the 
EPA's final cost analysis can be found in the EGU NOX 
Mitigation Strategies Final Rule TSD.
---------------------------------------------------------------------------

    b. $1,400 per ton, representing turning on idled existing SCRs and 
installing state-of-the-art NOX combustion controls.
    Turning on idled, existing SCRs also can significantly reduce EGU 
NOX emissions quickly, using investments in pollution 
control technologies that have already been made. Recent power sector 
data reveal that, in some cases, SCR controls have been idled for 
several seasons or years. The EPA finds that turning on idled SCRs is a 
readily available approach for EGUs to reduce NOX emissions.
    The EPA identifies $1,400 per ton as a level of uniform control 
stringency that represents turning on idled SCR controls. The EPA's 
analysis of this level of uniform control stringency for the final 
CSAPR Update is informed by comment on the proposal.\133\ While the 
costs of optimizing existing, operational SCRs include only variable 
costs (as described earlier), the cost of bringing existing SCR units 
that are currently idled back into service considers both variable and 
fixed costs. Variable and fixed costs include labor, maintenance and 
repair, reagent, parasitic load, and ammonia or urea. The EPA performed 
an in-depth cost assessment for all coal-fired units with SCRs. More 
information about this analysis is available in the EGU NOX 
Mitigation Strategies Final Rule TSD, which is found in the docket for 
this rule.
---------------------------------------------------------------------------

    \133\ The EPA proposed that $1,300 per ton was a level of 
uniform control stringency that represented turning on idled SCR 
controls. The EPA received comments suggesting that its cost 
estimates should be revised. Details of the EPA's final cost 
analysis can be found in the EGU NOX Mitigation 
Strategies Final Rule TSD.
---------------------------------------------------------------------------

    The EPA also includes installing state-of-the-art combustion 
controls in the level of uniform control stringency represented by 
$1,400 per ton. State-of-the-art combustion controls such as low-
NOX burners (LNB) and over-fire air (OFA) can be installed 
quickly, and can significantly reduce EGU NOX emissions. In 
the 22 state CSAPR Update Region, approximately 99 percent of coal-
fired EGU capacity in the East is equipped with some form of combustion 
control. Combustion controls alone can achieve NOX emission 
rates of 0.15 to 0.50 lbs/mmBtu.\134\ Once installed, combustion 
controls reduce NOX emissions at all times of EGU operation. 
The EPA finds that the installation of state-of-the-art combustion 
controls is a readily available approach for EGUs to reduce 
NOX emissions.
---------------------------------------------------------------------------

    \134\ Details of the EPA's assessment of state-of-the-art 
NOX combustion controls are provided in the EGU 
NOX Mitigation Strategies Final Rule TSD.
---------------------------------------------------------------------------

    The cost of installing state-of-the-art combustion controls per ton 
of NOX reduced is dependent on the combustion control type 
and unit type. The EPA estimates the cost per ton of state-of-the-art 
combustion controls to be $500 per ton to $1,200 per ton of 
NOX removed. In specifying a representative marginal cost at 
which state-of-the-art combustion controls are widely available, the 
EPA uses the conservatively high end of this identified range of costs, 
$1,200 per ton. Because $1,200 per ton is similar in terms of EGU 
NOX control stringency to $1,400 per ton, for purposes of 
the analysis that follows, the EPA includes installing state-of-the-art 
NOX combustion controls in the uniform control stringency 
level represented by $1,400 per ton of NOX removed.\135\
---------------------------------------------------------------------------

    \135\ As described in section VI, the EPA's assessment of 
emission budgets reflecting uniform NOX control 
stringency represented by $1,400 per ton does not over-control as to 
any upwind state. Only one state, Tennessee, fully resolves its 
obligation at this level of control stringency and Tennessee's 
emission budget is exactly the same at $800 per ton and $1,400 per 
ton, indicating that it was not necessary for the agency to evaluate 
a distinct level of uniform NOX control stringency linked 
solely installing state-of-the-art NOX combustion 
controls.
---------------------------------------------------------------------------

    c. $3,400 per ton, representing turning on idled existing SNCRs. 
Turning on idled existing SNCRs can also significantly reduce EGU 
NOX emissions quickly, using investments in pollution 
control technologies that have already been made. SNCRs can achieve up 
to 25 percent reduction in EGU NOX emissions (with 
sufficient reagent). These controls are in widespread use across the 
U.S. power sector. In the 22 state CSAPR Update region, approximately 
10 percent of coal-fired EGU capacity is equipped with SNCR. Recent 
power sector data reveal that, in some cases, SNCR controls have been 
idled for several seasons or years. The EPA finds that turning on idled 
SNCRs is a readily available approach for EGUs to reduce NOX 
emissions
    The EPA identifies $3,400 per ton as a level of uniform control 
stringency that represents turning on and fully operating idled SNCRs. 
For existing SNCRs that have been idled, unit operators may need to 
restart payment of some fixed and variable costs associated with these 
controls. Fixed and variable costs include labor, maintenance and 
repair, reagent, parasitic load, and ammonia or urea. The majority of 
the total fixed and variable operating costs for SNCR is related to the 
cost of the reagent used (e.g., ammonia or urea) and the resulting cost 
per ton of NOX reduction is sensitive to the NOX 
rate of the unit prior to SNCR operation. For more details on this 
assessment, refer to the EGU NOX Mitigation Strategies Final 
Rule TSD in the docket for this rule.
    d. $5,000 per ton, representing installing new SCRs. The amount of 
time to retrofit with new SCR exceeds the implementation timeframes 
considered in this final rule. It would therefore not be feasible to 
retrofit new SCR to achieve EGU NOX reductions for the 2017, 
or even 2018, ozone season. Exclusion of new SCR installation from this 
analysis reflects a determination only that these strategies are 
infeasible for implementation of this rule, not a determination that 
they are infeasible or inappropriate for consideration of 
NOX reduction potential to address interstate emission 
transport over a longer timeframe. See EGU NOX Mitigation 
Strategies Final Rule TSD for discussion of feasibility of EGU 
NOX controls for the 2017 ozone season.
    The EPA identifies $5,000 per ton as a level of uniform control 
stringency that represents retrofitting a unit with new SCR technology. 
The EPA evaluated this level of uniform NOX emission control 
stringency, with the limitation that no new SCR systems were installed 
as a result of the EPA's analysis for the 2017 ozone season. The agency 
examined the cost for retrofitting a unit with new SCR technology, 
which typically attains controlled NOX rates of 0.07 lbs/
mmBtu, or less. Because this EGU NOX reduction strategy is 
prospective and the EPA does not know the exact specifications of EGUs 
that may find this NOX reduction strategy feasible and cost-
effective beyond 2017, it performed a cost analysis using a 
representative electric generating unit.

[[Page 74542]]

A coal-fired EGU with an uncontrolled NOX rate of 0.35 lbs/
mmBtu, retrofitted with an SCR to a lower emission rate of 0.07 lbs/
mmBtu, results in a cost of approximately $5,000 per ton of 
NOX removed. For more details on this assessment, refer to 
the EGU NOX Mitigation Strategies Final Rule TSD in the 
docket for this rule.
    e. $6,400 per ton, representing installing new SNCRs. The amount of 
time to retrofit with new SNCR exceeds the implementation timeframes 
considered in this final rule. It would therefore not be feasible to 
retrofit new SNCR to achieve EGU NOX reductions for the 
2017, or even 2018, ozone season. Exclusion of new SNCR installation 
from this analysis reflects a determination only that these strategies 
are infeasible for implementation of this rule, not a determination 
that they are infeasible or inappropriate for consideration of 
NOX reduction potential to address interstate emission 
transport over a longer timeframe. See EGU NOX Mitigation 
Strategies Final Rule TSD for discussion of feasibility of EGU 
NOX controls for the 2017 ozone season.
    The EPA identifies $6,400 per ton as a level of uniform control 
stringency that represents retrofitting a unit with new SNCR 
technology. The EPA evaluated this level of uniform NOX 
emission control stringency, with the limitation that no new SNCR 
systems were installed as a result of the EPA's analysis for the 2017 
ozone season. SNCR technology provides owners a low capital cost option 
for reducing NOX emissions, albeit at the expense of higher 
operating costs. The higher cost per ton of NOX removed 
reflects this technology's lower removal efficiency, which results in 
greater reagent consumption and escalates the cost of operating the 
SNCR relative to tons of NOX removed. Owners may favor this 
technology to meet certain NOX performance requirements for 
certain units. Because this EGU NOX reduction strategy is 
prospective and the EPA does not know the exact specifications of EGUs 
that may find this NOX reduction strategy feasible and cost-
effective beyond 2017, the EPA performed a cost analysis using a 
representative electric generating unit. For a unit with a 40 percent 
capacity factor and using a NOX emission reduction 
assumption of 25 percent, the cost is $6,500 per ton of NOX 
removed. For more details on this assessment, refer to the EGU 
NOX Mitigation Strategies Final Rule TSD in the docket for 
this rule.
2. Non-EGU NOX Mitigation Strategies and Feasibility for the 
2017 Ozone Season
    The EPA is not at this time addressing non-EGU emission reductions 
in its efforts to reduce interstate emission transport for the 2017 
ozone season with respect to the 2008 ozone NAAQS. As compared to EGUs, 
there is greater uncertainty in the EPA's current assessment of non-EGU 
point-source NOX mitigation potential and the EPA believes 
more time is required for states and the EPA to improve non-EGU point 
source data and pollution control assumptions before including related 
reduction potential in this regulation. Further, the 2017 ozone season 
implementation timeframe for this rulemaking would limit the number of 
non-EGU source categories that could potentially implement 
NOX emission reductions within that timeframe. Finally, 
using the best information available to the EPA, which was submitted 
for public comment with the proposed CSAPR Update, the EPA finds that 
there are more non-EGU point sources than EGU sources and that these 
sources on average emit less relative to EGUs. The implication of these 
fleet characteristics is that there are more individual sources to 
control and there are relatively fewer emission reductions available 
from each source. Considering these factors, the EPA finds substantial 
uncertainty regarding whether significant aggregate NOX 
mitigation is achievable from non-EGU point sources for the 2017 ozone 
season.
    In assessing the potentially available 2017 ozone season 
NOX emission reductions from non-EGU sources, the EPA 
identified potential controls, the reduction potential of each control, 
the associated cost of each control using a nationwide average, and the 
timing for the installation of control. The EPA then evaluated the 
cost-effective controls that could be implemented by the 2017 ozone 
season. While there may be a few categories where cost-effective 
installation of non-EGU NOX controls on a limited number of 
sources would be feasible by the 2017 ozone season, the EPA does not 
observe that significant, certain, and meaningful non-EGU 
NOX reduction is in fact feasible for the 2017 ozone season. 
For example, one factor influencing uncertainty is that the EPA lacks 
sufficient information on the capacity and experience of suppliers and 
major engineering firms' supply chains to conclude that they would be 
able to execute the project work for non-EGU sources in the limited 
timeframe of this rule.
    The EPA has evaluated the potential for ozone season NOX 
reductions from non-EGU sources. A detailed discussion of this 
assessment was provided in the draft Non-EGU NOX Mitigation 
Potential TSD, which was located in the docket for the proposed rule 
and was available for comment. The EPA did not receive any comments 
that changed its conclusions in the draft Non-EGU NOX 
Mitigation Potential TSD. As commenters generally agreed with the EPA's 
assessment with respect to the regulation of non-EGUs in this rule, the 
TSD will be finalized with no substantive change from the proposal TSD. 
This TSD contains information shared at the proposal on non-EGU source 
category emissions, the EPA's tools for estimating emission reductions 
from non-EGU categories, brief discussions of available controls, 
costs, potential emission reductions for specific source categories and 
efforts, to date, to review and refine its estimates for certain 
states. There were no significant comments on the TSD, and the minor 
comments that were received will be addressed in the response to 
comments document. The EPA views this non-EGU assessment as a step 
toward future efforts to evaluate non-EGU categories that may be 
necessary to fully quantify upwind states' significant contribution to 
nonattainment or interference with maintenance.
    Although the EPA is not analyzing non-EGU reductions for purposes 
of quantifying emission budgets in this final action, future EPA 
rulemakings or guidance could revisit the potential for reductions from 
non-EGU sources.
3. Summary of EGU Uniform Control Stringency Represented by Marginal 
Cost of Reduction (Dollar per Ton)
    Table VI.B-1 lists the final EGU uniform NOX emission 
control stringencies, represented by marginal cost per ton of 
NOX reduced, that the EPA evaluated and the NOX 
reduction strategy or policy that identified each uniform cost level.

[[Page 74543]]

 Table VI.B-1--Levels of EGU Uniform NOX Emission Control Stringency and
                      Representative Marginal Cost
------------------------------------------------------------------------
  Levels of EGU uniform  control
            stringency                 Representative EGU NOX controls
------------------------------------------------------------------------
$800 per ton......................  Widespread availability of
                                     optimizing existing and operating
                                     SCRs.
$1,400 per ton....................  Widespread availability of turning
                                     on idled existing SCRs and
                                     installing state-of-the-art
                                     combustion controls.
$3,400 per ton \136\..............  Widespread availability of turning
                                     on idled existing SNCRs.
$5,000 per ton....................  Widespread availability of
                                     installing new SCRs.\137\
$6,400 per ton....................  Widespread availability of
                                     installing new SNCRs.\138\
------------------------------------------------------------------------

    The EPA finds that $800 per ton is the lowest marginal cost at 
which any specific EGU pollution control technology (i.e., optimizing 
existing and operating SCRs) is available and feasible in the timeframe 
for implementing this rule. The EPA's final analysis shows that no 
specific EGU NOX reduction technologies are available at a 
lower cost than $800 per ton. The implication of this finding is that 
evaluating $500 per ton, which was assessed at proposal, for the final 
rule would not yield any EGU NOX reduction potential 
attributable to specific pollution control technologies. As such, $800 
per ton is the lowest uniform cost evaluated for the final CSAPR 
Update.
---------------------------------------------------------------------------

    \136\ The EPA notes that this cost is similar to the 
NOX SIP Call ozone season NOX cost threshold, 
adjusted to 2014$.
    \137\ The cost assessment for new SCR is available in the EGU 
NOX Mitigation Strategies Final Rule TSD. While chosen to 
define a cost-threshold, new SCRs were not considered a feasible 
control on the compliance timeframe for this rule.
    \138\ The cost assessment for new SNCR is available in the EGU 
NOX Mitigation Strategies Final Rule TSD. While chosen to 
define a cost-threshold, new SNCRs were not considered a feasible 
control on the compliance timeframe for this rule.
---------------------------------------------------------------------------

    In the CSAPR Update proposal, the EPA also evaluated $10,000 per 
ton as a uniform level of control stringency. The EPA identified this 
level of control stringency as an upper bound for the analysis 
conducted for the proposed rule. However, the proposal's analysis 
showed that no specific EGU NOX reduction technologies were 
available at a higher cost than $6,400 per ton. The EPA did not receive 
comment on the proposal indicating that there are additional EGU 
NOX reduction technologies available between $6,400 per ton 
and $10,000 per ton. As a result, the EPA did not evaluate $10,000 per 
ton as a uniform level of control stringency for the final CSAPR 
Update.
    The EPA finds that the selection of uniform cost thresholds 
presented in Table VI.B-1 is appropriate to evaluate potential EGU 
NOX reductions and corresponding emission budgets to address 
interstate emission transport for the 2008 ozone NAAQS. The EPA has 
identified cost thresholds where control technologies are widely 
available and therefore where the most significant incremental emission 
reduction potential is expected. The EPA did not evaluate additional 
cost thresholds in between those selected because this analysis would 
not yield meaningful insights as to NOX reduction potential 
as the EPA did not identify any control technologies that become 
available at such cost thresholds. Because these cost thresholds are 
linked to costs at which EGU NOX mitigation strategies 
become widely available in each state, the cost thresholds represent 
the break points at which the most significant step-changes in EGU 
NOX mitigation are expected.

C. EGU NOX Reductions and Corresponding Emission Budgets

    The EPA evaluated the EGU NOX reduction potential for 
each identified uniform level of NOX control stringency 
represented by marginal cost. This analysis applied the uniform control 
stringency to EGUs in each upwind state NOX using IPM 
version 5.15. The EPA then used the modeled EGU NOX 
reduction potential in combination with monitored EGU data to quantify 
emission budgets for each uniform level of NOX control 
stringency. The next step of the process (described in the next 
subsection) evaluated air quality impacts of each set of emission 
budgets.
1. Evaluating EGU NOX Reduction Potential
    The EPA evaluates emission reductions from all EGU NOX 
mitigation strategies available at each level of uniform NOX 
control stringency. However, two components of this assessment are key 
to the level of reductions available and/or received significant 
comment at proposal. These components are the achievable NOX 
rate for units with SCR and shifting generation to lower 
NOX-emitting or zero-emitting EGUs.
    One key input to the EPA's analysis of EGU NOX reduction 
potential is the NOX emission rate that can be achieved for 
EGUs with SCRs that are not optimized or are idled. This input 
influences the EPA's estimate of EGU NOX reduction potential 
and corresponding NOX ozone season emission budgets. To 
estimate EGU NOX reduction potential from optimizing or 
turning-on idled SCRs, the EPA considers the delta between the non-
optimized or idled NOX emission rates and an achievable 
operating and optimized SCR NOX emission rate. Assuming a 
higher achievable EGU NOX emission rate for SCRs yields a 
higher emission budget and assuming a lower achievable EGU 
NOX emission rate for SCRs yields a lower emission budget. 
For the final rule analysis, the EPA finds that an achievable 2017 EGU 
NOX ozone season emission rate for units with SCR is 0.10 
lbs/mmBtu. To determine this rate, the EPA evaluated coal-fired EGU 
NOX ozone season emission data from 2009 through 2015 and 
calculated an average NOX ozone season emission rate across 
the fleet of coal-fired EGUs with SCR for each of these seven years. 
The EPA finds it prudent to not consider the lowest or second lowest 
ozone season NOX rates, which may reflect new SCR systems 
that have all new components (e.g., new layers of catalyst). Data from 
these new systems are not representative of ongoing achievable 
NOX rates considering broken-in components and routine 
maintenance schedules. The EPA believes that the third lowest fleet-
wide average coal-fired EGU NOX rate for EGUs with SCR is 
representative of ongoing achievable emission rates. The EPA observes 
that the third lowest fleet-wide average coal-fired EGU NOX 
rate for EGUs with SCR is 0.10 lbs/mmBtu. The EPA has implemented 0.10 
lbs/mmBtu as an EGU NOX rate ceiling in IPM. For more 
information about how this rate is implemented in IPM, see the EPA's 
IPM documentation, which can be found in the docket for this rulemaking 
or at www.epa.gov/powersectormodeling.
    The EPA's analysis of SCR NOX rates for the final rule 
differs from the proposal in two ways. First, the evaluation focuses on 
a more recent timeframe for analysis--2009 through 2015 compared to 
2003 through 2014. The EPA believes this change is reasonable because 
there have been

[[Page 74544]]

significant shifts in the power sector since 2003, particularly with 
respect to power sector economics (e.g., lower natural gas prices in 
response to shale gas development) and environmental regulations (e.g., 
CAIR and CSAPR). Because of these changes, the EPA considers it 
reasonable to evaluate SCR performance focusing on more recent 
historical data that better represent the current landscape of 
considerations affecting the power sector. The EPA chose 2009 because 
that is the first year of CAIR NOX annual compliance. 
Second, the analysis focuses on the third best ozone season average 
rate as compared to the second best rate at proposal. The EPA believes 
that the second best rate, as discussed previously, could continue to 
capture disproportionately new SCR components and does not necessarily 
reflect achievable ongoing NOX emission rates. Therefore, 
the EPA is finalizing analysis using the third best rate.
    The proposed CSAPR Update put forward 0.075 lbs/mmBtu as a widely 
achievable EGU NOX ozone season emission rate for coal-fired 
EGUs with SCR. As noted in the previous paragraph, the EPA has 
reassessed this assumption, partly in response to comment received on 
the proposal. Some of the key comments are summarized later and 
additional detail can be found in the Assessment of Non-EGU 
NOX Emission Controls, Cost of Controls, and Time for 
Compliance Final TSD and the Response to Comments Document.
    Comment: Some commenters suggested that the EPA's proposed coal-
fired EGU NOX ozone season emission rate of 0.075 lbs/mmBtu 
for units with SCR was too low and did not represent an achievable 
NOX rate for the 2017 ozone season. These commenters 
provided several examples of changes in power sector economics that 
have significantly changed EGU dispatch in recent years and also 
changes in compliance planning for environmental regulations. These 
commenters suggested that the EPA should consider a shorter time-frame 
for evaluating SCR operation.
    Response: The EPA acknowledges that various factors, both economic 
and regulatory, have influenced the power sector in recent years. The 
EPA believes that the achievable SCR NOX rate and underlying 
assumptions that it is finalizing in this action are generally 
responsive to these comments. As discussed previously, for the purposes 
of evaluating EGU NOX reduction potential, the EPA uses an 
EGU NOX emission rate for units with SCR of 0.10 lbs/mmBtu 
as a ceiling in the IPM model. This rate reflects a generally 
achievable NOX emission rate that is appropriate for the 
EPA's budget-setting purposes. The use of this rate to establish 
emission budgets was supported in comments by many power sector 
companies and their representative groups.
    Comment: Other commenters noted that many coal-fired EGUs with SCR 
have demonstrated the ability to achieve NOX emission rates 
of 0.06 lbs/mmBtu or lower. These commenters suggested that the EPA 
should use SCR NOX ozone season emission rates that are 
lower than 0.075 lbs/mmBtu in quantifying emission budgets.
    Response: The EPA acknowledges that many individual coal-fired EGUs 
with SCR have achieved rates lower than 0.075 lbs/mmBtu. However, in 
evaluating a regional environmental challenge (i.e., interstate 
transport of ozone pollution) and designing an analysis of EGU 
NOX reduction potential in the many states in that region, 
the EPA believes it is prudent to consider a range of demonstrated 
NOX emission rates and believes that an ozone season average 
is a more reasonable approach for identifying NOX reduction 
potential using a uniform standard.
    Another key input to the EPA's analysis of EGU NOX 
reduction potential is shifting generation to existing, lower 
NOX-emitting or zero-emitting EGUs within the same state. 
Shifting generation to existing lower NOX-emitting or zero-
emitting EGUs within the same state would be a readily available 
approach for EGUs to reduce NOX emissions, and the EPA 
included this NOX mitigation strategy in quantifying EGU 
NOX reduction potential in the analyses informing this rule.
    Regarding feasibility of shifting generation to existing lower-
NOX emitting or zero-emitting units within the same state 
for the 2017 ozone season, the EPA finds that this EGU NOX 
reduction strategy is consistent with demonstrated EGU dispatch 
behavior. Power generators produce a relatively fungible product, 
electricity, and they operate within an interconnected electricity grid 
in which electricity generally cannot be stored in large volumes, so 
generation and use must be balanced in real time. See FERC v. Elec. 
Power Supply Ass'n, 136 S. Ct. 760, 768 (2016). Because of their 
uniquely interconnected and interdependent operations--so much so that 
the utility sector has been likened to a ``complex machine'' \139\--
power plants shift generation in the normal course of business. Every 
time a power plant either increases or decreases operations, that has 
implications for the overall amount of pollution emitted by other 
plants within the interconnected electricity grid, because those other 
plants must commensurately decrease or increase their operations to 
balance supply with demand. As a result, by shifting some generation 
from higher-emitting to lower-emitting plants, sources can achieve an 
effective degree of emission limitation that might otherwise have 
required them to make much more expensive investments in end-of-stack 
technologies at their particular plants. As a result, sources would 
likely use shifting generation measures to comply with standards 
whenever doing so is less expensive than end-of-stack controls, even if 
EPA considered only end-of-stack controls in determining those 
standards. Further, the flexibility that power plants have to shift 
generation in establishing dispatch patterns is synergistic with the 
flexibility afforded by implementation through an allowance trading 
program, as the EPA is finalizing in this CSAPR Update. Allowance 
prices can be seamlessly factored into dispatch decisions, which 
provides for an efficient approach to administering shifting generation 
for compliance with the CSAPR Update requirements, if EGUs so choose. 
For these reasons, it is therefore reasonable for the EPA to consider 
that sources may cost-effectively address their emissions through 
arrangements that incorporate cleaner forms of power generation.
---------------------------------------------------------------------------

    \139\ Phillip F. Schewe, The Grid: A Journey Through the Heart 
of Our Electrified World 1 (2007). The integrated nature of the 
utility power sector is well-recognized. See, e.g., CAA section 
404(f)(2)(B)(iii)(I); New York v. Federal Energy Regulatory 
Commission, 535 U.S. 1, at 7 (2002).
---------------------------------------------------------------------------

    For establishing emission budgets for the CSAPR Update, the EPA 
finds that shifting specified, small amounts of generation to existing 
lower NOX-emitting or zero-emitting units could occur 
consistent with the near-term 2017 implementation timing for this 
rule.\140\ As a proxy for limiting the amount of generation shifting 
that is feasible for the 2017 ozone season, the EPA limited its 
assessment to shifting generation to other EGUs within the same state. 
The EPA believes that limiting its evaluation of shifting generation 
(which we sometimes refer to as re-dispatch) to the amount that could

[[Page 74545]]

occur within the state transfer represents a conservatively small 
amount of generation-shifting because it does not capture further 
potential emission reductions that would occur if generation was 
shifted more broadly among units in different states within the 
interconnected electricity grid, which the EPA believes is feasible 
over time. However, this broader, interstate generation-shifting may 
involve greater complexity--due to, for example, the greater amount of 
demand, larger number of sources, and greater amount of infrastructure 
involved--and therefore may be more challenging to implement in the 
near term. Limiting our consideration of such generation-shifting 
potential to a small percentage of total generation-shifting potential 
is consistent with the limited amount of time that states and sources 
have to achieve the required reductions. EPA relied on the in-state 
limitation as a reasonable indication of the amount of EGU 
NOX reduction potential from shifting generation to existing 
lower NOX-emitting or zero-emitting units that states and 
sources can readily implement by the 2017 summer ozone season. Of 
course, sources are not limited to generation-shifting within state, 
and instead are free to shift generation across state lines to comply 
with the CSAPR Update requirements.
---------------------------------------------------------------------------

    \140\ The EGU NOX Mitigation Strategies Final Rule 
TSD provides data indicating the extent to which electricity 
generation shifted from one ozone season to another in recent years.
---------------------------------------------------------------------------

    Regarding the cost of the amount of generation-shifting that would 
result from shifting generation to existing lower-NOX 
emitting or zero-emitting units within the same state, the EPA finds 
that this NOX reduction strategy occurs on a cost continuum 
rather than at a discrete marginal cost per ton of NOX. In 
tracking power sector development over time, the EPA observes that 
shifting generation to existing lower-NOX emitting or zero-
emitting EGUs occurs in response to economic factors such as fuel 
costs. Similar to this response to economic factors, the EGU 
NOX reduction potential analysis conducted for the CSAPR 
Update rule shows shifting generation occurring on a continuum in 
response to environmental policy, represented by marginal cost of 
NOX reductions. In other words, unlike the retrofit 
pollution control technologies that are evaluated in this CSAPR Update, 
there is no discrete cost at which this EGU NOX mitigation 
strategy is singularly widely available. Rather, relatively lower 
marginal NOX costs incentivize some EGU NOX 
reductions from shifting generation, while relatively higher marginal 
NOX costs incentivize more EGU NOX reductions 
from shifting generation. The EPA quantified NOX reduction 
potential from this EGU NOX reduction strategy at each 
uniform NOX control stringency level analyzed. As described 
in the EGU NOX Mitigation Strategies Final Rule TSD, the 
amount of generation shifting seen in the CSAPR Update is modest in 
comparison to ozone season-to-ozone season generation shifting seen in 
recent years.
    Comment: Commenters raised concerns regarding the EPA's authority 
pursuant to CAA section 110(a)(2)(D)(i)(I) to analyze generation 
shifting as a NOX reduction strategy for purposes of 
calculating budgets for the final rule. The commenters cite the 
statutory language requiring states to prohibit ``any source . . . from 
emitting'' pollutants that contribute to downwind nonattainment and 
maintenance as constraining the EPA's authority to require reductions 
only from existing sources. The commenters claim that this language 
prohibits the EPA's authority to require sources to re-dispatch to new 
or alternative existing emission sources as this does not constitute a 
control on a ``source.'' Commenters add that the proposed budgets make 
it impossible for states to comply without taking this measure. Some 
commenters claim that, while the EPA may not set budgets assuming 
generation shifting, re-dispatch can serve as a compliance option for 
EGUs to meet budgets quantified in this rule.
    Some commenters cite to the EPA's reliance on generation shifting 
in developing the best system of emissions reductions (BSER) pursuant 
to CAA section 111(d) in the CPP. These commenters claim that the EPA 
cannot rely on the same justification used to consider generation 
shifting in the CPP because, unlike CO2, NOX is 
not a global, well-mixed pollutant with limited control options. These 
commenters also note that the EPA's assertion that section 111(d) 
permits consideration of generation shifting is subject to current 
litigation.
    Response: The good neighbor provision requires state and federal 
plans implementing its requirements to ``prohibit[ ] . . . any source 
or other type of emissions activity within the State from emitting any 
air pollutant in amounts which will'' significantly contribute to 
nonattainment or interfere with maintenance of the NAAQS in any other 
state. CAA section 110(a)(2)(D)(i)(I) (emphasis added). The EPA's 
consideration of the potential for generation shifting in developing 
state budgets is consistent with this statutory requirement.
    First, contrary to the commenters' contention, the statute does not 
limit the EPA's authority under the good neighbor provision to basing 
regulation only to control strategies for individual sources. The 
statute authorizes the state or EPA in promulgating a plan to prohibit 
emissions from ``any source or other type of emissions activity within 
the State'' that contributes (as determined by EPA) to the interstate 
transport problem with respect to a particular NAAQS. This broad 
statutory language shows that Congress was directing the states and the 
EPA to address a wide range of entities and activities that may be 
responsible for downwind emissions. However, this provision is silent 
as to the type of emission reduction measures that the states and the 
EPA may consider in establishing emission reduction requirements, and 
it does not limit those measures to individual source controls. The EPA 
reasonably interprets this provision to authorize consideration of a 
wide range of measures to reduce emissions from sources, which is 
consistent with the broad scope of this provision, as noted immediately 
above.\141\ In the case of power plants, those measures can include on-
site technology-based control measures, but they can also include 
measures through which power plants reduce emissions by shifting 
generation from higher-emitting EGUs to lower-emitting EGUs. It should 
be noted that because of the integrated nature of the power sector, 
higher-emitting EGUs have a variety of methods for implementing 
generation-shifting.\142\ In addition, states can take action, such as 
imposing permit limits, that would result in generation shifting.
---------------------------------------------------------------------------

    \141\ Interpreting the Good Neighbor Provision to be 
sufficiently broad to authorize reliance on generation shifting is 
also consistent with the legislative history for the 1970 CAA 
Amendments. The Senate Report stated that to achieve the NAAQS, 
``[g]reater use of natural gas for electric power generation may be 
required,'' S. Rep. No. 91-1196 at 2, which can best be achieved by 
shifting generation from coal-fired to natural-gas-fired generators.
    \142\ See Legal Memorandum Accompanying Clean Power Plan for 
Certain Issues, 137-48, EPA-HQ-OAR-2013-0602-36872; West Virginia v. 
EPA, D.C. Cir. No. 15-1363, Brief of Amici Curia Grid Experts 
Benjamin F. Hobbs, Brendan Kirby, Kenneth J. Lutz, James D. 
McCalley, and Brian Parsons in Support of Respondents, at 1-4, 12-
14.
---------------------------------------------------------------------------

    Moreover, the statute instructs the plan to prohibit emissions 
activity in ``amounts'' that significantly contribute to nonattainment 
or interfere with maintenance of downwind air quality. In identifying 
those amounts, the EPA has not mandated generation shifting, but rather 
has factored each state's capacity for re-dispatch into the calculation 
of the amounts of emission reductions that are achievable to address 
downwind air quality. The

[[Page 74546]]

emission reductions are captured in state budgets, which are then 
implemented through the flexible CSAPR NOX ozone season 
allowance trading program that allows each source to determine its own 
strategy for compliance, whether that be through implementation of on-
site controls, re-dispatch, or the purchase of allowances. Indeed, no 
state would violate the provisions of the rule if sources within the 
state decided not to employ re-dispatch as a means of compliance. As 
discussed in Section VII, the EPA performed a feasibility analysis 
which demonstrates that regionally and for each CSAPR Update state, the 
trading program requirements promulgated by this rule can be met 
through cost-effective measures, even without re-dispatch.
    Further, we note that while commenters urged EPA to allow sources 
to use generation shifting as a means of compliance with statewide 
emissions budgets, they do not explain why they believe that re-
dispatch may be used by sources for compliance but that the EPA may not 
consider this anticipated and widely-used means of reducing emissions 
when quantifying the amount of reductions achievable from sources 
within the state. In fact, because these comments acknowledge that 
sources are able to implement generation-shifting for the purpose of 
reducing emissions, they support EPA's reliance on generation-shifting 
to quantify the amount of reductions required under the good neighbor 
provision. Moreover, these comments support the view that even if the 
EPA did not base the amount of required emission reductions on 
generation-shifting, sources would rely on generation-shifting to meet 
their requirements as long as it is less expensive than other emission 
controls.
    Although the commenters contend that the consideration of shifting 
generation as a source of emission reductions is unprecedented, 
shifting generation is a well-established technique for reducing power 
plant emissions, which has already been incorporated into many other 
CAA programs. For example, when promulgating the original CSAPR 
rulemaking, the EPA considered shifting generation when establishing 
state budgets in the same manner in which the EPA has incorporated 
generation shifting into the analysis for this rule.\143\
---------------------------------------------------------------------------

    \143\ See 76 FR at 48280 (EPA's selection of a $500 threshold 
``reflect[ed] an amount of . . . generation shifting that can be 
achieved for $500/ton''). For other CAA programs and rules that are 
based at least in part on generation-shifting, see S. Rep. No. 101-
228, at 316 (1989) (Congress designed the Title IV acid rain 
provisions in the 1990 CAA Amendments in part on the ability of 
power plants to re-dispatch); 77 FR 9304, 9410 (Feb. 16, 2012) (in 
Mercury Air Toxics Rule, EPA authorized compliance extensions so 
that power plants could comply by generation-shifting); 70 FR 28606, 
28619 (May 18, 2005) (in Clean Air Mercury Rule, EPA based emission 
requirements in part on the ability of power plants to generation 
shift); 70 FR 25162, 25256-57, 25277 (May 12, 2005) (several of 
CAIR's provisions were based on the ability of power plants to re-
dispatch); 63 FR 57356, 57401 (Oct. 27, 1998) (NOX SIP 
Call included ``changes in dispatch'' among the highly cost-
effective controls that served as the basis for the required amount 
of reductions). In addition, several states have already adopted 
renewable energy measures in their SIPs for attaining and 
maintaining the NAAQS, and the EPA has provided initial guidance for 
states to do so. See, e.g., Guidance on SIP Credits for Emission 
Reductions from Electric-Sector Energy Efficiency and Renewable 
Energy Measures (Aug. 2004), http://www.epa.gov/ttn/oarpg/t1/memoranda/ereseerem_gd.pdf. For example, in 2005, EPA approved 
inclusion of county government commitments to purchase 5 percent of 
their annual electricity consumption from wind power in Maryland's 
SIP. 70 FR 24988 (May 12, 2005).
---------------------------------------------------------------------------

    Finally, the commenters have not identified a clear conflict with 
the EPA's justification for considering generation shifting in the 
context of the CPP. The CPP was designed pursuant to the authority in 
CAA section 111(d), while the CSAPR Update is promulgated consistent 
with the requirements of the good neighbor provision at CAA section 
110(a)(2)(D)(i)(I). As explained earlier, the good neighbor provision 
is permissibly interpreted to allow the EPA to consider generation 
shifting when defining the ``amounts'' of emission reductions that may 
be required to address each states' significant contribution to 
nonattainment and interference with maintenance of downwind air 
quality. Thus, while EPA is confident that its interpretation of 
section 111(d) to authorize generation-shifting will be upheld, the 
fact that litigants have challenged the EPA's authority pursuant to 
section 111(d) does not affect the EPA's authority pursuant to the good 
neighbor provision.
    Moreover, the fact that there are factual differences between the 
nature of CO2 and NOX as air pollutants, does not 
constrain the EPA's authority to consider shifting generation when 
regulating NOX emissions pursuant to the good neighbor 
provision. Rather, as described earlier, both rules regulate sources in 
the power sector that commonly engage in generation shifting as a means 
of achieving emission reductions of either CO2 or 
NOX. It is thus reasonable for the EPA to consider such 
practices in quantifying achievable emission reductions to address 
downwind air quality concerns. Furthermore, the rulemakings 
appropriately reflect the factual differences to the extent they are 
relevant (e.g., this rule includes assurance provisions constraining 
emissions in each state and CPP does not, which reflects the regional 
nature of NOX and the global nature of CO2).
    Comment: Commenters contend that the EPA cannot consider generation 
shifting for purposes of developing state emission budgets because the 
Federal Energy Regulatory Commission (FERC) has exclusive authority 
over dispatch requirements under the Federal Power Act. These 
commenters claim that scheduling and dispatch are controlled by 
regional transmission organizations and independent system operators, 
pursuant to FERC approval. Additionally, the commenters note that EGUs 
already may have committed their capacity under long term power 
purchase agreements (PPAs), which the EPA lacks the authority to alter 
or abrogate. Other commenters contend that the EPA must at least confer 
with FERC to confirm that the generation shifting required by this rule 
do not impact grid reliability.
    Response: The CSAPR Update is an air-pollution rule specifically 
authorized by the CAA. As discussed in response to the previous 
comment, shifting generation is a well-established technique for 
reducing power plant emissions, which has already been incorporated 
into many other CAA programs. This rule limits EGU NOX 
emissions that interfere with downwind states' ability to attain and 
maintain the 2008 ozone NAAQS. The rule does not regulate any other 
aspect of energy generation, distribution, or sale. For these reasons, 
the CSAPR Update does not intrude on FERC's power under the Federal 
Power Act, 16 U.S.C. 791a, et seq., nor does the rule alter or abrogate 
the PPAs to which EGUs are subject. Like any pollution limits for the 
power industry (of which there are many under the CAA), the CSAPR 
Update will indirectly impact energy markets, but those impacts do not 
mean that the EPA has overstepped its authority.
    The CSAPR Update does not require implementation of any specific 
control technology or compliance strategy. As described in section VII, 
the emission reductions quantified in this rule are implemented through 
EGU participation in a flexible allowance trading program. Sources may 
achieve these emission reductions in any manner they choose, including 
the purchasing of additional allowances if a particular source is 
constrained to reduce its emissions. Although sources have demonstrated 
ability to use re-dispatch as a compliance strategy (and indeed, some 
commenters concede they intend to do so here), such actions are not 
mandated

[[Page 74547]]

by this rule. As discussed in Section VII, the EPA performed a 
feasibility analysis which demonstrates that regionally and for each 
CSAPR Update state, the trading program requirements promulgated by 
this rule can be met, even without re-dispatch.
    Moreover, the EPA has evaluated the impact on electric reliability 
of the emission reductions required by this rule and found that 
compliance with the CSAPR Update requirements is consistent with 
maintaining electric reliability. For more information regarding this 
assessment, see the EGU NOX Mitigation Strategies Final Rule 
TSD in the docket for this rule. The EPA also met with FERC during the 
development of the CSAPR Update to discuss compliance with the entirety 
of the rule, not only in relation to shifting generation. This meeting 
is documented in the docket for the CSAPR Update.
2. Quantifying Emission Budgets
    In the proposed CSAPR Update, the EPA proposed setting emission 
budgets by considering monitored heat input (mmBtu) and modeled 
emission rates (lbs/mmBtu) from IPM. Specifically, the proposed CSAPR 
Update put forward a methodology to set emission budgets by multiplying 
monitored historical state-level heat input by model-projected 2017 
state-level emission rates. The monitored historical data were based on 
2014, which was the most recent complete ozone season dataset at the 
time of the proposal. The model-projected state-level emission rates 
were used to reflect EGU NOX reduction potential. The 
proposed emission budgets were the lower of the calculated emission 
budget or the 2014 historical state-level emissions. The EPA took 
comment on all aspects of quantifying state emission budgets reflecting 
upwind EGU NOX reduction potential.
    The proposed CSAPR Update budget-setting approach differed from the 
finalized methodology in the original CSAPR, which used model-projected 
state-level emission data as emission budgets. The EPA received 
feedback on the finalized original CSAPR budget-setting approach 
through model input data submitted after the final rule that led to two 
revisions rules \144\ and in litigation on the original CSAPR. 
Considering this feedback, the EPA believed that it was reasonable to 
update the budget-setting methodology for the proposed CSAPR Update. 
The proposed approach is similar to the proposed approach used to 
quantify emission budgets for the original CSAPR.\145\
---------------------------------------------------------------------------

    \144\ 77 FR 34830 (June 12, 2012) and 77 FR 10324 (February 21, 
2012).
    \145\ The original CSAPR proposal set proposed emission budgets 
by using an approach that considered monitored state-level heat 
input and modeled state-level emission rates. (75 FR 45291).
---------------------------------------------------------------------------

    The final rule methodology for setting emission budgets reflects 
the CSAPR Update proposal in that it retains the approach of 
multiplying historical state-level heat input by state-level emission 
rates that reflect EGU NOX reduction potential. For the 
final CSAPR Update rule, the EPA is refining its methodology for 
establishing emission budgets that reflect EGU NOX reduction 
potential by using historical state-level NOX emission rates 
\146\ adjusted by modeled NOX reduction potential. 
Specifically, the final rule's approach applies the change in modeled 
2017 state-level emission rates (the budget-setting base case 2017 
projected rates minus the cost threshold modeling 2017 projected rates) 
to historical 2015 state-level NOX emission rates,\147\ such 
that the emission budgets assume the potential of each state to improve 
its historical NOX rate by the same degree that it is 
projected to improve its NOX rate when moving between the 
budget-setting base case 2014 projection and cost threshold projection.
---------------------------------------------------------------------------

    \146\ The EPA notes that historical state-level ozone season EGU 
NOX emission rates are publicly available and quality 
assured data. They are monitored using continuous emissions monitors 
(CEMs) data and are reported to the EPA directly by power sector 
sources.
    \147\ The EPA used 2014 historical data at proposal because that 
was the latest available at that time. Since then, 2015 historical 
data is available and the EPA is using 2015 data in the final rule 
because it best reflects the current state of the power sector.
---------------------------------------------------------------------------

    This approach uses the EPA's IPM EGU NOX reduction 
potential modeling in a relative sense by applying the projected 2017 
change in state-level EGU NOX emission rates to 2015 
historical data. This approach is similar to the EPA's method for 
projecting ambient air quality concentrations described in section V. 
The EPA is finalizing this refinement to the proposed approach in 
response to comment received on the proposal. The primary improvement 
of this approach relevant to comment received is that it circumvents 
quantifying in emission budgets any modeled EGU NOX 
reduction potential (e.g., modeled retirements) that occurs in the 
budget-setting base case projection.
    However, this approach also circumvents quantifying in emission 
budgets any known EGU NOX reduction activities (e.g., 
announced new SCR at existing EGUs, announced coal-to-gas conversions, 
or announced retirements) occurring between the historical 2015 data 
and the modeled projection 2017 data.
    To account for known changes in the final rule budget-setting 
methodology, the EPA developed an adjusted historical dataset. This 
adjusted historical data starts with 2015 state-level monitored and 
reported EGU NOX emissions and heat input. The dataset is 
then adjusted for three categories of known changes in the power sector 
occurring between 2015 and 2017: Announced new SCR at existing EGUs; 
announced coal-to-gas conversions; and announced retirements. These 
important adjustments ensure that the emission budgets established by 
this rule reflect EGU NOX reductions both from already 
announced power sector changes and further EGU NOX 
reductions quantified in the EPA's EGU NOX reduction 
potential analysis. Accounting for known EGU NOX reduction 
activities in establishing emission budgets ensures that the emission 
budgets reflect the best available information in terms of achievable 
EGU NOX reductions and remaining emission levels. To account 
for announced new SCR at existing EGUs, the EPA adjusts the 2015 
emissions at the relevant units as though the new SCR had been 
operating at that time (assuming no change in heat input \148\ at those 
units). Similarly, to account for announced coal-to-gas conversions, 
the EPA adjusts the 2015 emissions at the relevant units as though the 
conversion had already taken place (assuming no change in heat input at 
those units). To account for announced retirements, the EPA subtracts 
the 2015 emissions from these units and replaces them by adding assumed 
emissions for an equivalent amount of generation using state-wide 
average emission rates after accounting for the retirement. Preserving 
some emissions associated with the generation from retired units, 
assuming that generation will be replaced by other EGUs in the state, 
ensures that the budget-setting approach accounts for known retirements 
but estimates the emission impact using generation replacement 
assumptions with conservatively high NOX emission rates. In 
other words, the EPA assumes that the retired generation is replaced by 
the average remaining EGU composition within the state rather than by 
newer lower-emitting generation.
---------------------------------------------------------------------------

    \148\ In this analysis the EPA used heat input as a proxy for 
electricity generation.
---------------------------------------------------------------------------

    Comment: Commenters supported the EPA's consideration of historical 
monitored data to quantify emission budgets and advocated that the EPA

[[Page 74548]]

further utilize historical data in its budget-setting methodology. For 
example, some commenters proposed an alternative budget-setting 
methodology that was grounded entirely in historical data, with 
NOX control assumptions applied. Commenters also suggested 
that the budget-setting base case projection emission rates were unduly 
influenced by model-projected changes for the 2017 analysis year and 
that this created emission budgets that did not reflect achievable 
NOX emission levels.
    Response: In response to these comments, the agency considered 
approaches to isolate model-projected changes in the power sector 
occurring in the budget-setting base case projection and model-
projected changes that result from the application of uniform cost 
threshold analysis. As discussed previously, for the final rule, the 
EPA is refining its method for calculating emission budgets in response 
to these comments. In doing so, the EPA is also finalizing a budget-
setting methodology that further relies on historical data, which is 
further aligned with comment received on the proposal.
    The approach for applying this budget-setting methodology to the 
EPA's EGU NOX reduction potential analysis uses a three step 
process, applied to each control stringency level. First, the EPA uses 
the state-level modeled EGU NOX emission rate from the 2017 
budget-setting base case projection and subtracts the state-level 
modeled EGU NOX emission rate from the 2017 cost threshold 
projection (e.g., $1,400 per ton).\149\ This yields the EPA's 
assessment of policy-related EGU NOX reduction potential in 
the form of a reduction in state-level NOX emission rate. 
Second, the EPA subtracts this modeled change in state-level 
NOX emission rate from the adjusted historical state-level 
EGU NOX emission rate. This yields a cleaner state-level EGU 
NOX emission rate that is grounded in historical data and 
reflects policy-related EGU NOX reduction potential. Third, 
the EPA multiplies the resulting EGU NOX emission rate by 
2015 historical heat input. This multiplication yields state-specific 
ozone season EGU NOX emission budgets for 2017 that are 
grounded in historical data and reflect EGU NOX reduction 
potential modeled in IPM. Similar to the proposal, the final CSAPR 
Update establishes emission budgets as the lower of the calculated 
emission budget or the 2015 historical (unadjusted) state-level 
emissions.
---------------------------------------------------------------------------

    \149\ Each state-level emission rate is calculated as the total 
emissions from affected sources within the state divided by the 
total heat input from these sources.
---------------------------------------------------------------------------

    In conducting the IPM modeling of each cost threshold, the EPA 
limited IPM's evaluation of NOX mitigation strategies to 
those that can be implemented for the 2017 ozone season, which is the 
compliance timeframe for this rulemaking. The agency analyzed levels of 
uniform EGU NOX control using IPM, where each level is 
represented by marginal NOX costs listed in Table VI.C-1 in 
this preamble. The analysis applied these uniform levels of control to 
EGUs in the 48 contiguous United States and the District of Columbia, 
starting with 2017. The analysis included EGUs with a capacity 
(electrical output) greater than 25 MW, which reflects the CSAPR Update 
rule applicability criteria. The Ozone Transport Policy Analysis Final 
Rule TSD, which is in the docket for this rule, provides further 
details of the EPA's analysis of ozone season NOX emission 
reductions occurring at each level of uniform control stringency for 
the 2017 ozone season.
    As described in in Section V, air quality data for the CSAPR Update 
indicates that the District of Columbia contributes at or above the 1 
percent threshold to a downwind maintenance receptor in Harford County, 
Maryland. Moreover, in Step 3 of the CSAPR framework, the EPA's 
analysis finds that there are no EGUs in the District of Columbia that 
meet the CSAPR Update applicability criteria (i.e., EGUs with a 
capacity greater than 25 MW). Therefore, the EPA does not calculate or 
finalize an EGU NOX ozone season emission budget for the 
District.
    The 2015 historical data, adjusted historical data, and EGU 
NOX ozone season emission budgets calculated using each cost 
threshold identified in the final emission budget-setting approach can 
be found in Tables VI.C-1 and VI.C.2.

          Table VI.C-1--Evaluated EGU NOX Ozone Season Emission Budgets, Reflecting EGU NOX Reductions
                                             [Ozone season NOX tons]
----------------------------------------------------------------------------------------------------------------
                                                     Adjusted      $800 per ton   $1,400 per ton  $3,400 per ton
              State                    2015         historical       emission         emission        emission
                                     emissions       emissions        budgets         budgets         budgets
----------------------------------------------------------------------------------------------------------------
Alabama.........................          20,369          15,179          14,332          13,211          12,620
Arkansas........................          12,560          12,560          12,048           9,210           9,048
Illinois........................          15,976          14,850          14,682          14,601          14,515
Indiana.........................          36,353          31,382          28,960          23,303          21,634
Iowa............................          12,178          11,478          11,477          11,272          11,065
Kansas..........................           8,136           8,031           8,030           8,027           7,975
Kentucky........................          27,731          26,318          24,052          21,115          21,007
Louisiana.......................          19,257          19,101          19,096          18,639          18,452
Maryland........................           3,900           3,871           3,870           3,828           3,308
Michigan........................          21,530          19,811          19,558          17,023          15,782
Mississippi.....................           6,438           6,438           6,438           6,315           6,243
Missouri........................          18,855          18,443          17,250          15,780          15,299
New Jersey......................           2,114           2,114           2,100           2,062           2,008
New York........................           5,593           5,531           5,220           5,135           5,006
Ohio............................          27,382          27,382          23,659          19,522          19,165
Oklahoma........................          13,922          13,747          13,746          11,641           9,174
Pennsylvania....................          36,033          35,607          20,014          17,952          17,928
Tennessee.......................           9,201           7,779           7,736           7,736           7,735
Texas...........................          55,409          54,839          54,521          52,301          50,011
Virginia........................           9,651           9,367           9,365           9,223           8,754
West Virginia...................          26,937          26,874          25,984          17,815          17,380
Wisconsin.......................           9,072           7,939           7,924           7,915           7,790
                                 -------------------------------------------------------------------------------

[[Page 74549]]

 
    22 State Region.............         398,596         378,641         350,062         313,626         301,899
----------------------------------------------------------------------------------------------------------------

          Table VI.C-2--Evaluated EGU NOX Ozone Season Emission Budgets, Reflecting EGU NOX Reductions
                                             [Ozone season NOX tons]
----------------------------------------------------------------------------------------------------------------
                                                                     Adjusted     $5,000 per ton  $6,400 per ton
                      State                            2015         historical        emission        emission
                                                     emissions       emissions        budgets         budgets
----------------------------------------------------------------------------------------------------------------
Alabama.........................................          20,369          15,179          11,928          11,573
Arkansas........................................          12,560          12,560           8,518           8,050
Illinois........................................          15,976          14,850          14,248          14,054
Indiana.........................................          36,353          31,382          19,990          18,720
Iowa............................................          12,178          11,478          10,891          10,491
Kansas..........................................           8,136           8,031           7,962           7,767
Kentucky........................................          27,731          26,318          20,273          19,496
Louisiana.......................................          19,257          19,101          18,442          18,426
Maryland........................................           3,900           3,871           2,938           2,926
Michigan........................................          21,530          19,811          13,110          12,612
Mississippi.....................................           6,438           6,438           6,203           6,205
Missouri........................................          18,855          18,443          14,673          14,555
New Jersey......................................           2,114           2,114           1,867           1,879
New York........................................           5,593           5,531           4,746           4,594
Ohio............................................          27,382          27,382          18,561          18,348
Oklahoma........................................          13,922          13,747           8,790           8,439
Pennsylvania....................................          36,033          35,607          17,621          17,374
Tennessee.......................................           9,201           7,779           7,724           7,729
Texas...........................................          55,409          54,839          48,795          47,994
Virginia........................................           9,651           9,367           8,619           8,416
West Virginia...................................          26,937          26,874          17,388          17,373
Wisconsin.......................................           9,072           7,939           7,435           7,023
                                                 ---------------------------------------------------------------
    22 State Region.............................         398,596         378,641         290,722         284,044
----------------------------------------------------------------------------------------------------------------

D. Multi-Factor Test Considering Costs, EGU NOX Reductions, and 
Downwind Air Quality Impacts

    Next, the EPA applied the multi-factor test to consider cost, 
available emission reductions, and downwind air quality impacts to 
determine the appropriate level of uniform NOX control 
stringency, feasible for 2017, that addresses the impacts of interstate 
transport on downwind nonattainment or maintenance receptors. This test 
evaluates these factors to determine the appropriate stopping point for 
quantifying upwind state obligations to address interstate ozone 
transport, including whether the identified downwind ozone problems 
(i.e., nonattainment or maintenance problems) are resolved.

[[Page 74550]]

[GRAPHIC] [TIFF OMITTED] TR26OC16.000

    Combining costs, EGU NOX reductions, and corresponding 
improvements in downwind ozone concentrations results in a ``knee in 
the curve'' at a point where emission budgets reflect a control 
stringency with an estimated marginal cost of $1,400 per ton. This 
level of stringency in emission budgets represents the level at which 
incremental EGU NOX reduction potential and corresponding 
downwind ozone air quality improvements are maximized with respect to 
marginal cost. That is, the ratio of emission reductions to marginal 
cost and the ratio of ozone improvements to marginal cost are maximized 
relative to the other emission budget levels evaluated. Further, more 
stringent emission budget levels (e.g., emission budgets reflecting 
$3,400 per ton or greater) yield fewer additional emission reductions 
and fewer air quality improvements relative to the increase in control 
costs. This evaluation shows that significant EGU NOX 
reductions are available at reasonable cost and that these reductions 
can provide improvements in downwind ozone concentrations at the 
identified nonattainment and maintenance receptors for the final rule.
    To assess downwind air quality impacts for each nonattainment or 
maintenance receptor identified in this rulemaking, the EPA evaluated 
the air quality change at that receptor expected from the progressively 
more stringent upwind EGU NOX emission budgets quantified 
for each uniform NOX control stringency level. This 
assessment provides the downwind ozone improvements for consideration 
and provides air quality data that is used to evaluate over-control.
    In order to assess the air quality impacts of the various control 
stringencies, the EPA evaluated changes resulting from the application 
of the emission budgets to states that are linked to each receptor as 
well as the state containing the receptor. By applying each budget 
level to the state containing the receptor, the EPA ensures that it is 
accounting for the downwind state's fair share. For states that were 
not linked to that receptor, the air quality change at that receptor 
was evaluated assuming emissions equal to the adjusted historic 
emission level, including Pennsylvania RACT. This method holds each 
upwind state responsible for its fair share of the downwind problems to 
which it is linked. Reductions made by other states in order to address 
air quality problems at other receptors do not increase or decrease 
this fair share. This approach removes state equity considerations from 
this component of the multi-factor test and preserves the apportionment 
of upwind responsibility to the assessment of uniform control 
stringency represented by cost, which the Supreme Court found to be 
``an efficient and equitable solution to the allocation problem the 
Good Neighbor Provision requires the Agency to address.'' 134 S. Ct. at 
1607.
    For this assessment, the EPA used an ozone air quality assessment 
tool (ozone AQAT) to estimate downwind changes in ozone concentrations 
related to upwind changes in emission levels. This tool is similar to 
the AQAT tool used in the original CSAPR to evaluate changes in 
PM2.5 concentrations. The ozone AQAT uses simplifying 
assumptions regarding the relationship between each state's change in 
EGU NOX emissions and the corresponding change in ozone 
concentrations at nonattainment and maintenance receptors to which that 
state is linked. This method is calibrated using two CAMx air quality 
modeling scenarios that fully account for the non-linear relationship 
between emissions and air quality associated with atmospheric 
chemistry. See the Ozone Transport Policy Analysis Final Rule TSD for 
additional details.

[[Page 74551]]

    For each emission budget level and for each receptor, the EPA 
evaluated the magnitude of the change in concentration and determined 
whether the estimated concentration would resolve the receptor's 
nonattainment or maintenance concern by lowering the average or maximum 
design values below 76 ppb, respectively.
    As an example, the EPA evaluated the Harford County, Maryland 
receptor with all linked states and Maryland meeting emission budgets 
reflecting controls available at $800 per ton of NOX 
emissions reduced. Adding up the state-by-state changes in air quality 
contributions resulting from the changes in emissions, this assessment 
showed a 0.1 ppb reduction in expected ozone design values. After 
subtracting this air quality improvement from the design values 
quantified in section V of this preamble, the residual design values at 
this site are still expected to exceed the 2008 ozone NAAQS with an 
average design value of 79.0 ppb and a maximum design value of 81.6 
ppb. Next, the EPA evaluated this receptor with all linked states and 
Maryland meeting emission budgets reflecting controls available at 
$1,400 per ton. This assessment showed a 0.4 ppb reduction in expected 
ozone design values. At emission budgets reflecting $1,400 per ton, the 
residual design values at this site are expected to continue to exceed 
the 2008 ozone NAAQS with an average design value of 78.7 ppb and a 
maximum design value of 81.3 ppb. Next, the EPA evaluated this receptor 
with all linked states and Maryland meeting emission budgets reflecting 
controls available at $3,400 per ton. This assessment showed a 0.6 ppb 
reduction in expected ozone design values. At emission budgets 
reflecting $3,400 per ton, the residual design values at this site are 
expected to continue to exceed the 2008 ozone NAAQS with an average 
design value of 78.5 ppb and a maximum design value of 81.2 ppb. Next, 
the EPA evaluated this receptor with all linked states and Maryland 
meeting emission budgets reflecting controls available at $5,000 per 
ton. This assessment showed a 0.7 ppb reduction in expected ozone 
design values. At emission budgets reflecting $5,000 per ton, the 
residual design values at this site are expected to continue to exceed 
the 2008 ozone NAAQS with an average design value of 78.4 ppb and a 
maximum design value of 81.1 ppb. Next, the EPA evaluated this receptor 
with all linked states and Maryland meeting emission budgets reflecting 
controls available at $6,400 per ton. This assessment showed a 0.7 ppb 
reduction in expected ozone design values. At emission budgets 
reflecting $6,400 per ton, the residual design values at this site are 
expected to continue to exceed the 2008 ozone NAAQS with an average 
design value of 78.4 ppb and a maximum design value of 81.0 ppb.
    Generally, the EPA evaluated the air quality improvements at each 
monitoring site for the emission budgets associated with each 
progressively more stringent emission budget. For more information 
about how this assessment was performed and the results of the analysis 
for each receptor, refer to the Ozone Transport Policy Analysis Final 
Rule TSD.
    As part of this analysis, the EPA evaluates potential over-control 
with respect to whether (1) the expected ozone improvements would be 
sufficient or greater than necessary to resolve the downwind ozone 
pollution problem (i.e., resolving nonattainment or maintenance 
problems) or (2) the expected ozone improvements would reduce upwind 
state ozone contributions to below the screening threshold (i.e., one 
percent of the NAAQS).
    In EME Homer City, the Supreme Court held that the EPA cannot 
``require[] an upwind State to reduce emissions by more than the amount 
necessary to achieve attainment in every downwind State to which it is 
linked.'' 134 S. Ct. at 1608. On remand from the Supreme Court, the 
D.C. Circuit held that this means that the EPA might overstep its 
authority ``when those downwind locations would achieve attainment even 
if less stringent emissions limits were imposed on the upwind States 
linked to those locations.'' EME Homer City II, 795 F.3d at 127. The 
D.C. Circuit qualified this statement by noting that this ``does not 
mean that every such upwind State would then be entitled to less 
stringent emission limits. Some of those upwind States may still be 
subject to the more stringent emissions limits so as not to cause other 
downwind locations to which those States are linked to fall into 
nonattainment.'' Id. at 14-15. As the Supreme Court explained, ``while 
EPA has a statutory duty to avoid over-control, the Agency also has a 
statutory obligation to avoid `under-control,' i.e., to maximize 
achievement of attainment downwind.'' 134 S. Ct. at 1609. The Court 
noted that ``a degree if imprecision is inevitable in tackling the 
problem of interstate air pollution.'' Id. ``Required to balance the 
possibilities of under-control and over-control, EPA must have leeway 
in fulfilling its statutory mandate.'' Id.
    Consistent with these instructions from the Supreme Court and the 
D.C. Circuit, the EPA first evaluated whether reductions resulting from 
the $800 per ton emission budgets can be anticipated to resolve any 
downwind nonattainment or maintenance problems (as defined in section 
V) and by how much. This assessment shows that the emission budgets 
reflecting $800 per ton would resolve maintenance problems at one 
downwind maintenance receptors--Philadelphia, Pennsylvania (maximum 
design value of 75.8 ppb). The EPA's assessment shows that no state 
included in the CSAPR Update is linked solely to the Philadelphia 
receptor that is resolved at the $800 per ton level of control 
stringency.
    Next, the EPA evaluated whether reductions resulting from the 
$1,400 per ton emission budgets can be anticipated to resolve any 
further downwind nonattainment or maintenance problems. For the 22 
CSAPR Update states, the EPA assessed further EGU NOX 
reductions of emission budgets reflecting $1,400 per ton and found that 
the emission budgets reflecting $1,400 per ton would resolve 
nonattainment and maintenance problems at one downwind nonattainment 
receptors--Jefferson County, Kentucky (maximum design value of 75.7 
ppb)--and would resolve maintenance problems at one additional downwind 
maintenance receptor--Hamilton County, Ohio (maximum design value of 
75.1 ppb). The EPA's assessment shows that this control level does 
resolve the only identified nonattainment or maintenance problems to 
which Tennessee is linked--the Hamilton County, Ohio and Philadelphia, 
Pennsylvania receptors. However, no other no state included in the 
CSAPR Update is linked solely to these receptors that are resolved at 
the $1,400 per ton level of control stringency.
    In light of the improvements at the maintenance receptors to which 
Tennessee is linked, the EPA evaluated the magnitude of those 
improvements and whether the air quality problems could have been 
resolved at a lower level of control stringency. At the emission 
budgets reflecting $1,400 per ton, the EPA's assessment demonstrates 
that the receptors to which Tennessee is linked would just be 
maintaining the standard, with maximum design values of 75.5 
(Philadelphia) and 75.1 ppb (Hamilton County), which the EPA truncates 
to compare against the 2008 ozone standard. Consistent with the manner 
in which the EPA truncates design values to evaluate NAAQS attainment, 
these concentrations are equal to the level of the 2008 ozone

[[Page 74552]]

NAAQS at 75 ppb. Therefore, the emission reductions that would be 
achieved by emission budgets reflecting $1,400 per ton would not result 
in air quality improvements at these receptors significantly better 
than the standard such that emission reductions might constitute over-
control as to the receptors. On the contrary, the emission reductions 
achieved in upwind states by emission budgets reflecting $1,400 per ton 
are necessary to bring the maximum design value at the receptors into 
alignment with the standard. The EPA finds that, based on the 
information supporting this final rule, the $1,400 per ton emission 
budget level would not constitute over-control for Tennessee or for any 
other state included in the CSAPR Update.
    In EME Homer City, the Supreme Court also held that ``EPA cannot 
require a State to reduce its output of pollution . . . at odds with 
the one percent threshold the Agency has set.'' 134 S. Ct. at 1608. The 
Court explained that ``EPA cannot demand reductions that would drive an 
upwind State's contribution to every downwind State to which it is 
linked below one percent of the relevant NAAQS.'' Id. Accordingly, the 
EPA evaluated the potential for over-control with respect to the one 
percent threshold applied in this rulemaking at each relevant emission 
budget level. Specifically, the EPA evaluated whether the emission 
budget levels would reduce upwind EGU emissions to a level where the 
contribution from any upwind state would be below the one percent 
threshold that linked the upwind state to the downwind receptors. If 
the EPA found that any state's emission budget would decrease its 
contribution below the one percent threshold to every downwind receptor 
to which it is linked, then it would adjust the state's reduction 
obligation accordingly. The EPA's assessment reveals that there is not 
over-control with respect to the one percent threshold at any of the 
evaluated uniform cost emission budget levels in any upwind state. Most 
relevant, the EPA finds that under the $800 per ton and $1,400 per ton 
emission budgets, all 22 eastern states that contributed greater than 
or equal to the one percent threshold in the base case continued to 
contribute greater than or equal to one percent of the NAAQS to at 
least one downwind nonattainment or maintenance receptor. For more 
information about this assessment, refer to the Ozone Transport Policy 
Analysis Final Rule TSD.
    Considering the EPA's findings with respect to application of the 
multi-factor test and over-control, the EPA is finalizing ozone season 
EGU NOX emission budgets reflecting $1,400 per ton of EGU 
NOX control for all CSAPR Update states. The EPA finds that 
the finalized Tennessee emission budget fully addresses Tennessee's 
good neighbor obligation with respect to the 2008 ozone NAAQS. For the 
remaining CSAPR Update states, final emission budgets reflecting $1,400 
per ton of EGU NOX control represent a partial solution for 
these states' good neighbor obligation with respect to the 2008 ozone 
NAAQS.
    In establishing emission budgets reflecting $1,400 per ton of EGU 
NOX control, the EPA notes that combustion controls are the 
only EGU NOX reduction strategy that the EPA generally 
considers feasible for the 2017 ozone season in quantifying emission 
budgets for the final CSAPR Update and that also requires new 
construction. For this unique reason, in developing each state emission 
budget, the EPA specifically considered the number of EGUs with 
NOX reduction potential from installing state-of-the-art 
combustion controls, 2015 reliance on these EGUs for electricity 
generation in the state, and the magnitude of reductions relative to 
the resulting emission budgets.
    These data indicate that nearly all of the EGU NOX 
reduction potential for one state, Arkansas, comes from installing 
state-of-the-art combustion controls. The EPA's analysis for the final 
rule finds that two units at White Bluff and two units at Independence 
power plants in Arkansas have significant EGU NOX reduction 
potential from the installation of state-of-the-art combustion 
controls. The NOX reduction potential from these units is 
uniquely significant relative to Arkansas' resulting emission budget. 
The agency's analysis finds approximately 3,000 tons of ozone season 
NOX reduction potential from these 4 units in Arkansas. If 
the EPA were to calculate a 2017 emission budget for Arkansas that 
includes reductions attributable to combustion controls, these 
reductions would be equivalent to 33 percent of Arkansas' resulting 
emission budget. The NOX reduction potential from installing 
combustion controls has an outsized effect on Arkansas' resulting 
emission budget relative to other states. Arkansas is unique with 
respect to emission reduction potential achievable from combustion 
controls relative to its corresponding emission budget. In all other 
states covered by this rule, reduction potential from combustion 
controls relative to the CSAPR Update rule emission budgets is 11 
percent or less. While the EPA does not anticipate that sources in any 
other state would have difficulty installing upgraded combustion 
controls for the 2017 ozone season, for the reasons described earlier, 
the relatively low number of expected emissions reductions from those 
controls means that failure of any of these sources to install such 
controls would not lead the state to exceed the assurance levels and 
incur CSAPR assurance penalties.
    Further, these units at White Bluff and Independence power plants 
in Arkansas, combined, accounted for nearly 40 percent of the state's 
2015 heat input. Compared to other CSAPR Update states, Arkansas is 
also uniquely situated in this regard. In all other states covered by 
this rule, the percentage of state-level heat input from units with 
reduction potential from installation of combustion controls is 20 
percent or less. The CSAPR allowance trading program allows Arkansas' 
utilities the option to choose alternative compliance paths. However, 
the EPA considers that if their compliance path included combustion 
controls for these units, then it may be difficult to schedule outage 
time to upgrade all four of the Arkansas units to state-of-the-art 
combustion controls for the 2017 ozone season and supply adequate 
electricity to meet demand in the state.
    If, due to the unique feasibility concerns discussed earlier, the 
Arkansas units could not install upgraded controls for the 2017 ozone 
season, Arkansas utilities could exceed the CSAPR assurance level in 
2017.\150\ In such circumstances, Arkansas utilities would not only 
need to purchase allowances for compliance, but they would also face 
the CSAPR assurance provision penalty, meaning that for emissions 
exceeding the assurance level, utilities would need to surrender three 
allowances for each ton of emissions.
---------------------------------------------------------------------------

    \150\ More information about CSAPR Update Rule assurance levels 
can be found in section VII of this document.
---------------------------------------------------------------------------

    In light of these unique circumstances, the EPA believes that it is 
prudent and appropriate to finalize for Arkansas a 2017 ozone season 
emission budget for Arkansas that does not account for EGU 
NOX reduction potential from combustion controls and a 2018 
ozone season emission budget for Arkansas that does account for EGU 
NOX reduction potential from combustion controls. This 
approach provides utilities an extra year to upgrade combustion 
controls in the event that this is their chosen CSAPR Update compliance 
path. This extra year

[[Page 74553]]

allows for upgrades to be made across four shoulder seasons (fall 2016, 
spring 2017, fall 2017, and spring 2018).
    The emission budgets that the EPA is finalizing in FIPs for the 
CSAPR Update rule are summarized in table VI.E-2.

            Table VI.E-2--Final 2017 EGU NOX Ozone Season Emission Budgets for the CSAPR Update Rule
                                             [Ozone season NOX tons]
----------------------------------------------------------------------------------------------------------------
                                                                                 Adjusted      CSAPR update rule
                         State                             2015 emissions       historical      2017 * emission
                                                                                emissions           budgets
----------------------------------------------------------------------------------------------------------------
Alabama................................................             20,369             15,179             13,211
Arkansas...............................................             12,560             12,560       12,048/9,210
Illinois...............................................             15,976             14,850             14,601
Indiana................................................             36,353             31,382             23,303
Iowa...................................................             12,178             11,478             11,272
Kansas.................................................              8,136              8,031              8,027
Kentucky...............................................             27,731             26,318             21,115
Louisiana..............................................             19,257             19,101             18,639
Maryland...............................................              3,900              3,871              3,828
Michigan...............................................             21,530             19,811             17,023
Mississippi............................................              6,438              6,438              6,315
Missouri...............................................             18,855             18,443             15,780
New Jersey.............................................              2,114              2,114              2,062
New York...............................................              5,593              5,531              5,135
Ohio...................................................             27,382             27,382             19,522
Oklahoma...............................................             13,922             13,747             11,641
Pennsylvania...........................................             36,033             35,607             17,952
Tennessee..............................................              9,201              7,779              7,736
Texas..................................................             55,409             54,839             52,301
Virginia...............................................              9,651              9,367              9,223
West Virginia..........................................             26,937             26,874             17,815
Wisconsin..............................................              9,072              7,939              7,915
                                                        --------------------------------------------------------
    22 State Region....................................            398,596            378,641    316,464/313,626
----------------------------------------------------------------------------------------------------------------
* The EPA is finalizing CSAPR EGU NOX ozone season emission budgets for Arkansas of 12,048 tons for 2017 and
  9,210 tons for 2018 and subsequent control periods.

    The EPA's selection of emission budgets for this rule is specific 
to, and appropriate for, defining near-term achievable upwind 
obligations with respect to the 2008 ozone NAAQS in states where a FIP 
is necessary. The EPA does not intend--nor does it believe it would be 
justified in doing so in any event--that the cost-level-based 
determinations in this rule impose a constraint for selection of cost 
levels in addressing transported pollution with respect to future NAAQS 
and/or any revisions to these FIPs for any other future transport rules 
that the EPA may develop to address any potential remaining obligation 
as to the current NAAQS, for which different cost levels may be 
appropriate.
    In addition to 22 states identified previously, the EPA also 
assessed the potential for EGU NOX reductions in Delaware 
and the District of Columbia. This assessment finds that the District 
of Columbia does not have any affected EGUs. As a result, despite the 
District of Columbia's linkage to the Harford County, Maryland 
receptor, the District does not have any EGU NOX reduction 
potential. The EPA also has not taken action to approve or disapprove a 
pending good neighbor SIP addressing the 2008 ozone NAAQS. Given that 
the District of Columbia does not have any affected sources and the 
District's SIP is still before the agency, the EPA is not finalizing a 
FIP for the District in this action. Also, the EPA's assessment of EGU 
NOX reduction potential shows zero reductions available in 
Delaware in 2017 at any evaluated cost threshold because they are 
already equivalently controlled. Given this information and the fact 
that Delaware's SIP is also still pending before the agency, we are not 
promulgating a FIP for Delaware in this rule. The EPA will consider the 
information developed for this rule, as appropriate, in evaluating the 
good neighbor SIPs for these areas,\151\ and if the EPA ultimately 
disapproves those SIPs, the EPA will address any resulting FIP 
obligation separately.
---------------------------------------------------------------------------

    \151\ As noted earlier, the EPA has not taken final action to 
approve or disapprove Delaware's good neighbor SIP addressing the 
2008 ozone NAAQS.
---------------------------------------------------------------------------

    The proposed CSAPR Update sought comment on whether or not to 
include Wisconsin in the final CSAPR Update considering that the 
modeling data for the proposal showed zero NOX reduction 
potential for Wisconsin under the proposed EGU NOX control 
stringency. Unlike our analysis at proposal, the EGU NOX 
emission reduction potential analysis for the final rule shows that 
EGUs in Wisconsin and all 22 CSAPR Update states have EGU emission 
reductions available using the uniform control stringency represented 
by $1,400 per ton. Further, ozone season emission budgets that the EPA 
is finalizing in the CSAPR Update represent reductions from 2015 
emission levels for Wisconsin and all 22 CSAPR Update states. The EPA 
is therefore including each of the 22 CSAPR Update states in the final 
CSAPR Update to ensure that each state achieves NOX emission 
reductions to address significant contribution to nonattainment or 
interference with maintenance of downwind pollution with respect to the 
2008 ozone NAAQS.

VII. Implementation Using the Existing CSAPR NOX Ozone 
Season Allowance Trading Program and Relationship to Other Rules

A. Introduction

    This section addresses step four of the CSAPR framework by 
describing how the EPA will implement and enforce the EGU emission 
budgets quantified in section VI, which represent the remaining EGU 
emissions after reducing

[[Page 74554]]

those amounts of each state's emissions that significantly contribute 
to downwind nonattainment or interfere with maintenance of the 2008 
ozone NAAQS in downwind states. See Table VI.E-2 for final emission 
budgets. The EPA is finalizing FIPs with respect to the 2008 ozone 
NAAQS for each of the 22 states covered by this rule. The FIPs will 
require affected EGUs to participate in the CSAPR NOX ozone 
season trading program subject to the final emission budgets. The EPA 
is updating the CSAPR NOX ozone season program requirements 
in 40 CFR part 97 to reflect these CSAPR NOX ozone season 
emission budgets and final CSAPR Update Rule trading program 
requirements.
    The CSAPR NOX ozone season trading program is a market-
based approach that implements emission reductions needed to meet the 
CAA's good neighbor requirements. The emission budgets establish state-
level aggregate emission caps that specify the quantity of emissions 
authorized from affected EGUs. The EPA creates individual 
authorizations (``allowances'') to emit a specific quantity (i.e., 1 
ton) of ozone season NOX. The total number of allowances 
equals the level of the emission budgets, which partially address 
interstate emission transport under the good neighbor provision for the 
2008 ozone NAAQS. To be in compliance, each participant must hold 
allowances equal to its actual emissions for each control period. It 
may buy or sell (trade) them with other market participants. Each 
affected EGU can design its own compliance strategy--emission 
reductions and allowance purchases or sales--to minimize its compliance 
cost. And it can adjust its compliance strategy in response to changes 
in technology or market conditions. The compliance flexibility provided 
by the CSAPR NOX ozone season trading program does not 
prescribe unit-specific and technology-specific NOX 
mitigation. While the EPA establishes emission budgets that reflect 
emission reductions that can be achieved by certain near-term and cost 
effective EGU NOX mitigation strategies (e.g., turning on 
idled SCRs), no particular EGU NOX reduction strategy is 
required for any specific EGU to demonstrate compliance with the CSAPR 
Update rule.
    In order to ensure that each upwind state addresses its significant 
contribution to nonattainment or interference with maintenance and to 
accommodate inherent year-to-year variability in state-level EGU 
operations, the CSAPR NOX ozone season trading program 
includes variability limits and assurance provisions. These provisions 
are unchanged from those established in the original CSAPR with the 
exception of each CSAPR Update state having a revised variability limit 
and assurance level that corresponds with its revised emission budget. 
The CSAPR assurance provisions require additional allowance surrender 
penalties (a total of 3 allowances per ton of emissions) \152\ on 
emissions that exceed a state's CSAPR NOX ozone season 
assurance level, or 121 percent of the emission budget.
---------------------------------------------------------------------------

    \152\ Each excess ton above the assurance level must be met with 
one allowance for normal compliance plus two additional allowances 
to satisfy the penalty.
---------------------------------------------------------------------------

    When the EPA finalized the original CSAPR in 2011, the rule 
established regional trading programs designed to cost-effectively 
reduce transported emissions of SO2 and NOX from 
power plants in eastern states that affect air quality in downwind 
states. See 76 FR 48272 and 48273 (August 8, 2011). The EPA envisioned 
that this approach to implementing necessary emission reductions could 
be used to address transport obligations under other existing NAAQS and 
future NAAQS revisions. See 76 FR 48211 and 48246 (August 8, 2011). The 
EPA is finalizing implementation of the CSAPR Update emission budgets 
using the CSAPR NOX ozone season allowance trading program, 
with certain updates. Using the familiar CSAPR trading program to 
implement these near-term EGU reductions for the 2008 ozone standard 
provides many significant advantages, including certainty in emission 
reductions achieved by dint of caps on emissions and air quality-
assured allowance trading, ease of transition to the new emission 
budgets, the economic and administrative efficiency of trading 
approaches, and the flexibility afforded to sources regarding 
compliance.
    The first control period for the requirements finalized in these 
FIPs is the 2017 ozone season (May 1, 2017-September 30, 2017). 
Affected EGUs within each covered state must demonstrate compliance 
with FIP requirements for the 2017 ozone season and each subsequent 
ozone season unless and until the state submits a SIP that the EPA 
approves as replacing the FIP, or the EPA promulgates another federal 
rule replacing or revising the FIP.
    In this section of the preamble, the following topics are 
addressed: New and revised FIPs; updates to CSAPR NOX ozone 
season trading requirements, including trading program structure and 
treatment of banked allowances; feasibility of compliance; key elements 
of the CSAPR trading programs; replacing the FIP with a SIP; title V 
permitting; and the relationship of this rule to other emission trading 
and ozone transport programs (NOX SIP Call, CSAPR trading 
programs, CPP).

B. New and Revised FIPs

    As explained in section III in this preamble, the EPA is finalizing 
new or revised FIP requirements only for those states where the EPA has 
the authority and obligation to promulgate a FIP addressing the state's 
interstate transport obligation pursuant to CAA section 
110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS. That is, the EPA is 
finalizing new or revised FIP requirements for certain states where the 
EPA either found that the state failed to submit a complete good 
neighbor SIP or disapproved a good neighbor SIP for that state. 
Moreover, the EPA is only finalizing new or revised FIP requirements 
for those states identified in sections V and VI of this preamble, 
whose emissions significantly contribute to nonattainment or interfere 
with maintenance of the 2008 ozone NAAQS in other eastern states. For 
those states that contribute below the one percent threshold applied in 
section V of this preamble, the EPA concludes that the state's 
emissions do not significantly contribute to nonattainment or interfere 
with maintenance of the 2008 ozone NAAQS. There is therefore no need to 
impose further emission limits on sources within those states through 
issuance of new or revised FIP requirements.
    Of the 22 states required to participate in the CSAPR 
NOX ozone season trading program under this CSAPR Update, 21 
states \153\ already comply with the original CSAPR NOX 
ozone season requirements with respect to the 1997 ozone NAAQS. For 
those 21 states, the EPA is revising their existing FIP requirements to 
require compliance with updated budgets at the levels in Table VI.E-2. 
One state, Kansas, has newly added CSAPR NOX ozone season 
compliance requirements in this action. For Kansas, the agency is 
establishing new FIP requirements to require compliance with a budget 
at the level in Table VI.E-2.
---------------------------------------------------------------------------

    \153\ Alabama, Arkansas, Illinois, Indiana, Iowa, Kentucky, 
Louisiana, Maryland, Michigan, Mississippi, Missouri, New Jersey, 
New York, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Virginia, 
West Virginia, and Wisconsin.
---------------------------------------------------------------------------

    One state, Georgia, has a continued compliance requirement under 
the original CSAPR NOX ozone season program with respect to 
the 1997 ozone NAAQS and is not found to significantly contribute to

[[Page 74555]]

nonattainment or interfere with maintenance of the 2008 ozone NAAQS in 
other states. Therefore, Georgia's CSAPR NOX ozone season 
requirements (including its emission budget) continue unchanged 
pursuant to the state's previously-defined obligation that was 
quantified to address the 1997 ozone NAAQS, and the EPA is not making 
any changes to the existing FIP requirements for Georgia contained in 
40 CFR part 52.
    Three states (Florida, North Carolina, and South Carolina) are 
currently subject to the CSAPR NOX ozone season trading 
program with respect to the 1997 ozone NAAQS under the original CSAPR. 
However, as described in section IV of this preamble, the phase 2 
NOX ozone season budgets \154\ for these three states were 
remanded to the EPA for reconsideration by the D.C. Circuit in EME 
Homer City II, 795 F.3d at 138. In this final rule, the EPA finds that 
emissions from Florida, North Carolina, and South Carolina do not 
significantly contribute to nonattainment or interfere with maintenance 
of either the 1997 ozone NAAQS or the 2008 ozone NAAQS in other states. 
Accordingly, starting with the 2017 ozone season, these three states 
will no longer be subject to CSAPR NOX ozone season trading 
program requirements and EGUs in these states will not be allocated 
further allowances nor obligated to demonstrate compliance with CSAPR 
NOX ozone season requirements. The EPA is revising 40 CFR 
part 52 to remove CSAPR NOX ozone season program 
requirements for these three states.
---------------------------------------------------------------------------

    \154\ CSAPR phase 1 NOX ozone season emission budgets 
are effective for 2015 and 2016 while phase 2 NOX ozone 
season emission budgets would be effective starting with the 2017 
ozone season.
---------------------------------------------------------------------------

C. Updates to CSAPR NOX Ozone Season Trading Program 
Requirements

    For the CSAPR Update rule, the EPA is finalizing certain updates to 
the CSAPR NOX ozone season trading program to transition the 
existing original CSAPR NOX ozone season trading program, 
designed to address the 1997 ozone NAAQS, to address new requirements 
as to interstate emission transport for the 2008 ozone NAAQS. These 
changes will be effective for the 2017 ozone season control period. In 
this context, the EPA determines the extent to which allowances issued 
under emission budgets established to address interstate transport with 
respect to the 1997 ozone NAAQS would or would not be eligible for 
compliance under this rule for affected EGUs with emission budgets 
established to address interstate transport for the 2008 ozone NAAQS. 
In developing approaches to transition the CSAPR trading program, the 
EPA weighed several factors, including achieving the environmental goal 
of the CSAPR Update (i.e., achieving necessary emission reductions to 
address interstate transport with respect to the 2008 ozone NAAQS) and 
feasibility of implementing the CSAPR Update rule. The EPA proposed and 
took comment on several approaches regarding this transition of the 
original CSAPR NOX ozone season program to address 
interstate emission transport for the more recent 2008 ozone NAAQS.
    The EPA considered whether CSAPR NOX ozone season 
allowances issued in 2017 and thereafter to affected EGUs in original 
CSAPR states without updated CSAPR NOX ozone season trading 
program budgets (i.e., Georgia) can be used for compliance in the 22 
CSAPR Update states and vice versa. As described later on, this final 
rule prohibits the use of allowances for compliance between Georgia and 
the CSAPR Update states because of the differences in air quality goals 
(i.e., the 1997 ozone NAAQS versus the 2008 ozone NAAQS) and the 
different NOX control stringency used to establish emission 
budgets necessary to achieve those air quality goals. The EPA is 
implementing this prohibition by establishing two distinct trading 
groups with distinct allowances within the CSAPR NOX ozone 
season allowance trading program. The EPA provides an option for 
Georgia to voluntarily adopt via SIP a commensurate CSAPR Update 
emission budget that would obviate this prohibition by including 
Georgia in the trading group with the CSAPR Update states.
    The EPA also considered whether, and to what extent, banked \155\ 
2015 and 2016 CSAPR NOX ozone season allowances issued under 
original CSAPR NOX ozone season emission budgets should be 
eligible for compliance in CSAPR Update states in 2017 and beyond. As 
described later on, this rule establishes a one-time allowance 
conversion that transitions a limited number of banked 2015 and 2016 
allowances (approximately 99,700 allowances) for compliance use in 
CSAPR Update states. This allowance conversion is designed to limit the 
potential use of banked allowances to no more than one year of the 
CSAPR variability limits in order to ensure that implementation of the 
trading program will result in NOX emission reductions 
sufficient to address significant contribution to nonattainment or 
interference with maintenance of downwind pollution with respect to the 
2008 ozone NAAQS. However, the conversion also facilitates compliance 
with the CSAPR Update by carrying over some allowances that can be used 
for compliance.
---------------------------------------------------------------------------

    \155\ Allowances that were not used for compliance and were 
saved for use in a later compliance period.
---------------------------------------------------------------------------

1. Relationship of Allowances and Compliance for CSAPR Update States 
and States With Ongoing Original CSAPR Requirements
    The final rule establishes two trading groups within the CSAPR 
NOX ozone season allowance trading program. Group 2 is newly 
established and is comprised of the 22 CSAPR Update states. Group 1, at 
this time, consists of Georgia. The CSAPR Update rule ozone season 
Group 1 and Group 2 trading programs are codified under 40 CFR part 97, 
subparts BBBBB for Group 1 and EEEEE for Group 2, to enact the EGU 
NOX ozone season emission budgets for the 2008 ozone NAAQS. 
Section 52.38(b) has been amended to update which sources are subject 
to the requirements of the respective subparts of part 97 for control 
periods after 2016.
    The EPA will issue distinct allowances for these trading groups, 
CSAPR NOX ozone season Group 1 allowances and CSAPR 
NOX ozone season Group 2 allowances, for the 2017 ozone 
season control period and subsequent control periods. Covered entities 
may transfer, trade (buy and sell), and bank (save) these allowances. 
Pursuant to the CSAPR trading program regulations, compliance is 
demonstrated by holding and surrendering one allowance for each ton of 
ozone season NOX emitted during the control period (i.e., 
ozone season). The CSAPR Update finalizes provisions governing 
compliance that prohibit the use of Group 1 allowances for compliance 
in Group 2 states or the use of Group 2 allowances for compliance in 
Group 1 states.\156\ Aside from revised emission budgets for CSAPR 
NOX ozone season Group 2 states and the prohibition of using 
Group 1 allowances for compliance in Group 2 states, and vice versa, 
the CSAPR Update rule NOX ozone season trading programs' 
implementation requirements (e.g., monitoring, reporting, assurance 
provisions) are substantively identical to the original CSAPR 
NOX ozone season trading program.
---------------------------------------------------------------------------

    \156\ There are limited exceptions for circumstances where a 
source becomes subject to a requirement to hold additional Group 1 
allowances after Group 1 allowances have been converted to Group 2 
allowances, as discussed in section IX in this preamble.

---------------------------------------------------------------------------

[[Page 74556]]

    In the original CSAPR SO2 annual allowance trading 
program, the EPA discussed its concern with permitting the use of 
allowances for compliance between groups of states linked to air 
pollution problems that are more easily resolved and groups of states 
linked to air pollution problems that are more persistent. The EPA was 
concerned that allowance trading between these groups of states could 
undermine the capacity of the rule to achieve the emission reductions 
required by the good neighbor provision of the CAA. Specifically, 
trading between these groups could lead to greater emission reductions 
in states linked to more easily resolved air pollution problems and 
fewer emission reductions in states linked to more persistent air 
pollution problems. This concern arose, in part, because the EPA 
identified different levels of significant contribution to 
nonattainment or interference with maintenance for these groups of 
states. As a result, these groups' emission budgets were established 
using different levels of control stringency. Allowing trading between 
groups of states with emission budgets representing substantially 
different uniform costs could lead to allowance transfers from EGUs in 
states with less stringent emission budgets to EGUs in states with more 
stringent emission budgets.\157\ The EPA was concerned that allowing 
trading between such groups of states could increase the risk of 
emissions within a state exceeding the CSAPR emission budget or 
assurance level. For these reasons, the original CSAPR rulemaking 
prohibited the use of CSAPR SO2 Group 1 allowances in 
SO2 Group 2 states and vice versa.
---------------------------------------------------------------------------

    \157\ 76 FR at 48263-64.
---------------------------------------------------------------------------

    In similar fashion, in order to ensure that the CSAPR 
NOX ozone season trading program implements emission 
reductions needed to meet the CAA's good neighbor requirements for the 
CSAPR Update states, the EPA is finalizing a prohibition on allowance 
usage between Georgia and the CSAPR Update states. Specifically, for 
the final CSAPR Update rule, the EPA determines that allowances issued 
in 2017 and thereafter under the original CSAPR will not be eligible 
for compliance in the 22 CSAPR Update states, and vice versa. The EPA 
is finalizing this prohibition because states participating in the 
original CSAPR NOX ozone season program (i.e., Georgia) are 
doing so to address interstate emission transport for the 80 ppb 1997 
ozone NAAQS, while CSAPR Update States are addressing interstate 
emission transport for the 75 ppb 2008 ozone NAAQS. The air quality 
assessment performed for this rule shows that ozone pollution problems 
with respect to the 75 ppb standard are relatively more robust than 
ozone problems with respect to the 80 ppb standard. Further, due in 
part to these differences in ozone pollution risk represented by the 
two standards, the EPA has identified different levels of significant 
contribution to nonattainment or interference with maintenance for 
these groups and the corresponding emission budgets and assurance 
levels reflect different levels of EGU NOX control 
stringency. The original CSAPR NOX ozone season emission 
budgets and assurance levels reflect $500 per ton of NOX 
emissions reduced while the CSAPR Update emission budgets and assurance 
levels reflect $1,400 per ton of NOX emissions reduced. The 
EPA finds this substantial difference in uniform cost could lead to 
allowance transfers from EGUs in Georgia to EGUs in CSAPR Update 
states. Specifically, the EPA notes that the ratio of marginal cost of 
ozone season NOX control reflected in these emission budgets 
is nearly three-to-one, which is similar to the three-to-one assurance 
provision allowance surrender penalty that is incurred on emissions 
that exceed any state's assurance level (121 percent of the emission 
budget). The EPA finds that allowing trading between Georgia and the 
CSAPR Update states could increase the risk that emissions in CSAPR 
Update states exceed their emission budget or their assurance level.
    The EPA does not expect that the prohibition of using CSAPR Update 
rule NOX ozone season Group 2 allowances for compliance in 
Group 1 states will create significant concern regarding feasibility of 
compliance for Group 1 states. Georgia's ozone season emissions have 
been well below its original CSAPR NOX ozone season emission 
budget for several years. The EPA anticipates that units within the 
state will continue to meet compliance obligations even without the 
ability to use CSAPR Update rule NOX ozone season Group 2 
allowances for compliance. Further, the EPA is quantifying an optional 
CSAPR Update rule EGU NOX ozone season emission budget for 
Georgia, using the same methods and uniform cost as budgets for CSAPR 
Update states. This emission budget reflects protection of downwind air 
quality under the 2008 ozone NAAQS. If Georgia chooses to adopt this 
emission budget via a revised SIP submittal, then the EPA believes that 
such a SIP submission may be approvable and Georgia may thereby opt 
into the CSAPR Update rule NOX ozone season Group 2 trading 
program and use the CSAPR Update rule NOX ozone season Group 
2 allowances for compliance.
    Comment: Commenters suggested that if states subject to the 
original CSAPR for the 1997 ozone NAAQS are not found to significantly 
contribute to nonattainment or interfere with maintenance for the 2008 
ozone NAAQS, then allowances issued in those states should not be part 
of the remedy, since there is no physical connection between 
NOX allowances issued for those states and the downwind 
ozone nonattainment or maintenance problem that another state's 
reductions must address for a different NAAQS.
    Response: In light of the specific differences in ozone pollution 
problems addressed, level of significant contribution to nonattainment 
or interference with maintenance, and marginal cost of NOX 
reduction used to establish emission budgets for the original CSAPR and 
the CSAPR Update rule, the EPA agrees that it is reasonable to prohibit 
the use of CSAPR Update rule NOX ozone season Group 1 
allowances for compliance in Group 2 states and vice versa, as 
described previously.
    Comment: Commenters suggested that there should not be a 
prohibition on using allowances between these groups of states and that 
the CSAPR assurance provisions are sufficient to ensure that emission 
reductions are made in upwind states.
    Response: The assurance provisions provide limited flexibility 
around the finalized emission budgets developed using uniform control 
stringency to accommodate inherent variability in average power sector 
operations. For example, assurance levels are intended to accommodate 
specific unusual events, such as sudden and unexpected outages of a 
unit, or severe weather. The assurance level is intended to function as 
a not-to-exceed cap that includes both the state budget--established to 
reduce significant contribution to and interference with maintenance of 
the 2008 ozone NAAQS in downwind states--and the variability limit. The 
flexibility provided by the assurance provisions is not designed to 
address interstate trading in the case of two groups of states that are 
addressing different ozone pollution problems, levels of significant 
contribution to nonattainment or interference with maintenance, or 
levels of EGU NOX reduction stringency in emission budgets. 
Further, as described previously, the EPA finds that were it to

[[Page 74557]]

authorize use of allowances issued to EGUs in Georgia for compliance in 
CSAPR Update states, the risk of emissions in a CSAPR Update state 
exceeding its emission budget or assurance level would increase.
2. Use of Banked Vintage 2015 and 2016 CSAPR NOX Ozone 
Season Trading Program Allowances for Compliance in CSAPR Update States
    In this subsection, the EPA describes its approach to transition a 
limited number of allowances that were banked in 2015 and 2016 under 
the original CSAPR EGU NOX ozone season emission budgets 
into the allowances that can be used for compliance in CSAPR Update 
states in 2017 and thereafter. As proposed, the EPA is finalizing a 
limit on the number of banked allowances carried over based on the need 
to assure that the CAA objective of the CSAPR Update is achieved. This 
approach transitions some allowances for compliance to further ensure 
feasibility of implementing the CSAPR Update rule.
    Specifically, the EPA is including in this final rule a method for 
ensuring that emissions in the CSAPR Update region do not exceed a 
specified level--this is, emissions up to the sum of the states' 
seasonal emissions budgets and variability limits--as a result of the 
use of banked allowances. The method is captured in a formula or ratio, 
the numerator of which is the total number of banked allowances at the 
end of the 2016 ozone season and the denominator of which is 1.5 times 
the aggregated variability limits finalized in this rule. The ratio is 
then applied to the banked vintage 2015 and 2016 allowances in each 
account to yield the number of banked allowances available to each 
account holder in 2017.\158\
---------------------------------------------------------------------------

    \158\ As discussed in section IX of the preamble, banked 
allowances held in compliance accounts for sources in Georgia will 
not be converted and will be excluded from the conversion ratio 
calculation.
---------------------------------------------------------------------------

    When proposing this approach, the EPA described how sources in 
states with new or updated budgets could use all of their banked 
allowances, but at a turn-in ratio significantly higher than one under 
which only one allowance would be used to cover each ton of emissions 
(e.g., a four-for-one or a two-for-one turn-in ratio). The EPA proposed 
to use turn-in ratios calculated using the proposed formula described 
above--essentially the same formula that the EPA is including in this 
final rule. At proposal, the EPA explained that the ratio of the banked 
vintage 2015 and 2016 allowances to the aggregated ozone season 
variability limits was designed to limit the magnitude of the emission 
impact of sources' use of banked allowances to that of the emissions 
level that would result from all states emitting up to the sum of their 
budgets and their variability limits for one or two years. (See 80 FR 
75747.) The formulaic ratio when applied to the actual bank and 
emissions levels would yield a conversion factor for banked allowances 
that would be used to implement the proposed emissions limitation.
    The final approach described in this section--a one-time conversion 
of aggregated banked vintage 2015 and 2016 allowances to 2017 vintage 
allowances equivalent to 1.5 years of the aggregated CSAPR Update 
variability limits--is virtually identical to the approach we laid out 
in the NPRM. In particular, it is identical to the proposal in terms of 
the formula used to assess the number of banked allowances relative to 
the CSAPR Update variability limits. Further, the value for the 
principal input to this formula that the EPA is updating in this final 
rule--the aggregated variability limits--is very similar to the value 
for this input at proposal.\159\ The EPA has refined this approach to 
converting the banked allowances based on comments we received that 
urged us to simplify implementation. The final approach limits the 
influence of banked allowances via a one-time conversion, which has the 
same impact on the allowance bank as an ongoing turn-in ratio, but 
provides simplified implementation of the CSAPR Update rule. Further, 
because the EPA will perform the conversion at one time and each 
allowance going forward will equate to one ton of emissions, the EPA 
does not find it necessary to finalize rounding the conversion ratio to 
the nearest whole number.
---------------------------------------------------------------------------

    \159\ At proposal, the aggregated variability limits totaled 
approximately 60,000 tons and in the final rule the aggregated 
variability limits total approximately 65,000 tons.
---------------------------------------------------------------------------

    The denominator in the conversion formula--1.5 times the states' 
aggregated variability limits--represents the number of banked 
allowances that will be available for use toward compliance with the 
CSAPR Update. Under the CSAPR implementation framework, variability 
limits are established to allow the units in a state to emit above the 
state's emission budget in a single control period when necessary 
because of year-to-year variability in power sector operations. The 
variability limits operate in conjunction with, but are distinct from, 
the state emission budgets. The purpose of the state emission budgets 
is to ensure that each state achieves necessary emission reductions, as 
required under CAA section 110(a)(2)(D)(i)(I). The purpose of the 
variability limits, and the assurance provisions that require 
additional allowances to be surrendered when emissions from covered 
sources within a state exceed those limits, is to ensure that the 
requirement for each state to reduce emissions necessary to address its 
downwind air quality impacts is implemented in a manner consistent with 
normal year-to-year variability in power sector operations while 
keeping any emissions above the budget within acceptable limits.
    In the proposal, the EPA requested comment on a range of turn-in 
ratios for banked allowances derived from the formula described 
previously, including a four-for-one ratio based on the sum of covered 
states' variability limits for one year and a two-for-one ratio based 
on the sum of covered states' variability limits for two years. 
Commenters expressed a wide range of views, from those advocating for 
no use of banked allowances to those advocating for the use of all 
banked allowances with no turn-in ratio, as well others advocating for 
turn-in ratios between these extremes. However, commenters generally 
did not address the specific topic of whether one, two, or a different 
number of years of variability limits would represent an appropriate 
quantity of banked allowances to allow to be used for compliance with 
the CSAPR Update.
    The EPA has determined that it is appropriate to use as the formula 
denominator the sum of covered states' variability limits for 1.5 
years. As noted above, the purpose of the variability limits is to 
accommodate year-to-year variability in power sector operations at the 
state level. In theory, a bank based on the sum of all covered states' 
variability limits would be sufficient to accommodate such variability 
for all states simultaneously--in other words, the maximum amount of 
permissible emissions consistent with the purpose and design of the 
variability limits--for one year. Because it is unlikely that normal 
year-to-year power sector variability would cause all states to need to 
exceed their emissions budgets in the same year, the EPA considers the 
sum of the states' variability limits for one year a reasonable maximum 
for the number of allowances that would ever need to be used for 
compliance to address potential variability in power sector operations. 
However, the EPA's experience with implementing market-based trading 
programs is that in

[[Page 74558]]

historical practice most sources typically do not use every available 
allowance for compliance, but instead keep some in reserve in order to 
ensure compliance (e.g., to avoid penalties in the event of unforeseen 
emissions and/or problems with preliminary data calculations). The EPA 
believes that using the states' variability limits for 1.5 years 
instead of one year provides sources with sufficient allowances to 
accommodate maximum year-to-year variability in power sector operations 
while also addressing the manner in which allowance holdings are 
actually managed and used. Thus, the EPA believes that providing 
allowances equivalent to 1.5 years of covered states' variability 
limits fulfills the primary purpose we described in our proposal--
limiting the use of banked allowances to no more than one year of 
states' aggregated variability limits--while acknowledging the 
historical practice in market-based trading programs of sources keeping 
some allowances in reserve from year to year in order to provide 
planning and operating flexibility over multi-year periods. The EPA 
believes that this ratio provides an appropriate balance of these 
considerations, while providing a bank any larger would be inconsistent 
with the rule's purpose of achieving emission reductions required by 
CAA section 110(a)(2)(D)(i)(I).
    The numerator in the conversion formula is the number of banked 
allowances to be converted. At proposal, the EPA anticipated, based on 
2014 emissions data, that there would be approximately 210,000 banked 
allowances following the 2015 and 2016 ozone seasons. As commenters 
correctly predicted, based on more recent data, the size of the 
anticipated bank is now larger. Based on 2015 emissions data, the EPA 
anticipates that there will be approximately 350,000 banked allowances 
entering the CSAPR NOX ozone season trading program by the 
start of the 2017 ozone season control period.\160\ As explained in 
more detail below, this anticipated total of banked allowances reflects 
the fact that the seasonal NOX emissions budgets established 
in CSAPR are to a significant extent not acting to constrain actual 
NOX emission levels during the ozone season. Affected units 
overall are emitting less than their budgeted levels by a substantial 
margin and therefore do not have to use all of their allowances to 
comply with the requirements of CSAPR; as a result, the bank is growing 
substantially, especially relative to the emissions reductions that 
this rule is designed to achieve.
---------------------------------------------------------------------------

    \160\ This allowance bank size was quantified as the observed 
allowance bank at the conclusion of 2015 plus an estimate of 
allowances likely to be banked in 2016, assuming that 2016 emissions 
would be unchanged from 2015 levels. These data rely on 40 CFR part 
75 emission reporting and are available in the EPA's Air Markets 
Program Data, available at http://ampd.epa.gov/ampd/.
---------------------------------------------------------------------------

    This amount of anticipated banked allowances is greater than the 
sum of all the state emission budgets established in this CSAPR Update 
and is roughly five times the total emission reduction potential that 
informs the emission budgets imposed by this rule. This number of 
anticipated banked allowances is also approximately five times larger 
than the aggregated CSAPR Update variability limits. Without imposing a 
limit on the transitioned vintage 2015 and 2016 banked allowances, the 
number of banked allowances would increase the risk of emissions 
exceeding the CSAPR Update emission budgets or assurance levels and 
would be large enough to let all affected sources emit up to the CSAPR 
Update assurance levels for five consecutive ozone seasons.
    In prior ozone season emissions trading programs, such as the Ozone 
Transport Commission's NOX Budget Program and the 
NOX Budget Trading Program implemented in conjunction with 
the NOX SIP Call, allowance deduction provisions (in some 
cases known as ``flow control'') were included in order to prevent 
banked allowances from being used in a single ozone season in 
quantities that would result in excess total emissions. Similarly under 
the CSAPR Update rule, the conversion ratio together with the assurance 
provisions will address the large size of the existing CSAPR bank with 
respect to the 2017 ozone season.
    Limiting the influence of the banked allowances is critical to 
achieving the goal of reducing ozone formation, because reduction in 
ozone depends on reductions in precursor emissions contemporaneous with 
the meteorological conditions conducive to the formation of ozone. 
Hence the rule is designed with ozone season-specific budgets intended 
to achieve emission reductions by the 2017 ozone season in order to 
assist downwind states with meeting the July 2018 Moderate area 
attainment date for the 2008 ozone NAAQS. See North Carolina, 531 F.3d 
at 911-12 (instructing the EPA to coordinate upwind state emission 
reductions with downwind attainment deadlines). Other Clean Air Act 
programs designed to address public health and environmental problems 
that result from cumulative emissions permit sources to comply by over-
controlling emissions in earlier years and using the resulting banked 
reductions to offset emissions in later years. In contrast, states, and 
when acting to meet its FIP obligations, the EPA, must ensure that the 
goal of improved air quality will be achieved and can do so only if 
emissions are reduced to specified levels during each ozone season.
    This approach to limiting the influence of banked allowances also 
serves the goal of ensuring that emission reductions are achieved in 
each state. A bank of allowances that is five times the CSAPR Update 
variability limit would increase the risk of EGUs exceeding their 
states' CSAPR assurance levels, and thereby impede the ability of the 
assurance provisions to meaningfully limit emissions in each state. 
These circumstances would undermine compliance with CAA section 
110(a)(2)(D)(i)(I), which requires that ``[e]ach state must eliminate 
its own significant contribution to downwind pollution.'' North 
Carolina, 531 F.3d at 921. The assurance provisions, as finalized in 
the original CSAPR rulemaking, were designed to address this 
requirement by imposing a penalty in the event that EGUs exceed the 
state assurance levels. 76 FR at 48294-98. If EGUs' incentive to 
constrain emissions is compromised by the availability of a large bank 
of allowances, the EPA could no longer ensure that appropriate state-
level emissions reductions are achieved.
    While the bank of allowances reflects actions taken by sources in 
CSAPR to reduce emissions, it also reflects other factors unique to the 
regulatory history of CSAPR. In particular, the CSAPR budgets were 
established based on information available in 2010 and 2011. As 
promulgated in 2011, CSAPR required the budgets to be implemented in 
2012 (Phase 1) and 2014 (Phase 2). As a result of litigation, the 
emissions budgets did not take effect until 2015. Between 2011 and 
2015, the power sector responded to increases in natural gas supply, 
declines in natural gas prices, and increasing penetration of wind and 
other low- or zero-emitting renewable energy resources. Consequently, 
by the time the CSAPR ozone season budgets were implemented in the 2015 
ozone season, they were no longer binding on state emission levels, 
even though they were anticipated to be binding when developed in 2011. 
The original CSAPR emission budgets for the 2015 ozone season were 
about 628,000 tons in aggregate, but actual emissions were about 
451,000 tons, resulting in a substantial bank of allowances after the 
2015 ozone season. In addition, based on emissions data for May and 
June of 2016 (i.e., the first two months of the

[[Page 74559]]

2016 ozone season under the trading program), ozone season 
NOX emissions have declined 15 percent compared to the 
comparable period in 2015, which we anticipate will lead to a yet 
larger bank of allowances. In this final rule, the 2017 emission 
budgets plus the 21 percent variability limits total about 381,000 tons 
in aggregate, compared to 2015 emissions from the relevant states of 
about 399,000 tons. The bank of CSAPR allowances fostered in part by 
the unique circumstances of CSAPR's implementation is thus of a size 
that is so large relative to the budgets under this final CSAPR Update 
rule that, if all of the banked allowances were used without 
restriction, all states would exceed their emissions budgets for 
several successive ozone seasons. In that case, use of the bank would 
impede the achievement of the reductions needed to reduce ozone levels 
and assist downwind states with attainment and maintenance of the NAAQS 
by the 2017 ozone season. For these reasons, the implementation of the 
conversion ratio derived from the formula that is established in the 
final rule is necessary to limit the use of banked allowances and 
assure that reductions will actually occur and contribute to improved 
air quality in time to assist downwind states with meeting their 
attainment dates.
    Some commenters objected to any limitation on the use of banked 
allowances, in part noting the additional compliance flexibility that 
banked allowances provide. But as explained above, without limitation, 
the number of banked allowances could undermine the capacity of the 
rule to achieve the emission reductions required by the good neighbor 
provision of the CAA--timely emission reductions in upwind areas that 
are necessary to avoid significant contribution to nonattainment or 
interference with maintenance of the 2008 ozone NAAQS in downwind 
areas. Specifically, the CSAPR Update establishes emission budgets that 
represent the remaining EGU emissions after reducing those amounts of 
each state's emissions that significantly contribute to downwind 
nonattainment or interfere with maintenance of the 2008 ozone NAAQS in 
downwind states, as required under CAA section 110(a)(2)(D)(i)(I). In 
other words, the CSAPR Update establishes an emission budget for each 
state that is its good neighbor obligation. If made available in its 
entirety for compliance with the CSAPR Update, then the anticipated 
350,000 banked allowances would inherently increase the risk of states 
exceeding their emission budget by providing a total number of 
allowances for compliance in 2017 that is more than double the 22 state 
sum of emission budgets. The CSAPR allowance trading program already 
provides some flexibility in the form of the CSAPR variability limits 
and corresponding assurance levels to allow states to meet their good 
neighbor obligation while respecting inherent variability in 
electricity generation. However, the anticipated 350,000 banked 
allowances, if fully available for compliance, would also increase the 
risk of EGUs exceeding their states' CSAPR assurance level by providing 
allowances for compliance greater than five times the CSAPR variability 
limit. These excess allowances could be used for compliance 
irrespective of the need to achieve the CAA good neighbor obligation 
while complying with typical year-to-year variability on which the 
assurance levels are based. The allowance bank would thereby further 
undermine the capacity of the rule to achieve the emission reductions 
required by the good neighbor provision of the CAA by increasing the 
risk that emissions would exceed not only the emission budgets, but 
also the assurance levels.
    The EPA believes that allowing for banking of excess emission 
reductions is a positive element of a trading-based program such as 
this one. Banking encourages early reductions, provides certainty, and 
creates flexibility in order to achieve the public health goal more 
cost-effectively and reliably. When use of banked allowances can 
undermine the environmental goal rather than help to achieve it, 
however, it is reasonable and appropriate to restructure the use of 
banked allowances. For these reasons, when the EPA finalized the 
original CSAPR provisions, the agency explicitly reserved its authority 
to eliminate or revise allowances issued in a given compliance year. 
The existing regulations for the current NOX ozone season 
trading program explain that an allowance is ``a limited authorization 
to emit one ton of NOX during the control period in one 
year.'' 40 CFR 97.506(c)(6). The regulations continue by providing the 
Administrator the ``authority to terminate or limit the use and 
duration of such authorization to the extent the Administrator 
determines is necessary or appropriate to implement any provision of 
the Clean Air Act.'' Id. 97.506(c)(6)(ii). The regulations also clearly 
state that such allowances do not constitute property rights. Id. 
97.506(c)(7). The EPA also notes that banked allowances were accrued 
against 2015 and 2016 implementation of seasonal emission budgets that 
were established to address interstate emission transport for the 80 
ppb 1997 ozone NAAQS. Banked compliance instruments with respect to the 
1997 ozone NAAQS in 2015 or 2016 are not inherently interchangeable 
with emission reductions needed to address interstate emission 
transport for the 75 ppb 2008 ozone NAAQS starting in 2017.
    However, provided that it can do so without jeopardizing the good 
neighbor objectives of the CSAPR Update rule, the EPA believes that 
permitting some allowances banked under the original CSAPR to be used 
to meet compliance with the CSAPR Update can facilitate compliance with 
the requirements of the latter. As described in section VI, the EPA is 
establishing emission budgets that it finds to be feasible for the 2017 
ozone season. As a result, the EPA believes that it is feasible to 
implement the final CSAPR Update rule emission budgets that the EPA is 
promulgating in this action, even without availability of banked 
allowances for compliance. However, in order to ensure implementation 
feasibility, the EPA is finalizing an approach that transitions a 
limited number of banked allowances into the CSAPR NOX ozone 
season Group 2 program for compliance starting with the 2017 ozone 
season. By providing for the use of some banked allowances for 
compliance with the CSAPR Update rule, the EPA provides immediate but 
limited compliance flexibility that will support the feasibility of 
meeting emission budgets for the 2017 ozone season and variation in 
power sector operations. The CSAPR Update assurance level reflects the 
upper bound variation in power sector generation that the EPA would 
expect in any given year. Thus, the carryover of converted banked 
allowances equal to 1.5 years' worth of variability limits provides the 
affected fleet with the ability to accommodate potential variation from 
the mean in its load and emission patterns in the initial year of the 
program and also maintain a small reserve of allowances, while 
balancing the need to ensure that emissions are reduced, on average, to 
the level of the budgets and within the assurance levels in subsequent 
years. For a further discussion of additional implementation 
feasibility provided by this approach, see section VII.C.
    Considering these factors--especially the EPA's obligation to 
achieve the NOX emission reductions needed to address 
transport with respect to the 2008 NAAQS--the EPA believes it is 
reasonable--even required--to restrict

[[Page 74560]]

the number of banked allowances carried over.
    To enable the use of banked 2015 and 2016 vintage allowances for 
compliance with the CSAPR Update, the EPA is finalizing a one-time 
conversion that transitions a number of allowances equivalent to 1.5 
years of the sum of states' CSAPR NOX ozone season Group 2 
variability limits (the variability limits are 21 percent of the 
regional total emission budgets), or approximately 99,700 allowances. 
The one-time conversion of the 2015 and 2016 banked allowances will be 
made using a calculated ratio, or equation, to be applied in early 2017 
once compliance reconciliation (or ``true-up'') for the 2016 ozone 
season program is completed. The EPA will use an equation to derive the 
ratio by dividing the number of all 2015 and 2016 post-true-up banked 
CSAPR NOX ozone season allowances being converted by 1.5 
times the sum of the 2017 CSAPR Update variability limits quantified in 
Table VII.C-2 in this preamble. As soon as practicable and not later 
than March 1, 2018, which is the compliance deadline for the 2017 
control period, and pending notification of all allowance holders, the 
EPA will freeze allowance accounts and convert the original CSAPR 
NOX ozone season 2015 and 2016 banked allowances to the 2017 
vintage CSAPR Update rule NOX ozone season Group 2 
allowances. These allowances may then be used in 2017 and thereafter on 
a 1-to-1 (one allowance to one ton of ozone season emissions) basis for 
compliance in Group 2 states.
    Dividing the bank by 1.5 times the collective variability limits 
results in the ratio that the EPA will apply to convert each source's 
banked 2015 and 2016 original CSAPR NOX ozone season 
allowances to 2017 CSAPR Update rule NOX ozone season Group 
2 allowances. The resulting post-conversion bank will be equivalent to 
1.5 times the sum of states' CSAPR NOX ozone season Group 2 
variability limits, or approximately 99,700 allowances. Based on 
current data, the EPA notes that this conversion ratio would be 
approximately 3.5 to 1, but the ratio could be lower or higher 
depending on 2016 emissions. By instituting the one-time conversion of 
banked 2015 and 2016 allowances, the EPA is limiting the use of such 
allowances for purposes of assuring that emission reductions necessary 
to address interstate transport with respect to the 2008 ozone standard 
are achieved.
    As of the conversion date (see 40 CFR 97.526(c)(1)), the EPA will 
convert all 2015 and 2016 allowances held in any account, other than a 
Georgia source's compliance account, to Group 2 allowances. This 
includes banked 2015 and 2016 allowances held in accounts in non-CSAPR 
Update states (i.e., Florida, North Carolina, and South Carolina). The 
ratio will be determined by dividing the number of allowances held in 
all such accounts (i.e., every general account and every compliance 
account except for a compliance account for a Georgia source) by 1.5 
times the sum of the variability limits for all states other than 
Georgia. Starting with the 2017 ozone season control period, only CSAPR 
NOX ozone season Group 2 allowances can be used for 
compliance with the CSAPR Update rule ozone season program. Any 
remaining CSAPR NOX ozone season 2015 and 2016 allowances 
that are not converted to Group 2 allowances may only be used for 
compliance by affected sources in states that are subject to the 
original CSAPR ozone season program to meet obligations for the 1997 
ozone NAAQS (the only such state is Georgia).
    A source in the state of Georgia that chooses to have some or all 
of its banked 2015 and 2016 allowances converted to Group 2 allowances 
may move any of its 2015 and 2016 banked allowances out of a compliance 
account and into a general account. These allowances in the general 
account will then be subject to conversion to Group 2 allowances.
    The EPA proposed and took comment on a range of options for how to 
treat the use of banked 2015 and 2016 CSAPR NOX ozone season 
allowances by EGUs in the 22 CSAPR Update states. As described 
previously, the EPA proposed that sources in states with new or updated 
budgets could use all of their banked allowances, but at a ratio 
significantly higher than one allowance to cover each ton (e.g., at a 
four-for-one turn-in ratio). Additionally, the proposed CSAPR Update 
solicited comment on less and more restrictive approaches to address 
use of the CSAPR EGU NOX ozone allowance bank. Specifically, 
the EPA sought comment on: (1) Allowing banked 2015 and 2016 CSAPR 
NOX ozone allowances to be used for compliance with the 
CSAPR Update for the 2008 ozone NAAQS starting in 2017 at a one-for-one 
ratio, or (2) completely disallowing the use of banked 2015 and 2016 
CSAPR NOX ozone allowances for compliance with the CSAPR 
Update for the 2008 ozone NAAQS starting in 2017. The EPA also 
solicited comment on whether and how the assurance provision penalty 
might be increased, in conjunction with any of the above approaches, to 
address the relationship of the allowance bank to emissions occurring 
under this revised program from 2017 onward. At this time, the EPA is 
not changing the assurance provision penalty or its application.
    Comment: Some commenters suggested that implementation by way of 
ongoing turn-in ratios would be cumbersome and complicated because it 
requires affected EGUs to hold allowances for compliance that are 
equivalent to differing ratios of tons of emissions.
    Response: The EPA agrees with the commenters who observed that an 
allowance trading program in which a CSAPR NOX ozone season 
allowance issued in 2017 and thereafter would be worth one ton of 
emissions while a CSAPR NOX ozone season allowance issued in 
2015 or 2016 would be worth less than one ton of emissions is overly 
complex. These differing emission equivalents of otherwise similar 
compliance tools (i.e., allowances) would add a layer of complexity to 
ongoing compliance demonstrations. Implementing a ratio by way of a 
one-time conversion, instead, has the same impact on emission 
reductions as an ongoing turn-in ratio in that the emissions equivalent 
of the banked allowances will be reduced consistent with the ratio, but 
the implementation of the ratio through a one-time conversion 
simplifies implementation of the CSAPR Update rule, which supports 
efficient and accurate compliance planning.
    Comment: Some commenters requested that the EPA not limit the use 
of banked vintage 2015 and 2016 CSAPR NOX ozone season 
allowances in the final CSAPR Update, suggesting that the EPA had not 
demonstrated that use of these allowances would undermine the goals of 
the CSAPR Update. These commenters suggested that the assurance levels 
are adequately protective of the CSAPR Update emission reduction 
requirements.
    Response: The EPA disagrees with these comments. As discussed 
previously, the EPA anticipates a large number of banked allowances 
entering the 2017 CSAPR ozone season control period. Allowing unlimited 
use of this magnitude of vintage 2015 and 2016 CSAPR NOX 
ozone season allowances in the 2017 control period and going forward 
would put the emission reduction requirements of the CSAPR Update rule 
in jeopardy and undermine the realization of the emission reductions 
needed under the good neighbor provisions of the CAA to avoid 
significant contribution to nonattainment and interference with

[[Page 74561]]

maintenance of the 2008 ozone NAAQS in downwind areas.
    Comment: Some commenters recommended that the EPA completely 
disallow the use of banked 2015 and 2016 CSAPR NOX ozone 
allowances for compliance with the CSAPR Update for the 2008 ozone 
NAAQS starting in 2017.
    Response: A key feature of allowance trading programs is that they 
provide sources an economically efficient strategy for integrating 
current and future compliance. Banking of allowances for later use also 
creates incentives to make early emission reductions, which often 
result in improved air quality earlier than otherwise required. The EPA 
has seen early reductions and banking in implementing other trading 
programs over the past 20 years, such as the Acid Rain Program and the 
NOX SIP Call. The EPA believes such an economic incentive, 
and the associated environmental benefits, is conditioned on the 
expectation that the resulting banked allowances will have some value 
in the future of that program. The approach that the EPA is finalizing 
provides a means for the existing 2015 and 2016 CSAPR NOX 
ozone season allowances to retain some value, while appropriately 
mitigating the potential adverse impact of the allowance bank on the 
emission-reducing actions needed from affected EGUs in states with 
obligations to address interstate transport for the 2008 ozone NAAQS.
    Comment: Commenters contend that discounting allowances by a turn-
in ratio essentially penalizes sources for early action.
    Response: Commenters did not provide quantitative analysis that the 
turn-in ratio would reduce the overall economic value of the allowance 
holdings nor even address the question of whether or how the diminution 
of the number of allowances available would affect the value of each 
individual allowance or that of the overall bank--especially in view of 
the fact that the NOX emissions budgets are more 
constraining. Because the allowance bank value is a product of both 
allowance quantity and allowance price, the conclusion that any 
reduction in quantity inherently reduces the bank value is flawed 
because it ignores the likely increase in price. Similarly, it merits 
noting the high likelihood that some portion of the banked allowance 
price reflects larger dynamics in the power markets, such as lower 
natural gas prices in recent years, as opposed to explicit early 
actions.

D. Feasibility of Compliance

    In practice, the EGU emission budgets that the EPA is finalizing in 
this action are achievable for each of the 22 states through operating 
and optimizing existing SCR controls, operating existing SNCR controls, 
installing state-of-the-art combustion controls, shifting generation to 
lower NOX-emitting or non-emitting units, using allowances 
that the EPA has allocated to EGUs (including banked allowances), or 
obtaining allowances on the allowance market. The EPA believes that 
this rule provides sufficient lead time to comply with the 2017 ozone 
season requirements.\161\
---------------------------------------------------------------------------

    \161\ As described in Section VI, the EPA is finalizing for 
Arkansas a 2017 ozone season emission budget that does not account 
for EGU NOX reduction potential from combustion controls 
and a 2018 ozone season emission budget for Arkansas that does 
account for EGU NOX reduction potential from combustion 
controls. This approach provides utilities an extra year to upgrade 
combustion controls in the event that this is their chosen CSAPR 
Update compliance path. This extra year allows for upgrades to be 
made across 4 shoulder seasons (fall 2016, spring 2017, fall 2017, 
and spring 2018).
---------------------------------------------------------------------------

    To further examine the compliance feasibility of the state 
NOX ozone season budgets, the EPA performed an analysis of 
state-level achievable NOX ozone season emissions for 2017 
that is independent of the IPM-based assessment used to establish the 
emission budgets. This analysis relied on the most recent ozone season 
data for 2015. For the covered states, these data were adjusted to 
account for announced retirements, announced new SCR at existing units, 
and announced coal-to-gas conversions at existing units.\162\ The EPA 
then applied certain control assumptions directly to the reported unit-
level data. Specifically, this analysis applied EGU NOX 
reductions for turning on idled SCR, optimizing all SCR to historically 
demonstrated NOX emission rates, installing state-of-the-art 
combustion controls, and turning on idled SNCR.
---------------------------------------------------------------------------

    \162\ These adjustments are performed in the same way as the 
adjusted historic emissions described in section VI.
---------------------------------------------------------------------------

    The EPA evaluated the feasibility of turning on idled SCRs for the 
2017 ozone season. Based on past practice, the EPA finds that idled 
controls can be restored to operation in no more than a few months. 
This timeframe is informed by many electric utilities' previous, long-
standing practice of utilizing SCRs to reduce EGU NOX 
emissions during the ozone season while putting the systems into 
protective lay-up during non-ozone season months. For example, this was 
the long-standing practice of many EGUs that used SCR systems for 
compliance with the NOX Budget Trading Program. It was quite 
typical for SCRs to be turned off following the September 30 end of the 
ozone season control period. These controls would then be put in 
protective lay-up for several months of non-use before being returned 
to operation by May 1 of the following ozone season. In the 22 state 
CSAPR Update region, 2005 EGU NOX emission data suggest that 
125 EGUs operated SCR systems in the summer ozone season while idling 
these controls for the remaining seven non-ozone season months of the 
year.\163\ Based on EGUs' past experience and the frequency of this 
practice, the EPA finds that idled SCRs can be restored to operation in 
no more than a few months. Further, because turning on idled SCRs 
requires inherently more steps than fully operating existing operating 
SCR or turning on idled SNCR, the EPA finds that these additional EGU 
NOX reduction strategies are also feasible within a few 
months. The lead-time for compliance with this rule is longer than this 
timeframe. More details on these analyses can be found in the EGU 
NOX Mitigation Strategies Final Rule TSD.
    The EPA also finds that, generally,\164\ state-of-the-art 
combustion controls require a short installation time--typically, four 
weeks to install along with a scheduled outage (with order placement, 
fabrication, and delivery occurring beforehand). Feasibility of 
installing combustion controls was examined by the EPA in the original 
CSAPR where industry demonstrated the ability to install LNB controls 
on a large unit (800 MW) in under six months. More details on these 
analyses can be found in the EGU NOX Mitigation Strategies 
Final Rule TSD.
---------------------------------------------------------------------------

    \164\ This is true with one exception. The EPA finds that for 
Arkansas it is reasonable to delay EGU NOX reduction 
potential for certain new combustion controls until 2018 and 
therefore gives Arkansas a 2017 budget that does not reflect these 
controls and a 2018 budget that does reflect these controls. This 
issue is discussed further in Section VI.
---------------------------------------------------------------------------

    As described in section VI, to establish emission budgets, the EPA 
made a data-informed assumption with respect to the reasonable 
achievable SCR NOX rate (0.10 lbs/mmBtu) for units that are 
not operating SCR optimally. In order to independently evaluate whether 
emission budgets that rely on this assumption are achievable, the EPA 
used actual SCR rates for existing units that reflect demonstrated 
unit-level achievable SCR performance. Specifically, the EPA used the 
lower of 2015 NOX rates (the most recent demonstrated 
achievable SCR NOX rate) and each unit's third lowest 
historical ozone season NOX rate. This approach

[[Page 74562]]

reflects SCR units operating in a manner consistent with demonstrated 
SCR performance capability at each unit. This analysis does not account 
for further EGU NOX reduction potential from shifting 
generation to lower NOX-emitting or non-emitting units. As 
discussed in section VI and further in the EGU NOX 
Mitigation Strategies Final Rule TSD, the EPA believes shifting 
generation to lower NOX-emitting or non-emitting units is 
feasible to implement for the 2017 ozone season but the agency has not 
developed an approach to assess generation shifting that is independent 
of the IPM-based assessment discussed previously.
    The EPA's analysis showed that, with known fleet changes and 
accounting for NOX reduction potential from SCR, SNCR, and 
combustion controls, all CSAPR Update rule states would be at or below 
their 2017 CSAPR Update rule assurance level while continuing to 
otherwise operate consistent with 2015 behavior. The analysis showed 
that, with known changes occurring prior to 2017, optimizing SCR and 
SNCR, and installing combustion controls, the 22 states would lower 
their emissions to approximately 306,000 tons--approximately 3 percent 
below their aggregated CSAPR Update rule budgets, and each state would 
be below its assurance level. Moreover, this analysis does not reflect 
the NOX reduction potential from generation shifting that is 
also available for compliance planning. The state-level summary of this 
2017 analysis is provided in Table VII.D-1. For further discussion of 
implementation feasibility, see the EGU NOX Mitigation 
Strategies Final Rule TSD.\165\
---------------------------------------------------------------------------

    \165\ The EPA notes that a state can instead require non-EGU 
NOX emission reductions through a SIP, if they choose to 
do so.

  Table VII.D-1--Final 2017 EGU NOX Ozone Season Emission Budgets, Assurance Level, and Compliance Feasibility
                                                    Analysis
                                                     [Tons]
----------------------------------------------------------------------------------------------------------------
                                                                   Final 2017 *     Final 2017
                                                                      EGU NOX         EGU NOX       Compliance
                              State                                  emission        assurance      feasibility
                                                                      budgets          level         analysis
----------------------------------------------------------------------------------------------------------------
Alabama.........................................................          13,211          15,985          13,673
Arkansas........................................................          12,048          14,578           8,362
Illinois........................................................          14,601          17,667          13,892
Indiana.........................................................          23,303          28,197          25,325
Iowa............................................................          11,272          13,639          11,070
Kansas..........................................................           8,027           9,713           7,845
Kentucky........................................................          21,115          25,549          21,269
Louisiana.......................................................          18,639          22,553          18,250
Maryland........................................................           3,828           4,632           3,815
Michigan........................................................          17,023          20,598          17,960
Mississippi.....................................................           6,315           7,641           6,296
Missouri........................................................          15,780          19,094          16,326
New Jersey......................................................           2,062           2,495           2,048
New York........................................................           5,135           6,213           5,406
Ohio............................................................          19,522          23,622          16,481
Oklahoma........................................................          11,641          14,086          13,039
Pennsylvania....................................................          17,952          21,722          17,262
Tennessee.......................................................           7,736           9,361           6,569
Texas...........................................................          52,301          63,284          52,647
Virginia........................................................           9,223          11,160           8,670
West Virginia...................................................          17,815          21,556          12,236
Wisconsin.......................................................           7,915           9,577           7,813
                                                                 -----------------------------------------------
    22 State Region.............................................         316,464  ..............         306,252
----------------------------------------------------------------------------------------------------------------
* The EPA is finalizing CSAPR EGU NOX ozone season emission budgets for Arkansas of 12,048 tons for 2017 and
  9,210 tons for 2018 and subsequent control periods.

    The allowance trading program used to implement the emission 
reductions in this rulemaking further promotes compliance feasibility. 
With this approach, an individual source has the flexibility to forgo 
any physical changes to its combustion or post-combustion process and 
simply acquire allowances from another source for compliance. 
Therefore, any unit-specific limitations in regard to permitting, 
installing, and/or modifying controls or other elements of plant 
operation do not jeopardize compliance, as the sources have alternative 
compliance options.\166\ Allowance markets are well established, 
liquid, and will carry a number of already available banked allowances. 
Regarding market liquidity, the EPA observes that as of August 15, 2016 
(part way through the second CSAPR NOX ozone season 
compliance period) more than 1,200 private transfers have taken place 
involving more than 260,000 CSAPR NOX ozone season 
allowances.\167\ In particular, the combined flexibility of a bank and 
a liquid market ensures that any unit with unique circumstances 
regarding its control configuration can continue to operate in its 
current fashion. Trading flexibility further enhances system 
reliability because affected units may cover emissions from any 
reliability-relevant operations with allowances available in the 
marketplace.
---------------------------------------------------------------------------

    \166\ The EPA does not anticipate that restarting an existing 
and permitted idled post-combustion NOX control device 
would trigger any new permitting requirements.
    \167\ Allowance transaction data are available in EPA's Air 
Markets Program Data, at http://ampd.epa.gov/ampd/.
---------------------------------------------------------------------------

    Stakeholders have a history and familiarity with trading programs. 
Congress has enacted, and the EPA has promulgated, many rules that 
allow EGUs and other sources to meet their emission limits by trading 
allowances

[[Page 74563]]

with other sources. In a trading program, the EPA authorizes a source 
to meet its emission limit by purchasing emission allowances generated 
from other sources, typically ones that implement or enhance their 
pollution control devices to reduce emissions to the point where they 
are able to sell allowances. As a result, the availability of trading 
reduces overall costs to the industry by using the marketplace to 
incentivize particular sources that have the lowest control costs to 
implement and operate pollution controls.
    The combination of control optimization feasibility, recent trends 
in emission reductions, on-the-way emission reductions, allowance 
trading, a pre-existing bank, and assurance levels support the 
feasibility of the CSAPR Update rule 2017 emission budgets finalized in 
this action.
    Further supporting the feasibility of this rule's compliance 
obligation is the trend in recent emission reductions. While 2014 ozone 
season NOX emissions for the 22 covered states were 
approximately 466,000 tons, they dropped by 14 percent in 2015 to 
400,000. Moreover, the 2016 ozone season emissions are anticipated to 
be approximately 380,000 tons. This pace of reduction illustrates the 
speed and adaptability in the fleet's response to market conditions. It 
shows a trend in emission reductions that is consistent with the level 
of reductions anticipated by the CSAPR Update rule budgets.
    Comment: The EPA received comment highlighting the significant drop 
in the CSAPR Update rule budgets for 2017 relative to the CSAPR phase 1 
and phase 2 budgets finalized in the original CSAPR rulemaking to 
address the 1997 ozone standard. Some commenters asserted this 
significant percent difference between the two illustrated a 
feasibility concern.
    Response: The EPA views a comparison of the original CSAPR phase 1 
and 2 budgets as a poor metric for assessing feasibility of sources' 
compliance with the budgets being finalized in the CSAPR Update rule. 
As noted previously, states are already well below their current CSAPR 
budgets: Reported 2015 emissions for the 21 states subject to the 
NOX ozone season trading program pursuant to both the 
original CSAPR rulemaking and the CSAPR Update rule total 390,000 tons 
in aggregate. For these 21 states, CSAPR phase 1 budgets aggregate to 
535,000 tons and phase 2 budgets aggregate to 502,000 tons. Thus, 
aggregate 2015 emissions from these states are already more than 
100,000 tons below the original CSAPR budgets. Based upon the first two 
quarters of emissions data, 2016 emissions are anticipated to be even 
lower. These actual emissions make a more appropriate assessment of 
what emission reductions are feasible for the 2017 ozone season. 
Moreover, CSAPR Update rule states have limited flexibility to exceed 
the emission budgets if needed for compliance feasibility by using 
banked allowances.

E. FIP Requirements and Key Elements of the CSAPR Trading Programs

    The original CSAPR established a NOX ozone season 
allowance trading program that allows affected sources within each 
state to use allowances from other sources within the same trading 
group for compliance, pursuant to certain monitoring requirements as 
codified in 40 CFR part 75. In the CSAPR NOX ozone season 
trading program, sources are required to hold one CSAPR ozone season 
allowance for each ton of NOX emitted during the ozone 
season. The EPA is utilizing that same regional trading approach, with 
updated emission budgets, trading groups, and certain additional 
revisions described later on, as the compliance remedy implemented 
through the FIPs to address interstate transport for the 2008 ozone 
NAAQS. The EPA is using the existing NOX ozone season 
allowance trading system that was established under CSAPR in 40 CFR 
part 97, subpart BBBBB for Group 1, and as promulgated in Subpart EEEEE 
for Group 2, to implement the emission reductions identified and 
quantified in the FIPs for this action.
1. Applicability
    In this rule, the EPA is finalizing the same applicability 
provisions as the original CSAPR, without change. Under the general 
CSAPR applicability provisions, a covered unit is any stationary 
fossil-fuel-fired boiler or combustion turbine serving at any time on 
or after January 1, 2005, a generator with nameplate capacity exceeding 
25 MW, which is producing electricity for sale, with the exception of 
certain cogeneration units and solid waste incineration units. See 76 
FR 48273 (August 8, 2011), for a discussion on applicability in the 
final CSAPR rule. The EPA is finalizing the same applicability 
provisions as the original CSAPR for the CSAPR Update rule 
NOX ozone season trading program Groups 1 and 2. See 40 CFR 
97.504 and 40 CFR 97.804. The EPA is codifying these provisions as 
described in section IX.
2. State Budgets
    The EPA is promulgating CSAPR NOX ozone season emission 
budgets, as provided in table VII.E-1 in this preamble and in 40 CFR 
97.810, for the 22 states in this final rule.\168\ This includes the 
NOX ozone season emission budgets, new unit set-asides, and 
Indian country new unit set-asides for 2017 and beyond.
---------------------------------------------------------------------------

    \168\ The 22 states are: Alabama, Arkansas, Illinois, Indiana, 
Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, 
Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, 
Tennessee, Texas, Virginia, West Virginia, and Wisconsin.
---------------------------------------------------------------------------

    The EPA is establishing new or revised CSAPR NOX ozone 
season emission budgets for the 22 eastern states subject to FIPs in 
this final rule to address interstate transport for the 2008 ozone 
NAAQS. For the 21 of these 22 states that are currently covered by the 
original CSAPR ozone season program, the requirement to comply with the 
budgets established to address the 2008 ozone NAAQS will replace the 
current requirement to comply with the budgets established to address 
the 1997 ozone NAAQS.\169\ For Kansas, which is newly brought into the 
CSAPR NOX ozone season program, the EPA is finalizing a new 
EGU NOX ozone season emission budget designed to address 
interstate transport for the 2008 ozone standard.
---------------------------------------------------------------------------

    \169\ As discussed in section IV.C, Iowa, Maryland, Michigan, 
New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, Virginia, 
West Virginia, and Wisconsin will no longer be subject to an 
obligation to reduce emissions to address the 1997 ozone NAAQS after 
2016, so for these states the requirement to comply with the budgets 
established under this rule will succeed the current requirement to 
comply with the budgets established to address the 1997 ozone NAAQS. 
Alabama, Arkansas, Illinois, Indiana, Kentucky, Louisiana, 
Mississippi, Missouri, and Tennessee remain subject to an obligation 
to reduce emissions to address the 1997 ozone NAAQS, but because the 
budgets established in this rule are established with regard to the 
more stringent 2008 ozone NAAQS, the EPA is coordinating compliance 
requirements and allowing compliance with the budgets established 
under this rule to serve the purposes of meeting these states' 
interstate transport obligations with regard to both the 1997 ozone 
NAAQS and the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    The EPA is implementing the emission budgets finalized in this rule 
by allocating allowances to sources in those states equal to the 
budgets for compliance starting in 2017. The EPA is finalizing 
allowance allocations for existing units for CSAPR NOX ozone 
season Group 2 states through this rulemaking. Portions of the state 
budgets will be set aside for new units, and the EPA will use the 
processes set forth in the CSAPR regulations to annually allocate 
allowances to the new units in each state from the new unit set-asides.
3. Allocations of Emission Allowances
    For states participating in the CSAPR NOX ozone season 
Group 2 program, the

[[Page 74564]]

EPA will issue CSAPR NOX ozone season Group 2 allowances to 
be used for compliance starting with the 2017 ozone season. This 
section explains that, for most states, the EPA is allocating these 
allowances up to each state's budget to existing units and new units in 
that state by applying the same allocation methodology finalized in the 
original CSAPR. This methodology considers both a unit's historical 
heat input and its maximum historical emissions. See 76 FR 48284, 
August 8, 2011. A different approach is taken for Alabama, Missouri, 
and New York, as described later on. This section also describes 
allocation to the new unit set-asides and Indian country new unit set-
asides in each state; allocation to units that are not operating; and 
the recordation of allowance allocations in source compliance accounts.
    a. Allocations to existing units. The EPA will implement each 
state's EGU NOX ozone season emission budget in the CSAPR 
NOX ozone season Group 2 trading program by allocating the 
number of emission allowances to covered units \170\ within that state 
equal to the tonnage of that specific state's budget, as calculated in 
section VI. See Table VI.E-2. The portion of a state budget allocated 
to existing units in that state is the state budget minus the state's 
new unit set-aside and minus the state's Indian country new unit set-
aside. The new unit set-asides are portions of each budget reserved for 
new units that might locate in each state or in Indian country in the 
future. For the existing source level allocations, see the TSD called, 
``Unit Level Allocations and Underlying Data for the CSAPR for the 2008 
Ozone NAAQS,'' in the docket for this rulemaking. The only allowance 
allocations that are being updated in this final rule are allocations 
of NOX ozone season allowances under the CSAPR 
NOX ozone season Group 2 program. This final rule does not 
change allowance allocations for the CSAPR NOX ozone season 
Group 1 trading program or allocations of CSAPR SO2 or 
NOX annual allowances.
---------------------------------------------------------------------------

    \170\ As described previously in applicability criteria.
---------------------------------------------------------------------------

    For the purpose of allocations, the original CSAPR regulations 
defined an ``existing unit'' as one that commenced commercial operation 
prior to January 1, 2010. For the 22 states subject to FIPs in this 
rulemaking, the EPA is modifying the definition of an ``existing unit'' 
for purposes of the NOX ozone season Group 2 program to 
include those units that commenced commercial operation prior to 
January 1, 2015. This change will allow these units to be directly 
allocated allowances from each state's budget as existing units and 
will allow the new unit set-asides to be fully reserved for any future 
new units locating in covered states or Indian country. The EPA did not 
propose, and is not finalizing, any change in the definition of 
``existing units'' for sources located in states subject to the 
original CSAPR regulations (i.e., sources located in Georgia with 
respect to allocation of the CSAPR NOX ozone season Group 1 
allowances, and sources located in all covered states with respect to 
allocations of CSAPR SO2 or NOX annual 
allowances).
    The EPA proposed to apply the methodology finalized in the original 
CSAPR for allocating emission allowances to existing units. This 
methodology allocates allowances to each unit based on the unit's share 
of the state's heat input, limited by the unit's maximum historical 
emissions. As discussed in the original CSAPR final rule (See 76 FR 
48288-9, August 8, 2011), the EPA finds this allowance allocation 
approach to be fuel-neutral, control-neutral, transparent, based on 
reliable data, and similar to allocation methodologies previously used 
in the NOX SIP Call and Acid Rain Program. The EPA is 
therefore finalizing the continued application of this methodology for 
allocating allowances to existing sources in this final rule (except as 
otherwise noted later on with respect to existing sources in Alabama, 
Missouri, and New York).
    This final rule uses the average of the three highest years of heat 
input data out of a consecutive five-year period to establish the heat 
input baseline for each unit. These heat input data are used to 
calculate each unit's proportion of state-level heat input (the unit's 
three year average heat input divided by the state's average heat 
input). As a first step, the EPA applies this proportion to the total 
amount of existing unit allowances to be allocated to quantify unit-
level allocations. However, the EPA constrains the unit-level 
allocations so as not to exceed the maximum historical baseline 
emissions, calculated as the highest year of emissions out of a 
consecutive eight-year period.\171\ The proposal evaluated 2010-2014 
heat input data and 2007-2014 emissions data, which was the most recent 
data available at that time. The final rule relies on 2011-2015 heat 
input data and 2008-2015 emission data, which is currently the most 
recent complete dataset.\172\
---------------------------------------------------------------------------

    \171\ The EPA's allocation methodology also considers whether 
unit-level allocations should be limited because they would 
otherwise exceed emission levels that are permissible under the 
terms of consent decrees. However, in this instance the EPA's 
analysis indicates that consideration of consent decree limits does 
not alter the unit-level allocations.
    \172\ See the CSAPR Allowance Allocations Final Rule TSD for 
further description of the allocation methodology.
---------------------------------------------------------------------------

    For the states of Alabama, Missouri, and New York, the EPA is not 
applying the methodology described previously. Instead, for these 
states only, the EPA is allocating allowances to existing units in the 
state according to methodologies for allocating ozone season 
NOX allowances under the current CSAPR NOX Ozone 
Season Trading Program that have been adopted into state regulations 
and submitted to the EPA for approval as SIP revisions, but with the 
states' methodologies applied to the final budgets established in this 
rule. This approach is consistent with the proposal, in which the EPA 
indicated that where a state had adopted state regulations to govern 
the allocation of allowances under the current CSAPR NOX 
ozone season program and had included those regulations in an approved 
SIP revision, if the state regulations by their terms would govern 
allocations under a revised budget, or if it was clear how the state's 
approved methodology could be used by the EPA to compute allocations 
using the revised budget, the state's regulations or methodology would 
be used to govern the allowance allocations under the final rule. These 
three states have adopted state regulations regarding the allocation of 
CSAPR allowances for ozone season NOX emissions and have 
made SIP submittals seeking incorporation of the regulations into their 
SIPs. Although the EPA has not acted on those SIP submittals (because 
they concern the current NOX ozone season trading program to 
which the sources in these three states will no longer be subject after 
2016), the EPA has determined that it is clear how the allocation 
methodologies reflected in the state-adopted regulations can be used to 
compute allocations under the final budgets for this rule. The EPA took 
comment in the proposal on this topic. As explained in the proposal, 
these possible approaches could avert the need for a state to submit 
another SIP revision to implement the same allocation provisions under 
this rule that the state has already implemented or sought to implement 
under CSAPR before adoption of this rule. Since the agency received no 
adverse comments on using this modified allocation approach for states 
with an EPA-approved SIP revision under the current rule, the EPA is 
finalizing this approach

[[Page 74565]]

for these three states.\173\ Further discussion of how these three 
states' methodologies were used to determine the allocations of 
allowances to existing units in the states is included in the CSAPR 
Allowance Allocations Final Rule TSD.
---------------------------------------------------------------------------

    \173\ In the case of Missouri, the allocations also reflect the 
state's comments regarding the use of the state's methodology to 
establish the allocations.
---------------------------------------------------------------------------

    As discussed later on, states have several options under CSAPR to 
submit SIP revisions which, if approved, may result in the replacement 
of the EPA's default allocations with state-determined allocations for 
control periods in 2018 or later years. The provisions described 
previously will not preclude any state from submitting an alternative 
allocation methodology for later compliance years through a SIP 
revision. See section VII.F for further details on the development of 
approvable SIP submissions.
    b. Allocations to new units. Consistent with the revision to the 
definition of ``existing unit'' described earlier, for purposes of the 
final rule a ``new unit'' that is eligible to receive allocations from 
the ``new unit set-aside'' for a state includes any covered unit that 
commences commercial operation on or after January 1, 2015, as well as 
a unit that becomes covered by meeting applicability criteria 
subsequent to January 1, 2015; a unit that relocates to a different 
state covered by a FIP promulgated by this final rule; and an 
``existing'' covered unit that stops operating for two consecutive 
years but resumes commercial operation at some point thereafter. To the 
extent that states seek approval of SIPs with different allocation 
provisions than those provided by CSAPR, these SIPs may also define new 
units differently.
    The EPA is also finalizing allocations to a new unit set-aside 
(NUSA) for each state equal to a minimum of 2 percent of the total 
state budget, plus the projected amount of emissions from planned units 
in that state. For instance, if planned units in a state are projected 
to emit 3 percent of the state's NOX ozone season emission 
budget, then the new unit set-aside for the state would be set at 5 
percent, the sum of the minimum 2 percent set-aside plus an additional 
3 percent for planned units. This is the same approach currently used 
to implement the NUSA for all CSAPR trading programs. See 76 FR 48292. 
Pursuant to the CSAPR regulations, new units may receive allocations 
starting with the first year they are subject to the allowance-holding 
requirements of the rule. If the allowances in the NUSA remain 
unallocated to new units, the allowances from the set-asides are 
redistributed to existing units before each compliance deadline. For 
more detail on the CSAPR new unit set-aside provisions, see 40 CFR 
97.811(b) and 97.812.

   Table VII.E-1--Final EGU NOX Ozone Season New Unit Set-Aside Amounts, Reflecting Final EGU Emission Budgets
                                                     [Tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                  Indian country
                                               Final 2017 *  EGU  New unit  set-  New unit  set-   new unit  set-
                    State                        NOX  emission     aside  amount   aside  amount   aside  amount
                                                budgets  (tons)      (percent)      (tons) \1\        (tons)
----------------------------------------------------------------------------------------------------------------
Alabama......................................             13,211               2             255              13
Arkansas*....................................       12,048/9,210             2/2         240/185  ..............
Illinois.....................................             14,601               2             302  ..............
Indiana......................................             23,303               2             468  ..............
Iowa.........................................             11,272               3             324              11
Kansas.......................................              8,027               2             148               8
Kentucky.....................................             21,115               2             426  ..............
Louisiana....................................             18,639               2             352              19
Maryland.....................................              3,828               4             152  ..............
Michigan.....................................             17,023               4             665              17
Mississippi..................................              6,315               2             120               6
Missouri.....................................             15,780               2             324  ..............
New Jersey...................................              2,062               9             192  ..............
New York.....................................              5,135               5             252               5
Ohio.........................................             19,522               2             401  ..............
Oklahoma.....................................             11,641               2             221              12
Pennsylvania.................................             17,952               3             541  ..............
Tennessee....................................              7,736               2             156  ..............
Texas........................................             52,301               2             998              52
Virginia.....................................              9,223               6             562  ..............
West Virginia................................             17,815               2             356  ..............
Wisconsin....................................              7,915               2             151               8
                                              ------------------------------------------------------------------
    22 State Region..........................    316,464/313,626  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
\1\ New-unit set-aside amount (tons) does not include the Indian country new unit set-aside amount (tons).
* The EPA is finalizing CSAPR EGU NOX ozone season emission budgets for Arkansas of 12,048 tons for 2017 and
  9,210 tons for 2018 and subsequent control periods.

    c. Allocations to new units in Indian Country. Clean Air Act 
programs on Indian reservations and other areas of Indian country over 
which a tribe or the EPA has demonstrated that a tribe has jurisdiction 
are implemented either by a tribe through an EPA-approved tribal 
implementation plan (TIP) or the EPA through a FIP. Tribes may, but are 
not required to, submit TIPs. Under the EPA's Tribal Authority Rule 
(TAR), 40 CFR 49.1-49.11, the EPA is authorized

[[Page 74566]]

to promulgate FIPs for Indian country as necessary or appropriate to 
protect air quality if a tribe does not submit and get EPA approval of 
a TIP. See 40 CFR 49.11(a); see also 42 U.S.C. 7601(d)(4). To date, no 
tribes have sought approval of a TIP implementing the good neighbor 
provision at CAA section 110(a)(2)(D)(i)(I) with respect to the 2008 
ozone NAAQS. The EPA has therefore determined that it is necessary and 
appropriate for EPA to implement the FIPs in any affected Indian 
reservations or other areas of Indian country over which a tribe has 
jurisdiction. There are no existing units that would qualify as 
``covered units'' under the final CSAPR Update in Indian country 
located in the states covered by this rule.
    The EPA is finalizing its proposal to apply the CSAPR approach for 
allocating allowances to any new units locating in Indian country. 
Under the CSAPR approach, allowances to possible future new units 
locating in Indian country are allocated by the EPA from an Indian 
country new unit set-aside established for each state with Indian 
country. See 40 CFR 97.811(b)(2) and 97.812(b). The EPA reserves 0.1 
percent of the total state budget for new units in Indian country 
within that state (5 percent of the minimum 2 percent new unit set-
aside, without considering any increase in a state's new unit set-aside 
amount for planned units). Because states generally have no SIP 
authority in these areas, the EPA will continue to allocate such 
allowances to sources locating in such areas of Indian country within a 
state over which a tribe or EPA has demonstrated that a tribe has 
jurisdiction, even if the state submits a SIP to replace the applicable 
FIP. 40 CFR 52.38(b)(9)(vi) and (vii) and 52.38(b)(10). Unallocated 
allowances from a state's Indian country new unit set-aside are 
returned to the state's new unit set-aside and allocated according to 
the methodology described previously.
    d. Allocations to units that do not operate and the new unit set-
aside. The EPA is finalizing its proposal to apply the CSAPR approach 
for allocating to units that do not operate and to the new unit set-
aside. The EPA is codifying the existing CSAPR provision under which a 
covered unit that does not operate for a period of two consecutive 
years will receive allowance allocations for a total of up to five 
years of non-operation. 40 CFR 97.811(a)(2). This approach mitigates 
concerns that loss of allowance allocations could be an economic 
consideration that would cause a unit, which would otherwise retire, to 
continue operations in order to retain ongoing allowance allocations. 
Pursuant to this provision, starting in the fifth year after the first 
year of non-operation, allowances allocated to such units will instead 
be allocated to the new unit set-aside for the state in which the non-
operating unit is located. This approach allows the balance of 
allowance allocations to shift over time from existing units to new 
units, aligned with transition of the EGU fleet from older generating 
resources to newer ones. Allowances in the new unit set-aside that are 
not used by new units are reallocated to existing units in the state. 
The EPA proposed to retain this timeline for allowance allocation for 
non-operating units and it is finalizing that proposal.
4. Variability Limits, Assurance Levels, and Penalties
    In the original CSAPR, the EPA developed assurance provisions, 
including variability limits and assurance levels (with associated 
compliance penalties), to ensure that each state will meet its 
pollution control obligations and to accommodate inherent year-to-year 
variability in state-level EGU operations.
    The original CSAPR budgets, and the updated CSAPR emission budgets 
finalized in this document, reflect EGU operations in an ``average 
year.'' However, year-to-year variability in EGU operations occurs due 
to the interconnected nature of the power sector and from changing 
weather patterns, changes in electricity demand, or disruptions in 
electricity supply from other units or from the transmission grid. 
Recognizing this, the trading program provisions finalized in the 
original CSAPR rulemaking include variability limits, which define the 
amount by which an individual state's emissions may exceed the level of 
its budget in a given year to account for this variability in EGU 
operations. A state's budget plus its variability limit equals a 
state's assurance level, which acts as a cap on each state's 
NOX emissions during a control period (that is, during the 
May-September ozone season in the case of this rule). The new 
NOX ozone season trading program provisions established for 
affected sources in the 22 states subject to this rule contain 
equivalent assurance provisions.
    These variability limits ensure that the trading program can 
accommodate the inherent variability in the power sector while also 
ensuring that each state eliminates the amount of emissions within the 
state, in a given year, that must be eliminated to meet the statutory 
mandate of section 110(a)(2)(D)(i)(I). Moreover, the structure of the 
program, which achieves required emission reductions through limits on 
the total number of allowances allocated, assurance provisions, and 
penalty mechanisms, ensures that the variability limits only allow the 
amount of temporal and geographic shifting of emissions that is likely 
to result from the inherent variability in power generation, and not 
from decisions to avoid or delay the installation of necessary 
controls.
    To establish the variability limits in the original CSAPR, the EPA 
analyzed historical state-level heat input variability as a proxy for 
emissions variability, assuming constant emission rates. See 76 FR 
48265, August 8, 2011. The variability limits for ozone season 
NOX in the original CSAPR were calculated as 21 percent of 
each state's budget, and these variability limits for the 
NOX ozone season trading program were then codified in 40 
CFR 97.510 along with the state budgets. The EPA performed an updated 
analysis to ensure the 21 percent variability limits used in the 
original CSAPR rule were also valid for purposes of implementing the 
new and revised budgets finalized in this rule. The EPA's updated 
analysis demonstrates that variability considering recent data remains 
consistent (i.e., within 1 percent) with the assessment conducted for 
the original CSAPR rulemaking. This analysis may be found in the TSD 
called, Power Sector Variability Final CSAPR Update TSD, in the docket 
for this rulemaking. The EPA is therefore setting variability limits 
for the 22 states covered by this rule calculated as 21 percent of each 
state's new or revised budget and codifying these variability limits in 
40 CFR 97.810.
    Table VII.E-2 shows the final EGU NOX ozone season Group 
2 emission budgets, variability limits, and assurance levels for each 
state.

[[Page 74567]]

 Table VII.E-2--Final EGU NOX Ozone Season Emission Budgets Reflecting EGU NOX Mitigation Available for 2017 at
                            $1,400 per Ton, Variability Limits, and Assurance Levels
                                                     [Tons]
----------------------------------------------------------------------------------------------------------------
                                                             EGU 2017 * NOX     EGU NOX ozone
                                                              ozone season     season group 2     EGU NOX ozone
                           State                            group 2 emission     variability     season group 2
                                                                 budgets           limits       assurance levels
----------------------------------------------------------------------------------------------------------------
Alabama...................................................            13,211             2,774            15,985
Arkansas..................................................      12,048/9,210       2,530/1,934     14,578/11,144
Illinois..................................................            14,601             3,066            17,667
Indiana...................................................            23,303             4,894            28,197
Iowa......................................................            11,272             2,367            13,639
Kansas....................................................             8,027             1,686             9,713
Kentucky..................................................            21,115             4,434            25,549
Louisiana.................................................            18,639             3,914            22,553
Maryland..................................................             3,828               804             4,632
Michigan..................................................            17,023             3,575            20,598
Mississippi...............................................             6,315             1,326             7,641
Missouri..................................................            15,780             3,314            19,094
New Jersey................................................             2,062               433             2,495
New York..................................................             5,135             1,078             6,213
Ohio......................................................            19,522             4,100            23,622
Oklahoma..................................................            11,641             2,445            14,086
Pennsylvania..............................................            17,952             3,770            21,722
Tennessee.................................................             7,736             1,625             9,361
Texas.....................................................            52,301            10,983            63,284
Virginia..................................................             9,223             1,937            11,160
West Virginia.............................................            17,815             3,741            21,556
Wisconsin.................................................             7,915             1,662             9,577
22 State Region...........................................   316,464/313,626  ................  ................
----------------------------------------------------------------------------------------------------------------
* The EPA is finalizing CSAPR EGU NOX ozone season emission budgets for Arkansas of 12,048 tons for 2017 and
  9,210 tons for 2018 and subsequent control periods.

    The assurance provisions include penalties that are triggered when 
the state emissions as a whole exceed the state's assurance level. The 
original CSAPR provided that, when the EGUs in a state exceed that 
state's assurance level in a given year, some of those sources will be 
assessed a 3-to-1 allowance surrender on the excess tons, as described 
later on. Each excess ton above the assurance level must be met with 
one allowance for normal compliance plus two additional allowances to 
satisfy the penalty. The penalty is designed to deter state-level 
emissions from exceeding assurance levels. This was described in the 
original CSAPR as air quality-assured trading that accounts for 
variability in the electricity sector but also ensures that the 
necessary emission reductions occur within each covered state.\174\ If 
the EGU emissions in a state do not exceed the state's assurance level, 
no penalties are incurred by any source. Establishing assurance levels 
with compliance penalties therefore responds to the court's holding in 
North Carolina requiring the EPA to ensure that sources in each state 
are required to eliminate emissions that significantly contribute to 
nonattainment or interfere with maintenance of the NAAQS in another 
state.\175\
---------------------------------------------------------------------------

    \174\ See 76 FR 48266, August 8, 2011: ``Far from excusing any 
state from addressing emissions within the state that significantly 
contribute to nonattainment or interfere with maintenance in other 
states, these variability limits ensure that the system can 
accommodate the inherent variability in the power sector while 
ensuring that each state eliminates the amount of emissions within 
the state, in a given year, that must be eliminated to meet the 
statutory mandate of section 110(a)(2)(D)(i)(I). Moreover, the 
structure of the program, which achieves required emission 
reductions through limits on the total number of allowances 
allocated, assurance provisions, and penalty mechanisms, ensures 
that the variability limits only allow the amount of temporal and 
geographic shifting of emissions that is likely to result from the 
inherent variability in power generation, and not from decisions to 
avoid or delay the installation of necessary controls. Under the 
remedy, an individual state can have emissions up to its budget plus 
the variability limit. However, the requirement that all sources 
hold allowances covering emissions, and the fact that those 
allowances are allocated based on state-specific budgets without 
variability, ensure that the total emissions from the states do not 
exceed the sum of the state budgets. The remedy, therefore, ensures 
both that total emissions do not exceed the total of the state 
budgets and that the required emission reductions occur in each 
state.''
    \175\ 531 F.3d at 908.
---------------------------------------------------------------------------

    To assess the penalty under the assurance provisions, the EPA 
evaluates whether any state's total EGU emissions in a control period 
exceeded the state's assurance level, and if so, the EPA then 
determines which owners and operators of units in the state exceeded 
the common designated representative's (DR) share of the state 
assurance level and, therefore, will be subject to an allowance 
surrender requirement. Since a DR often represents multiple sources, 
the EPA evaluates which groups of units at the common DR level had 
emissions exceeding the respective common DR's share of the state 
assurance level. This provision is triggered only if two criteria are 
met: (1) The group of sources and units with a common DR are located in 
a state where the total state EGU emissions for a control period exceed 
the state assurance level; and (2) that group with the common DR had 
emissions exceeding the respective DR's share of the state assurance 
level. The EPA is finalizing equivalent assurance provisions, modified 
only as necessary to allow the provisions to work in the same way 
despite the presence of factors that could otherwise alter their 
operation, such as converted banked allowances, the possible election 
by Georgia to bring its sources into the Group 2 program through a SIP 
revision, and the possible election by other states to bring non-EGUs 
and additional allowances into the program through SIP revisions. These 
differences are discussed in section IX in this preamble. For more 
information on the CSAPR assurance provisions generally, see 76 FR 
48294 (August 8, 2011).

[[Page 74568]]

5. Compliance Deadlines
    As discussed in sections II.A., III.B., and IV.A., the rule 
requires sources to comply with the new and revised NOX 
emission budgets for the 2017 ozone season (May 1 through September 30) 
in order to ensure that necessary NOX emissions reductions 
are made as expeditiously as practicable to assist downwind states' 
attainment and maintenance of the 2008 ozone NAAQS. The compliance 
deadline is coordinated with the attainment deadline for that standard 
and the rule includes provisions to ensure that all necessary 
reductions occur at sources within each individual state. Thus, under 
the new CSAPR NOX Ozone Season Group 2 Trading Program 
established by this rule at subpart EEEEE of 40 CFR part 97, the first 
control period is the 2017 ozone season (i.e., May 1, 2017 through 
September 30, 2017).
    The deadline by which sources must hold Group 2 allowances in their 
compliance accounts at least equal to their emissions during the 
control period is March 1 of the year following the control period, 
which is the same as the deadline for holding allowances under the 
CSAPR annual trading programs. This is a change from the current CSAPR 
NOX Ozone Season Trading Program provisions, which set a 
deadline of December 1 of the year of the control period, and is 
intended to simplify compliance and program administration and thereby 
reduce costs for both regulated parties and the EPA. Under these 
coordinated deadlines, the date by which Group 2 sources will be 
required to hold Group 2 allowances for compliance for purposes of the 
2017 control period is March 1, 2018.
6. Monitoring and Reporting and the Allowance Management System
    Monitoring and reporting in accordance with the provisions of 40 
CFR part 75 are required for all units subject to the CSAPR 
NOX ozone season trading programs and for all units covered 
under this final rule for the 2008 ozone NAAQS requirements. The EPA 
finalizes that the monitoring system certification deadline by which 
monitors are installed and certified for compliance use generally will 
be May 1, 2017, the beginning of the first control period in this rule, 
with potentially later deadlines for units that commence commercial 
operation less than 180 days before that date. Similarly, the EPA is 
finalizing that the first period in which emission reporting is 
required would be the quarter that includes May 1, 2017 (the second 
quarter of the year that covers April, May, and June). These monitoring 
and reporting deadlines are analogous to the current deadlines under 
the original CSAPR.
    Under part 75, a unit has several options for monitoring and 
reporting, including the use of a CEMS; an excepted monitoring 
methodology based in part on fuel-flow metering for certain gas- or 
oil-fired peaking units; low-mass emissions monitoring for certain non-
coal-fired, low emitting units; or an alternative monitoring system 
approved by the Administrator through a petition process. In addition, 
sources can submit petitions to the Administrator for alternatives to 
specific CSAPR and part 75 monitoring, recordkeeping, and reporting 
requirements. Each CEMS must undergo rigorous initial certification 
testing and periodic quality assurance testing thereafter, including 
the use of relative accuracy test audits (RATAs) and 24-hour 
calibrations. In addition, when a monitoring system is not operating 
properly, standard substitute data procedures are applied and result in 
a conservative estimate of emissions for the period involved.
    Further, part 75 requires electronic submission of a quarterly 
emissions report to the Administrator, in a format prescribed by the 
Administrator. The report will contain all of the data required 
concerning ozone season NOX emissions.
    Units currently subject to CSAPR NOX ozone season or 
CSAPR NOX annual trading program requirements monitor and 
report NOX emissions in accordance with part 75, so most 
sources will not have to make any changes to monitoring and reporting 
practices. In fact, only units in Kansas, which are currently subject 
to the CSAPR NOX annual trading program but not the CSAPR 
NOX ozone season trading program, will need to start newly 
reporting ozone season NOX mass emissions. These emissions 
are already measured under the annual program, so the change will be a 
minor reporting modification and the sources will not be required to 
install new monitoring systems. Units in the following states monitor 
and report NOX emissions under the CSAPR NOX 
ozone season trading program and will continue to do so without change 
under the CSAPR ozone update for the 2008 NAAQS: Alabama, Arkansas, 
Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, 
Mississippi, Missouri, New Jersey, New York, Ohio, Oklahoma, 
Pennsylvania, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.
7. Recordation of Allowances
    The EPA is establishing deadlines for recording allocations of 
ozone season NOX allowances to sources affected under this 
rule that generally parallel the recordation deadlines under the 
existing CSAPR trading programs, but with later deadlines reflecting 
the fact that this program is starting two years later than the 
existing CSAPR trading programs. Specifically, allocations to existing 
units for the first two control periods under the new program (2017 and 
2018) will be recorded by January 9, 2017. This recordation deadline is 
four months before the start of the first control period for the new 
program (May 1, 2017) and 14 months before the date by which sources 
are required to hold allowances sufficient to cover their emissions for 
that first control period (March 1, 2018, as discussed previously), 
giving sources ample time to engage in allowance trading activities 
consistent with their preferred compliance strategies. Allowance 
allocations for 2019 and 2020 will be recorded by July 1, 2018; 
allocations for 2021 and 2022 will be recorded by July 1, 2019; and 
allocations for 2023 and 2024 will be recorded by July 1, 2020. 
Allowances for each succeeding control period will be recorded by July 
1 of the fourth year before the year of the control period, matching 
the recordation schedule for the existing CSAPR trading programs. These 
deadlines apply to recordation of both allocations based on the default 
allocation provisions under 40 CFR 97.811 and 97.812 and allocations 
provided by states pursuant to approved SIP revisions. As under the 
CSAPR annual programs, allocations to new units from the NUSAs and 
Indian country NUSAs are made in two rounds, with first-round 
allocations recorded by August 1 of the year of the control period and 
second-round allocations recorded by February 15 of the year after the 
year of the control period. (In a change from the current CSAPR 
NOX Ozone Season Trading Program provisions, the second-
round recordation deadline is now coordinated with the analogous 
deadline for the CSAPR annual programs.) For 2018 allocations, the EPA 
will defer recordation if a state submits a timely letter indicating an 
intent to submit a SIP revision that if approved would substitute 
state-determined allocations for the default allocations determined by 
the EPA. The recordation provisions for the new program are codified in 
40 CFR 97.821.
    Consistent with the first recordation deadline described previously 
for allocations to existing units under the new trading program, the 
EPA is also delaying the deadline in 40 CFR 97.521(c) for recordation 
of allowances

[[Page 74569]]

for the 2017 and 2018 control periods under the existing NOX 
ozone season trading program (i.e., allocations for sources in Georgia) 
to January 9, 2017. As explained in the proposal, the reason for 
extending this deadline was to avoid the possible need to take back 
allowances recorded under the existing NOX ozone season 
trading program in cases where state budgets might have been reduced 
under that program by this final rule.

F. Submitting a SIP

    Any state may replace the FIP finalized in this rule with a SIP at 
any time if approved by the EPA. ``Abbreviated'' and ``full'' SIP 
options finalized in the original CSAPR rulemaking continue to be 
available. An abbreviated SIP allows a state to submit a SIP that would 
provide for state-based allocation provisions in the CSAPR 
NOX ozone season trading program that are then incorporated 
into the FIP the EPA has established for that state. A second approach, 
referred to as a full SIP, allows a state to adopt state provisions 
that would require sources in the state to continue to use the EPA-
administered CSAPR trading program through an approved SIP, rather than 
a FIP. In addition to the abbreviated and full SIP options, as under 
the original CSAPR rulemaking, the EPA provides states with an 
opportunity to adopt state-determined allowance allocations for 
existing units for the second control period under this rule--in this 
case, the 2018 control period--through streamlined SIP revisions. See 
76 FR 48208 at 48326-48332 (August 8, 2011) for additional discussion 
on full and abbreviated SIP options and 40 CFR 52.38(b). Once the state 
has made a SIP submission, the EPA will evaluate the submission(s) for 
completeness. The EPA's criteria for determining completeness of a SIP 
submission are codified at 40 CFR part 51, appendix V.
1. 2018 SIP Option
    The EPA will allow a state to submit a SIP revision establishing 
allowance allocations for existing units for the second compliance year 
(2018) for the new and revised budgets in order to replace the FIP-
based allocations finalized in this rule. The process will be the same 
as under the original CSAPR rulemaking with deadlines shifted roughly 2 
years: A state that wishes to take advantage of this option must submit 
a letter to EPA by December 27, 2016, indicating its intent to submit a 
complete SIP revision by April 1, 2017. The SIP must provide in an EPA-
prescribed format a list of existing units and their allocations for 
the 2018 control period. If a state does not submit a letter of intent 
to submit a SIP revision, FIP allocations will be recorded by January 
9, 2017. If a state submits a timely letter of intent but fails to 
submit a SIP revision, FIP allocations will be recorded by April 15, 
2017. If a state submits a timely letter of intent followed by a timely 
SIP revision that is approved, the approved SIP allocations will be 
recorded by October 1, 2017.
2. 2019 and Beyond SIP Option
    For the 2019 control period and later, the EPA is finalizing 
revisions to the regulations at 40 CFR 52.38(b) that provide additional 
options to submit abbreviated or full SIP revisions to modify or 
replace the FIP allowance allocations in 2019 or later years. The 
deadline for SIP submittals to modify or replace the FIP allocations 
for 2019 and 2020 is December 1, 2017. The deadline for the state to 
then submit state allocations for 2019 and 2020 is June 1, 2018 and the 
deadline for the EPA to record those allocations is July 1, 2018. A 
state may submit by December 1, 2018, a SIP revision applicable to 
control periods starting in 2021 or 2022, with state allocations due 
June 1, 2019, and allocation recordation by July 1, 2019. See section 
IV of this preamble and 76 FR 48208 at 48326-48332 (August 8, 2011) for 
additional discussion on full and abbreviated SIP options and 40 CFR 
52.38(b).
3. SIP Revisions That Do Not Use the CSAPR Trading Program
    Each state has the authority under the CAA to replace the FIP 
finalized in this rule by submitting a transport SIP revision that does 
not use the CSAPR NOX ozone season trading program. The EPA 
will evaluate such SIPs to determine whether they include adequate and 
enforceable provisions ensuring that the emission reductions will be 
achieved based on the particular control strategies selected by each 
state. The SIP revision could include the following general elements: 
(1) A comprehensive baseline statewide NOX emission 
inventory (which includes growth and existing control requirements); 
(2) a list and description of control measures to satisfy the state 
emission reduction obligation and a demonstration showing when each 
measure will be in place by the time the SIP is approved and replaces 
the CSAPR FIP; (3) fully-adopted state rules providing for such 
NOX controls during the ozone season; (4) for EGUs greater 
than 25 MWe and large boilers and combustion turbines with a rated heat 
input capacity of 250 mmBtu per hour or greater, Part 75 monitoring, 
and for other units, monitoring and reporting procedures sufficient to 
demonstrate that sources are complying with the SIP; and (5) a 
projected inventory demonstrating that state measures along with 
federal measures will achieve the necessary emission reductions in a 
timely manner considering ozone NAAQS attainment dates.\176\ The SIPs 
must meet the requirements for public hearing, be adopted by the 
appropriate board or authority, and establish by a practically 
enforceable regulation a permit schedule and date for each affected 
source or source category to achieve compliance. For further 
information on replacing a FIP with a SIP, see the discussion in the 
final CSAPR rulemaking (76 FR 48326, August 8, 2011).
---------------------------------------------------------------------------

    \176\ The EPA notes that the SIP is not required to include 
modeling.
---------------------------------------------------------------------------

4. Submitting a SIP To Participate in CSAPR for States Not Included in 
This Rule
    There could be circumstances where a state that is not obligated to 
reduce NOX emissions in order to address interstate 
transport requirements (such as Florida, North Carolina, or South 
Carolina for purposes of this final rule) may wish to participate in 
the CSAPR NOX ozone season trading program in order to serve 
a different regulatory purpose. For example, the state may have a 
pending request for redesignation of an area to attainment that relies 
on participation in the trading program as part of the state's 
demonstration that emissions will not exceed certain levels; or the 
state may wish to rely on participation in the trading program for 
purposes of a SIP revision to satisfy certain obligations under the 
Regional Haze Rule. Further, as discussed previously, Georgia may wish 
to join the CSAPR NOX ozone season Group 2 trading program 
in order to trade with other Group 2 states.
    The EPA took comment on whether the EPA should revise the CSAPR 
regulations to allow the EPA to approve a SIP revision in which a state 
seeks to participate in the NOX ozone season trading program 
for a purpose other than addressing ozone transport obligations.
    The EPA is finalizing revisions to CSAPR regulations to allow 
Georgia to opt-in to the CSAPR NOX ozone season Group 2 
trading group if it adopts, as part of a SIP revision, a NOX 
ozone season emission budget no higher than the emission budget that 
reflects EGU NOX mitigation strategies represented by a 
uniform cost of $1,400 per ton for EGUs in Georgia. Such an emission

[[Page 74570]]

budget is provided by this final rule. As discussed previously, Georgia 
submitted comments indicating an interest in allowing its sources to 
trade with other states, although without any change to its budget. The 
EPA has already discussed the reasons for rejecting the specific option 
most favored by Georgia in comments. By providing Georgia with the 
option to bring the state's sources into the Group 2 program through a 
SIP revision, the EPA is allowing Georgia to implement its expressed 
preference for broader trading if that preference continues to apply 
even when conditioned on adoption of a more stringent budget.
    The EPA also took comment on whether the EPA should revise the 
CSAPR regulations to allow the EPA to approve a SIP revision in which a 
state seeks to participate in the NOX ozone season trading 
program for a purpose other than addressing ozone transport 
obligations. The EPA received no comments indicating that states had an 
interest in this option at this time, and the EPA is therefore not 
finalizing this option at this time.

G. Title V Permitting

    This rule, like CSAPR, does not establish any permitting 
requirements independent of those under title V of the CAA and the 
regulations implementing title V, 40 CFR parts 70 and 71.\177\ All 
major stationary sources of air pollution and certain other sources are 
required to apply for title V operating permits that include emission 
limitations and other conditions as necessary to assure compliance with 
the applicable requirements of the CAA, including the requirements of 
the applicable State Implementation Plan. CAA sections 502(a) and 
504(a), 42 U.S.C. 7661a(a) and 7661c(a). The ``applicable 
requirements'' that must be addressed in title V permits are defined in 
the title V regulations (40 CFR 70.2 and 71.2 (definition of 
``applicable requirement'')).
---------------------------------------------------------------------------

    \177\ Part 70 addresses requirements for state title V programs, 
and Part 71 governs the federal title V program.
---------------------------------------------------------------------------

    The EPA anticipates that, given the nature of the units subject to 
this transport rule and given that many of the units covered here are 
already subject to CSAPR, most of the sources at which the units are 
located are already subject to title V permitting requirements. For 
sources subject to title V, the interstate transport requirements for 
the 2008 ozone NAAQS that are applicable to them under the final FIPs 
are ``applicable requirements'' under title V and therefore must be 
addressed in the title V permits. For example, requirements concerning 
designated representatives, monitoring, reporting, and recordkeeping, 
the requirement to hold allowances covering emissions, the assurance 
provisions, and liability are ``applicable requirements'' that must be 
addressed in the permits.
    Title V of the CAA establishes the basic requirements for state 
title V permitting programs, including, among other things, provisions 
governing permit applications, permit content, and permit revisions 
that address applicable requirements under final FIPs in a manner that 
provides the flexibility necessary to implement market-based programs 
such as the trading programs established by CSAPR and updated by this 
ozone interstate transport rule. 42 U.S.C. 7661a(b).
    In CSAPR, the EPA established standard requirements governing how 
sources covered by the rule would comply with title V and its 
regulations.\178\ 40 CFR 97.506(d). Under this rule, those same 
requirements would continue to apply to sources already in the CSAPR 
NOX ozone season trading program and to any newly affected 
sources that have been added to address interstate transport of the 
2008 ozone NAAQS. For example, the title V regulations provide that a 
permit issued under title V must include ``[a] provision stating that 
no permit revision shall be required under any approved . . . emissions 
trading and other similar programs or processes for changes that are 
provided for in the permit.'' 40 CFR 70.6(a)(8) and 71.6(a)(8). 
Consistent with these provisions in the title V regulations, in CSAPR, 
the EPA included a provision stating that no permit revision is 
necessary for the allocation, holding, deduction, or transfer of 
allowances. 40 CFR 97.806(d)(1). This provision is also included in 
each title V permit for an affected source. This final rule maintains 
the approach taken under CSAPR that allows allowances to be traded (or 
allocated, held, or deducted) without a revision to the title V permit 
of any of the sources involved.
---------------------------------------------------------------------------

    \178\ The EPA also issued a guidance document and template that 
includes instructions describing how to incorporate the CSAPR 
applicable requirements into a source's title V permit. https://www3.epa.gov/airtransport/CSAPR/pdfs/CSAPR_Title_V_Permit_Guidance.pdf.
---------------------------------------------------------------------------

    Similarly, this final rule also continues to support the means by 
which sources in the CSAPR NOX ozone season trading program 
can use the title V minor modification procedure to change their 
approach for monitoring and reporting emissions, in certain 
circumstances. Specifically, sources may use the minor modification 
procedure so long as the new monitoring and reporting approach is one 
of the prior-approved approaches under CSAPR (i.e., approaches using a 
continuous emission monitoring system, an excepted monitoring system 
under appendices D and E to part 75, a low mass emissions excepted 
monitoring methodology under 40 CFR 75.19, or an alternative monitoring 
system under subpart E of part 75), and the permit already includes a 
description of the new monitoring and reporting approach to be used. 
See 40 CFR 97.806(d)(2); 40 CFR 70.7(e)(2)(i)(B) and 40 CFR 
71.7(e)(1)(i)(B). As described in the EPA's 2015 guidance, the agency 
suggests in its template that sources may comply with this requirement 
by including a table of all of the approved monitoring and reporting 
approaches under the rule, and the applicable requirements governing 
each of those approaches. Inclusion of the table in a source's title V 
permit therefore allows a covered unit that seeks to change or add to 
their chosen monitoring and recordkeeping approach to easily comply 
with the regulations governing the use of the title V minor 
modification procedure.
    Under CSAPR, in order to employ a monitoring or reporting approach 
different from the prior-approved approaches discussed previously, unit 
owners and operators must submit monitoring system certification 
applications to the EPA establishing the monitoring and reporting 
approach actually to be used by the unit, or, if the owners and 
operators choose to employ an alternative monitoring system, to submit 
petitions for that alternative to the EPA. These applications and 
petitions are subject to EPA review and approval to ensure consistency 
in monitoring and reporting among all trading program participants. The 
EPA's responses to any petitions for alternative monitoring systems or 
for alternatives to specific monitoring or reporting requirements are 
posted on the EPA's Web site.\179\ The EPA maintains the same approach 
in this final rule.
---------------------------------------------------------------------------

    \179\ https://www.epa.gov/airmarkets/part-75-petition-responses.
---------------------------------------------------------------------------

    Consistent with the EPA's approach under CSAPR, the applicable 
requirements resulting from these FIPs must be incorporated into 
affected sources' existing title V permits either pursuant to the 
provisions for reopening for cause (40 CFR 70.7(f) and 40 CFR 71.7(f)) 
or the standard permit renewal provisions (40 CFR 70.7(c) and

[[Page 74571]]

71.7(c)).\180\ For sources newly subject to title V that are affected 
sources under the final FIPs, the initial title V permit issued 
pursuant to 40 CFR 70.7(a) should address the final FIP requirements.
---------------------------------------------------------------------------

    \180\ A permit is reopened for cause if any new applicable 
requirements (such as those under a FIP) become applicable to an 
affected source with a remaining permit term of 3 or more years. If 
the remaining permit term is less than 3 years, such new applicable 
requirements will be added to the permit during permit renewal. See 
40 CFR 70.7(f)(1)(I) and 71.7(f)(1)(I).
---------------------------------------------------------------------------

    As in CSAPR, the approach to title V permitting under the FIPs 
imposes no independent permitting requirements and should reduce the 
burden on sources already required to be permitted under title V and on 
permitting authorities.

H. Relationship to Other Emission Trading and Ozone Transport Programs

1. Interactions With Existing CSAPR Annual Programs, Title IV Acid Rain 
Program, NOX SIP Call, and Other State Implementation Plans
    a. CSAPR Annual Programs.\181\ Nothing in this rule affects any 
CSAPR NOX annual or CSAPR SO2 Group 1 or CSAPR 
SO2 Group 2 requirements.\182\ The CSAPR annual program 
requirements were premised on the 1997 and 2006 PM2.5 NAAQS 
that are not being addressed in this rulemaking. The CSAPR 
NOX annual trading program and the CSAPR SO2 
Group 1 and Group 2 trading programs remain in place and will continue 
to be administered by the EPA.
---------------------------------------------------------------------------

    \181\ Reflecting the nomenclature updates adopted in this rule, 
the CSAPR Annual Programs are referred to in regulations as the 
CSAPR NOX Annual Trading Program (40 CFR 97.401-97.435), 
the CSAPR SO2 Group 1 Trading Program (40 CFR 97.601-
97.635) and the CSAPR SO2 Group 2 Trading Program (40 CFR 
97.701-97.735). (Prior to this rule, the regulations used the 
acronym ``TR'' instead of the acronym ``CSAPR''.)
    \182\ As discussed in section IX in this preamble, the EPA is 
making technical corrections to the regulations concerning CSAPR's 
annual programs, but these corrections do not substantively alter 
any existing requirements.
---------------------------------------------------------------------------

    The EPA acknowledges that, in addition to the ozone budgets 
discussed previously, the D.C. Circuit has remanded for reconsideration 
the CSAPR SO2 budgets for Alabama, Georgia, South Carolina, 
and Texas. EME Homer City II, 795 F.3d at 138. This rule does not 
address the remand of these CSAPR phase 2 SO2 emission 
budgets. On June 27, 2016, the EPA released a memorandum outlining the 
agency's approach for responding to the D.C. Circuit's July 2015 remand 
of the CSAPR phase 2 SO2 annual emission budgets for 
Alabama, Georgia, South Carolina and Texas. The memorandum can be found 
at https://www3.epa.gov/airtransport/CSAPR/pdfs/CSAPR_SO2_Remand_Memo.pdf.
    b. Title IV Interactions. This rule will not affect any Acid Rain 
Program requirements. Acid Rain Program SO2 and 
NOX requirements are established in Title IV of the Clean 
Air Act, and will continue to apply independently of this rule's 
provisions. Any Title IV sources that are subject to provisions of this 
rule are still required to comply with Title IV requirements, including 
the requirement to hold Title IV allowances to cover SO2 
emissions at the end of a compliance year.
    c. NOX SIP Call Interactions. States subject to both the 
NOX SIP Call and the final CSAPR Update will be required to 
comply with the requirements of both rules. The final CSAPR Update rule 
requires NOX ozone season emission reductions from EGUs 
greater than 25 MW in most NOX SIP Call states and at levels 
greater than required by the NOX SIP Call. Therefore, 
compliance with the budgets established under the CSAPR Update would 
satisfy the requirements of the NOX SIP Call for these large 
EGU units.
    The NOX SIP Call states used the NOX Budget 
Trading Program (NBP) model rule to comply with the NOX SIP 
Call requirements for EGUs serving a generator with a nameplate 
capacity greater than 25 MW and large non-EGUs with a maximum rated 
heat input capacity greater than 250 mmBTU/hr. (In some states, EGUs 
smaller than 25 MW were also part of the NBP as a carryover from the 
Ozone Transport Commission NOX Budget Trading Program.) When 
the EPA promulgated CAIR and the CAIR FIPs, it allowed states, via SIP, 
to adopt SIP revisions modifying the applicability provisions of the 
CAIR NOX Ozone Season Trading Program to include all 
NOX Budget Trading Program units in that program as a way to 
continue to meet the requirements of the NOX SIP Call for 
these sources.
    In CSAPR, however, the EPA allowed states, via SIP, to expand 
applicability of the trading program to EGUs smaller than 25 MW but did 
not allow the expansion of applicability to include large non-EGU 
sources. The EPA explained that the reason for excluding large non-EGU 
sources was based on a concern that emissions from these sources were 
generally much lower than the portion of each state's NOX 
SIP Call budget amount attributable to these large non-EGUs, and we 
were therefore concerned that surplus allowances created as a result of 
an overestimation of baseline emissions (the main basis for the non-EGU 
portion of the NOX Budget Trading Program budget) and 
subsequent shutdowns of these large non-EGUs (since 1999 when the 
NOX SIP Call was promulgated) would prevent needed 
reductions by the EGUs to address significant contribution to downwind 
air quality impacts. See 76 FR 48323 (August 8, 2011).
    Since then, states have had to find appropriate ways to ensure that 
their rules continue to show compliance with emissions reduction 
obligations of the NOX SIP Call, particularly for large non-
EGUs.\183\ Most states that used the CAIR NOX Ozone Season 
Trading Program as a means of complying with the NOX SIP 
Call obligations for large non-EGUs are still working to find suitable 
solutions now that CSAPR has replaced CAIR.\184\
---------------------------------------------------------------------------

    \183\ Compliance with CSAPR by the EGUs in a state will 
generally ensure that aggregate emissions from the state's EGUs will 
not exceed the amount of the state's NOX SIP Call budget 
for the source category because the CSAPR cap is lower than the EGU 
portion of the NOX SIP Call emission levels.
    \184\ Affected sources continue to report ozone season emissions 
using part 75 as required by the NOX SIP Call and 
reported emissions have been below NOX SIP Call non-EGU 
budget levels.
---------------------------------------------------------------------------

    Therefore, the EPA is finalizing provisions to allow any 
NOX SIP Call state subject to a FIP promulgated by this rule 
to voluntarily submit a SIP revision with a revised budget level that 
is environmentally neutral to address the state's NOX SIP 
Call requirement for ozone season NOX reductions. The SIP 
revision could include a provision to expand the applicability of the 
CSAPR NOX ozone season trading program in that state to 
include all NOX Budget Trading Program units, including 
large non-EGUs. Analysis shows that these units (mainly large non-EGU 
boilers, combustion turbines, and combined cycle units with a maximum 
rated heat input capacity greater than 250 mmBtu/hr) continue to emit 
well below their portion of the NOX SIP Call budget. In 
order to ensure that the necessary amount of EGU emission reductions 
occur for purposes of addressing interstate transport with respect to 
the 2008 ozone NAAQS in covered states that submit such a SIP revision, 
the corresponding state ozone season emission budget amount could be 
increased by no more than the lesser of the highest ozone season 
NOX emissions in the last 3 years from those units or the 
portion of the NOX Budget Trading Program Budget 
attributable to large non-EGUs.\185\ The environmental

[[Page 74572]]

impact would be neutral using this approach. This approach addresses 
requests by states for help in determining an appropriate way to 
address the continuing NOX SIP Call requirement as to non-
EGU sources.
---------------------------------------------------------------------------

    \185\ For further information regarding the determination of the 
maximum amounts of additional allowances that could be issued by 
these states, see the memo entitled ``Maximum amounts of additional 
ozone season NOX allowances that may be issued under SIP 
revisions expanding CSAPR trading program applicability to large 
non-EGUs'', available in the docket.
---------------------------------------------------------------------------

    The variability limits established for EGUs remain unchanged as a 
result of including these non-EGUs. The assurance provisions apply to 
EGUs, and emissions from non-EGUs would not affect the assurance 
levels. The provisions of the new Group 2 trading program exclude the 
emissions and allowance allocations of any non-EGUs participating in 
the program from any determination of whether a state exceeds its 
assurance level or whether any group of sources exceeds its share of 
the responsibility for any exceedance of a state's assurance level. 
Similarly, the provisions limit the total allocations that can be taken 
into account for such purposes by all the EGUs in the state to the 
state budget and thereby prevent any additional allowances issued by 
the state as a result of expanded program applicability from unduly 
influencing determinations of shares of responsibility for any 
exceedance of the state's assurance level. For additional discussion of 
the specific regulatory provisions involved, see section IX of this 
preamble.
    The NOX SIP Call generally requires that states choosing 
to rely on large EGUs and large non-EGUs for meeting NOX SIP 
Call emission reduction requirements must establish a NOX 
mass emissions cap on each source and require part 75, subpart H 
monitoring. As an alternative to source-by-source NOX mass 
emission caps, a state may impose NOX emission rate limits 
on each source and use maximum operating capacity for estimating 
NOX mass emissions or may rely on other requirements that 
the state demonstrates to be equivalent to either the NOX 
mass emission caps or the NOX emission rate limits that 
assume maximum operating capacity. Collectively, the caps or their 
alternatives cannot exceed the portion of the state budget for those 
sources. See 40 CFR 51.121(f)(2) and (i)(4). If a state chooses to 
expand the applicability of the CSAPR NOX ozone season 
trading program to other sources in the state through a voluntary SIP 
revision to include all the NOX Budget Trading Program units 
in the CSAPR NOX ozone season trading program, the cap 
requirement would be met through the new budget and the monitoring 
requirement would be met through the trading program provisions, which 
require part 75 monitoring. The EPA will work with states to ensure 
that NOX SIP Call obligations continue to be met.
    d. Other State Implementation Plans. The EPA has not conducted any 
technical analysis to determine whether compliance with this rule will 
satisfy other requirements for EGUs in any attainment or nonattainment 
areas (e.g., RACT or BART). For that reason, the EPA is not making 
determinations nor establishing any presumptions that compliance with 
the final rule satisfies any other requirements for EGUs. Based on 
analyses that states conduct on a case-by-case basis, states may be 
able to conclude that compliance with the rule for certain EGUs 
fulfills other SIP requirements. The EPA encourages states to work with 
their regional office on these issues.
2. Other Federal Rulemakings
    a. Clean Power Plan. On August 3, 2015, the EPA finalized the Clean 
Power Plan (CPP).\186\ The Clean Air Act--under section 111(d)--creates 
a partnership between the EPA, states, tribes and U.S. territories--
with the EPA setting a goal and states and tribes choosing how they 
will meet it. The CPP follows that approach. The CPP establishes 
interim and final CO2 emission performance rates for certain 
existing power plants, under CAA section 111(d). States then develop 
and implement plans that ensure that the affected power plants in their 
state--either individually, together, or in combination with other 
measures--achieve these rates or equivalent state rate- or mass-based 
goals. The CPP includes interim emission performance rates (or 
equivalent state goals) to be achieved over the years 2022 to 2029 and 
the final CO2 emission performance rates (or equivalent 
state goals) to be achieved in 2030 and after.
---------------------------------------------------------------------------

    \186\ Carbon Pollution Emission Guidelines for Existing 
Stationary Sources: Electric Utility Generating Units; Final Rule, 
80 FR 64661 (Oct. 23, 2015).
---------------------------------------------------------------------------

    On February 9, 2016, the Supreme Court granted applications to stay 
the Clean Power Plan, pending judicial review of the rule in the D.C. 
Circuit, including any subsequent review by the Supreme Court.\187\ The 
EPA firmly believes the Clean Power Plan will be upheld when the courts 
address its merits because the Clean Power Plan rests on strong 
scientific and legal foundations. The stay means that no one has to 
comply with the Clean Power Plan while the stay is in effect. During 
the pendency of the stay, states are not required to submit plans to 
EPA, and EPA will not take any action to impose or enforce any such 
obligations. The Supreme Court's orders granting the stay did not 
discuss the parties' differing views of whether and how the stay would 
affect the CPP's compliance deadlines, and they did not expressly 
resolve that issue. In this context, the question of whether and to 
what extent tolling is appropriate will need to be resolved once the 
validity of the CPP is finally adjudicated.
---------------------------------------------------------------------------

    \187\ West Virginia et al. v. EPA, No. 15A773 (U.S. Feb. 9, 
2016).
---------------------------------------------------------------------------

    Because mandatory emission reductions under the CPP would not begin 
until several years after the 2017 implementation of the CSAPR Update 
rule, the EPA does not anticipate significant interactions with the CPP 
and the near-term (i.e., starting in 2017) ozone season EGU 
NOX emission reduction requirements under this rule. See 
section V.B of the preamble for further information on this point. 
However the EPA notes that actions taken to reduce CO2 
emissions (e.g., deployment of zero-emitting generation) may also 
reduce ozone season NOX emissions. The EPA is also cognizant 
of the potential influence of addressing interstate ozone transport on 
CO2 emissions. As states and utilities undertake the near- 
and longer-term planning to reduce emissions of these pollutants, they 
will have the opportunity to consider how compliance with this rule can 
anticipate, or be consistent with, greenhouse gas mitigation. Some EGU 
NOX mitigation strategies, most notably shifting generation 
from higher NOX-emitting coal-fired units to existing low 
NOX-emitting units or zero-emitting units, can potentially 
also reduce CO2 emissions. As the EPA has structured the 
interstate transport obligations that would be established by this rule 
as requirements to limit aggregate affected EGU emissions and the EPA 
is not enforcing source-specific emission reduction requirements, EGU 
owners have the flexibility to plan for compliance with the interstate 
ozone transport requirements in ways that are consistent with state and 
EGU strategies to reduce CO2 emissions.
    b. 2015 Ozone Standard. On October 1, 2015, the EPA strengthened 
the ground-level ozone NAAQS to 70 ppb, based on extensive scientific 
evidence about ozone's effects on public health and welfare.\188\ This 
rule updating the CSAPR NOX ozone season trading program to 
address interstate emission transport with respect to the 2008 ozone 
NAAQS is a separate and distinct regulatory action and is not meant to 
address the CAA's good neighbor

[[Page 74573]]

provision with respect to the strengthened 2015 ozone NAAQS.
---------------------------------------------------------------------------

    \188\ 80 FR 65291 (October 26, 2015).
---------------------------------------------------------------------------

    The EPA is mindful of the need to address ozone transport for the 
2015 ozone NAAQS. The statutory deadline for the EPA to finalize area 
designations is October 1, 2017. Further, good neighbor SIPs from 
states are due on October 1, 2018. The steps taken under this rule to 
reduce interstate ozone transport will help states make progress toward 
attaining and maintaining the 2015 ozone NAAQS. Moreover, to facilitate 
the implementation of the CAA good neighbor provision with respect to 
the 2015 ozone NAAQS, the EPA intends to provide additional information 
regarding steps 1 and 2 of the CSAPR framework in the fall of 2016. In 
particular, the EPA expects to conduct and release modeling necessary 
to assist states to identify projected nonattainment and maintenance 
receptors with respect to the 2015 ozone NAAQS and identify the upwind 
state emissions that contribute significantly to these receptors.

VIII. Costs, Benefits, and Other Impacts of the Final Rule

    The EPA evaluated the costs, benefits, and impacts of compliance 
with the final EGU NOX ozone season emission budgets 
developed using uniform control stringency represented by $1,400 per 
ton. In addition, the EPA also assessed compliance with one more and 
one less stringent alternative EGU NOX ozone season emission 
budgets, developed using uniform control stringency represented by 
$3,400 per ton and $800 per ton, respectively. The EPA evaluated the 
impact of implementing these emission budgets to reduce interstate 
transport for the 2008 ozone NAAQS in 2017. More details for this 
assessment can be found in the Regulatory Impact Analysis (RIA) in the 
docket for this final rule.
    The EPA notes that its analysis of the regulatory control 
alternatives (i.e., the final rule and more and less stringent 
alternatives) is illustrative in nature, in part because the EPA will 
implement the EGU NOX emission budgets via a regional 
NOX ozone season allowance trading program. This 
implementation approach provides utilities with the flexibility to 
determine their own compliance path. The EPA's assessment develops and 
analyzes one possible scenario for implementing the NOX 
budgets finalized by this action and one possible scenario for 
implementing the more and less stringent alternatives. Furthermore, the 
emission budgets evaluated for the CSAPR Update regulatory control 
alternative in this benefit and cost analysis are illustrative because 
they differ somewhat from the budgets finalized in this rule. (The 
budgets for the more and less stringent alternative also differ 
somewhat from the budgets represented by $3,400 per ton and $800 per 
ton reported in Table VI.C-1). However, the RIA also reports the costs 
and emissions changes associated with the finalized budgets. Further 
details on the illustrative nature of this analysis can be found in the 
RIA in the docket for this rule.
    For this final rule, the EPA analyzed the costs to the electric 
power sector and emissions changes using IPM. The IPM is a dynamic 
linear programming model that can be used to examine the economic 
impacts of air pollution control policies throughout the contiguous 
United States for the entire power system. Documentation for IPM can be 
found in the docket for this rulemaking or at www.epa.gov/powersectormodeling.
    Table VIII.1 provides the projected 2017 EGU emissions reductions 
for the evaluated regulatory control alternatives.

Table VIII.1--Projected 2017 Emissions Reductions of NOX and CO2 With the Final NOX Emission Budgets and More or
                                           Less Stringent Alternatives
                                                   [Tons] 1 2
----------------------------------------------------------------------------------------------------------------
                                                                               More stringent    Less stringent
                                                               Final rule        alternative       alternative
----------------------------------------------------------------------------------------------------------------
NOX (annual)..............................................           -75,000           -79,000           -27,000
NOX (ozone season)........................................           -61,000           -66,000           -27,000
CO2 (annual)..............................................        -1,600,000        -2,000,000        -1,300,000
----------------------------------------------------------------------------------------------------------------
\1\ NOX emissions are reported in English (short) tons; CO2 is reported in metric tons.
\2\ All estimates are rounded to two significant figures.

    The EPA estimates the costs associated with compliance with the 
illustrative regulatory control alternative for the final CSAPR Update 
to be approximately $68 million annually. These costs represent the 
private compliance cost of reducing NOX emissions to comply 
with the final rule and does not include monitoring, recordkeeping, and 
reporting costs. Table VIII.2 provides the estimated costs for the 
evaluated regulatory control scenarios, including the final rule and 
more and less stringent alternatives. Estimates are in 2011 dollars.

Table VIII.2--Cost Estimates for Compliance With the Final Rule NOX Emission Budgets and More and Less Stringent
                                                  Alternatives
                                                   [2011$] 1 2
----------------------------------------------------------------------------------------------------------------
                                                                              More stringent     Less stringent
                                                             Final rule        alternative        alternative
----------------------------------------------------------------------------------------------------------------
Costs..................................................        68,000,000         82,000,000          8,000,000
----------------------------------------------------------------------------------------------------------------
\1\ Costs are annualized over the period 2017 through 2020 using the 4.77 discount rate used in IPM's objective
  function of minimizing the net present value of the stream of total costs of electricity generation. These
  costs do not include monitoring, recordkeeping, and reporting costs, which are reported separately. See
  Chapter 4 of the RIA for this final rule for details and explanation.
\2\ All estimates are rounded to two significant figures.

    In this analysis, the EPA monetized the estimated benefits 
associated with reducing population exposure to ozone and 
PM2.5 from reductions in NOX emissions and co-
benefits of decreased emissions of CO2, but was unable to

[[Page 74574]]

quantify or monetize the potential co-benefits associated with reducing 
exposure to NO2 as well as ecosystem effects and reduced 
visibility impairment from reducing NOX emissions. Among the 
benefits it could quantify, the EPA estimated combinations of health 
benefits at discount rates of 3 percent and 7 percent (as recommended 
by the EPA's Guidelines for Preparing Economic Analyses [U.S. EPA, 
2014] and OMB's Circular A-4 [OMB, 2003]) and climate co-benefits of 
CO2 reductions at discount rates of 5 percent, 3 percent, 
2.5 percent, and 3 percent (95th percentile) (as recommended by the 
interagency working group). The EPA estimates the monetized ozone-
related benefits \189\ of the final rule to be $370 million to $610 
million (2011$) in 2017 and the PM2.5-related co-benefits 
\190\ of the final rule to be $93 million to $210 million (2011$) using 
a 3 percent discount rate and $83 million to $190 million (2011$) using 
a 7 percent discount rate. Further, the EPA estimates CO2-
related co-benefits of $54 to $87 million (2011$). Additional details 
on this analysis are provided in the RIA for this final rule. Tables 
VIII.3 and VIII.5 summarize the quantified monetized human health and 
climate benefits of the rule and the more and less stringent control 
alternatives. Table VIII.4 summarizes the estimated avoided ozone- and 
PM2.5-related health incidences for the final rule and the 
more and less stringent control alternatives.
---------------------------------------------------------------------------

    \189\ The ozone-related health benefits range is based on 
applying different adult mortality functions (i.e., Smith et al. 
(2009) and Zanobetti and Schwartz (2008)).
    \190\ The PM2.5-related health co-benefits range is 
based on applying different adult mortality functions (i.e., Krewski 
et al. (2009) and Lepeule et al. (2012)).

 Table VIII.3--Estimated Health Benefits of Projected 2017 Emissions Reductions for the Final Rule, and More or
                                           Less Stringent Alternatives
                                             [Millions of 2011$] 1 2
----------------------------------------------------------------------------------------------------------------
                                                               More stringent
                                          Final rule            alternative         Less stringent alternative
----------------------------------------------------------------------------------------------------------------
NOX (as ozone)....................  $370 to $610.........  $400 to $650.........  $160 to $270
NOX (as PM2.5)....................  $93 to $210..........  $98 to $220..........  $34 to $75
    3% Discount Rate..............  $83 to $190..........  $88 to $200..........  $30 to $67
    7% Discount Rate
                                   -----------------------------------------------------------------------------
Total:
    3% Discount Rate..............  $460 to $810.........  $500 to $870.........  $200 to $340
    7% Discount Rate..............  $450 to $790.........  $490 to $850.........  $190 to $330
----------------------------------------------------------------------------------------------------------------
\1\ The health benefits range is based on adult mortality functions (e.g., from Krewski et al. (2009) with Smith
  et al. (2009) to Lepeule et al. (2012) with Zanobetti and Schwartz (2008)).
\2\ All estimates are rounded to two significant figures.

Table VIII.4--Summary of Estimated Avoided Ozone-Related and PM2.5-Related Health Incidences From Projected 2017
               Emissions Reductions for the Final Rule and More or Less Stringent Alternatives \1\
----------------------------------------------------------------------------------------------------------------
                                                                                  More stringent  Less stringent
                                                                    Final rule      alternative     alternative
----------------------------------------------------------------------------------------------------------------
                                          Ozone-Related Health Effects
----------------------------------------------------------------------------------------------------------------
Avoided Premature Mortality:
    Smith et al. (2009) (all ages)..............................              21              23               9
    Zanobetti and Schwartz (2008) (all ages)....................              60              65              26
Avoided Morbidity:
    Hospital admissions--respiratory causes (ages >65)..........              59              64              26
    Emergency room visits for asthma (all ages).................             240             250             100
    Asthma exacerbation (ages 6-18).............................          67,000          73,000          30,000
    Minor restricted-activity days (ages 18-65).................         170,000         180,000          75,000
    School loss days (ages 5-17)................................          56,000          60,000          25,000
----------------------------------------------------------------------------------------------------------------
                                          PM2.5-Related Health Effects
----------------------------------------------------------------------------------------------------------------
Avoided Premature Mortality:
    Krewski et al. (2009) (adult)...............................              10              11             3.7
    Lepeule et al. (2012) (adult)...............................              23              25             8.4
    Woodruff et al. (1997) (infant).............................              <1              <1              <1
Avoided Morbidity:
    Emergency department visits for asthma (all ages)...........             6.1             6.5             2.2
    Acute bronchitis (age 8-12).................................              15              15             5.2
    Lower respiratory symptoms (age 7-14).......................             180             190              67
    Upper respiratory symptoms (asthmatics age 9-11)............             260             280              95
    Minor restricted-activity days (age 18-65)..................           7,500           7,900           2,700
    Lost work days (age 18-65)..................................           1,300           1,300             450
    Asthma exacerbation (age 6-18)..............................             270             290              98
    Hospital admissions--respiratory (all ages).................             2.8             2.9             1.0
    Hospital admissions--cardiovascular (age >18)...............             3.8             4.0             1.4
    Non-Fatal Heart Attacks (age 18).................  ..............  ..............  ..............

[[Page 74575]]

 
    Peters et al. (2001)........................................              12              13             4.3
    Pooled estimate of 4 studies................................             1.3             1.4            0.46
----------------------------------------------------------------------------------------------------------------
\1\ All estimates are rounded to whole numbers with two significant figures.

    Table VIII.5--Estimated Global Climate Co-Benefits of CO2 Reductions for the Final Rule and More or Less
                                             Stringent Alternatives
                                              [Millions of 2011$] 1
----------------------------------------------------------------------------------------------------------------
                                                                                  More stringent  Less stringent
                   Discount rate and statistic                      Final rule      alternative     alternative
----------------------------------------------------------------------------------------------------------------
5% (average)....................................................             $19             $25             $15
3% (average)....................................................              66              87              54
2.5% (average)..................................................             100             130              81
3% (95th percentile)............................................             190             250             150
----------------------------------------------------------------------------------------------------------------
\1\ The social cost of carbon (SC-CO2) values are dollar-year and emissions-year specific. SC-CO2 values
  represent only a partial accounting of climate impacts.

    The EPA combined this information to perform a benefit-cost 
analysis for this final rule (shown in table VIII.6 and for the more 
and less stringent alternatives--shown in the RIA in the docket for 
this rule).

Table VIII.6--Total Costs, Total Monetized Benefits, and Net Benefits of
                     the Final Rule in 2017 for U.S.
                          [Millions of 2011$] 1
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Climate Co-Benefits....................  $66
Air Quality Health Benefits............  $460 to $810 \2\ and $450 to
                                          $790 \3\
Total Benefits.........................  $530 to $880 \2\ and $520 to
                                          $860 \3\
Annualized Compliance Costs............  $68 \4\
Net Benefits...........................  $460 to $810 \2\ and $450 to
                                          $790 \3\
Non-Monetized Benefits.................  Non-monetized climate benefits.
                                         Reductions in exposure to
                                          ambient NO2.
                                         Ecosystem benefits and
                                          visibility improvement assoc.
                                          with reductions in emissions
                                          of NOX.
------------------------------------------------------------------------
\1\ All estimates are rounded to two significant figures.
\2\ 3% discount rate.
\3\ 7% discount rate.
\4\ These costs do not include monitoring, recordkeeping, and reporting
  costs, which are reported separately. See Chapter 4 of the RIA for
  this final rule for details and explanation.

    There are additional important benefits that the EPA could not 
monetize. Due to current data and modeling limitations, the EPA's 
estimates of the co-benefits from reducing CO2 emissions do 
not include important impacts like ocean acidification or potential 
tipping points in natural or managed ecosystems. Unquantified benefits 
also include the potential co-benefits from reducing direct exposure to 
NOX as well as from reducing ecosystem effects and 
visibility impairment by reducing NOX emissions. Based upon 
the foregoing discussion, it remains clear that the benefits of this 
final action are substantial, and far exceed the costs. Additional 
details on benefits, costs, and net benefits estimates are provided in 
the RIA for this rule.
    The EPA provides a qualitative assessment of economic impacts 
associated with electricity price changes to consumers that may result 
from this final rule. This assessment can be found in the RIA for this 
rule in the docket.
    Executive Order 13563 directs federal agencies to consider the 
effect of regulations on job creation and employment. According to the 
Executive Order, ``our regulatory system must protect public health, 
welfare, safety, and our environment while promoting economic growth, 
innovation, competitiveness, and job creation. It must be based on the 
best available science'' (Executive Order 13563, 2011). Although 
benefit-cost analyses that are consistent with standard economic theory 
have not typically included a separate analysis of regulation-induced 
employment impacts, regulatory impact analyses prepared by the EPA do 
include analysis of employment impacts. Employment impacts are of 
particular concern and questions may arise about their existence and 
magnitude.
    States have the responsibility and flexibility to implement 
policies and practices as part of developing SIPs for compliance with 
the emission budgets found in this final rule. Given the wide range of 
approaches that may be used and industries that could be affected, 
quantifying the associated employment impacts is difficult. The EPA 
provides an analysis of employment impacts for the final rule in the 
RIA. The employment analysis includes quantitative estimation of 
employment changes related to installation and operation of new 
pollution control equipment, ongoing expenditures on

[[Page 74576]]

pollution control, changes in electricity generation and fuel use, and 
qualitative discussion of employment trends both for the electric power 
sector and in related fuel markets for the illustrative CSAPR update 
alternative.

IX. Summary of Changes to the Regulatory Text for the CSAPR FIPs and 
CSAPR Trading Programs

    This section describes amendments to the regulatory text in the CFR 
for the CSAPR FIPs and the CSAPR NOX ozone season trading 
program related to the findings and remedy discussed throughout this 
preamble. This section also describes other minor corrections to the 
existing CFR text for the CSAPR FIPs and the CSAPR trading programs 
more generally.
    As a preliminary matter, it is worth noting that two of the changes 
made from the proposal to the final rule after consideration of 
comments dramatically simplify the final regulatory text as compared to 
the proposed amendments. First, because the final rule does not allow 
post-2016 allowances issued to sources in Georgia to be used for 
compliance by sources in other states, the final regulatory text 
establishes a new, separate CSAPR NOX Ozone Season Group 2 
Trading Program in a new subpart EEEEE of part 97 for sources subject 
to this rule instead of including those sources in the existing trading 
program in subpart BBBBB of part 97 (which is renamed the CSAPR 
NOX Ozone Season Group 1 Trading Program and will now apply 
only to sources in Georgia). Second, the final text addresses the use 
of banked 2015 and 2016 allowances to meet compliance obligations under 
this rule by providing for a one-time conversion of Group 1 allowances 
to Group 2 allowances instead of creating an ongoing process of 
``tonnage equivalent'' determinations. These two simplifying changes 
largely eliminate the need for substantive amendments to the existing 
Group 1 trading program regulations other than to address the one-time 
conversion of the banked allowances, as discussed in section IX.B of 
this preamble. Although the changes do result in the creation of new 
subpart EEEEE of part 97, the provisions of the new subpart parallel 
the existing subpart BBBBB provisions with only a small number of 
exceptions.

A. Amendments to the CSAPR FIPs in Part 52

    The CSAPR FIPs related to ozone season NOX emissions are 
set forth in Sec.  52.38(b) as well as CFR sections specific to each 
covered state. The principal amendments to those FIPs made by this rule 
appear in Sec.  52.38(b)(1) and (2) as well as the state-specific CFR 
sections. The amendments to Sec.  52.38(b)(1) expand the overall set of 
CSAPR trading programs addressing ozone season NOX emissions 
to include the new Group 2 trading program in subpart EEEEE of part 97 
in addition to the current Group 1 trading program in subpart BBBBB of 
part 97. The amendments to Sec.  52.38(b)(2) identify the states whose 
sources are required under the FIPs to participate in each of the 
respective trading programs with regard to their emissions occurring in 
particular years. More specifically, Sec.  52.38(b)(2)(ii) ends the 
requirement to participate in the Group 1 program after the 2016 
control period for sources in all states whose sources currently 
participate in that program except Georgia, and Sec.  52.38(b)(2)(iii) 
establishes the requirement for the 22 states covered by this rule to 
participate in the Group 2 program starting with the 2017 control 
period. These changes in requirements are replicated, as applicable, in 
the state-specific CFR sections for the respective states.\191\
---------------------------------------------------------------------------

    \191\ See Sec. Sec.  52.54(b) (Alabama), 52.184 (Arkansas), 
52.540 (Florida), 52.731(b) (Illinois), 52.789(b) (Indiana), 
52.840(b) (Iowa), 52.882(b) (Kansas), 52.940(b) (Kentucky, 52.984(d) 
(Louisiana), 52.1084(b) (Maryland), 52.1186(e) (Michigan), 52,1284 
(Mississippi), 52.1326(b) (Missouri), 52.1584(e) (New Jersey), 
52.1684(b) (New York), 52.1784(b) (North Carolina), 52.1882(b) 
(Ohio), 52.1930 (Oklahoma), 52.2040(b) (Pennsylvania), 52.2140(b) 
(South Carolina), 52.2240(e) (Tennessee), 52.2283(d) (Texas), 
52.2440(b) (Virginia), 52.2540(b) (West Virginia), and 52.2587(e) 
(Wisconsin).
---------------------------------------------------------------------------

    The options for states covered by this rule to modify or replace 
the FIPs implementing the emission reduction requirements under this 
rule are finalized substantially as proposed, but generally as new 
options to modify or replace subpart EEEEE requirements instead of as 
changes to the existing options to modify or replace subpart BBBBB 
requirements. Thus, new Sec.  52.38(b)(7), (8), and (9) establish 
options to replace allowance allocations for the 2018 control period, 
to adopt an abbreviated SIP revision for control periods in 2019 or 
later years, and to adopt a full SIP revision for control periods in 
later years, respectively. These options generally replicate the 
analogous options in Sec.  52.38(b) (3), (4) and (5) with regard to the 
subpart BBBBB program. To make use of the 2018 option, a state must 
notify the EPA by December 27, 2016 of its intent to submit to the EPA 
by April 1, 2017 a state-approved spreadsheet with allowance 
allocations to existing units. The submission deadline for an 
abbreviated or full SIP affecting 2019 or 2020 allocations is December 
1, 2017. The revised FIPs also clarify that in cases where a FIP 
represents a partial rather than full remedy for the state's obligation 
to address interstate air pollution, an approved SIP revision replacing 
that FIP would also be a partial rather than full remedy for that 
obligation, unless provided otherwise in the EPA's approval. (As 
discussed in section VI of this preamble, for all covered states except 
Tennessee, the emission reduction requirements established in this rule 
represent partial rather than full remedies to the respective states' 
interstate transport obligations with regard to the 2008 ozone NAAQS.)
    The abbreviated and full SIP options under the Group 2 program do 
have one important difference from the similar options under the Group 
1 program, namely that Sec.  52.38(b)(8)(ii) and (9)(ii) include an 
option for a state to expand applicability to include non-EGUs in the 
state that were previously subject to the NOX Budget Trading 
Program. As discussed in section VII.F of this preamble, in conjunction 
with such an expansion, the state may also issue an additional amount 
of allowances. New Sec.  52.38(b)(10)(ii) clarifies that a SIP revision 
requiring a state's sources--EGUs or non-EGUs--to participate in the 
Group 2 trading program would satisfy the state's obligations to adopt 
control measures for such sources under the NOX SIP Call.
    The option discussed in section VII.C.1 of this preamble for 
Georgia to replace the FIP requiring its sources to participate in the 
Group 1 program with a SIP revision requiring its sources to 
participate in the Group 2 program is set forth in Sec.  52.38(b)(6). 
This option is generally similar to the full SIP option under Sec.  
52.38(b)(9) for states whose sources are already subject to the Group 2 
program under a FIP. The provisions would allow Georgia to elect 
(subject to EPA approval) to allocate Group 2 allowances for future 
control periods under the SIP revision (even if the EPA had already 
commenced allocations of Group 1 allowances to Georgia sources for 
those control periods) instead of having the EPA convert the Group 1 
allowances already allocated for future years into Group 2 allowances 
under Sec.  97.526(c)(2), as described later on. Approval by the EPA of 
a Georgia SIP revision of this nature would also result in the 
conversion of all remaining Group 1 allowances banked from earlier 
control periods into Group 2 allowances under Sec.  97.526(c)(3), as 
also described later on.
    New Sec.  52.38(b)(11)(ii) preserves the EPA's authority to carry 
out conversions of Group 1 allowances to Group 2

[[Page 74577]]

allowances in all compliance accounts (as well as all general accounts) 
following any SIP revision that would otherwise lead to automatic 
withdrawal of a CSAPR FIP with regard to particular sources.
    Finally, new Sec.  52.38(b)(12) and (13), respectively, contain 
updatable lists of states with approved SIP revisions to modify or 
replace the CSAPR FIPs requiring participation in either the Group 1 
program or the Group 2 program. Similar updatable lists for states with 
SIPs related to the NOX Annual, SO2 Group 1, and 
SO2 Group 2 programs are added at new Sec. Sec.  52.38(a)(8) 
and 52.39(l) and (m), respectively. With the addition of these 
updatable lists, all previously approved and future CSAPR SIP revisions 
will be acknowledged in centralized CFR locations and will no longer be 
acknowledged through amendments to the individual states' FIPs.\192\
---------------------------------------------------------------------------

    \192\ As part of several 2015 actions approving SIP revisions to 
modify allocations of allowances for the 2016 control period to 
sources in Alabama, Kansas, Missouri, and Nebraska, the EPA added 
language acknowledging the approved SIP revisions to the state-
specific CFR sections describing the CSAPR FIPs for these states. 
This rule removes those previous additions to the state-specific CFR 
sections. See Sec. Sec.  52.54 and 52.55 (Alabama), 52.882 (Kansas), 
52.1326 (Missouri), and 52.1428 and 52.1429 (Nebraska). The removed 
acknowledgements are replaced by similar acknowledgements in new 
Sec. Sec.  52.38(a)(8)(i) and (b)(12)(i) and 52.39(m)(1), and the 
SIP revisions remain effective notwithstanding the removal of the 
previous acknowledgements.
---------------------------------------------------------------------------

B. Amendments to the Group 1 Trading Program Provisions in Subpart 
BBBBB of Part 97

    As noted previously, the EPA's determinations regarding the 
separation of Georgia allowances and the one-time conversion of banked 
allowances dramatically simplify the amendments in the final rule 
compared to the proposed amendments. Most significantly, in place of 
the proposed amendments designed to implement the concept of ``tonnage 
equivalents,'' which would have affected multiple sections of the Group 
1 regulations throughout subpart BBBBB, the final regulatory text 
implements the one-time conversion of banked Group 1 allowances to 
Group 2 allowances through amendments limited to the Group 1 trading 
program banking provisions in Sec.  97.526. Specifically, new Sec.  
97.526(c)(1) sets forth the schedule and mechanics for a default one-
time conversion of most Group 1 allowances that remain banked following 
the completion of deductions for compliance for the 2016 control 
period. The conversion will be applied to banked Group 1 allowances 
held in any general account and in any compliance account except a 
compliance account for a source located in Georgia. The owner or 
operator of a Georgia source can retain banked Group 1 allowances for 
future use in the Group 1 program simply by keeping the allowances in 
the source's compliance account as of the conversion date or, 
alternatively, can elect to have banked allowances converted to Group 2 
allowances simply by transferring the allowances from the source's 
compliance account to a general account prior to the conversion date. 
The conversion factor is determined based on the ratio of the total 
number of banked Group 1 allowances being converted to 1.5 times the 
sum of the variability limits for all states covered by the Group 2 
program.
    Two additional conversion provisions in Sec.  97.526(c)(2) and (3) 
apply only if Georgia submits and the EPA approves a SIP revision 
requiring sources in Georgia to participate in the Group 2 program. In 
that case, under Sec.  97.526(c)(2) the EPA would replace the 
allocations of Group 1 allowances to Georgia sources already recorded 
for future control periods with allocations of Group 2 allowances, 
using a conversion factor determined based on the ratio of Georgia's 
emissions budget under the Group 1 program to its emissions budget 
under the Group 2 program. Under Sec.  97.526(c)(3) the EPA would 
convert any remaining banked Group 1 allowances from prior control 
periods using a conversion factor based on the ratio of the total 
number of Group 1 allowances being converted to 1.5 times Georgia's 
variability limit under the Group 2 program. Allowances would be 
converted under these provisions regardless of the accounts in which 
they were held.
    Additional provisions of Sec.  97.526(c) address special 
circumstances. Under Sec.  97.526(c)(4), if Group 1 allowances are 
removed for conversion from the compliance account for a source located 
in Florida, North Carolina, or South Carolina, the owner or operator 
can identify to the EPA a different account to receive the Group 2 
allowances. This provision is necessary because sources in these states 
will not be participating in the Group 2 program, and Group 2 
allowances cannot be recorded in any compliance account other than a 
compliance account for a source with a unit affected under the Group 2 
program.
    Under Sec.  97.526(c)(5), the EPA may group multiple general 
accounts under common ownership for purposes of performing conversion 
computations. Because allowances are only recorded as whole allowances, 
allowance conversion computations will necessarily be rounded to whole 
allowances. The purpose of the grouping provision is to ensure that, 
given rounding, the total quantities of Group 2 allowances issued are 
not unduly affected by how the Group 1 allowances are distributed 
across multiple general accounts under common ownership, with 
potentially adverse consequences to achievement of the emission 
reductions required under the rule.
    There is a possibility under the Group 1 program that some new 
Group 1 allowances could be issued after the conversions to Group 2 
allowances have already taken place. Under Sec.  97.526(c)(6), the EPA 
may convert these allowances to Group 2 allowances as if they had been 
issued and recorded before the general conversions.
    Owners and operators of non-Georgia sources generally will not be 
able to retain banked Group 1 allowances (except to the extent that 
they also own or operate sources in Georgia and choose to hold Group 1 
allowances in the compliance accounts for those sources). However, new 
Sec.  97.526(c)(7) authorizes the use of Group 2 allowances to satisfy 
obligations to hold Group 1 allowances that might arise after the 
conversion date, such as an obligation to hold additional allowances 
because of excess emissions or for compliance with the assurance 
provisions. When held for this purpose, a single Group 2 allowance may 
satisfy the obligation to hold more than one Group 1 allowance, as 
though the conversion were reversed.
    Beyond the conversion provisions, additional amendments to the 
Group 1 program align certain deadlines under the Group 1 program with 
the comparable deadlines under the new Group 2 program and the CSAPR 
annual programs. Although these changes were not addressed in the 
proposal, the EPA expects them to be noncontroversial because they 
impose no additional burdens and are designed to simplify program 
compliance and administration, thereby tending to reduce costs for both 
regulated parties and the EPA. Specifically, the date as of which 
allowances equal to emissions in the preceding control period must be 
held in a source's compliance account under the Group 1 program is 
being amended from December 1 of the year of the control period to 
March 1 of the following year. This change is accomplished through an 
amendment to the definition of ``allowance transfer deadline'' in Sec.  
97.502. In addition, the deadlines for providing notices regarding the 
units that are eligible for

[[Page 74578]]

second-round allocations of NUSA allowances and for allocating and 
recording those allowances are being amended from September 15 and 
November 15 of the year of the control period to December 15 of the 
year of the control period and February 15 of the following year, 
respectively. These changes are accomplished through amendments to 
Sec. Sec.  97.511(b)(1)(iii) and (iv) and (2)(iii) and (iv), 
97.512(a)(9)(i) and (b)(9)(i), and 97.521(i).
    The final substantive revision to the Group 1 trading program in 
the final regulatory text is in Sec.  97.521(c), where the deadline for 
the EPA to record Group 1 allowances for the control periods in 2017 
and 2018 is amended to January 9, 2017, as discussed in section VII.E.7 
of this preamble.
    Additional proposed amendments to the Group 1 trading program 
regulations establishing new amounts for budgets, new unit set-asides, 
Indian country new unit set-asides, and variability limits and new 
deadlines for compliance, allowance recordation, monitor certification, 
and reporting are not being finalized because they concern budgets and 
sources under the new Group 2 trading program instead of the Group 1 
trading program. The substance of the proposed amendments to deadlines 
is reflected in the new Group 2 trading program regulations in various 
subsections of new subpart EEEEE. Similarly, the amounts of the 
budgets, new unit set-asides, Indian country new unit set-asides, and 
variability limits as finalized in this rule are reflected in Sec.  
97.810 of the new Group 2 trading program regulations.

C. Group 2 Trading Program Provisions in Subpart EEEEE of Part 97

    The Group 2 trading program regulations in new subpart EEEEE of 
part 97 generally parallel the existing Group 1 trading program 
regulations in subpart BBBBB of part 97 but reflect the amounts of the 
budgets, new unit set-asides, Indian country new unit set-asides, and 
variability limits established in this rule, all of which are set forth 
in Sec.  97.810. That same section sets forth the amounts of a Group 2 
budget, new unit set-aside, and variability limit which Georgia could 
adopt in a SIP revision that would be approvable under new Sec.  
52.38(b)(6).
    Under Sec.  97.806(c)(3)(i), the obligation to hold one Group 2 
allowance for each ton of emissions during the control period begins 
with the 2017 control period, two years later than the analogous start 
date for the Group 1 program. The deadlines for certifying monitoring 
systems under Sec.  97.830(b) and for beginning quarterly reporting 
under Sec.  97.834(d)(1) are similarly two years later than the 
analogous Group 1 program deadlines. However, the start date for the 
assurance provisions for the Group 2 program under Sec.  
97.806(c)(3)(ii) is May 1, 2017. The allowance recordation deadlines 
under Sec.  97.821 begin generally two years later than the comparable 
recordation deadlines under the Group 1 program but reach the same 
schedule by July 1, 2020, which is the deadline for recordation of 
allowances for the control period in 2024 under both programs.
    Additional differences in the Group 2 program regulations relative 
to the Group 1 program regulations concern the use of converted Group 1 
allowances. In general, the Group 2 regulations allow a Group 2 
allowance that was allocated to any account as a replacement for 
removed Group 1 allowances to be used for all of the purposes for which 
any other Group 2 allowance may be used. This is accomplished by adding 
references to Sec.  97.526(c)--the section under which the conversions 
are carried out--to the definitions of ``allocate'' and ``CSAPR 
NOX Ozone Season Group 2 allowance'' in Sec.  97.802 as well 
as the default order for deducting allowances for compliance purposes 
under Sec.  97.824(c)(2).
    Any Group 2 allowances allocated based on conversion of Group 1 
allowances allocated for future years--specifically, the Group 2 
allowances that could be allocated under Sec.  97.526(c)(2) if the EPA 
approved a SIP revision from Georgia requiring Georgia sources to 
participate in the Group 2 program--would also be treated like any 
other Group 2 allowance for purposes of determining shares of 
responsibility for exceedances under the assurance provisions. New 
paragraph (2)(ii) of the definition of ``common designated 
representative's share'' in Sec.  97.802 establishes this equivalence. 
However, allocations of Group 2 allowances converted from banked Group 
1 allowances must be excluded for purposes of determining such shares 
of responsibility because such converted allowances do not represent 
allowances allocated from the current control period's emissions 
budgets. This exclusion is addressed in new paragraph (2)(i) of the 
definition of ``common designated representative's share'' in Sec.  
97.802.
    Consistent with the proposal, the EPA has determined that, in order 
to facilitate NOX SIP Call compliance, a state should be 
allowed to expand applicability of the Group 2 program to include any 
sources that previously participated in the NOX Budget 
Trading Program, and that the state should be able to issue an amount 
of allowances beyond the CSAPR Update state budget if applicability is 
expanded. The EPA has further determined, again consistent with the 
proposal, that the assurance provisions should continue to apply only 
to emissions from the sources subject to the Group 2 program before any 
such expansion. Accordingly, the Group 2 program rules reflect certain 
revisions to the assurance provisions so as to exclude any additional 
units and allowances brought into the program through such a SIP 
revision.
    In order to exclude the additional units, new definitions of ``base 
CSAPR NOX Ozone Season Group 2 unit'' and ``base CSAPR 
NOX Ozone Season Group 2 source'' are added in Sec.  97.802 
which exclude units that would not have been included in the program 
under Sec.  97.804. All provisions related to the assurance provisions 
are amended to reference only such ``base'' units and sources. The 
amended provisions are Sec. Sec.  97.802 (the definitions of 
``assurance account'', ``common designated representative'', and 
``common designated representative's share''), 97.806(c)(2) and 
(3)(ii), and 97.825.\193\ The exclusion of the additional allowances 
from the determination of shares of responsibility for exceedances of 
the assurance provisions is accomplished through an amendment to 
paragraph (2) of the definition of ``common designated representative's 
share'' in Sec.  97.802.
---------------------------------------------------------------------------

    \193\ In the provisions in Sec.  52.38(b)(9)(vii) concerning 
full CSAPR SIP revisions, the new definitions of ``base'' units and 
sources also have been included in the lists of trading program 
provisions that may be removed from a state's SIP revision and added 
to a FIP if and when a unit is located in Indian country within the 
state's borders.
---------------------------------------------------------------------------

    Finally, amendments to Sec. Sec.  97.816, 97.818, and 97.820(c)(1) 
and (5) reduce the administrative compliance burden for sources in the 
transition from the Group 1 program to the Group 2 program by providing 
that certain one-time or periodic submissions made for purposes of 
compliance with the Group 1 program will be considered valid for 
purposes of the Group 2 program as well. The submissions treated in 
this manner are a certificate of representation or notice of delegation 
submitted by a designated representative and an application for a 
general account or notice of delegation submitted by an authorized 
account representative.

C. Administrative Appeal Procedures in Part 78

    The final rule amends the administrative appeal provisions in part 
78 in order to make the procedures of

[[Page 74579]]

that part applicable to determinations of the EPA Administrator under 
the new Group 2 program in subpart EEEEE of part 97 in the same manner 
as the procedures are applicable to similar determinations under the 
other CSAPR trading programs and previous EPA trading programs. These 
amendments concern the list in Sec.  78.1(a)(1) of CFR sections (and 
analogous SIP revisions) generally giving rise to determinations 
subject to the part 78 procedures; the list in Sec.  78.1(b) of certain 
determinations that are expressly subject to those procedures; the list 
in Sec.  78.3(a) of the types of persons who may seek review under the 
procedures; the list in Sec.  78.3(c) of the required contents of 
petitions for review; the list in Sec.  78.3(d) of matters for which a 
right of review is not provided; and the requirements in Sec.  
78.4(a)(1) as to who must sign a filing.
    In addition, consistent with the proposal, under new Sec.  
78.1(b)(14)(viii), determinations of the EPA Administrator under Sec.  
97.526(c) regarding the removal of Group 1 allowances from accounts and 
the allocation in their place of Group 2 allowances are added to the 
list of determinations expressly subject to the part 78 procedures.

D. Nomenclature Changes

    The EPA is finalizing the proposal to change the nomenclature in 
the CFR from ``Transport Rule'' to ``Cross-State Air Pollution Rule'' 
and from ``TR'' to ``CSAPR''. The change affects subparts AAAAA, BBBBB, 
CCCCC, and DDDDD of part 97, part 78, and all the CSAPR FIP sections in 
part 52 of 40 CFR.
    In order to minimize administrative burden associated with the 
nomenclature changes, the regulations for all of the CSAPR trading 
programs (including the new subpart EEEEE) include provisions allowing 
continued use of the acronym ``TR'' instead of the acronym ``CSAPR'' in 
SIP revisions and in submissions by regulated parties. Language for 
this purpose has been included in Sec. Sec.  97.502 (introductory 
text), 97.516, and 97.520(c)(1) and (2).\194\
---------------------------------------------------------------------------

    \194\ For brevity, in this section and the following section 
only the citations to subpart BBBBB are listed. Unless otherwise 
indicated, the citations should also be understood as representing 
the analogous provisions in subparts AAAAA, CCCCC, DDDDD, and 
potentially EEEEE which would have the same section numbers as the 
citations shown but with ``4'', ``6'', ``7'', or ``8'' respectively, 
substituted for the initial ``5'' in the section number (e.g., a 
reference to Sec.  97.502 is intended to also refer to Sec. Sec.  
97.402, 97.602, 97.702, and 97.802).
---------------------------------------------------------------------------

E. Technical Corrections and Clarifications

    The final rule also finalizes technical corrections and 
clarifications throughout the sections of parts 52, 78, and 97 
implementing CSAPR, including the sections implementing CSAPR's other 
three emissions trading programs. The EPA received no adverse comments 
on any of the technical corrections that were discussed in the 
proposal. The final rule contains some additional technical corrections 
that the EPA considers similarly noncontroversial.
    The most common category of these minor changes consists of 
corrections to cross-references that as originally published indicated 
incorrect locations because of typographical errors or indicated 
correct locations but did not use the correct CFR format. In virtually 
all cases, the intended correct cross-reference can be determined from 
context, but the corrections clarify the regulations. Besides the 
corrections to cross-references, most of the remaining corrections 
address typographical errors.
    A small number of the CFR changes correct errors that are not 
cross-references or obviously typographical errors. While the EPA views 
these corrections as noncontroversial, and no adverse comments were 
received regarding the corrections described in the proposal, they 
merit a short explanation.
    The phrase ``with regard to the State'' or ``the State and'' has 
been added in a number of locations in Sec. Sec.  52.38 and 52.39 where 
it was inadvertently omitted. The added phrase clarifies that when the 
EPA approves a state's SIP revision as modifying or replacing 
provisions in a CSAPR trading program, the modification or replacement 
is effective only with regard to that particular state. Correcting the 
omissions of these phrases makes the language concerning SIP revisions 
consistent for all the types of SIP revisions under all the CSAPR 
trading programs.
    The phrase ``in part'' has been removed from the existing FIP 
language in various sections of part 52 for certain states with Indian 
country to clarify that in order to replace a CSAPR FIP affecting the 
sources in these states, a SIP revision must fully, not ``in part,'' 
correct the SIP deficiency identified by the EPA as the basis for the 
FIP. The intended purpose of the words ``in part''--specifically, to 
indicate that approval of a state's SIP revision would apply only to 
sources in the state and would not relieve any sources in Indian 
country within the borders of the state from obligations under the 
FIP--is already served by other language in those FIPs, and is further 
clarified by addition of the phrase ``for those sources and units'' 
(referencing the units in the state). The corrections make the language 
in these CSAPR FIPs consistent with the FIP language for the remaining 
CSAPR FIPs that address states with Indian country. Analogous changes 
to the general CSAPR FIP language in Sec. Sec.  52.38(a)(5) and (6) and 
(b)(5) and (6) and 52.39(f), (i), and (j) have removed the phrase ``in 
whole or in part'' (referencing states without Indian country and 
states with Indian country, respectively) while adding language 
distinguishing the effect that the EPA's approval of a SIP revision has 
on sources in the state from the lack of effect on any sources in 
Indian country within the borders of the state.
    Language has been added to Sec.  78.1 clarifying that 
determinations by the EPA Administrator under the CSAPR trading 
programs that are subject to the part 78 administrative appeal 
procedures are subject to those procedures whether the source in 
question participates in a CSAPR federal trading program under a FIP or 
a CSAPR state trading program under an approved SIP revision. This 
approach is consistent with the approach taken under CAIR FIPs and SIPs 
and with the EPA's intent in CSAPR, as evidenced by the lack of any 
proposal or discussion in the CSAPR rulemaking regarding deviation from 
the historical approach taken under CAIR. This approach is also 
consistent with provisions in Sec. Sec.  52.38 and 52.39 prohibiting 
approvable SIP revisions from altering certain provisions of the CSAPR 
trading programs, including the provisions specifying that 
administrative appeal procedures for determinations of the EPA 
Administrator under the trading programs are set forth in part 78.
    The phrase ``steam turbine generator'' has been changed to 
``generator'' in the list of required equipment in the definition of a 
``cogeneration system'' in Sec.  97.502. Absent this correction, a 
combustion turbine in a facility that uses the combustion turbine in 
combination with an electricity generator and heat recovery steam 
generator, but no steam turbine, to produce electricity and useful 
thermal energy would not meet the definition of a ``cogeneration 
unit.'' The correction clarifies that a combustion turbine in such a 
facility should be able to qualify as a ``cogeneration unit'' (assuming 
it meets other relevant criteria) under the CSAPR trading programs, as 
it could under the CAIR trading programs. The consistency of this 
approach with the

[[Page 74580]]

EPA's intent in the CSAPR rulemaking is evidenced by the lack of any 
proposal or discussion in that rulemaking regarding the concept of 
narrowing the set of facilities qualifying for an applicability 
exemption as cogeneration units. To the contrary, as discussed in the 
preamble to the CSAPR proposal (75 FR 45307, August 2, 2010), the 
definition of ``cogeneration system'' was created in CSAPR to 
potentially broaden the set of facilities qualifying for the exemption, 
specifically by facilitating qualification as ``cogeneration units'' 
for certain units that might not meet the required levels of efficiency 
on an individual basis but that operate as components of multi-unit 
``cogeneration systems'' that do meet the required levels of 
efficiency.
    The deadline for recording certain allowance allocations under 
Sec.  97.521(j) has been changed from ``the date on which'' the EPA 
receives the necessary allocation information to ``the date 15 days 
after the date on which'' the EPA receives the information. The EPA's 
lack of intention in the CSAPR rulemaking to establish the deadline as 
defined prior to the correction is evidenced by the impracticability of 
complying with such a deadline.
    A change to a description of a required notice under the assurance 
provisions in Sec.  97.525(b)(2)(iii)(B) has modified the phrase ``any 
adjustments'' to the phrase ``calculations incorporating any 
adjustments'' in order to clarify that the required notice will 
identify not only any adjustments made to previously noticed 
calculations, but also the complete calculations with (or without) such 
adjustments. The intended meaning is clear from the subsequent 
provisions that use this document as the point of reference for the 
complete calculations used in the succeeding administrative procedures.
    The final rule also makes several additional technical corrections 
and clarifications. One set of corrections addresses the inconsistent 
treatment in the regulations of allowances initially distributed to 
sources by means of auction mechanisms instead of zero-cost allocation 
mechanisms. The original CSAPR regulations gave states the option to 
distribute allowances by auction under the provisions of an approved 
SIP revision, and some of the trading program provisions expressly 
accounted for that possibility. See, e.g., Sec. Sec.  52.38(b)(4) and 
(5); 97.502 (definitions of ``common designated representative's 
share'', ``CSAPR NOX Ozone Season Group 1 allowance and 
``record''), and 97.521. However, other trading program provisions, 
including some that define the allowances that can be used for 
compliance, failed to address the possible use of allowances acquired 
in an auction held pursuant to an approved SIP revision. The technical 
corrections have addressed this inadvertent omission principally by 
adding a definition of ``auction'' in Sec.  97.502 and by adding 
references to auctioned allowances in provisions describing allowances 
available for use in compliance in Sec. Sec.  97.506(c)(4)(i) and (ii), 
97.524(a)(1) and (d), and 97.525(a). Additional changes recognizing the 
possible existence of auctioned allowances have been made in Sec.  
97.802 (definitions of ``Allowance Management System'' and Allowance 
Management System account'') and in Sec. Sec.  97.523(b) and 
97.524(c)(2)(i) and (ii).
    Technical corrections have been made to the definitions of ``heat 
input'', ``heat input rate'', ``heat rate'', ``maximum heat input 
rate'', and ``potential electrical output capacity'' in Sec.  97.502 in 
order to express the definitions in correct and clearly identified 
units of measurement. The corrections clarify the regulations and do 
not change any regulatory requirement for any unit.
    In a provision in Sec.  97.506(c)(2)(ii) stating the deadline to 
hold allowances for purposes of the assurance provisions, the phrase 
``after such control period'' has been corrected to say ``after the 
year of such control period''. The change makes the deadline as 
described in this section consistent with the deadline as already 
described correctly in Sec.  97.525(b)(4)(i).
    In Sec.  97.520(c)(5)(v), incorrect references to the ``designated 
representative'' have been replaced with references to the ``authorized 
account representative''. The EPA's intent to use the term ``authorized 
account representative'' is clear from the cross-references to other 
paragraphs of Sec.  97.520(c)(5) where that term, rather than the term 
``designated representative'', is used.
    In Sec.  97.521, a new paragraph (j) has been added to correct the 
inadvertent omission of any recordation deadline for second-round 
allocations of allowances from an Indian country NUSA. The deadlines in 
the new paragraph are identical to the recordation deadlines for 
second-round allocations of allowances from a NUSA. The EPA's intent 
for such deadlines to apply is evident from the provisions of 
Sec. Sec.  97.511(b)(2) and 97.512(b) which establish schedules for the 
determination of allocations of allowances from Indian country NUSAs 
that are fully synchronized with the schedules for determination of 
allocations of allowances from other NUSAs.
    The provisions concerning full CSAPR SIP revisions in Sec. Sec.  
52.38(a)(5)(iv) and (b)(5)(v) and 52.39(f)(4) and (i)(4) have been 
amended to include more comprehensive lists of the specific CSAPR 
trading program provisions that concern administration of Indian 
country NUSAs and that therefore should not be incorporated by a state 
into a full CSAPR SIP revision. The language has also been modified to 
clarify that mere ``references to'' units in Indian country within a 
state's borders are not impermissible in such SIP revisions, as long as 
the SIP revisions do not impose any obligations on any units in Indian 
country and as long as the SIP revisions remain substantively identical 
to the federal trading program regulations (except as otherwise 
expressly permitted) notwithstanding any references to units in Indian 
country.
    In the state-specific sections of part 52, the EPA has corrected 
instances from the original CSAPR rulemaking where language to address 
sources and units in Indian country within a state's borders was 
inadvertently omitted from or included in the state-specific FIP 
language for certain states. Specifically, language addressing sources 
and units in Indian country has been added to the FIP language 
concerning annual NOX and SO2 emissions for 
Alabama in Sec. Sec.  52.54(a)(1) and 52.55(a), respectively, and has 
been removed from the FIP language concerning annual NOX and 
SO2 emissions for Tennessee in Sec. Sec.  52.2240(d)(1) and 
52.2241(c)(1), respectively. These revisions make the state-specific 
FIP language consistent with the existing general FIP language in 
Sec. Sec.  52.38(a)(2) and 52.39(b) and (c) making CSAPR FIP 
requirements applicable to any units in Indian country located within 
the borders of each state listed in those sections
    In several provisions in part 78, cross-references that previously 
referred to part 97 in its entirety have been clarified to refer to 
only the portions of part 97 related to particular non-CSAPR trading 
programs, consistent with the intent of the provisions when 
promulgated. Specifically, general references to part 97 in Sec. Sec.  
78.1(a)(1) and (b)(6) and 78.3(a)(3), (c)(7), and (d) have been 
replaced by references to either subparts A through J (federal 
NOX Budget Trading Program); subparts AA through II, AAA 
through III, and AAAA through IIII (CAIR); or subparts AAAAA, BBBBB, 
CCCCC, DDDDD, and EEEEE (CSAPR). In several of these sections the more 
precise reference lists have been further clarified through 
reorganization. For the same reason, former appendices A through D to 
part 97 have been

[[Page 74581]]

redesignated as appendices A through D to subpart E of part 97, and the 
cross-references to those appendices in subpart E of part 97 have been 
updated.
    In Sec.  78.3(a)(10) and (11), the phrase ``and that is appealable 
under Sec.  78.1(a)'' has been added in order to correct an inadvertent 
omission and clarify that, like the other paragraphs of Sec.  78.3(a), 
these paragraphs are subject to the limits set in Sec.  78.1(a). The 
provisions of Sec.  78.3(a) concern the types of persons who may 
petition for administrative review, while the provisions of Sec.  78.1 
address the subject matter over which administrative review may be 
sought. The words being added to Sec.  78.3(a)(10) and (11) are present 
in each of the other parallel provisions in Sec.  78.3(a). The EPA's 
intent to include the words being added is evident from the fact that, 
without the added words, these two paragraphs concerning the persons 
who may petition for administrative review could be misread as 
expanding the matters for which administrative review may be sought, in 
conflict with the provisions of Sec.  78.1(a).

X. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

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

    This action is an economically significant regulatory action that 
was submitted to the Office of Management and Budget (OMB) for review. 
Any changes made in response to OMB recommendations have been 
documented in the docket. The EPA prepared an analysis of the potential 
costs and benefits associated with this action. This analysis, which is 
contained in the ``Regulatory Impact Analysis for the Final Cross-State 
Air Pollution Rule Update for the 2008 Ozone NAAQS'', is available in 
the docket and is briefly summarized in section VIII of this preamble.
    Consistent with Executive Orders 12866 and 13563, the EPA estimated 
the costs and benefits for three regulatory control alternatives: The 
final rule EGU NOX ozone season emission budgets and more 
and less stringent alternatives. This final action reduces ozone season 
NOX emissions from EGUs in 22 eastern states. Actions taken 
to comply with the EGU NOX ozone season emission budgets 
also reduce emissions of other criteria air pollutants, including 
annual NOX and associated PM2.5 concentrations, 
and CO2. The benefits associated with these co-pollutant 
reductions are referred to as co-benefits, as these reductions are not 
the primary objective of this rule.
    The RIA for this rule analyzed illustrative compliance approaches 
for implementing the FIPs. This action establishes EGU NOX 
ozone season emission budgets for 22 states and implements these 
budgets via the existing CSAPR NOX ozone season allowance 
trading program.
    The EPA evaluated the costs, benefits, and impacts of implementing 
the EGU NOX ozone season emission budgets developed using 
uniform control stringency represented by $1,400 per ton. In addition, 
the EPA also assessed implementation of one more and one less stringent 
alternative EGU NOX ozone season emission budgets, developed 
using uniform control stringency represented by $3,400 per ton and $800 
per ton, respectively. The EPA evaluated the impact of implementing 
these emission budgets to reduce interstate transport for the 2008 
ozone NAAQS in 2017. More details for this assessment can be found in 
the Regulatory Impact Analysis in the docket for this rule.
    The EPA notes that its analysis of the regulatory control 
alternatives (i.e., the final rule and more and less stringent 
alternatives) is illustrative in nature, in part because the EPA 
implements the EGU NOX emission budgets via a regional 
NOX ozone season allowance trading program. This 
implementation approach provides utilities with the flexibility to 
determine their own compliance path. The EPA's assessment develops and 
analyzes one possible scenario for implementing the NOX 
budgets in this action and one possible scenario for implementing the 
more and less stringent alternatives. Furthermore, the emission budgets 
evaluated for the CSAPR Update regulatory control alternative in this 
benefit and cost analysis are illustrative because they differ somewhat 
from the budgets finalized in this rule. (The budgets for the more and 
less stringent alternative also differ somewhat from the budgets 
represented by $3,400 per ton and $800 per ton reported in Table VI.C-
1). However, the RIA also reports the costs and emissions changes 
associated with the finalized budgets. Further details on the 
illustrative nature of this analysis can be found in the RIA in the 
docket for this rule.
    The EPA estimates the costs associated with compliance with the 
illustrative regulatory control alternative to be approximately $68 
million (2011$) annually. These costs represent the private compliance 
cost of reducing NOX emissions to comply with the final 
rule.
    In this analysis, the EPA monetized the estimated benefits 
associated with the reduced exposure to ozone and PM2.5 and 
co-benefits of decreased emissions of CO2, but was unable to 
quantify or monetize the potential co-benefits associated with reducing 
exposure to NO2 as well as ecosystem effects and reduced 
visibility impairment from reducing NOX emissions. 
Specifically, the EPA estimated combinations of health benefits at 
discount rates of 3 percent and 7 percent (as recommended by the EPA's 
Guidelines for Preparing Economic Analyses [U.S. EPA, 2014] and OMB's 
Circular A-4 [OMB, 2003]) and climate co-benefits of CO2 
reductions at discount rates of 5 percent, 3 percent, 2.5 percent, and 
3 percent (95th percentile) (as recommended by the interagency working 
group). The EPA estimates the monetized ozone-related benefits\195\ of 
the final rule to be $370 million to $610 million (2011$) in 2017 and 
the PM2.5-related co-benefits\196\ of the rule to be $93 
million to $210 million (2011$) using a 3 percent discount rate and $83 
million to $190 million (2011$) using a 7 percent discount rate. 
Further, the EPA estimates CO2-related co-benefits of $54 to 
$87 million (2011$). Additional details on this analysis are provided 
in the RIA for this final rule. Tables X.A-1, X.A-2, and X.A-3 
summarize the quantified human health and climate benefits and the 
costs of the rule and the more and less stringent control alternatives.
---------------------------------------------------------------------------

    \195\ The ozone-related health benefits range is based on 
applying different adult mortality functions (i.e., Smith et al. 
(2009) and Zanobetti and Schwartz (2008)).
    \196\ The PM2.5-related health co-benefits range is 
based on applying different adult mortality functions (i.e., Krewski 
et al. (2009) and Lepeule et al. (2012)).

[[Page 74582]]

  Table X.A-1--Estimated Health Benefits of Projected 2017 Emissions Reductions for the Final Rule and More or
                                           Less Stringent Alternatives
                                           [Millions of 2011$] \1\ \2\
----------------------------------------------------------------------------------------------------------------
                                          Final rule           More stringent             Less stringent
----------------------------------------------------------------------------------------------------------------
NOX (as ozone)....................  $370 to $610.........  $400 to $650.........  $160 to $270
NOX (as PM2.5):
    3% Discount Rate..............  $93 to $210..........  $98 to $220..........  $34 to $75
    7% Discount Rate..............  $83 to $190..........  $88 to $200..........  $30 to $67
Total:
    3% Discount Rate..............  $460 to $810.........  $500 to $870.........  $200 to $340
    7% Discount Rate..............  $450 to $790.........  $490 to $850.........  $190 to $330
----------------------------------------------------------------------------------------------------------------
\1\ The health benefits range is based on adult mortality functions (e.g., from Krewski et al. (2009) with Smith
  et al. (2009) to Lepeule et al. (2012) with Zanobetti and Schwartz (2008)).
\2\ All estimates are rounded to two significant figures.

     Table X.A-2--Estimated Global Climate Co-Benefits of CO2 Reductions for the Final Rule and More or Less
                                             Stringent Alternatives
                                             [Millions of 2011$] \1\
----------------------------------------------------------------------------------------------------------------
                   Discount rate and statistic                      Final rule    More stringent  Less stringent
----------------------------------------------------------------------------------------------------------------
5% (average)....................................................             $19             $25             $15
3% (average)....................................................              66              87              54
2.5% (average)..................................................             100             130              81
3% (95th percentile)............................................             190             250             150
----------------------------------------------------------------------------------------------------------------
\1\ The social cost of carbon (SC-CO2) values are dollar-year and emissions-year specific. SC-CO2 values
  represent only a partial accounting of climate impacts.

    The EPA combined this information to perform a benefit-cost 
analysis for this action (shown in table VIII.6 and for the more and 
less stringent alternatives--shown in the RIA in the docket for this 
rule).

 Table X.A-3--Total Costs, Total Monetized Benefits, and Net Benefits of
                     the Final Rule in 2017 for U.S.
                         [Millions of 2011$] \1\
------------------------------------------------------------------------
          Climate Co-Benefits                          $66
------------------------------------------------------------------------
Air Quality Health Benefits............  $460 to $810 \2\ and $450 to
                                          $790.\3\
Total Benefits.........................  $530 to $880 \2\ and $520 to
                                          $860.\3\
Annualized Costs Compliance Costs......  $68 \4\
Net Benefits...........................  $460 to $810 \2\ and $450 to
                                          $790.\3\
Non-Monetized Benefits.................  Non-monetized climate benefits.
                                         Reductions in exposure to
                                          ambient NO2.
                                         Ecosystem benefits and
                                          visibility improvement assoc.
                                          with reductions in emissions
                                          of NOX.
------------------------------------------------------------------------
\1\ All estimates are rounded to two significant figures.
\2\ 3% discount rate.
\3\ 7% discount rate.
\4\ These costs do not include monitoring, recordkeeping, and reporting
  costs, which are reported separately. See Chapter 4 of the RIA for
  this final rule for details and explanation.

    There are additional important benefits that the EPA could not 
monetize. Due to current data and modeling limitations, the EPA's 
estimates of the co-benefits from reducing CO2 emissions do 
not include important impacts like ocean acidification or potential 
tipping points in natural or managed ecosystems. Unquantified benefits 
also include co-benefits from reducing direct exposure to 
NO2 as well as from reducing ecosystem effects and 
visibility impairment from reducing NOX emissions. Based 
upon the foregoing discussion, it remains clear that the benefits of 
this action are substantial, and far exceed the costs. Additional 
details on benefits, costs, and net benefits estimates are provided in 
the RIA for this final rule.

B. Paperwork Reduction Act (PRA)

    The information collection activities in this rule have been 
submitted for approval to the OMB under the Paperwork Reduction Act 
(PRA), 44 U.S.C. 3501 et seq. The Information Collection Request (ICR) 
document that the EPA prepared has been assigned EPA ICR number 
2391.05. You can find a copy of the ICR in the docket for this rule, 
and it is briefly summarized here. The information collection 
requirements are not enforceable until OMB approves them.
    The information generated by information collection activities 
under CSAPR is used by the EPA to ensure that affected facilities 
comply with the emission limits and other requirements. Records and 
reports are necessary to enable the EPA or states to identify affected 
facilities that may not be in compliance with the requirements. The 
recordkeeping requirements require only the specific information needed 
to determine compliance. These recordkeeping and reporting requirements 
are established pursuant to CAA sections 110(a)(2)(D) and (c) and 
301(a) (42 U.S.C. 7410(a)(2)(D) and (c) and 7601(a)) and are 
specifically authorized by CAA section 114 (42

[[Page 74583]]

U.S.C. 7414). Reported data may also be used for other regulatory and 
programmatic purposes. All information submitted to the EPA for which a 
claim of confidentiality is made will be safeguarded according to EPA 
policies in 40 CFR part 2, subpart B, Confidentiality of Business 
Information.
    All of the EGUs that are subject to changed information collection 
requirements under this rule are already subject to information 
collection requirements under CSAPR. Most of these EGUs also are 
already subject to information collection requirements under the Acid 
Rain Program (ARP) established under Title IV of the 1990 Clean Air Act 
Amendments. Both CSAPR and the ARP have existing approved ICRs: EPA ICR 
Number 2391.03/OMB Control Number 2060-0667 (CSAPR) and EPA ICR Number 
1633.16/OMB Control Number 2060-0258 (ARP). The burden and costs of the 
information collection requirements covered under the CSAPR ICR are 
estimated as incremental to the information collection requirements 
covered under the ARP ICR. Most of the information used to estimate 
burden and costs in this ICR was developed for the existing CSAPR and 
ARP ICRs.
    This rule changes the universe of sources subject to certain 
information collection requirements under CSAPR but does not change the 
substance of any CSAPR information collection requirements. The burden 
and costs associated with the changes in the reporting universe are 
estimated as reductions from the burden and costs under the existing 
CSAPR ICR. (This rule does not change any source's information 
collection requirements with respect to the ARP.) The EPA intends to 
incorporate the burden and costs associated with the changes in the 
reporting universe under this rulemaking into the next renewal of the 
CSAPR ICR.
    Respondents/affected entities: Entities potentially affected by 
this action are EGUs in the states of Florida, Kansas, North Carolina, 
and South Carolina that meet the applicability criteria for the CSAPR 
NOX ozone season Group 1 and Group 2 trading programs in 40 
CFR 97.504 and 97.804.
    Respondent's obligation to respond: Mandatory (sections 110(a), 
110(c), and 301(a) of the Clean Air Act).
    Estimated number of respondents: 138 sources in Florida, Kansas, 
North Carolina, and South Carolina with one or more EGUs.
    Frequency of response: Quarterly, occasionally.
    Total estimated burden: Reduction of 12,879 hours (per year). 
Burden is defined at 5 CFR 1320.3(b).
    Total estimated cost: Reduction of $1,347,291 (per year), includes 
reduction of $409,786 operation and maintenance costs.
    The burden and cost estimates above reflect the reduction in burden 
and cost for Florida sources with EGUs that would no longer be required 
to report NOX mass emissions and heat input data for the 
ozone season to the EPA under the rule and that are not subject to 
similar information collection requirements under the Acid Rain 
Program. Because these EGUs would no longer need to collect 
NOX emissions or heat input data under 40 CFR part 75, the 
estimates above also reflect the reduction in burden and cost to 
collect and quality assure these data and to maintain the associated 
monitoring equipment.
    The EPA estimates that the rule causes no change in information 
collection burden or cost for EGUs in Kansas that would be required to 
report NOX mass emissions and heat input data for the ozone 
season to the EPA or for EGUs in North Carolina or South Carolina that 
would no longer be required to report NOX emissions and heat 
input data for the ozone season to the EPA. The EGUs in Kansas, North 
Carolina, and South Carolina already are and would remain subject to 
requirements to report NOX mass emissions and heat input 
data for the entire year to the EPA under the CSAPR NOX 
Annual Trading Program, and the requirements related to ozone season 
reporting are a subset of the requirements related to annual reporting. 
Similarly, the EPA estimates that the rule causes no change in 
information collection burden or cost for EGUs in Florida that are 
subject to the Acid Rain Program because of the close similarity 
between the information collection requirements under CSAPR and under 
the Acid Rain Program. The EPA also estimates that the rule causes no 
change in information collection burden or cost for EGUs in the states 
have been covered by the current CSAPR NOX Ozone Season 
Group 1 Trading Program and starting in 2017 will be covered by the new 
CSAPR NOX Ozone Season Group 2 Trading Program because the 
information collection requirements applicable to an individual source 
under the two programs are identical.
    The comments received in response to the proposal included no 
comments regarding the ICR for this final rule, but did include one 
comment regarding the existing CSAPR ICR. The comment noted that the 
existing CSAPR ICR should have been renewed in order to remain valid 
past July 31, 2014, but that OMB had not acted on the EPA's renewal 
submission as of that date. The commenter is correct as to those facts, 
but the commenter's apparent suggestion that the existing CSAPR ICR may 
have lapsed as of that date is incorrect. The EPA made a timely renewal 
submission for that ICR, and an agency may continue to collect 
information pursuant to a previously approved ICR if a timely renewal 
submission for the ICR has been made, pending OMB action on the 
submission. 5 CFR 1320.10(e)(2). Further, prior to the date when the 
comment was submitted, OMB did in fact approve the EPA's renewal 
submission for the CSAPR ICR.
    More information on the ICR analysis is included in the docket for 
this rule.
    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 the 
EPA's regulations in 40 CFR are listed in 40 CFR part 9. When OMB 
approves this ICR, the Agency will announce that approval in the 
Federal Register and publish a technical amendment to 40 CFR part 9 to 
display the OMB control number for the approved information collection 
activities contained in this final rule.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. The 
small entities subject to the requirements of this action are small 
businesses, small organizations, and small governmental jurisdictions.
    The EPA has lessened the impacts for small entities by excluding 
all units 25 MWe or less. This exclusion, in addition to the exemptions 
for cogeneration units and solid waste incineration units, eliminates 
the burden of higher costs for a substantial number of small entities 
located in the 22 states for which the EPA is finalizing FIPs.
    Within these states, the EPA identified a total of 365 potentially 
affected EGUs (i.e., greater than 25 MWe) warranting examination in its 
RFA analysis. Of these, the EPA identified 30 potentially affected EGUs 
that are owned by 11 entities that met the Small Business 
Administration's criteria for identifying small entities. The EPA 
estimated the annualized net compliance cost to these 11 small entities 
to be approximately $23.9 million in 2017. Of the 11 small entities

[[Page 74584]]

considered in this analysis, 1 entity may experience compliance costs 
greater than 1 or 3 percent of generation revenues in 2017. The EPA 
notes that this entity is located in a cost of service market, where 
the agency typically expects that entities should be able to recover 
all of their costs of complying with the final rule.
    The EPA has concluded that there is no significant economic impact 
on a substantial number of small entities (no SISNOSE) for this rule. 
Details of this analysis are presented in the RIA, which is in the 
public docket.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or 
more as described in UMRA, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments. The EPA has 
determined that this rule does not contain a Federal mandate that may 
result in expenditures of $100 million or more for State, local, and 
tribal governments, in the aggregate, or the private sector in any one 
year. According to the EPA's analysis, the total net economic impact on 
government owned entities (state- and municipality-owned utilities and 
subdivisions) is expected to be $20.5 million in 2017. Note that the 
EPA expects the rule to potentially have an impact on 11 municipality-
owned entities and 1 state-owned entity. This analysis does not examine 
potential indirect economic impacts associated with the rule, such as 
employment effects in industries providing fuel and pollution control 
equipment, or the potential effects of electricity price increases on 
government entities. For more information on the estimated impact on 
government entities, refer to the RIA, which is in the public docket.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

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

    This action has tribal implications. However, it will neither 
impose substantial direct compliance costs on federally recognized 
tribal governments, nor preempt tribal law.
    This final action implements EGU NOX ozone season 
emissions reductions in 22 eastern states. However, at this time, none 
of the existing or planned EGUs affected by this rule are owned by 
tribes or located in Indian country. This action may have tribal 
implications if a new affected EGU is built in Indian country. 
Additionally, tribes have a vested interest in how this rule affects 
air quality.
    In developing the original CSAPR, which was published on August 8, 
2011 to address interstate transport of ozone pollution under the 1997 
ozone NAAQS,\197\ the EPA consulted with tribal officials under the EPA 
Policy on Consultation and Coordination with Indian Tribes early in the 
process of developing that regulation to permit them to have meaningful 
and timely input into its development. A summary of that consultation 
is provided in 76 FR 48346 (August 8, 2011).
---------------------------------------------------------------------------

    \197\ CSAPR also addressed interstate transport of fine 
particulate matter (PM2.5) under the 1997 and 2006 
PM2.5 NAAQS.
---------------------------------------------------------------------------

    The EPA received comments from several tribal commenters regarding 
the availability of CSAPR allowance allocations to new units in Indian 
country. The EPA responded to these comments by instituting Indian 
country new unit set-asides in the final CSAPR. In order to protect 
tribal sovereignty, these set-asides are managed and distributed by the 
federal government regardless of whether CSAPR in the adjoining or 
surrounding state is implemented through a FIP or SIP. While there are 
no existing affected EGUs in Indian country covered by the CSAPR 
Update, the Indian country set-asides will ensure that any future new 
units built in Indian country will be able to obtain the necessary 
allowances. The CSAPR Update maintains the Indian country new unit set-
aside and adjusts the amounts of allowances in each set-aside according 
to the same methodology of the original CSAPR rule, with one small 
correction.
    The EPA consulted with tribal officials under the EPA Policy on 
Consultation and Coordination with Indian Tribes early in the process 
of developing this regulation to permit them to have meaningful and 
timely input into its development. The EPA informed tribes of its 
development of this rule on a regularly scheduled National Tribal Air 
Association--EPA air policy monthly conference call (January 29, 2015) 
and gave an overview of the proposed rule on a separate call (November 
17, 2015). In December 2015, the EPA offered consultation to tribal 
officials under the EPA Policy on Consultation and Coordination with 
Indian Tribes to permit them to have meaningful and timely input into 
the development of the final rule. The EPA sent letters to all 566 
federally-recognized tribes informing them of this action, offering 
consultation and requesting comment on this rulemaking. Letters were 
also sent via email to tribal air staff. The EPA received no requests 
for consultation on this rule.
    As part of the public comment process, we received one letter from 
the National Tribal Air Association (NTAA) that highlighted the need 
for an Indian country new unit set aside for the Poarch Band of Creek 
Indians in Alabama. EPA made this adjustment in the final rule and 
addressed the NTAA's other comments in the Response to Comments 
document, available in the docket, for this final action.
    In order to help tribes to better understand this final action and 
how it could affect their communities, the EPA is providing an 
interactive map of affected sources and Indian country. This map will 
be available online. The EPA will continue to engage with tribes as 
part of the outreach strategy for this final rule.

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

    The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 
1997) as applying only to those regulatory actions that concern health 
or safety risks, such that the analysis required under section 5-501 of 
the Order has the potential to influence the regulation. This action is 
not subject to Executive Order 13045 because it does not involve 
decisions on environmental health or safety risks that may 
disproportionately affect children. However, the EPA believes that the 
ozone-related benefits, PM2.5-related co-benefits, and 
CO2-related co-benefits would further improve children's 
health.

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

    This action, which is a significant regulatory action under 
Executive Order 12866, is likely to have a significant effect on the 
supply, distribution, or use of energy. The EPA noted in the proposal 
that one aspect of this rule that could affect energy supply, 
disposition, or use was the EPA's proposing and taking comment on a 
range of options with respect to use of 2015 vintage and 2016 vintage 
CSAPR NOX ozone season allowances for compliance with 2017 
and later ozone season requirements. The EPA did not finalize actions 
that could have eliminated the allowance

[[Page 74585]]

bank but is converting the 2015 and 2016 vintage CSAPR allowances to a 
currency that can be used for compliance in 2017 and beyond. The EPA 
prepared a Statement of Energy Effects for the regulatory control 
alternative as follows: The agency estimates no change in retail 
electricity prices on average across the contiguous U.S. in 2017 as a 
result of this rule, and a much less than 1 percent reduction in coal-
fired electricity generation in 2017 as a result of this rule. The EPA 
projects that utility power sector delivered natural gas prices will 
change by less than 1 percent in 2017. For more information on the 
estimated energy effects, refer to the RIA, which is in the public 
docket.

I. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

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

    The EPA believes that this action does not have disproportionately 
high and adverse human health or environmental effects on minority 
populations, low-income populations and/or indigenous peoples, as 
specified in Executive Order 12898 (59 FR 7629, February 16, 1994).
    The EPA notes that this action updates CSAPR to reduce interstate 
ozone transport with respect to the 2008 ozone NAAQS. This rule uses 
the EPA's authority in CAA section 110(a)(2)(d) to reduce 
NOX pollution that significantly contributes to downwind 
ozone nonattainment or maintenance areas. As a result, the rule will 
reduce exposures to ozone in the most-contaminated areas (i.e., areas 
that are not meeting the 2008 ozone NAAQS). In addition, the rule 
separately identifies both nonattainment areas and maintenance areas. 
This requirement reduces the likelihood that areas close to the level 
of the standard will exceed the current health-based standards in the 
future. The EPA implements these emission reductions using the CSAPR 
EGU NOX ozone season emissions trading program with 
assurance provisions.
    The EPA recognizes that some communities have voiced concerns in 
the past about emission trading and the potential for emission 
increases in any location from an environmental justice perspective. 
The EPA believes that CSAPR mitigated these concerns and that this 
final rule, which applies the CSAPR framework to reduce interstate 
ozone pollution and implement these reductions, will also alleviate 
community concerns.
    Ozone pollution from power plants has both local and regional 
components: part of the pollution in a given location--even in 
locations near emission sources--is due to emissions from nearby 
sources, and part is due to emissions that travel hundreds of miles and 
mix with emissions from other sources.
    It is important to note that the section of the Clean Air Act 
providing authority for this rule, section 110(a)(2)(D), unlike some 
other provisions, does not dictate levels of control for particular 
facilities. In developing the original CSAPR, the EPA considered 
several alternative implementation approaches, and found that none of 
the approaches could ensure that all affected power plants would 
decrease their emissions. For example, under an alternative approach 
that required direct emission controls on individual facilities, the 
emission rate for each facility would have been limited but individual 
facilities could emit more pollution overall by increasing their power 
output.\198\
---------------------------------------------------------------------------

    \198\ 76 FR 48348 (August 8, 2011).
---------------------------------------------------------------------------

    CSAPR allows sources to trade allowances with other sources in the 
same or different states while firmly limiting any emissions shifting 
that may occur by requiring a strict emission ceiling in each state 
(the assurance level). In addition, assurance provisions in the 
existing CSAPR regulations that will remain in place under this rule 
outline the allowance surrender penalties for failing to meet the 
assurance level; there are additional allowance penalties as well as 
financial penalties for failing to hold an adequate number of 
allowances to cover emissions.
    This approach reduces EGU emissions in each state that 
significantly contribute to downwind nonattainment or maintenance 
areas, while allowing power companies to adjust generation as needed 
and ensure that the country's electricity needs will continue to be 
met. The EPA maintains that the existence of these assurance 
provisions, including the penalties imposed when triggered, will ensure 
that state emissions will stay below the level of the budget plus 
variability limit.
    In addition, all sources must hold enough allowances to cover their 
emissions. Therefore, if a source emits more than its allocation in a 
given year, either another source must have used less than its 
allocation and be willing to sell some of its excess allowances, or the 
source itself had emitted less than its allocation in one or more 
previous years (i.e., banked, or saved, allowances for future use).
    In summary, the CSAPR addresses community concerns about localized 
hot spots and reduces ambient concentrations of pollution where they 
are most needed by sensitive and vulnerable populations by: Considering 
the science of ozone transport to set strict state emission budgets to 
reduce significant contributions to ozone nonattainment and maintenance 
(i.e., the most polluted) areas; implementing air quality-assured 
trading; requiring any emissions above the level of the allocations to 
be offset by emission decreases; and imposing strict penalties for 
sources that contribute to a state's exceedance of its budget plus 
variability limit. In addition, it is important to note that nothing in 
this final rule allows sources to violate their title V permit or any 
other federal, state, or local emissions or air quality requirements.
    It is also important to note that CAA section 110(a)(2)(D), which 
addresses transport of criteria pollutants between states, is only one 
of many provisions of the CAA that provide the EPA, states, and local 
governments with authorities to reduce exposure to ozone in 
communities. These legal authorities work together to reduce exposure 
to these pollutants in communities, including for minority, low-income, 
and tribal populations, and provide substantial health benefits to both 
the general public and sensitive sub-populations.
    The EPA informed communities of its development of this rule on an 
Environmental Justice community call (January 28, 2015) and two 
National Tribal Air Association--EPA air policy conference calls 
(January 29, 2015 and November 17, 2015). The EPA will continue to 
engage with communities and tribes as part of the outreach strategy for 
this final rule.

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the United States. This action is a ``major rule'' as defined by 5 
U.S.C. 804(2).

L. Judicial Review and Determinations Under Section 307(b)(1) and (d)

    Section 307(b)(1) of the CAA indicates which Federal Courts of 
Appeal have venue for petitions of review of final actions by the EPA. 
This section provides, in part, that petitions for review must be filed 
in the Court of Appeals for the District of Columbia Circuit if (i) the 
agency action consists of ``nationally applicable regulations

[[Page 74586]]

promulgated, or final action taken, by the Administrator,'' or (ii) 
such action is locally or regionally applicable, if ``such action is 
based on a determination of nationwide scope or effect and if in taking 
such action the Administrator finds and publishes that such action is 
based on such a determination.''
    The EPA finds that any final action related to this rulemaking is 
``nationally applicable'' and of ``nationwide scope and effect'' within 
the meaning of section 307(b)(1). Through this rulemaking action, the 
EPA interprets section 110 of the CAA, a provision which has nationwide 
applicability. In addition, the rule applies to 22 States. The rule is 
also based on a common core of factual findings and analyses concerning 
the transport of pollutants between the different states subject to it. 
For these reasons, the Administrator determines that this final action 
is of nationwide scope and effect for purposes of section 307(b)(1). 
Thus, pursuant to section 307(b) any petitions for review of any final 
actions regarding the rulemaking would be filed in the Court of Appeals 
for the District of Columbia Circuit within 60 days from the date any 
final action is published in the Federal Register.
    In addition, pursuant to sections 307(d)(1)(C) and 307(d)(1)(V) of 
the CAA, the Administrator determines that this action is subject to 
the provisions of section 307(d). CAA section 307(d)(1)(B) provides 
that section 307(d) applies to, among other things, to ``the 
promulgation or revision of an implementation plan by the Administrator 
under CAA section 110(c).'' 42 U.S.C. 7407(d)(1)(B). Under section 
307(d)(1)(V), the provisions of section 307(d) also apply to ``such 
other actions as the Administrator may determine.'' 42 U.S.C. 
7407(d)(1)(V). The agency has complied with procedural requirements of 
CAA section 307(d) during the course of this rulemaking.

List of Subjects

40 CFR Part 52

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

40 CFR Part 78

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

40 CFR Part 97

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Intergovernmental relations, Nitrogen oxides, 
Ozone, Reporting and recordkeeping requirements.

    Dated: September 7, 2016.
Gina McCarthy,
Administrator.

    For the reasons stated in the preamble, parts 52, 78, and 97 of 
chapter I of title 40 of the Code of Federal Regulations are amended as 
follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

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

Sec. Sec.  52.38, 52.39, 52.54, 52.55, 52.584, 52.585, 52.731, 52.732, 
52.789, 52.790, 52.840, 52.841, 52.882, 52.883, 52.940, 52.941, 
52.1084, 52.1085, 52.1186, 52.1187, 52.1240, 52.1241, 52.1326, 52.1327, 
52.1428, 52.1429, 52.1584, 52.1585, 52.1684, 52.1685, 52.1784, 52.1785, 
52.1882, 52.1883, 52.2040, 52.2041, 52.2140, 52.2141, 52.2240, 52.2241, 
52.2283, 52.2284, 52.2440, 52.2441, 52.2540, 52.2541, 52.2587, and 
52.2588   [Amended]

0
2. Sections 52.38, 52.39, 52.54, 52.55, 52.584, 52.585, 52.731, 52.732, 
52.789, 52.790, 52.840, 52.841, 52.882, 52.883, 52.940, 52.941, 
52.1084, 52.1085, 52.1186, 52.1187, 52.1240, 52.1241, 52.1326, 52.1327, 
52.1428, 52.1429, 52.1584, 52.1585, 52.1684, 52.1685, 52.1784, 52.1785, 
52.1882, 52.1883, 52.2040, 52.2041, 52.2140, 52.2141, 52.2240, 52.2241, 
52.2283, 52.2284, 52.2440, 52.2441, 52.2540, 52.2541, 52.2587, and 
52.2588 are amended by removing the text ``TR'' wherever it appears and 
adding in its place the text ``CSAPR''.

Subpart A--General Provisions

Sec.  52.36   [Amended]

0
3. Section 52.36, paragraph (e)(1)(i) is amended by removing the text 
``paragraphs (a) through (e)'' and adding in its place the text 
``paragraphs (a) through (c)''.

0
4. Section 52.38 is amended by:
0
a. Revising the section heading;
0
b. After the text ``NOX Ozone Season'' wherever it appears 
adding the text ``Group 1'';
0
c. In paragraph (a)(2), removing the words ``the sources in'' and 
adding in their place the words ``sources in each of'';
0
d. In paragraph (a)(3)(ii), after the text ``2016, of'' adding the word 
``the'';
0
e. In paragraph (a)(3)(v)(A), removing the word ``paragraph'' and 
adding in its place the word ``paragraphs'';
0
f. In paragraph (a)(4)(i)(B), table heading, removing the word 
``annual'' and adding in its place the word ``Annual'', and removing 
the word ``administrator'' and adding in its place the words ``the 
Administrator'';
0
g. In paragraph (a)(4)(ii), removing the words ``section for'' and 
adding in their place the words ``section applicable to'';
0
h. Revising paragraph (a)(5) introductory text;
0
i. In paragraph (a)(5)(i)(B), table heading, removing the word 
``annual'' and adding in its place the word ``Annual'', and removing 
the word ``administrator'' and adding in its place the words ``the 
Administrator'';
0
j. Revising paragraphs (a)(5)(iv) and (v);
0
k. In paragraph (a)(5)(vi), removing the text ``paragraphs (a)(5)(i) 
and (ii)'' and adding in its place the text ``paragraph (a)(5)(i)'';
0
l. Revising paragraph (a)(6);
0
m. In paragraph (a)(7), removing the words ``a State'' and adding in 
their place the words ``the State'';
0
n. Adding paragraph (a)(8);
0
o. Revising paragraphs (b)(1) and (2);
0
p. In paragraph (b)(3) introductory text, removing the text ``paragraph 
(b)(2)'' and adding in its place the text ``paragraph (b)(2)(i) or 
(ii)'';
0
q. In paragraph (b)(3)(ii), after the text ``2016, of'' adding the word 
``the'';
0
r. In paragraph (b)(3)(v)(A), removing the word ``paragraph'' and 
adding in its place the word ``paragraphs'';
0
s. In paragraph (b)(4) introductory text, removing the text ``paragraph 
(b)(2)'' and adding in its place the text ``paragraph (b)(2)(i)'';
0
t. Revising paragraph (b)(4)(i);
0
u. In paragraph (b)(4)(ii) introductory text, after the words ``with 
regard to'' adding the words ``the State and'';
0
v. In paragraph (b)(4)(ii)(B), table heading, removing the word 
``administrator'' and adding in its place the words ``the 
Administrator'';
0
w. Revising paragraph (b)(5) introductory text, paragraph (b)(5)(i), 
and paragraph (b)(5)(ii) introductory text;
0
x. In paragraph (b)(5)(ii)(B), removing the words ``auction of'' and 
adding in their place the words ``auctions of'', and removing from the 
table heading the word ``administrator'' and adding in its place the 
words ``the Administrator'';
0
y. In paragraph (b)(5)(ii)(C), removing the words ``any control'' and 
adding in

[[Page 74587]]

their place the words ``any such control'';
0
z. In paragraph (b)(5)(iii), after the words ``May adopt'' adding a 
comma;
0
aa. Revising paragraphs (b)(5)(v) through (vii), and (b)(6) and (7); 
and
0
bb. Adding paragraphs (b)(8) through (13).
    The revisions and additions read as follows:

Sec.  52.38  What are the requirements of the Federal Implementation 
Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) relating to 
emissions of nitrogen oxides?

    (a) * * *
    (5) Notwithstanding the provisions of paragraph (a)(1) of this 
section, a State listed in paragraph (a)(2) of this section may adopt 
and include in a SIP revision, and the Administrator will approve, as 
correcting the deficiency in the SIP that is the basis for the CSAPR 
Federal Implementation Plan set forth in paragraphs (a)(1) through (4) 
of this section with regard to sources in the State (but not sources in 
any Indian country within the borders of the State), regulations that 
are substantively identical to the provisions of the CSAPR 
NOX Annual Trading Program set forth in Sec. Sec.  97.402 
through 97.435 of this chapter, except that the SIP revision:
* * * * *
    (iv) Must not include any of the requirements imposed on any unit 
in Indian country within the borders of the State in the provisions in 
Sec. Sec.  97.402 through 97.435 of this chapter and must not include 
the provisions in Sec. Sec.  97.411(b)(2) and (c)(5)(iii), 97.412(b), 
and 97.421(h) and (j) of this chapter, all of which provisions will 
continue to apply under any portion of the CSAPR Federal Implementation 
Plan that is not replaced by the SIP revision;
    (v) Provided that, if and when any covered unit is located in 
Indian country within the borders of the State, the Administrator may 
modify his or her approval of the SIP revision to exclude the 
provisions in Sec. Sec.  97.402 (definitions of ``common designated 
representative'', ``common designated representative's assurance 
level'', and ``common designated representative's share''), 
97.406(c)(2), and 97.425 of this chapter and the portions of other 
provisions of subpart AAAAA of part 97 of this chapter referencing 
these sections and may modify any portion of the CSAPR Federal 
Implementation Plan that is not replaced by the SIP revision to include 
these provisions;
* * * * *
    (6) Following promulgation of an approval by the Administrator of a 
State's SIP revision as correcting the SIP's deficiency that is the 
basis for the CSAPR Federal Implementation Plan set forth in paragraphs 
(a)(1) through (4) of this section for sources in the State, the 
provisions of paragraph (a)(2) of this section will no longer apply to 
sources in the State, unless the Administrator's approval of the SIP 
revision is partial or conditional, and will continue to apply to 
sources in any Indian country within the borders of the State, provided 
that if the CSAPR Federal Implementation Plan was promulgated as a 
partial rather than full remedy for an obligation of the State to 
address interstate air pollution, the SIP revision likewise will 
constitute a partial rather than full remedy for the State's obligation 
unless provided otherwise in the Administrator's approval of the SIP 
revision.
* * * * *
    (8) The following States have SIP revisions approved by the 
Administrator under paragraph (a)(3), (4), or (5) of this section:
    (i) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (a)(3) of this section as 
replacing the CSAPR NOX Annual allowance allocation 
provisions in Sec.  97.411(a) of this chapter with regard to the State 
and the control period in 2016: Alabama, Kansas, Missouri, and 
Nebraska.
    (ii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (a)(4) of this section as 
replacing the CSAPR NOX Annual allowance allocation 
provisions in Sec. Sec.  97.411(a) and (b)(1) and 97.412(a) of this 
chapter with regard to the State and the control period in 2017 or any 
subsequent year: Kansas and Missouri.
    (iii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (a)(5) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (a)(1) through (4) of this 
section with regard to sources in the State (but not sources in any 
Indian country within the borders of the State): Alabama.
    (b)(1) The CSAPR NOX Ozone Season Group 1 Trading 
Program provisions and the CSAPR NOX Ozone Season Group 2 
Trading Program provisions set forth respectively in subparts BBBBB and 
EEEEE of part 97 of this chapter constitute the CSAPR Federal 
Implementation Plan provisions that relate to emissions of 
NOX during the ozone season, defined as May 1 through 
September 30 of a calendar year.
    (2)(i) The provisions of subpart BBBBB of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions in 
2015 and each subsequent year: Georgia.
    (ii) The provisions of subpart BBBBB of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2015 and 2016 only: Alabama, Arkansas, Florida, Illinois, 
Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Mississippi, 
Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, 
Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West 
Virginia, and Wisconsin.
    (iii) The provisions of subpart EEEEE of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2017 and each subsequent year: Alabama, Arkansas, 
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, 
Michigan, Mississippi, Missouri, New Jersey, New York, Ohio, Oklahoma, 
Pennsylvania, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.
* * * * *
    (4) * * *
    (i) The State may adopt, as applicability provisions replacing the 
provisions in Sec.  97.504(a)(1) and (2) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that the words ``more than 25 MWe'' are replaced, wherever such 
words appear, by words specifying a uniform lower limit on the amount 
of megawatts that is not greater than the amount specified by the words 
``more than 25 MWe'' and is not less than the amount specified by the 
words ``15 MWe or more''; and
* * * * *
    (5) Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State listed in paragraph (b)(2)(i) of this section may 
adopt and include in a SIP revision, and the Administrator will 
approve, as correcting the deficiency in the SIP that is the basis for 
the CSAPR Federal Implementation Plan set forth in paragraphs (b)(1), 
(b)(2)(i), and (b)(3) and (4) of this section with regard to sources in 
the State (but not sources in any Indian country within the borders of 
the State), regulations that are substantively identical to the 
provisions of the CSAPR NOX Ozone Season Group 1 Trading 
Program set forth in Sec. Sec.  97.502 through 97.535 of this chapter, 
except that the SIP revision:
    (i) May adopt, as applicability provisions replacing the provisions 
in Sec.  97.504(a)(1) and (2) of this chapter

[[Page 74588]]

with regard to the State, provisions substantively identical to those 
provisions, except that the words ``more than 25 MWe'' are replaced, 
wherever such words appear, by words specifying a uniform lower limit 
on the amount of megawatts that is not greater than the amount 
specified by the words ``more than 25 MWe'' and is not less than the 
amount specified by the words ``15 MWe or more''; and
    (ii) May adopt, as CSAPR NOX Ozone Season Group 1 
allowance allocation provisions replacing the provisions in Sec. Sec.  
97.511(a) and (b)(1) and 97.512(a) of this chapter with regard to the 
State and the control period in 2017 or any subsequent year, any 
methodology under which the State or the permitting authority allocates 
or auctions CSAPR NOX Ozone Season Group 1 allowances and 
that--
* * * * *
    (v) Must not include any of the requirements imposed on any unit in 
Indian country within the borders of the State in the provisions in 
Sec. Sec.  97.502 through 97.535 of this chapter and must not include 
the provisions in Sec. Sec.  97.511(b)(2) and (c)(5)(iii), 97.512(b), 
and 97.521(h) and (j) of this chapter, all of which provisions will 
continue to apply under any portion of the CSAPR Federal Implementation 
Plan that is not replaced by the SIP revision;
    (vi) Provided that, if and when any covered unit is located in 
Indian country within the borders of the State, the Administrator may 
modify his or her approval of the SIP revision to exclude the 
provisions in Sec. Sec.  97.502 (definitions of ``common designated 
representative'', ``common designated representative's assurance 
level'', and ``common designated representative's share''), 
97.506(c)(2), and 97.525 of this chapter and the portions of other 
provisions of subpart BBBBB of part 97 of this chapter referencing 
these sections and may modify any portion of the CSAPR Federal 
Implementation Plan that is not replaced by the SIP revision to include 
these provisions;
    (vii) Provided that the State must submit a complete SIP revision 
meeting the requirements of paragraphs (b)(5)(i) through (v) of this 
section by December 1 of the year before the year of the deadlines for 
submission of allocations or auction results under paragraphs 
(b)(5)(ii)(B) and (C) of this section applicable to the first control 
period for which the State wants to replace the applicability 
provisions, make allocations, or hold an auction under paragraph 
(b)(5)(i) or (ii) of this section.
    (6) Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State listed in paragraph (b)(2)(i) of this section may 
adopt and include in a SIP revision, and the Administrator will 
approve, as correcting the deficiency in the SIP that is the basis for 
the CSAPR Federal Implementation Plan set forth in paragraphs (b)(1), 
(b)(2)(i), and (b)(3) and (4) of this section with regard to sources in 
the State (but not sources in any Indian country within the borders of 
the State), regulations that are substantively identical to the 
provisions of the CSAPR NOX Ozone Season Group 2 Trading 
Program set forth in Sec. Sec.  97.802 through 97.835 of this chapter, 
subject to the following requirements and exceptions:
    (i) The provisions of paragraphs (b)(9)(i) through (viii) of this 
section apply to any such SIP revision.
    (ii) Following promulgation of an approval by the Administrator of 
such a SIP revision:
    (A) The provisions of the SIP revision will apply to sources in the 
State with regard to emissions occurring in the control period that 
begins May 1 immediately after promulgation of such approval, or such 
later control period as may be adopted by the State in its regulations 
and approved by the Administrator in the SIP revision, and in each 
subsequent control period.
    (B) Notwithstanding the provisions of paragraph (b)(6)(ii)(A) of 
this section, if, at the time of the approval of the SIP revision, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 1 allowances to units in the State 
for a control period in any year, the Administrator will not record 
allocations of CSAPR NOX Ozone Season Group 2 allowances to 
units in the State for any such control period under the provisions of 
the SIP revision but instead will allocate and record CSAPR 
NOX Ozone Season Group 2 allowances in place of CSAPR 
NOX Ozone Season Group 1 allowances under Sec.  97.526(c)(2) 
of this chapter, unless provided otherwise by such approval of the SIP 
revision.
    (7) Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State listed in paragraph (b)(2)(iii) of this section may 
adopt and include in a SIP revision, and the Administrator will 
approve, as CSAPR NOX Ozone Season Group 2 allowance 
allocation provisions replacing the provisions in Sec.  97.811(a) of 
this chapter with regard to the State and the control period in 2018, a 
list of CSAPR NOX Ozone Season Group 2 units and the amount 
of CSAPR NOX Ozone Season Group 2 allowances allocated to 
each unit on such list, provided that the list of units and allocations 
meets the following requirements:
    (i) All of the units on the list must be units that are in the 
State and commenced commercial operation before January 1, 2015;
    (ii) The total amount of CSAPR NOX Ozone Season Group 2 
allowance allocations on the list must not exceed the amount, under 
Sec.  97.810(a) of this chapter for the State and the control period in 
2018, of the CSAPR NOX Ozone Season Group 2 trading budget 
minus the sum of the new unit set-aside and Indian country new unit 
set-aside;
    (iii) The list must be submitted electronically in a format 
specified by the Administrator; and
    (iv) The SIP revision must not provide for any change in the units 
and allocations on the list after approval of the SIP revision by the 
Administrator and must not provide for any change in any allocation 
determined and recorded by the Administrator under subpart EEEEE of 
part 97 of this chapter;
    (v) Provided that:
    (A) By December 27, 2016, the State must notify the Administrator 
electronically in a format specified by the Administrator of the 
State's intent to submit to the Administrator a complete SIP revision 
meeting the requirements of paragraphs (b)(7)(i) through (iv) of this 
section by April 1, 2017; and
    (B) The State must submit to the Administrator a complete SIP 
revision described in paragraph (b)(7)(v)(A) of this section by April 
1, 2017.
    (8) Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State listed in paragraph (b)(2)(iii) of this section may 
adopt and include in a SIP revision, and the Administrator will 
approve, regulations revising subpart EEEEE of part 97 of this chapter 
as follows and not making any other substantive revisions of that 
subpart:
    (i) The State may adopt, as applicability provisions replacing the 
provisions in Sec.  97.804(a)(1) and (2) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that the words ``more than 25 MWe'' are replaced, wherever such 
words appear, by words specifying a uniform lower limit on the amount 
of megawatts that is not greater than the amount specified by the words 
``more than 25 MWe'' and is not less than the amount specified by the 
words ``15 MWe or more'';
    (ii) Such a State listed in Sec.  51.121(c) of this chapter may 
adopt, as applicability provisions replacing the provisions in Sec.  
97.804(a) and (b) of this chapter with regard to the State, provisions 
substantively identical to those provisions, except that

[[Page 74589]]

applicability is expanded to include, in addition to all units in the 
State that would be CSAPR NOX Ozone Season Group 2 units 
under Sec.  97.804(a) and (b) of this chapter and any units to which 
the State elects to expand applicability pursuant to paragraph 
(b)(8)(i) of this section, all other units that would have been subject 
to the State's emissions trading program regulations approved as a SIP 
revision under Sec.  51.121(p) of this chapter except units to which 
the State is authorized to expand applicability under paragraph 
(b)(8)(i) of this section; and
    (iii) The State may adopt, as CSAPR NOX Ozone Season 
Group 2 allowance allocation or auction provisions replacing the 
provisions in Sec. Sec.  97.811(a) and (b)(1) and 97.812(a) of this 
chapter with regard to the State and the control period in 2019 or any 
subsequent year, any methodology under which the State or the 
permitting authority allocates or auctions CSAPR NOX Ozone 
Season Group 2 allowances and may adopt, in addition to the definitions 
in Sec.  97.802 of this chapter, one or more definitions that shall 
apply only to terms as used in the adopted CSAPR NOX Ozone 
Season Group 2 allowance allocation or auction provisions, if such 
methodology--
    (A) Requires the State or the permitting authority to allocate and, 
if applicable, auction a total amount of CSAPR NOX Ozone 
Season Group 2 allowances for any such control period not exceeding the 
amount, under Sec. Sec.  97.810(a) and 97.821 of this chapter for the 
State and such control period, of the CSAPR NOX Ozone Season 
Group 2 trading budget minus the sum of the Indian country new unit 
set-aside and the amount of any CSAPR NOX Ozone Season Group 
2 allowances already allocated and recorded by the Administrator, plus, 
if the State adopts regulations expanding applicability to additional 
units pursuant to paragraph (b)(8)(ii) of this section, an additional 
amount of CSAPR NOX Ozone Season Group 2 allowances not 
exceeding the lesser of:
    (1) The highest of the sum, for all additional units in the State 
to which applicability is expanded pursuant to paragraph (b)(8)(ii) of 
this section, of the NOX emissions reported in accordance 
with part 75 of this chapter for the ozone season in the year before 
the year of the submission deadline for the SIP revision under 
paragraph (b)(8)(iv) of this section and the corresponding sums of the 
NOX emissions reported in accordance with part 75 of this 
chapter for each of the two immediately preceding ozone seasons, 
provided that each such seasonal sum shall exclude the amount of any 
NOX emissions reported by any unit for all hours in any 
calendar day during which the unit did not have at least one quality-
assured monitor operating hour, as defined in Sec.  72.2 of this 
chapter; or
    (2) The portion of the emissions budget under the State's emissions 
trading program regulations approved as a SIP revision under Sec.  
51.121(p) of this chapter that is attributable to the units to which 
applicability is expanded pursuant to paragraph (b)(8)(ii) of this 
section.
    (B) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 2 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 2 units covered by Sec.  97.811(a) of this chapter, 
that the State or the permitting authority submit such allocations or 
the results of such auctions for such control period (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 2 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator no later than the following dates:

------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone season group 2       allocations or auction results
 allowances are allocated or auctioned         to the Administrator
------------------------------------------------------------------------
2019...................................  June 1, 2018.
2020...................................  June 1, 2018.
2021...................................  June 1, 2019.
2022...................................  June 1, 2019.
2023...................................  June 1, 2020.
2024...................................  June 1, 2020.
2025 and any year thereafter...........  June 1 of the fourth year
                                          before the year of the control
                                          period.
------------------------------------------------------------------------

    (C) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 2 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 2 units covered by Sec. Sec.  97.811(b)(1) and 
97.812(a) of this chapter, that the State or the permitting authority 
submit such allocations or the results of such auctions (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 2 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator by July 1 of the year of such control 
period.
    (D) Does not provide for any change, after the submission deadlines 
in paragraphs (b)(8)(iii)(B) and (C) of this section, in the 
allocations submitted to the Administrator by such deadlines and does 
not provide for any change in any allocation determined and recorded by 
the Administrator under subpart EEEEE of part 97 of this chapter or 
Sec.  97.526(c) of this chapter;
    (iv) Provided that the State must submit a complete SIP revision 
meeting the requirements of paragraph (b)(8)(i), (ii), or (iii) of this 
section by December 1 of the year before the year of the deadlines for 
submission of allocations or auction results under paragraphs 
(b)(8)(iii)(B) and (C) of this section applicable to the first control 
period for which the State wants to replace the applicability 
provisions, make allocations, or hold an auction under paragraph 
(b)(8)(i), (ii), or (iii) of this section.
    (9) Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State listed in paragraph (b)(2)(iii) of this section may 
adopt and include in a SIP revision, and the Administrator will 
approve, as correcting the deficiency in the SIP that is the basis for 
the CSAPR Federal Implementation Plan set forth in paragraphs (b)(1), 
(b)(2)(iii), and (b)(7) and (8) of this section with regard to sources 
in the State (but not sources in any Indian country within the borders 
of the State), regulations that are substantively identical to the 
provisions of the CSAPR NOX Ozone Season Group 2 Trading 
Program set forth in Sec. Sec.  97.802 through 97.835 of this chapter, 
except that the SIP revision:
    (i) May adopt, as applicability provisions replacing the provisions 
in Sec.  97.804(a)(1) and (2) of this chapter with regard to the State, 
provisions substantively identical to those provisions, except that the 
words ``more than 25 MWe'' are replaced, wherever

[[Page 74590]]

such words appear, by words specifying a uniform lower limit on the 
amount of megawatts that is not greater than the amount specified by 
the words ``more than 25 MWe'' and is not less than the amount 
specified by the words ``15 MWe or more'';
    (ii) In the case of such a State listed in Sec.  51.121(c) of this 
chapter, may adopt, as applicability provisions replacing the 
provisions in Sec.  97.804(a) and (b) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that applicability is expanded to include, in addition to all 
units in the State that would be CSAPR NOX Ozone Season 
Group 2 units under Sec.  97.804(a) and (b) of this chapter and any 
units to which the State elects to expand applicability pursuant to 
paragraph (b)(9)(i) of this section, all other units that would have 
been subject to the State's emissions trading program regulations 
approved as a SIP revision under Sec.  51.121(p) of this chapter except 
units to which the State is authorized to expand applicability under 
paragraph (b)(9)(i) of this section; and
    (iii) May adopt, as CSAPR NOX Ozone Season Group 2 
allowance allocation provisions replacing the provisions in Sec. Sec.  
97.811(a) and (b)(1) and 97.812(a) of this chapter with regard to the 
State and the control period in 2019 or any subsequent year, any 
methodology under which the State or the permitting authority allocates 
or auctions CSAPR NOX Ozone Season Group 2 allowances and 
that--
    (A) Requires the State or the permitting authority to allocate and, 
if applicable, auction a total amount of CSAPR NOX Ozone 
Season Group 2 allowances for any such control period not exceeding the 
amount, under Sec. Sec.  97.810(a) and 97.821 of this chapter for the 
State and such control period, of the CSAPR NOX Ozone Season 
Group 2 trading budget minus the sum of the Indian country new unit 
set-aside and the amount of any CSAPR NOX Ozone Season Group 
2 allowances already allocated and recorded by the Administrator, plus, 
if the State adopts regulations expanding applicability to additional 
units pursuant to paragraph (b)(9)(ii) of this section, an additional 
amount of CSAPR NOX Ozone Season Group 2 allowances not 
exceeding the lesser of:
    (1) The highest of the sum, for all additional units in the State 
to which applicability is expanded pursuant to paragraph (b)(9)(ii) of 
this section, of the NOX emissions reported in accordance 
with part 75 of this chapter for the ozone season in the year before 
the year of the submission deadline for the SIP revision under 
paragraph (b)(9)(viii) of this section and the corresponding sums of 
the NOX emissions reported in accordance with part 75 of 
this chapter for each of the two immediately preceding ozone seasons, 
provided that each such seasonal sum shall exclude the amount of any 
NOX emissions reported by any unit for all hours in any 
calendar day during which the unit did not have at least one quality-
assured monitor operating hour, as defined in Sec.  72.2 of this 
chapter; or
    (2) The portion of the emissions budget under the State's emissions 
trading program regulations approved as a SIP revision under Sec.  
51.121(p) of this chapter that is attributable to the units to which 
applicability is expanded pursuant to paragraph (b)(9)(ii) of this 
section.
    (B) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 2 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 2 units covered by Sec.  97.811(a) of this chapter, 
that the State or the permitting authority submit such allocations or 
the results of such auctions for such control period (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 2 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator no later than the following dates:

------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone season group 2       allocations or auction results
 allowances are allocated or auctioned         to the Administrator
------------------------------------------------------------------------
2019...................................  June 1, 2018.
2020...................................  June 1, 2018.
2021...................................  June 1, 2019.
2022...................................  June 1, 2019.
2023...................................  June 1, 2020.
2024...................................  June 1, 2020.
2025 and any year thereafter...........  June 1 of the fourth year
                                          before the year of the control
                                          period.
------------------------------------------------------------------------

    (C) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 2 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 2 units covered by Sec. Sec.  97.811(b)(1) and 
97.812(a) of this chapter, that the State or the permitting authority 
submit such allocations or the results of such auctions (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 2 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator by July 1 of the year of such control 
period.
    (D) Does not provide for any change, after the submission deadlines 
in paragraphs (b)(9)(iii)(B) and (C) of this section, in the 
allocations submitted to the Administrator by such deadlines and does 
not provide for any change in any allocation determined and recorded by 
the Administrator under subpart EEEEE of part 97 of this chapter or 
Sec.  97.526(c) of this chapter;
    (iv) May adopt, in addition to the definitions in Sec.  97.802 of 
this chapter, one or more definitions that shall apply only to terms as 
used in the CSAPR NOX Ozone Season Group 2 allowance 
allocation or auction provisions adopted under paragraph (b)(9)(iii) of 
this section;
    (v) May substitute the name of the State for the term ``State'' as 
used in subpart EEEEE of part 97 of this chapter, to the extent the 
Administrator determines that such substitutions do not make 
substantive changes in the provisions in Sec. Sec.  97.802 through 
97.835 of this chapter; and
    (vi) Must not include any of the requirements imposed on any unit 
in Indian country within the borders of the State in the provisions in 
Sec. Sec.  97.802 through 97.835 of this chapter and must not include 
the provisions in Sec. Sec.  97.811(b)(2) and (c)(5)(iii), 97.812(b), 
and 97.821(h) and (j) of this chapter, all of which provisions will 
continue to apply under any portion of the CSAPR Federal Implementation 
Plan that is not replaced by the SIP revision;
    (vii) Provided that, if and when any covered unit is located in 
Indian country within the borders of the State, the Administrator may 
modify his or her approval of the SIP revision to exclude

[[Page 74591]]

the provisions in Sec. Sec.  97.802 (definitions of ``base CSAPR 
NOX Ozone Season Group 2 source'', ``base CSAPR 
NOX Ozone Season Group 2 unit'', ``common designated 
representative'', ``common designated representative's assurance 
level'', and ``common designated representative's share''), 
97.806(c)(2), and 97.825 of this chapter and the portions of other 
provisions of subpart EEEEE of part 97 of this chapter referencing 
these sections and may modify any portion of the CSAPR Federal 
Implementation Plan that is not replaced by the SIP revision to include 
these provisions;
    (viii) Provided that the State must submit a complete SIP revision 
meeting the requirements of paragraphs (b)(9)(i) through (vi) of this 
section by December 1 of the year before the year of the deadlines for 
submission of allocations or auction results under paragraphs 
(b)(9)(iii)(B) and (C) of this section applicable to the first control 
period for which the State wants to replace the applicability 
provisions, make allocations, or hold an auction under paragraph 
(b)(9)(i), (ii), or (iii) of this section.
    (10) Following promulgation of an approval by the Administrator of 
a State's SIP revision as correcting the SIP's deficiency that is the 
basis for the CSAPR Federal Implementation Plan set forth in paragraphs 
(b)(1), (b)(2)(i), and (b)(3) and (4) of this section or paragraphs 
(b)(1), (b)(2)(iii), and (b)(7) and (8) of this section for sources in 
the State--
    (i) The provisions of paragraph (b)(2)(i) or (iii) of this section, 
as applicable, will no longer apply to sources in the State, unless the 
Administrator's approval of the SIP revision is partial or conditional, 
and will continue to apply to sources in any Indian country within the 
borders of the State, provided that if the CSAPR Federal Implementation 
Plan was promulgated as a partial rather than full remedy for an 
obligation of the State to address interstate air pollution, the SIP 
revision likewise will constitute a partial rather than full remedy for 
the State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision; and
    (ii) For a State listed in Sec.  51.121(c) of this chapter, the 
State's adoption of the regulations included in such approved SIP 
revision will satisfy with regard to the sources subject to such 
regulations, including any sources made subject to such regulations 
pursuant to paragraph (b)(9)(ii) of this section, the requirement under 
Sec.  51.121(r)(2) of this chapter for the State to revise its SIP to 
adopt control measures with regard to such sources.
    (11) Notwithstanding the provisions of paragraph (b)(10)(i) of this 
section--
    (i) If, at the time of such approval of the State's SIP revision, 
the Administrator has already started recording any allocations of 
CSAPR NOX Ozone Season Group 1 allowances under subpart 
BBBBB of part 97 of this chapter, or allocations of CSAPR 
NOX Ozone Season Group 2 allowances under subpart EEEEE of 
part 97 of this chapter, to units in the State for a control period in 
any year, the provisions of subpart BBBBB of part 97 of this chapter 
authorizing the Administrator to complete the allocation and 
recordation of CSAPR NOX Ozone Season Group 1 allowances, or 
of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances, as applicable, to units 
in the State for each such control period shall continue to apply, 
unless provided otherwise by such approval of the State's SIP revision; 
and
    (ii) The provisions of Sec.  97.526(c)(1) through (6) of this 
chapter authorizing the Administrator to remove CSAPR NOX 
Ozone Season Group 1 allowances from any account where such allowances 
are held and to allocate and record amounts of CSAPR NOX 
Ozone Season Group 2 allowances in place of any CSAPR NOX 
Ozone Season Group 1 allowances that have been so removed or that have 
not been initially recorded, and the provisions of Sec.  97.526(c)(7) 
of this chapter authorizing the use of CSAPR NOX Ozone 
Season Group 2 allowances to satisfy requirements to hold CSAPR 
NOX Ozone Season Group 1 allowances, will continue to apply.
    (12) The following States have SIP revisions approved by the 
Administrator under paragraph (b)(3), (4), or (5) of this section:
    (i) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(3) of this section as 
replacing the CSAPR NOX Ozone Season Group 1 allowance 
allocation provisions in Sec.  97.511(a) of this chapter with regard to 
the State and the control period in 2016: Alabama and Missouri.
    (ii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(4) of this section as 
replacing the CSAPR NOX Ozone Season Group 1 applicability 
provisions in Sec.  97.504(a)(1) and (2) of this chapter or the CSAPR 
NOX Ozone Season Group 1 allowance allocation provisions in 
Sec. Sec.  97.511(a) and (b)(1) and 97.512(a) of this chapter with 
regard to the State and the control period in 2017 or any subsequent 
year: [none].
    (iii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(5) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (b)(1), (b)(2)(i), and 
(b)(3) and (4) of this section with regard to sources in the State (but 
not sources in any Indian country within the borders of the State): 
[none].
    (13) The following States have SIP revisions approved by the 
Administrator under paragraph (b)(6), (7), (8), or (9) of this section:
    (i) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(6) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (b)(1), (b)(2)(i), and 
(b)(3) and (4) of this section with regard to sources in the State (but 
not sources in any Indian country within the borders of the State): 
[none].
    (ii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(7) of this section as 
replacing the CSAPR NOX Ozone Season Group 2 allowance 
allocation provisions in Sec.  97.811(a) of this chapter with regard to 
the State and the control period in 2018: [none].
    (iii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(8) of this section as 
replacing the CSAPR NOX Ozone Season Group 2 applicability 
provisions in Sec.  97.804(a) and (b) or Sec.  97.804(a)(1) and (2) of 
this chapter or the CSAPR NOX Ozone Season Group 2 allowance 
allocation provisions in Sec. Sec.  97.811(a) and (b)(1) and 97.812(a) 
of this chapter with regard to the State and the control period in 2019 
or any subsequent year: [none].
    (iv) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(9) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (b)(1), (b)(2)(iii), and 
(b)(7) and (8) of this section with regard to sources in the State (but 
not sources in any Indian country within the borders of the State): 
[none].

0
5. Section 52.39 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (d)(2), after the text ``2016, of'' adding the word 
``the'';
0
c. In paragraph (d)(5)(i), removing the word ``paragraph'' and adding 
in its place the word ``paragraphs'';

[[Page 74592]]

0
d. In paragraph (e)(1) introductory text, after the words ``with regard 
to'' adding the words ``the State and'';
0
e. In paragraph (e)(1)(ii), removing the words ``auction of'' and 
adding in their place the words ``auctions of'', and removing from the 
table heading the word ``administrator'' and adding in its place the 
words ``the Administrator'';
0
f. Revising paragraph (f) introductory text;
0
g. In paragraph (f)(1) introductory text, removing the text ``control 
period in 2017 and'' and adding in its place the text ``State and the 
control period in 2017 or'';
0
h. In paragraph (f)(1)(i), removing the words ``for such'' and adding 
in their place the words ``for any such'';
0
i. In paragraph (f)(1)(ii), removing the words ``auction of'' and 
adding in their place the words ``auctions of'', and removing from the 
table heading the word ``administrator'' and adding in its place the 
words ``the Administrator'';
0
j. In paragraph (f)(1)(iv), removing the text ``paragraphs (f)(2)(ii) 
and (iii)'' and adding in its place the text ``paragraphs (f)(1)(ii) 
and (iii)'';
0
k. Revising paragraphs (f)(4) and (5);
0
l. In paragraph (f)(6), removing the text ``hold an auction under 
paragraph (f)(1)(ii) and (iii)'' and adding in its place the text 
``hold an auction under paragraph (f)(1)'';
0
m. In paragraph (g) introductory text, after the words ``with regard 
to'' adding the words ``the State and'';
0
n. In paragraph (g)(2), after the text ``2016, of'' adding the word 
``the'';
0
o. In paragraph (g)(5)(i), removing the word ``paragraph'' and adding 
in its place the word ``paragraphs'';
0
p. In paragraph (h)(1) introductory text, removing the text ``control 
period in 2017 and'' and adding in its place the text ``State and the 
control period in 2017 or'';
0
q. In paragraph (h)(1)(ii), removing the words ``auction of'' and 
adding in their place the words ``auctions of'', and removing from the 
table heading the word ``administrator'' and adding in its place the 
words ``the Administrator'';
0
r. In paragraph (h)(2), removing the text ``hold an auction under 
paragraph (h)(1)(ii) and (iii)'' and adding in its place the text 
``hold an auction under paragraph (h)(1)'';
0
s. Revising paragraph (i) introductory text;
0
t. In paragraph (i)(1) introductory text, removing the text ``control 
period in 2017 and'' and adding in its place the text ``State and the 
control period in 2017 or'';
0
u. In paragraph (i)(1)(ii), removing the words ``auction of'' and 
adding in their place the words ``auctions of'', and removing from the 
table heading the word ``administrator'' and adding in its place the 
words ``the Administrator'';
0
v. Revising paragraphs (i)(4) and (5);
0
w. In paragraph (i)(6), removing the text ``hold an auction under 
paragraphs (i)(1)(ii) and (iii)'' and adding in its place the text 
``hold an auction under paragraph (i)(1)'';
0
x. Revising paragraph (j);
0
y. In paragraph (k), removing the words ``a State'' and adding in their 
place the words ``the State''; and
0
z. Adding paragraphs (l) and (m).
    The revisions and additions read as follows:

Sec.  52.39  What are the requirements of the Federal Implementation 
Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) relating to 
emissions of sulfur dioxide?

* * * * *
    (f) Notwithstanding the provisions of paragraph (a) of this 
section, a State listed in paragraph (b) of this section may adopt and 
include in a SIP revision, and the Administrator will approve, as 
correcting the deficiency in the SIP that is the basis for the CSAPR 
Federal Implementation Plan set forth in paragraphs (a), (b), (d), and 
(e) of this section with regard to sources in the State (but not 
sources in any Indian country within the borders of the State), 
regulations that are substantively identical to the provisions of the 
CSAPR SO2 Group 1 Trading Program set forth in Sec. Sec.  
97.602 through 97.635 of this chapter, except that the SIP revision:
* * * * *
    (4) Must not include any of the requirements imposed on any unit in 
Indian country within the borders of the State in the provisions in 
Sec. Sec.  97.602 through 97.635 of this chapter and must not include 
the provisions in Sec. Sec.  97.611(b)(2) and (c)(5)(iii), 97.612(b), 
and 97.621(h) and (j) of this chapter, all of which provisions will 
continue to apply under any portion of the CSAPR Federal Implementation 
Plan that is not replaced by the SIP revision;
    (5) Provided that, if and when any covered unit is located in 
Indian country within the borders of the State, the Administrator may 
modify his or her approval of the SIP revision to exclude the 
provisions in Sec. Sec.  97.602 (definitions of ``common designated 
representative'', ``common designated representative's assurance 
level'', and ``common designated representative's share''), 
97.606(c)(2), and 97.625 of this chapter and the portions of other 
provisions of subpart CCCCC of part 97 of this chapter referencing 
these sections and may modify any portion of the CSAPR Federal 
Implementation Plan that is not replaced by the SIP revision to include 
these provisions;
* * * * *
    (i) Notwithstanding the provisions of paragraph (a) of this 
section, a State listed in paragraph (c) of this section may adopt and 
include in a SIP revision, and the Administrator will approve, as 
correcting the deficiency in the SIP that is the basis for the CSAPR 
Federal Implementation Plan set forth in paragraphs (a), (c), (g), and 
(h) of this section with regard to sources in the State (but not 
sources in any Indian country within the borders of the State), 
regulations that are substantively identical to the provisions of the 
CSAPR SO2 Group 2 Trading Program set forth in Sec. Sec.  
97.702 through 97.735 of this chapter, except that the SIP revision:
* * * * *
    (4) Must not include any of the requirements imposed on any unit in 
Indian country within the borders of the State in the provisions in 
Sec. Sec.  97.702 through 97.735 of this chapter and must not include 
the provisions in Sec. Sec.  97.711(b)(2) and (c)(5)(iii), 97.712(b), 
and 97.721(h) and (j) of this chapter, all of which provisions will 
continue to apply under any portion of the CSAPR Federal Implementation 
Plan that is not replaced by the SIP revision;
    (5) Provided that, if and when any covered unit is located in 
Indian country within the borders of the State, the Administrator may 
modify his or her approval of the SIP revision to exclude the 
provisions in Sec. Sec.  97.702 (definitions of ``common designated 
representative'', ``common designated representative's assurance 
level'', and ``common designated representative's share''), 
97.706(c)(2), and 97.725 of this chapter and the portions of other 
provisions of subpart DDDDD of part 97 of this chapter referencing 
these sections and may modify any portion of the CSAPR Federal 
Implementation Plan that is not replaced by the SIP revision to include 
these provisions;
* * * * *
    (j) Following promulgation of an approval by the Administrator of a 
State's SIP revision as correcting the SIP's deficiency that is the 
basis for the CSAPR Federal Implementation Plan set forth in paragraphs 
(a), (b), (d), and (e) of this section or paragraphs (a), (c), (g), and 
(h) of this section for sources in the State, the provisions of 
paragraph (b) or (c) of this section, as applicable, will no longer 
apply to sources in the State, unless the Administrator's approval of 
the SIP revision is partial or conditional, and will continue to apply 
to sources in any Indian country within the borders of the State, 
provided that if the CSAPR

[[Page 74593]]

Federal Implementation Plan was promulgated as a partial rather than 
full remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
* * * * *
    (l) The following States have SIP revisions approved by the 
Administrator under paragraph (d), (e), or (f) of this section:
    (1) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (d) of this section as 
replacing the CSAPR SO2 Group 1 allowance allocation 
provisions in Sec.  97.611(a) of this chapter with regard to the State 
and the control period in 2016: [none].
    (2) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (e) of this section as 
replacing the CSAPR SO2 Group 1 allowance allocation 
provisions in Sec. Sec.  97.611(a) and (b)(1) and 97.612(a) of this 
chapter with regard to the State and the control period in 2017 or any 
subsequent year: Missouri.
    (3) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (f) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (a), (b), (d), and (e) of 
this section with regard to sources in the State (but not sources in 
any Indian country within the borders of the State): [none].
    (m) The following States have SIP revisions approved by the 
Administrator under paragraph (g), (h), or (i) of this section:
    (1) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (g) of this section as 
replacing the CSAPR SO2 Group 2 allowance allocation 
provisions in Sec.  97.711(a) of this chapter with regard to the State 
and the control period in 2016: Alabama and Nebraska.
    (2) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (h) of this section as 
replacing the CSAPR SO2 Group 2 allowance allocation 
provisions in Sec. Sec.  97.711(a) and (b)(1) and 97.712(a) of this 
chapter with regard to the State and the control period in 2017 or any 
subsequent year: [none].
    (3) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (i) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (a), (c), (g), and (h) of 
this section with regard to sources in the State (but not sources in 
any Indian country within the borders of the State): Alabama.

Subpart B--Alabama

0
6. Section 52.54 is amended by:
0
a. Revising paragraph (a)(1);
0
b. Removing paragraph (a)(3); and
0
c. Revising paragraph (b).
    The revisions read as follows:

Sec.  52.54  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

    (a)(1) The owner and operator of each source and each unit located 
in the State of Alabama and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Annual Trading Program in subpart AAAAA of part 97 of 
this chapter must comply with such requirements. The obligation to 
comply with such requirements with regard to sources and units in the 
State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Alabama's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan under Sec.  52.38(a) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional. The obligation to comply with such requirements 
with regard to sources and units located in Indian country within the 
borders of the State will not be eliminated by the promulgation of an 
approval by the Administrator of a revision to Alabama's SIP.
* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Alabama and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Alabama and Indian country within the borders of the State 
and for which requirements are set forth under the CSAPR NOX 
Ozone Season Group 2 Trading Program in subpart EEEEE of part 97 of 
this chapter must comply with such requirements with regard to 
emissions occurring in 2017 and each subsequent year. The obligation to 
comply with such requirements with regard to sources and units in the 
State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Alabama's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Alabama's SIP.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Alabama's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

0
7. Section 52.55 is amended by:
0
a. Revising paragraph (a); and
0
b. Removing paragraph (c).
    The revisions read as follows:

Sec.  52.55  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of sulfur dioxide?

    (a) The owner and operator of each source and each unit located in 
the State of Alabama and Indian country within the borders of the State 
and for which requirements are set forth under the CSAPR SO2 
Group 2 Trading Program in subpart DDDDD of part 97 of this chapter 
must comply with such requirements. The obligation to comply with such 
requirements with regard to sources and units in the State will be 
eliminated by the promulgation of an approval by the Administrator of a

[[Page 74594]]

revision to Alabama's State Implementation Plan (SIP) as correcting the 
SIP's deficiency that is the basis for the CSAPR Federal Implementation 
Plan under Sec.  52.39 for those sources and units, except to the 
extent the Administrator's approval is partial or conditional. The 
obligation to comply with such requirements with regard to sources and 
units located in Indian country within the borders of the State will 
not be eliminated by the promulgation of an approval by the 
Administrator of a revision to Alabama's SIP.
* * * * *

Subpart E--Arkansas

0
8. Section 52.184 is revised to read as follows:

Sec.  52.184  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

    (a) The owner and operator of each source and each unit located in 
the State of Arkansas and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (b) The owner and operator of each source and each unit located in 
the State of Arkansas and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Arkansas' State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (c) Notwithstanding the provisions of paragraph (b) of this 
section, if, at the time of the approval of Arkansas' SIP revision 
described in paragraph (b) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart K--Florida

0
9. Section 52.540 is amended by:
0
a. Revising paragraph (a); and
0
b. Removing and reserving paragraph (b).
    The revisions read as follows:

Sec.  52.540  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

    (a) The owner and operator of each source and each unit located in 
the State of Florida and Indian country within the borders of the State 
and for which requirements are set forth under the CSAPR NOX 
Ozone Season Group 1 Trading Program in subpart BBBBB of part 97 of 
this chapter must comply with such requirements with regard to 
emissions occurring in 2015 and 2016.
* * * * *

Subpart L--Georgia

Sec.  52.584   [Amended]

0
10. Section 52.584 is amended by:
0
a. In paragraph (b)(1), removing the words ``Ozone Season'' and adding 
in their place the text ``Ozone Season Group 1''; and
0
b. In paragraph (b)(2), removing the words ``Ozone Season'' two times 
and adding in their place the text ``Ozone Season Group 1''.

Subpart O--Illinois

0
11. Section 52.731 is amended by revising paragraph (b) to read as 
follows:

Sec.  52.731  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Illinois and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Illinois and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Illinois' State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Illinois' SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart P--Indiana

0
12. Section 52.789 is amended by revising paragraph (b) to read as 
follows:

Sec.  52.789  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Indiana and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State

[[Page 74595]]

of Indiana and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017 and each subsequent year. The obligation 
to comply with such requirements will be eliminated by the promulgation 
of an approval by the Administrator of a revision to Indiana's State 
Implementation Plan (SIP) as correcting the SIP's deficiency that is 
the basis for the CSAPR Federal Implementation Plan (FIP) under Sec.  
52.38(b), except to the extent the Administrator's approval is partial 
or conditional, provided that because the CSAPR FIP was promulgated as 
a partial rather than full remedy for an obligation of the State to 
address interstate air pollution, the SIP revision likewise will 
constitute a partial rather than full remedy for the State's obligation 
unless provided otherwise in the Administrator's approval of the SIP 
revision.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Indiana's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart Q--Iowa

0
13. Section 52.840 is amended by:
0
a. In paragraph (a)(1), removing the words ``in part'', and after the 
text ``Sec.  52.38(a)'' adding the words ``for those sources and 
units''; and
0
b. Revising paragraph (b).
    The revisions read as follows:

Sec.  52.840  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Iowa and Indian country within the borders of the State 
and for which requirements are set forth under the CSAPR NOX 
Ozone Season Group 1 Trading Program in subpart BBBBB of part 97 of 
this chapter must comply with such requirements with regard to 
emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Iowa and Indian country within the borders of the State 
and for which requirements are set forth under the CSAPR NOX 
Ozone Season Group 2 Trading Program in subpart EEEEE of part 97 of 
this chapter must comply with such requirements with regard to 
emissions occurring in 2017 and each subsequent year. The obligation to 
comply with such requirements with regard to sources and units in the 
State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Iowa's State Implementation Plan (SIP) 
as correcting the SIP's deficiency that is the basis for the CSAPR 
Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Iowa's SIP.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Iowa's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Sec.  52.841   [Amended]

0
14. Section 52.841, paragraph (a) is amended by removing the words ``in 
part'', and after the text ``Sec.  52.39'' adding the words ``for those 
sources and units''.

Subpart R--Kansas

0
15. Section 52.882 is amended by:
0
a. In paragraph (a)(1), removing the words ``in part'', and after the 
text ``Sec.  52.38(a)'' adding the words ``for those sources and 
units'';
0
b. Removing paragraph (a)(3); and
0
c. Adding paragraph (b).
    The additions read as follows:

Sec.  52.882  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Kansas and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Kansas' State Implementation Plan (SIP) 
as correcting the SIP's deficiency that is the basis for the CSAPR 
Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Kansas' SIP.
    (2) Notwithstanding the provisions of paragraph (b)(1) of this 
section, if, at the time of the approval of Kansas' SIP revision 
described in paragraph (b)(1) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR

[[Page 74596]]

NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Sec.  52.883   [Amended]

0
16. Section 52.883, paragraph (a) is amended by removing the words ``in 
part'', and after the text ``Sec.  52.39'' adding the words ``for those 
sources and units''.

Subpart S--Kentucky

0
17. Section 52.940 is amended by revising paragraph (b) to read as 
follows:

Sec.  52.940  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Kentucky and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Kentucky and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Kentucky's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Kentucky's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart T--Louisiana

0
18. Section 52.984 is amended by revising paragraph (d) to read as 
follows:

Sec.  52.984  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (d)(1) The owner and operator of each source and each unit located 
in the State of Louisiana and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Louisiana and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Louisiana's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Louisiana's SIP.
    (3) Notwithstanding the provisions of paragraph (d)(2) of this 
section, if, at the time of the approval of Louisiana's SIP revision 
described in paragraph (d)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart V--Maryland

0
19. Section 52.1084 is amended by revising paragraph (b) to read as 
follows:

Sec.  52.1084  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Maryland and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Maryland and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Maryland's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.

[[Page 74597]]

    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Maryland's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart X--Michigan

0
20. Section 52.1186 is amended by:
0
a. In paragraph (d)(1), removing the words ``in part'', and after the 
text ``Sec.  52.38(a)'' adding the words ``for those sources and 
units''; and
0
b. Revising paragraph (e).
    The revisions read as follows:

Sec.  52.1186  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (e)(1) The owner and operator of each source and each unit located 
in the State of Michigan and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Michigan and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Michigan's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Michigan's SIP.
    (3) Notwithstanding the provisions of paragraph (e)(2) of this 
section, if, at the time of the approval of Michigan's SIP revision 
described in paragraph (e)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Sec.  52.1187   [Amended]

0
21. Section 52.1187 is amended by:
0
a. In paragraph (c)(1), removing the words ``in part'', and after the 
text ``Sec.  52.39'' adding the words ``for those sources and units''; 
and
0
b. In paragraph (c)(2), removing the word ``Maryland's'' and adding in 
its place the word ``Michigan's''.

Subpart Y--Minnesota

Sec.  52.1240   [Amended]

0
22. Section 52.1240, paragraph (c)(1) is amended by removing the words 
``in part'', and after the text ``Sec.  52.38(a)'' adding the words 
``for those sources and units''.

Sec.  52.1241   [Amended]

0
23. Section 52.1241, paragraph (c)(1) is amended by removing the words 
``in part'', and after the text ``Sec.  52.39'' adding the words ``for 
those sources and units''.

Subpart Z--Mississippi

0
24. Section 52.1284 is revised to read as follows:

Sec.  52.1284  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

    (a) The owner and operator of each source and each unit located in 
the State of Mississippi and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.
    (b) The owner and operator of each source and each unit located in 
the State of Mississippi and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Mississippi's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Mississippi's SIP.
    (c) Notwithstanding the provisions of paragraph (b) of this 
section, if, at the time of the approval of Mississippi's SIP revision 
described in paragraph (b) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such

[[Page 74598]]

control period shall continue to apply, unless provided otherwise by 
such approval of the State's SIP revision.

Subpart AA--Missouri

0
25. Section 52.1326 is amended by:
0
a. Removing paragraph (a)(3); and
0
b. Revising paragraph (b).
    The revisions read as follows:

Sec.  52.1326  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Missouri and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Missouri and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Missouri's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Missouri's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart CC--Nebraska

Sec.  52.1428   [Amended]

0
26. Section 52.1428 is amended by:
0
a. In paragraph (a), removing the words ``in part'', and after the text 
``Sec.  52.38(a)'' adding the words ``for those sources and units''; 
and
0
b. Removing paragraph (c).

Sec.  52.1429   [Amended]

0
27. Section 52.1429 is amended by:
0
a. In paragraph (a), removing the words ``in part'', and after the text 
``Sec.  52.39'' adding the words ``for those sources and units''; and
0
b. Removing paragraph (c).

Subpart FF--New Jersey

0
28. Section 52.1584 is amended by revising paragraph (e) to read as 
follows:

Sec.  52.1584  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (e)(1) The owner and operator of each source and each unit located 
in the State of New Jersey and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of New Jersey and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to New Jersey's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (3) Notwithstanding the provisions of paragraph (e)(2) of this 
section, if, at the time of the approval of New Jersey's SIP revision 
described in paragraph (e)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart HH--New York

0
29. Section 52.1684 is amended by:
0
a. In paragraph (a)(1), removing the words ``in part'', and after the 
text ``Sec.  52.38(a)'' adding the words ``for those sources and 
units''; and
0
b. Revising paragraph (b).
    The revisions read as follows:

Sec.  52.1684  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of New York and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of New York and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to New York's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an

[[Page 74599]]

obligation of the State to address interstate air pollution, the SIP 
revision likewise will constitute a partial rather than full remedy for 
the State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to New 
York's SIP.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of New York's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Sec.  52.1685   [Amended]

0
30. Section 52.1685, paragraph (a) is amended by removing the words 
``in part'', and after the text ``Sec.  52.39'' adding the words ``for 
those sources and units''.

Subpart II--North Carolina

0
31. Section 52.1784 is amended by:
0
a. In paragraph (a)(1), removing the words ``in part'', and after the 
text ``Sec.  52.38(a)'' adding the words ``for those sources and 
units'';
0
b. Revising paragraph (b)(1); and
0
c. Removing and reserving paragraph (b)(2).
    The revisions read as follows:

Sec.  52.1784  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of North Carolina and Indian country within the borders of 
the State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.
* * * * *

Sec.  52.1785   [Amended]

0
32. Section 52.1785, paragraph (a) is amended by removing the words 
``in part'', and after the text ``Sec.  52.39'' adding the words ``for 
those sources and units''.

Subpart KK--Ohio

0
33. Section 52.1882 is amended by revising paragraph (b) to read as 
follows:

Sec.  52.1882  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Ohio and for which requirements are set forth under the 
CSAPR NOX Ozone Season Group 1 Trading Program in subpart 
BBBBB of part 97 of this chapter must comply with such requirements 
with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Ohio and for which requirements are set forth under the 
CSAPR NOX Ozone Season Group 2 Trading Program in subpart 
EEEEE of part 97 of this chapter must comply with such requirements 
with regard to emissions occurring in 2017 and each subsequent year. 
The obligation to comply with such requirements will be eliminated by 
the promulgation of an approval by the Administrator of a revision to 
Ohio's State Implementation Plan (SIP) as correcting the SIP's 
deficiency that is the basis for the CSAPR Federal Implementation Plan 
(FIP) under Sec.  52.38(b), except to the extent the Administrator's 
approval is partial or conditional, provided that because the CSAPR FIP 
was promulgated as a partial rather than full remedy for an obligation 
of the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Ohio's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart LL--Oklahoma

0
34. Section 52.1930 is revised to read as follows:

Sec.  52.1930  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

    (a) The owner and operator of each source and each unit located in 
the State of Oklahoma and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.
    (b) The owner and operator of each source and each unit located in 
the State of Oklahoma and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Oklahoma's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Oklahoma's SIP.
    (c) Notwithstanding the provisions of paragraph (b) of this 
section, if, at the time of the approval of Oklahoma's SIP revision 
described in paragraph (b) of this section, the Administrator has 
already started recording any allocations

[[Page 74600]]

of CSAPR NOX Ozone Season Group 2 allowances under subpart 
EEEEE of part 97 of this chapter to units in the State for a control 
period in any year, the provisions of subpart EEEEE of part 97 of this 
chapter authorizing the Administrator to complete the allocation and 
recordation of CSAPR NOX Ozone Season Group 2 allowances to 
units in the State for each such control period shall continue to 
apply, unless provided otherwise by such approval of the State's SIP 
revision.

Subpart NN--Pennsylvania

0
35. Section 52.2040 is amended by revising paragraph (b) to read as 
follows:

Sec.  52.2040  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Pennsylvania and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Pennsylvania and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Pennsylvania's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Pennsylvania's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart PP--South Carolina

0
36. Section 52.2140 is amended by:
0
a. In paragraph (a)(1), removing the words ``in part'', and after the 
text ``Sec.  52.38(a)'' adding the words ``for those sources and 
units'';
0
b. Revising paragraph (b)(1); and
0
c. Removing and reserving paragraph (b)(2).
    The revisions read as follows:

Sec.  52.2140  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of South Carolina and Indian country within the borders of 
the State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.
* * * * *

Sec.  52.2141   [Amended]

0
37. Section 52.2141, paragraph (a) is amended by removing the words 
``in part'', and after the text ``Sec.  52.39'' adding the words ``for 
those sources and units''.

Subpart RR--Tennessee

0
38. Section 52.2240 is amended by:
0
a. In paragraph (d)(1), removing the last sentence; and
0
b. Revising paragraph (e).
    The revisions read as follows:

Sec.  52.2240  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (e)(1) The owner and operator of each source and each unit located 
in the State of Tennessee and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Tennessee and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Tennessee's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan under Sec.  52.38(b), except to the extent the 
Administrator's approval is partial or conditional.
    (3) Notwithstanding the provisions of paragraph (e)(2) of this 
section, if, at the time of the approval of Tennessee's SIP revision 
described in paragraph (e)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Sec.  52.2241   [Amended]

0
39. Section 52.2241, paragraph (c)(1) is amended by removing the last 
sentence.

Subpart SS--Texas

0
40. Section 52.2283 is amended by:
0
a. In paragraph (c)(1), removing the words ``in part'', and after the 
text ``Sec.  52.38(a)'' adding the words ``for those sources and 
units''; and
0
b. Revising paragraph (d).
    The revisions read as follows:

Sec.  52.2283  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (d)(1) The owner and operator of each source and each unit located 
in the State of Texas and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.

[[Page 74601]]

    (2) The owner and operator of each source and each unit located in 
the State of Texas and Indian country within the borders of the State 
and for which requirements are set forth under the CSAPR NOX 
Ozone Season Group 2 Trading Program in subpart EEEEE of part 97 of 
this chapter must comply with such requirements with regard to 
emissions occurring in 2017 and each subsequent year. The obligation to 
comply with such requirements with regard to sources and units in the 
State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Texas' State Implementation Plan (SIP) 
as correcting the SIP's deficiency that is the basis for the CSAPR 
Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Texas' SIP.
    (3) Notwithstanding the provisions of paragraph (d)(2) of this 
section, if, at the time of the approval of Texas' SIP revision 
described in paragraph (d)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Sec.  52.2284  [Amended]

0
41. Section 52.2284, paragraph (c)(1) is amended by removing the words 
``in part'', and after the text ``Sec.  52.39'' adding the words ``for 
those sources and units''.

Subpart VV--Virginia

0
42. Section 52.2440 is amended by revising paragraph (b) to read as 
follows:

Sec.  52.2440  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of Virginia and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Virginia and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Virginia's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of Virginia's SIP revision 
described in paragraph (b)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Subpart XX--West Virginia

0
43. Section 52.2540 is amended by revising paragraph (b) to read as 
follows:

Sec.  52.2540  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located 
in the State of West Virginia and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 1 Trading Program in 
subpart BBBBB of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of West Virginia and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to West Virginia's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (3) Notwithstanding the provisions of paragraph (b)(2) of this 
section, if, at the time of the approval of West Virginia's SIP 
revision described in paragraph (b)(2) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances under subpart EEEEE of 
part 97 of this chapter to units in the State for a control period in 
any year, the provisions of subpart EEEEE of part 97 of this chapter 
authorizing the Administrator to complete the allocation and 
recordation of CSAPR NOX Ozone Season Group 2 allowances to 
units in the State for each such control period shall continue to 
apply, unless provided otherwise by such approval of the State's SIP 
revision.

[[Page 74602]]

Subpart YY--Wisconsin

0
44. Section 52.2587 is amended by:
0
a. In paragraph (d)(1), removing the words ``in part'', and after the 
text ``Sec.  52.38(a)'' adding the words ``for those sources and 
units''; and
0
b. Revising paragraph (e).
    The revisions read as follows:

Sec.  52.2587  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (e)(1) The owner and operator of each source and each unit located 
in the State of Wisconsin and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 1 Trading Program in subpart BBBBB of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2015 and 2016.
    (2) The owner and operator of each source and each unit located in 
the State of Wisconsin and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Wisconsin's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b) for those 
sources and units, except to the extent the Administrator's approval is 
partial or conditional, provided that because the CSAPR FIP was 
promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision. The obligation to comply with such 
requirements with regard to sources and units located in Indian country 
within the borders of the State will not be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Wisconsin's SIP.
    (3) Notwithstanding the provisions of paragraph (e)(2) of this 
section, if, at the time of the approval of Wisconsin's SIP revision 
described in paragraph (e)(2) of this section, the Administrator has 
already started recording any allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of subpart EEEEE of part 97 of this chapter authorizing the 
Administrator to complete the allocation and recordation of CSAPR 
NOX Ozone Season Group 2 allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.

Sec.  52.2588  [Amended]

0
45. Section 52.2588, paragraph (c)(1) is amended by removing the words 
``in part'', and after the text ``Sec.  52.39'' adding the words ``for 
those sources and units''.

PART 78--APPEAL PROCEDURES

0
46. The authority citation for part 78 continues to read as follows:

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

0
47. Section 78.1 is amended by:
0
a. Removing the text ``TR'' wherever it appears and adding in its place 
the text ``CSAPR'';
0
b. Revising paragraphs (a)(1) and (b)(2)(iv) and (v);
0
c. In paragraph (b)(3)(iii), after the semicolon adding the word 
``and'';
0
d. In paragraph (b)(3)(iv), removing the semicolon and adding in its 
place a period;
0
e. Revising paragraph (b)(6) introductory text;
0
f. In paragraph (b)(9)(iv), after the text ``Sec.  96.361'' adding the 
words ``of this chapter'';
0
g. In paragraph (b)(12)(iv), after the text ``Sec.  97.361'' adding the 
words ``of this chapter'';
0
h. In paragraph (b)(13)(i), after the words ``decision on'' adding the 
word ``the'';
0
i. Revising paragraph (b)(14)(i);
0
j. In paragraphs (b)(14)(ii), (iii) and (v), after the words ``Ozone 
Season'' adding the text ``Group 1'';
0
k. Adding paragraph (b)(14)(viii);
0
l. In paragraphs (b)(15)(i) and (b)(16)(i), after the words ``decision 
on'' adding the word ``the'';
0
m. In paragraphs (b)(16)(ii), (iii), and (v), removing the text ``Group 
1'' and adding in its place the text ``Group 2''; and
0
n. Redesignating paragraph (b)(17) as paragraph (b)(18) and adding a 
new paragraph (b)(17).
    The revisions and additions read as follows:

Sec.  78.1  Purpose and scope.

    (a)(1)(i) This part shall govern appeals of any final decision of 
the Administrator under:
    (A) Part 72, 73, 74, 75, 76, or 77 of this chapter.
    (B) Subparts A through J of part 97 of this chapter.
    (C) Subparts AA through II, AAA through III, or AAAA through IIII 
of part 96 of this chapter or State regulations approved under Sec.  
51.123(o)(1) or (2) or (aa)(1) or (2) of this chapter or Sec.  
51.124(o)(1) or (2) of this chapter.
    (D) Subparts AA through II, AAA through III, or AAAA through IIII 
of part 97 of this chapter.
    (E) Subpart AAAAA, BBBBB, CCCCC, DDDDD, or EEEEE of part 97 of this 
chapter or State regulations approved under Sec.  52.38(a)(4) or (5) or 
(b)(4), (5), (6), (8), or (9) of this chapter or Sec.  52.39(e), (f), 
(h), or (i) of this chapter.
    (F) Subpart RR of part 98 of this chapter.
    (ii) Notwithstanding paragraph (a)(1)(i) of this section, matters 
listed in Sec.  78.3(d) and preliminary, procedural, or intermediate 
decisions, such as draft Acid Rain permits, may not be appealed.
    (iii) All references in paragraph (b) of this section and in Sec.  
78.3 to subparts AA through II of part 96 of this chapter, subparts AAA 
through III of part 96 of this chapter, and subparts AAAA through IIII 
of part 96 of this chapter shall be read to include the comparable 
provisions in State regulations approved under Sec.  51.123(o)(1) or 
(2) of this chapter, Sec.  51.124(o)(1) or (2) of this chapter, and 
Sec.  51.123(aa)(1) or (2) of this chapter, respectively.
    (iv) All references in paragraph (b) of this section and in Sec.  
78.3 to subpart AAAAA of part 97 of this chapter, subpart BBBBB of part 
97 of this chapter, subpart CCCCC of part 97 of this chapter, subpart 
DDDDD of part 97 of this chapter, and subpart EEEEE of part 97 of this 
chapter shall be read to include the comparable provisions in State 
regulations approved under Sec.  52.38(a)(4) or (5) of this chapter, 
Sec.  52.38(b)(4) or (5) of this chapter, Sec.  52.39(e) or (f) of this 
chapter, Sec.  52.39(h) or (i) of this chapter, and Sec.  52.38(b)(6), 
(8), or (9) of this chapter, respectively.
* * * * *
    (b) * * *
    (2) * * *
    (iv) The decision on the allocation of allowances under subpart F 
of part 73 of this chapter;
    (v) The decision on the sale or return of allowances and transfer 
of proceeds

[[Page 74603]]

under subpart E of part 73 of this chapter; and
* * * * *
    (6) Under subparts A through J of part 97 of this chapter,
* * * * *
    (14) * * *
    (i) The decision on the allocation of CSAPR NOX Ozone 
Season Group 1 allowances under Sec.  97.511(a)(2) and (b) of this 
chapter.
* * * * *
    (viii) The decision on the removal of CSAPR NOX Ozone 
Season Group 1 allowances from an Allowance Management System account 
and the allocation to such account or another account of CSAPR 
NOX Ozone Season Group 2 allowances under Sec.  97.526(c) of 
this chapter.
* * * * *
    (17) Under subpart EEEEE of part 97 of this chapter,
    (i) The decision on the allocation of CSAPR NOX Ozone 
Season Group 2 allowances under Sec.  97.811(a)(2) and (b) of this 
chapter.
    (ii) The decision on the transfer of CSAPR NOX Ozone 
Season Group 2 allowances under Sec.  97.823 of this chapter.
    (iii) The decision on the deduction of CSAPR NOX Ozone 
Season Group 2 allowances under Sec. Sec.  97.824 and 97.825 of this 
chapter.
    (iv) The correction of an error in an Allowance Management System 
account under Sec.  97.827 of this chapter.
    (v) The adjustment of information in a submission and the decision 
on the deduction and transfer of CSAPR NOX Ozone Season 
Group 2 allowances based on the information as adjusted under Sec.  
97.828 of this chapter.
    (vi) The finalization of control period emissions data, including 
retroactive adjustment based on audit.
    (vii) The approval or disapproval of a petition under Sec.  97.835 
of this chapter.
* * * * *

0
48. Section 78.3 is amended by:
0
a. In paragraph (a)(1) introductory text, removing the words ``of this 
part'';
0
b. Revising paragraph (a)(3) introductory text;
0
c. In paragraph (a)(8) introductory text and paragraph (a)(9) 
introductory text, after the text ``part 97'' adding the words ``of 
this chapter'';
0
d. Revising paragraph (a)(10) introductory text and paragraph (a)(11) 
introductory text;
0
e. In paragraph (b)(1), removing the words ``of this part'' two times; 
and
0
f. Revising paragraphs (b)(3)(i), (c)(7), and (d).
    The revisions read as follows:

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

    (a) * * *
    (3) The following persons may petition for administrative review of 
a decision of the Administrator that is made under subparts A through J 
of part 97 of this chapter and that is appealable under Sec.  78.1(a):
* * * * *
    (10) The following persons may petition for administrative review 
of a decision of the Administrator that is made under subpart AAAAA, 
BBBBB, CCCCC, DDDDD, or EEEEE of part 97 of this chapter and that is 
appealable under Sec.  78.1(a):
* * * * *
    (11) The following persons may petition for administrative review 
of a decision of the Administrator that is made under subpart RR of 
part 98 of this chapter and that is appealable under Sec.  78.1(a):
* * * * *
    (b) * * *
    (3) * * *
    (i) Serve a copy of the petition on the Administrator and the 
following person (unless such person is the petitioner):
    (A) The designated representative or authorized account 
representative, for a petition under paragraph (a)(1), (2), (10), or 
(11) of this section.
    (B) The NOX authorized account representative, for a 
petition under paragraph (a)(3) of this section.
    (C) The CAIR designated representative or CAIR authorized account 
representative, for a petition under paragraph (a)(4), (5), (6), (7), 
(8), or (9) of this section.
* * * * *
    (c) * * *
    (7) Any revised or alternative action of the Administrator sought 
by the petitioner as necessary to implement the requirements, purposes, 
or policies of, as appropriate:
    (i) Title IV of the Act.
    (ii) Subparts A through J of part 97 of this chapter.
    (iii) Subparts AA through II, AAA through III, or AAAA through IIII 
of part 96 of this chapter.
    (iv) Subparts AA through II, AAA through III, or AAAA through IIII 
of part 97 of this chapter.
    (v) Subpart AAAAA, BBBBB, CCCCC, DDDDD, or EEEEE of part 97 of this 
chapter.
    (d) In no event shall a petition for administrative review be 
filed, or review be available under this part, with regard to:
    (1) Actions of the Administrator under sections 112(r), 113, 114, 
120, 301, and 303 of the Act.
    (2) The reliance by the Administrator on:
    (i) A certificate of representation submitted by a designated 
representative or an application for a general account submitted by an 
authorized account representative under the Acid Rain Program or 
subpart AAAAA, BBBBB, CCCCC, DDDDD, or EEEEE of part 97 of this 
chapter.
    (ii) An account certificate of representation or an application for 
a general account submitted by a NOX authorized account 
representative under the NOX Budget Trading Program.
    (iii) A certificate of representation submitted by a CAIR 
designated representative or an application for a general account 
submitted by a CAIR authorized account representative under subparts AA 
through II, AAA through III, or AAAA through IIII of part 96 of this 
chapter or subparts AA through II, AAA through III, or AAAA through 
IIII of part 97 of this chapter.
    (3) Any provision or requirement of part 72, 73, 74, 75, 76, or 77 
of this chapter, including the standard requirements under Sec.  72.9 
of this chapter and any emission monitoring or reporting requirements.
    (4) Any provision or requirement of subparts A through J of part 97 
of this chapter, including the standard requirements under Sec.  97.6 
of this chapter and any emission monitoring or reporting requirements.
    (5) Any provision or requirement of subparts AA through II, AAA 
through III, or AAAA through IIII of part 96 of this chapter, including 
the standard requirements under Sec.  96.106, Sec.  96.206, or Sec.  
96.306 of this chapter, respectively, and any emission monitoring or 
reporting requirements.
    (6) Any provision or requirement of subparts AA through II, AAA 
through III, or AAAA through IIII of part 97 of this chapter, including 
the standard requirements under Sec.  97.106, Sec.  97.206, or Sec.  
97.306 of this chapter, respectively, and any emission monitoring or 
reporting requirements.
    (7) Any provision or requirement of subpart AAAAA, BBBBB, CCCCC, 
DDDDD, or EEEEE of part 97 of this chapter, including the standard 
requirements under Sec.  97.406, Sec.  97.506, Sec.  97.606, Sec.  
97.706, or Sec.  97.806 of this chapter, respectively, and any emission 
monitoring or reporting requirements.
    (8) Any provision or requirement of subpart RR of part 98 of this 
chapter.

0
49. Section 78.4 is amended by:
0
a. Revising paragraph (a)(1)(i);
0
b. In paragraph (a)(1)(ii), removing the word ``filing'' and adding in 
its place the word ``filings'';

[[Page 74604]]

0
c. Revising paragraph (a)(1)(iii); and
0
d. In paragraphs (d), (e)(1), and (g), removing the words ``of this 
part''.
    The revisions read as follows:

Sec.  78.4  Filings.

    (a)(1) * * *
    (i) Any filings on behalf of owners and operators of an affected 
unit or affected source, CSAPR NOX Annual unit or CSAPR 
NOX Annual source, CSAPR NOX Ozone Season Group 1 
unit or CSAPR NOX Ozone Season Group 1 source, CSAPR 
NOX Ozone Season Group 2 unit or CSAPR NOX Ozone 
Season Group 2 source, CSAPR SO2 Group 1 unit or CSAPR 
SO2 Group 1 source, or CSAPR SO2 Group 2 unit or 
CSAPR SO2 Group 2 source shall be signed by the designated 
representative. Any filings on behalf of persons with an ownership 
interest with respect to allowances, CSAPR NOX Annual 
allowances, CSAPR NOX Ozone Season Group 1 allowances, CSAPR 
NOX Ozone Season Group 2 allowances, CSAPR SO2 
Group 1 allowances, or CSAPR SO2 Group 2 allowances in a 
general account shall be signed by the authorized account 
representative.
* * * * *
    (iii) Any filings on behalf of owners and operators of a CAIR 
NOX unit or CAIR NOX source, CAIR SO2 
unit or CAIR SO2 source, or CAIR NOX Ozone Season 
unit or CAIR NOX Ozone Season source shall be signed by the 
CAIR designated representative. Any filings on behalf of persons with 
an ownership interest with respect to CAIR NOX allowances, 
CAIR SO2 allowances, or CAIR NOX Ozone Season 
allowances in a general account shall be signed by the CAIR authorized 
account representative.
* * * * *

PART 97--FEDERAL NOX BUDGET TRADING PROGRAM, CAIR NOX AND SO2 
TRADING PROGRAMS, AND CSAPR NOX AND SO2 TRADING PROGRAMS

0
50. The authority citation for part 97 continues to read as follows:

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

0
51. The heading of part 97 is revised to read as set forth above.

Subpart E--NOX Allowance Allocations

Sec.  97.40   [Amended]

0
52. Section 97.40 is amended by removing the text ``appendix C of this 
part'' and adding in its place the text ``appendix C to this subpart''.

Sec.  97.41   [Amended]

0
53. Section 97.41, paragraph (a) is amended by removing the text 
``appendices A and B of this part'' and adding in its place the text 
``appendices A and B to this subpart''.

Sec.  97.43   [Amended]

0
54. Section 97.43 is amended by:
0
a. In paragraph (c)(3), removing the text ``appendix D of this part'' 
and adding in its place the text ``appendix D to this subpart''; and
0
b. In paragraph (c)(4), removing the text ``appendix D of this part'' 
two times and adding in its place the text ``appendix D to this 
subpart''.

Subpart AAAAA--CSAPR NOX Annual Trading Program

0
55. The heading of subpart AAAAA of part 97 is revised to read as set 
forth above.

Sec.  97.401   [Amended]

0
56. Section 97.401 is amended by removing the text ``Transport Rule 
(TR) NOX Annual Trading Program'' and adding in its place 
the text ``Cross-State Air Pollution Rule (CSAPR) NOX Annual 
Trading Program''.

Sec. Sec.  97.402 through 97.435   [Amended]

0
57. Sections 97.402 through 97.435 are amended by removing the text 
``TR'' wherever it appears and adding in its place the text ``CSAPR''.

0
58. Section 97.402 is amended by:
0
a. Revising the introductory text and the definitions ``Allowable 
NOX emission rate'' and ``Allowance Management System'';
0
b. In the definition ``Allowance Management System account'', removing 
the word ``holding'' and adding in its place the text ``auction, 
holding'';
0
c. Revising the definition ``Alternate designated representative'';
0
d. Adding in alphabetical order the definition ``Auction'';
0
e. In the definition ``Cogeneration system'', removing the words 
``steam turbine'';
0
f. In the definition ``Commence commercial operation'', paragraph (2) 
introductory text, after the words ``defined in'' adding the word 
``the'';
0
g. In the definition ``Common designated representative's share'', 
paragraph (2), removing the words ``and of the total'' and adding in 
their place the words ``and the total'';
0
h. Placing the newly amended definitions ``CSAPR NOX Annual 
allowance'', ``CSAPR NOX Annual allowance deduction or 
deduct CSAPR NOX Annual allowances'', ``CSAPR NOX 
Annual allowances held or hold CSAPR NO4 Annual 
allowances'', ``CSAPR NOX Annual emissions limitation'', 
``CSAPR NOX Annual source'', ``CSAPR NOX Annual 
Trading Program'', ``CSAPR NOX Annual unit'', ``CSAPR 
NOX Ozone Season Trading Program'', ``CSAPR SO2 
Group 1 Trading Program'', and ``CSAPR SO2 Group 2 Trading 
Program'' in alphabetical order in the section;
0
i. In the newly amended definition heading ``CSAPR NOX 
Annual allowances held or hold CSAPR NO4 Annual 
allowances'', removing the text ``NO4'' and adding in its 
place the text ``NOX'';
0
j. Removing the newly amended definition ``CSAPR NOX Ozone 
Season Trading Program'';
0
k. Adding in alphabetical order the definitions ``CSAPR NOX 
Ozone Season Group 1 Trading Program'' and ``CSAPR NOX Ozone 
Season Group 2 Trading Program'';
0
l. Revising the newly amended definitions ``CSAPR SO2 Group 
1 Trading Program'' and ``CSAPR SO2 Group 2 Trading 
Program'' and the definition ``Designated representative'';
0
m. In the definition ``Fossil fuel'', paragraph (2), removing the text 
``Sec. Sec.  '' and adding in its place the text ``Sec.  '';
0
n. Removing the definition ``Gross electrical output'';
0
o. Revising the definitions ``Heat input'', ``Heat input rate'', and 
``Heat rate'';
0
p. In the definition heading ``Maximum design heat input'', after the 
words ``heat input'' adding the word ``rate'';
0
q. Italicizing the words ``Annual unit'' in the newly amended 
definition heading ``Newly affected CSAPR NOX Annual unit'';
0
r. Revising the definition ``Potential electrical output capacity''; 
and
0
s. In the definition ``Sequential use of energy'', paragraph (2), after 
the word ``from'' adding the word ``a''.
    The revisions and additions read as follows:

Sec.  97.402  Definitions.

    The terms used in this subpart shall have the meanings set forth in 
this section as follows, provided that any term that includes the 
acronym ``CSAPR'' shall be considered synonymous with a term that is 
used in a SIP revision approved by the Administrator under Sec.  52.38 
or Sec.  52.39 of this chapter and that is substantively identical 
except for the inclusion of the acronym ``TR'' in place of the acronym 
``CSAPR'':
* * * * *
    Allowable NOX emission rate means, for a unit, the most 
stringent State or

[[Page 74605]]

federal NOX emission rate limit (in lb/MWh or, if in lb/
mmBtu, converted to lb/MWh by multiplying it by the unit's heat rate in 
mmBtu/MWh) that is applicable to the unit and covers the longest 
averaging period not exceeding one year.
    Allowance Management System means the system by which the 
Administrator records allocations, auctions, transfers, and deductions 
of CSAPR NOX Annual allowances under the CSAPR 
NOX Annual Trading Program. Such allowances are allocated, 
auctioned, recorded, held, transferred, or deducted only as whole 
allowances.
* * * * *
    Alternate designated representative means, for a CSAPR 
NOX Annual source and each CSAPR NOX Annual 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 this subpart, to act on behalf of the designated representative in 
matters pertaining to the CSAPR NOX Annual Trading Program. 
If the CSAPR NOX Annual source is also subject to the Acid 
Rain Program, CSAPR NOX Ozone Season Group 1 Trading 
Program, CSAPR NOX Ozone Season Group 2 Trading Program, 
CSAPR SO2 Group 1 Trading Program, or CSAPR SO2 
Group 2 Trading Program, then this natural person shall be the same 
natural person as the alternate designated representative as defined in 
the respective program.
* * * * *
    Auction means, with regard to CSAPR NOX Annual 
allowances, the sale to any person by a State or permitting authority, 
in accordance with a SIP revision submitted by the State and approved 
by the Administrator under Sec.  52.38(a)(4) or (5) of this chapter, of 
such CSAPR NOX Annual allowances to be initially recorded in 
an Allowance Management System account.
* * * * *
    CSAPR NOX Ozone Season Group 1 Trading Program means a 
multi-state NOX air pollution control and emission reduction 
program established in accordance with subpart BBBBB of this part and 
Sec.  52.38(b)(1), (b)(2)(i) and (ii), (b)(3) through (5), and (b)(10) 
through (12) of this chapter (including such a program that is revised 
in a SIP revision approved by the Administrator under Sec.  52.38(b)(3) 
or (4) of this chapter or that is established in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(5) of this chapter), 
as a means of mitigating interstate transport of ozone and 
NOX.
    CSAPR NOX Ozone Season Group 2 Trading Program means a 
multi-state NOX air pollution control and emission reduction 
program established in accordance with subpart EEEEE of this part and 
Sec.  52.38(b)(1), (b)(2)(i) and (iii), (b)(6) through (11), and 
(b)(13) of this chapter (including such a program that is revised in a 
SIP revision approved by the Administrator under Sec.  52.38(b)(7) or 
(8) of this chapter or that is established in a SIP revision approved 
by the Administrator under Sec.  52.38(b)(6) or (9) of this chapter), 
as a means of mitigating interstate transport of ozone and 
NOX.
    CSAPR SO2 Group 1 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with subpart CCCCC of this part and Sec.  
52.39(a), (b), (d) through (f), and (j) through (l) of this chapter 
(including such a program that is revised in a SIP revision approved by 
the Administrator under Sec.  52.39(d) or (e) of this chapter or that 
is established in a SIP revision approved by the Administrator under 
Sec.  52.39(f) of this chapter), as a means of mitigating interstate 
transport of fine particulates and SO2.
    CSAPR SO2 Group 2 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with subpart DDDDD of this part and Sec.  
52.39(a), (c), (g) through (k), and (m) of this chapter (including such 
a program that is revised in a SIP revision approved by the 
Administrator under Sec.  52.39(g) or (h) of this chapter or that is 
established in a SIP revision approved by the Administrator under Sec.  
52.39(i) of this chapter), as a means of mitigating interstate 
transport of fine particulates and SO2.
    Designated representative means, for a CSAPR NOX Annual 
source and each CSAPR NOX Annual 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 this 
subpart, to represent and legally bind each owner and operator in 
matters pertaining to the CSAPR NOX Annual Trading Program. 
If the CSAPR NOX Annual source is also subject to the Acid 
Rain Program, CSAPR NOX Ozone Season Group 1 Trading 
Program, CSAPR NOX Ozone Season Group 2 Trading Program, 
CSAPR SO2 Group 1 Trading Program, or CSAPR SO2 
Group 2 Trading Program, then this natural person shall be the same 
natural person as the designated representative as defined in the 
respective program.
* * * * *
    Heat input means, for a unit for a specified period of unit 
operating time, the product (in mmBtu) of the gross calorific value of 
the fuel (in mmBtu/lb) fed into the unit multiplied by the fuel feed 
rate (in lb of fuel/time) and unit operating time, as measured, 
recorded, and reported to the Administrator by the designated 
representative and as modified by the Administrator in accordance with 
this subpart and excluding the heat derived from preheated combustion 
air, recirculated flue gases, or exhaust.
    Heat input rate means, for a unit, the quotient (in mmBtu/hr) of 
the amount of heat input for a specified period of unit operating time 
(in mmBtu) divided by unit operating time (in hr) or, for a unit and 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.
    Heat rate means, for a unit, the quotient (in mmBtu/unit of load) 
of the unit's maximum design heat input rate (in Btu/hr) divided by the 
product of 1,000,000 Btu/mmBtu and the unit's maximum hourly load.
* * * * *
    Potential electrical output capacity means, for a unit (in MWh/yr), 
33 percent of the unit's maximum design heat input rate (in Btu/hr), 
divided by 3,413 Btu/kWh, divided by 1,000 kWh/MWh, and multiplied by 
8,760 hr/yr.
* * * * *

Sec.  97.403   [Amended]

0
59. Section 97.403 is amended by:
0
a. Adding in alphabetical order the list entry ``CSAPR--Cross-State Air 
Pollution Rule'';
0
b. Removing the list entry ``kW--kilowatt electrical'';
0
c. Removing the list entry ``kWh--kilowatt hour'' and adding in its 
place the entry ``kWh--kilowatt-hour'';
0
d. Removing the list entry ``MWh--megawatt hour'' and adding in its 
place the entry ``MWh--megawatt-hour''; and
0
e. Adding in alphabetical order the list entries ``SIP--State 
implementation plan'' and ``TR--Transport Rule''.

Sec.  97.404   [Amended]

0
60. Section 97.404 is amended by:
0
a. In paragraph (b)(1)(i)(B), removing the word ``electric'' and adding 
in its place the word ``electrical'';
0
b. In paragraph (b)(2)(ii), removing the text ``paragraph (b)(1)(i)'' 
and adding in its place the text ``paragraph (b)(2)(i)''; and
0
c. Italicizing the headings of paragraphs (c)(1) and (2).

Sec.  97.405   [Amended]

0
61. Section 97.405, paragraph (b) is amended by italicizing the 
heading.

[[Page 74606]]

Sec.  97.406   [Amended]

0
62. Section 97.406 is amended by:
0
a. Italicizing the headings of paragraphs (c)(1) and (2) and (c)(4) 
through (7);
0
b. In paragraph (c)(2)(ii), after the words ``immediately after'' 
adding the words ``the year of'';
0
c. In paragraph (c)(4) heading, after the words ``Vintage of'' adding 
the text ``CSAPR NOX Annual''; and
0
d. In paragraphs (c)(4)(i) and (ii), after the word ``allocated'' 
adding the words ``or auctioned''.

0
63. Section 97.410 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a) introductory text, removing the text ``unit-set 
asides'' and adding in its place the text ``unit set-asides'';
0
c. In paragraphs (a)(1) through (23):
0
i. Removing the words ``annual trading'' wherever they appear and 
adding in their place the words ``Annual trading'';
0
ii. Removing the text ``NOX annual new'' wherever it appears 
and adding in its place the word ``new''; and
0
iii. Removing the text ``NOX annual Indian'' wherever it 
appears and adding in its place the word ``Indian'';
0
d. Adding and reserving paragraphs (a)(11)(vi) and (a)(16)(vi);
0
e. In paragraphs (b)(1) through (23), removing the text 
``NOX annual''; and
0
f. Revising paragraph (c).
    The revisions read as follows:

Sec.  97.410  State NOX Annual trading budgets, new unit set-asides, 
Indian country new unit set-asides, and variability limits.

* * * * *
    (c) Each State NOX Annual trading budget in this section 
includes any tons in a new unit set-aside or Indian country new unit 
set-aside but does not include any tons in a variability limit.

0
64. Section 97.411 is amended by:
0
a. Revising the section heading;
0
b. Italicizing the headings of paragraphs (b)(1) and (2);
0
c. In paragraph (b)(1)(iii), after the text ``November 30 of'' adding 
the word ``the'';
0
d. In paragraph (b)(1)(iv)(B), removing the words ``the each'' and 
adding in their place the word ``each'';
0
e. In paragraph (b)(2)(iii), after the text ``November 30 of'' adding 
the word ``the'';
0
f. In paragraph (b)(2)(iv)(B), removing the words ``the each'' and 
adding in their place the word ``each'';
0
g. In paragraph (c)(1)(ii), removing the text ``Sec.  52.38(a)(3), (4), 
or (5)'' and adding in its place the text ``Sec.  52.38(a)(4) or (5)'';
0
h. In paragraph (c)(5)(i)(B), after the text ``Sec.  52.38(a)(4) or 
(5)'' adding the words ``of this chapter'';
0
i. In paragraph (c)(5)(ii) introductory text, removing the words ``this 
paragraph'' and adding in their place the words ``this section'';
0
j. In paragraph (c)(5)(ii)(B), after the text ``Sec.  52.38(a)(4) or 
(5)'' adding the words ``of this chapter''; and
0
k. In paragraph (c)(5)(iii), removing the words ``this paragraph'' and 
adding in their place the words ``this section''.
    The revision reads as follows:

Sec.  97.411  Timing requirements for CSAPR NOX Annual allowance 
allocations.

* * * * *

0
65. Section 97.412 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(2), removing the text ``Sec. Sec.  '' and adding in 
its place the text ``Sec.  '';
0
c. In paragraph (a)(4)(i), removing the text ``paragraph (a)(1)(i) 
through (iii)'' and adding in its place the text ``paragraphs (a)(1)(i) 
through (iii)'';
0
d. In paragraph (a)(4)(ii), after the text ``paragraph (a)(4)(i)'' 
adding the words ``of this section'';
0
e. In paragraph (a)(9)(i), after the text ``November 30 of'' adding the 
word ``the'';
0
f. In paragraph (b)(4)(ii), after the text ``paragraph (b)(4)(i)'' 
adding the words ``of this section'';
0
g. In paragraph (b)(9)(i), after the text ``November 30 of'' adding the 
word ``the''; and
0
h. In paragraph (b)(10)(ii), after the text ``Sec.  52.38(a)(4) or 
(5)'' adding the words ``of this chapter''.
    The revision reads as follows:

Sec.  97.412  CSAPR NOX Annual allowance allocations to new units.

* * * * *

0
66. Section 97.416 is amended by:
0
a. In paragraph (a)(1), removing the word ``Country'' and adding in its 
place the word ``country''; and
0
b. Adding paragraph (c).
    The addition reads as follows:

Sec.  97.416  Certificate of representation.

* * * * *
    (c) A certificate of representation under this section that 
complies with the provisions of paragraph (a) of this section except 
that it contains the acronym ``TR'' in place of the acronym ``CSAPR'' 
in the required certification statements will be considered a complete 
certificate of representation under this section, and the certification 
statements included in such certificate of representation will be 
interpreted as if the acronym ``CSAPR'' appeared in place of the 
acronym ``TR''.

0
67. Section 97.420 is amended by:
0
a. Italicizing the headings of paragraphs (c)(1) through (6);
0
b. Adding paragraph (c)(1)(iv);
0
c. In paragraph (c)(2)(i) introductory text, removing the text 
``paragraph (b)(1)'' and adding in its place the text ``paragraph 
(c)(1)'';
0
d. Adding paragraph (c)(2)(iv):
0
e. In paragraph (c)(4)(i), removing the text ``paragraph (b)(1)'' and 
adding in its place the text ``paragraph (c)(1)'';
0
f. In paragraph (c)(5)(iii)(D), removing the words ``authorized 
representative'' and adding in their place the words ``authorized 
account representative''; and
0
g. In paragraph (c)(5)(v), removing the word ``designated'' two times 
and adding in its place the words ``authorized account''.
    The additions read as follows:

Sec.  97.420  Establishment of compliance accounts, assurance accounts, 
and general accounts.

* * * * *
    (c) * * *
    (1) * * *
    (iv) An application for a general account under paragraph (c)(1) of 
this section that complies with the provisions of such paragraph except 
that it contains the acronym ``TR'' in place of the acronym ``CSAPR'' 
in the required certification statement will be considered a complete 
application for a general account under such paragraph, and the 
certification statement included in such application for a general 
account will be interpreted as if the acronym ``CSAPR'' appeared in 
place of the acronym ``TR''.
    (2) * * *
    (iv) A certification statement submitted in accordance with 
paragraph (c)(2)(ii) of this section that contains the acronym ``TR'' 
will be interpreted as if the acronym ``CSAPR'' appeared in place of 
the acronym ``TR''.
* * * * *

0
68. Section 97.421 is amended by:
0
a. Revising the section heading;
0
b. In paragraphs (c), (d), and (e), removing the word ``period'' and 
adding in its place the word ``periods'';
0
c. In paragraph (i), after the text ``through (12)'' removing the 
comma;
0
d. Revising paragraph (j); and
0
e. Redesignating paragraph (k) as paragraph (l) and adding a new 
paragraph (k).
    The revisions and additions read as follows:

Sec.  97.421  Recordation of CSAPR NOX Annual allowance allocations and 
auction results.

* * * * *

[[Page 74607]]

    (j) By February 15, 2016 and February 15 of each year thereafter, 
the Administrator will record in each CSAPR NOX Annual 
source's compliance account the CSAPR NOX Annual allowances 
allocated to the CSAPR NOX Annual units at the source in 
accordance with Sec.  97.412(b)(9) through (12) for the control period 
in the year before the year of the applicable recordation deadline 
under this paragraph.
    (k) By the date 15 days after the date on which any allocation or 
auction results, other than an allocation or auction results described 
in paragraphs (a) through (j) of this section, of CSAPR NOX 
Annual allowances to a recipient is made by or are submitted to the 
Administrator in accordance with Sec.  97.411 or Sec.  97.412 or with a 
SIP revision approved under Sec.  52.38(a)(4) or (5) of this chapter, 
the Administrator will record such allocation or auction results in the 
appropriate Allowance Management System account.
* * * * *

0
69. Section 97.422 is amended by revising the section heading to read 
as follows:

Sec.  97.422  Submission of CSAPR NOX Annual allowance transfers.

* * * * *

0
70. Section 97.423 is amended by:
0
a. Revising the section heading; and
0
b. In paragraph (b), after the word ``allocated'' adding the words ``or 
auctioned''.
    The revision reads as follows:

Sec.  97.423  Recordation of CSAPR NOX Annual allowance transfers.

* * * * *

0
71. Section 97.424 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), after the word ``allocated'' adding the words 
``or auctioned'';
0
c. Revising paragraphs (c)(2)(i) and (ii); and
0
d. In paragraph (d), after the word ``allocated'' adding the words ``or 
auctioned''.
    The revisions read as follows:

Sec.  97.424  Compliance with CSAPR NOX Annual emissions limitation.

* * * * *
    (c) * * *
    (2) * * *
    (i) Any CSAPR NOX Annual allowances that were recorded 
in the compliance account pursuant to Sec.  97.421 and not transferred 
out of the compliance account, in the order of recordation; and then
    (ii) Any other CSAPR NOX Annual allowances that were 
transferred to and recorded in the compliance account pursuant to this 
subpart, in the order of recordation.
* * * * *

0
72. Section 97.425 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), after the word ``allocated'' adding the words 
``or auctioned'';
0
c. In paragraph (b)(2)(iii) introductory text, removing the text 
``paragraph (b)(1)(i)'' and adding in its place the text ``paragraph 
(b)(1)(ii)'';
0
d. In paragraph (b)(2)(iii)(B), after the words ``availability of'' 
adding the words ``the calculations incorporating'';
0
e. In paragraph (b)(4)(i), after the words ``established for'' removing 
the word ``the''; and
0
f. In paragraph (b)(6)(iii)(B), after the word ``appropriate'' removing 
the word ``at''.
    The revision reads as follows:

Sec.  97.425  Compliance with CSAPR NOX Annual assurance provisions.

* * * * *

Sec.  97.426   [Amended]

0
73. Section 97.426, paragraph (b) is amended by removing the text 
``97.427, or 97.428'' and adding in its place the text ``Sec.  97.427, 
or Sec.  97.428''.

Sec.  97.428   [Amended]

0
74. Section 97.428, paragraph (b) is amended by removing the text 
``paragraph (a)(1)'' and adding in its place the text ``paragraph 
(a)''.

0
75. Section 97.430 is amended by:
0
a. Revising paragraph (b) introductory text and paragraphs (b)(1) and 
(2);
0
b. In paragraph (b)(3) introductory text, removing the text 
``Sec. Sec.  75.4(e)(1) through (e)(4)'' and adding in its place the 
text ``Sec.  75.4(e)(1) through (4)''; and
0
c. In paragraph (b)(3)(iii), after the text ``Sec.  75.66'' adding the 
words ``of this chapter''.
    The revisions read as follows:

Sec.  97.430  General monitoring, recordkeeping, and reporting 
requirements.

* * * * *
    (b) Compliance deadlines. Except as provided in paragraph (e) of 
this section, the owner or operator of a CSAPR NOX Annual 
unit shall meet the monitoring system certification and other 
requirements of paragraphs (a)(1) and (2) of this section on or before 
the later of the following dates and shall record, report, and quality-
assure the data from the monitoring systems under paragraph (a)(1) of 
this section on and after the later of the following dates:
    (1) January 1, 2015; or
    (2) 180 calendar days after the date on which the unit commences 
commercial operation.
* * * * *

Sec.  97.431   [Amended]

0
76. Section 97.431 is amended by:
0
a. Italicizing the headings of paragraphs (d)(1) through (3), (d)(3)(i) 
through (iv), (d)(3)(iv)(A) through (D), and (d)(3)(v); and
0
b. In paragraph (d)(3) introductory text, removing the text 
``Sec. Sec.  '' and adding in its place the text ``Sec.  ''.

0
77. Section 97.434 is amended by:
0
a. In paragraph (b), after the words ``comply with'' adding the word 
``the''; and
0
b. Revising paragraphs (d)(1) and (3).
    The revisions read as follows:

Sec.  97.434  Recordkeeping and reporting.

* * * * *
    (d) * * *
    (1) The designated representative shall report the NOX 
mass emissions data and heat input data for a CSAPR NOX 
Annual unit, in an electronic quarterly report in a format prescribed 
by the Administrator, for each calendar quarter beginning with the 
later of:
    (i) The calendar quarter covering January 1, 2015 through March 31, 
2015; or
    (ii) The calendar quarter corresponding to the earlier of the date 
of provisional certification or the applicable deadline for initial 
certification under Sec.  97.430(b).
* * * * *
    (3) For CSAPR NOX Annual units that are also subject to 
the Acid Rain Program, CSAPR NOX Ozone Season Group 1 
Trading Program, CSAPR NOX Ozone Season Group 2 Trading 
Program, CSAPR SO2 Group 1 Trading Program, or CSAPR 
SO2 Group 2 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 
NOX mass emission data, heat input data, and other 
information required by this subpart.
* * * * *

Sec.  97.435   [Amended]

0
78. Section 97.435 is amended by redesignating paragraphs (b)(i) 
through (v) as paragraphs (b)(1) through (5).

Subpart BBBBB--CSAPR NOX Ozone Season Group 1 Trading Program

0
79. The heading of subpart BBBBB of part 97 is revised to read as set 
forth above.

[[Page 74608]]

Sec.  97.501   [Amended]

0
80. Section 97.501 is amended by removing the text ``Transport Rule 
(TR) NOX Ozone Season Trading Program'' and adding in its 
place the text ``Cross-State Air Pollution Rule (CSAPR) NOX 
Ozone Season Group 1 Trading Program''.

Sec. Sec.  97.502 through 97.508 and 97.511 through 97.535   [Amended]

0
81. Sections 97.502 through 97.508 and 97.511 through 97.535 are 
amended by:
0
a. Removing the text ``TR'' wherever it appears and adding in its place 
the text ``CSAPR''; and
0
b. After the words ``Ozone Season'' wherever they appear adding the 
text ``Group 1''.

0
82. Section 97.502 is amended by:
0
a. Revising the introductory text and the definitions ``Allowable 
NOX emission rate'' and ``Allowance Management System'';
0
b. In the definition ``Allowance Management System account'', removing 
the word ``holding'' and adding in its place the text ``auction, 
holding'';
0
c. Revising the definition ``Allowance transfer deadline'';
0
d. In the definition ``Alternate designated representative'', after the 
words ``the alternate designated representative'' removing the comma;
0
e. Adding in alphabetical order the definition ``Auction'';
0
f. In the definition ``Cogeneration system'', removing the words 
``steam turbine'';
0
g. In the definition ``Commence commercial operation'', paragraph (2) 
introductory text, after the words ``defined in'' adding the word 
``the'';
0
h. In the definition ``Common designated representative's share'', 
paragraph (2), removing the words ``and of the total'' and adding in 
their place the words ``and the total'';
0
i. Placing the newly amended definitions ``CSAPR NOX Annual 
Trading Program'', ``CSAPR NOX Ozone Season allowance'', 
``CSAPR NOX Ozone Season allowance deduction or deduct CSAPR 
NOX Ozone Season allowances'', ``CSAPR NOX Ozone 
Season allowances held or hold CSAPR NOX Ozone Season 
allowances'', ``CSAPR NOX Ozone Season emissions 
limitation'', ``CSAPR NOX Ozone Season source'', ``CSAPR 
NOX Ozone Season Trading Program'', ``CSAPR NOX 
Ozone Season unit'', ``CSAPR SO2 Group 1 Trading Program'', 
and ``CSAPR SO2 Group 2 Trading Program'' in alphabetical 
order in the section;
0
j. Revising the newly amended definition ``CSAPR NOX Ozone 
Season Group 1 Trading Program'';
0
k. Adding in alphabetical order the definitions ``CSAPR NOX 
Ozone Season Group 2 allowance'' and ``CSAPR NOX Ozone 
Season Group 2 Trading Program'';
0
l. Revising the newly amended definitions ``CSAPR SO2 Group 
1 Trading Program'' and ``CSAPR SO2 Group 2 Trading 
Program'';
0
m. In the definition ``Designated representative'', after the words 
``the designated representative'' removing the comma;
0
n. In the definition ``Fossil fuel'', paragraph (2), removing the text 
``Sec. Sec.  '' and adding in its place the text ``Sec.  '';
0
o. Removing the definition ``Gross electrical output'';
0
p. Revising the definitions ``Heat input'', ``Heat input rate'', and 
``Heat rate'';
0
q. In the definition heading ``Maximum design heat input'', after the 
words ``heat input'' adding the word ``rate'';
0
r. Revising the definition ``Potential electrical output capacity'';
0
s. In the definition ``Sequential use of energy'', paragraph (2), after 
the word ``from'' adding the word ``a''; and
0
t. Revising the definition ``State''.
    The revisions and additions read as follows:

Sec.  97.502   Definitions.

    The terms used in this subpart shall have the meanings set forth in 
this section as follows, provided that any term that includes the 
acronym ``CSAPR'' shall be considered synonymous with a term that is 
used in a SIP revision approved by the Administrator under Sec.  52.38 
or Sec.  52.39 of this chapter and that is substantively identical 
except for the inclusion of the acronym ``TR'' in place of the acronym 
``CSAPR'':
* * * * *
    Allowable NOX emission rate means, for a unit, the most stringent 
State or federal NOX emission rate limit (in lb/MWh or, if 
in lb/mmBtu, converted to lb/MWh by multiplying it by the unit's heat 
rate in mmBtu/MWh) that is applicable to the unit and covers the 
longest averaging period not exceeding one year.
    Allowance Management System means the system by which the 
Administrator records allocations, auctions, transfers, and deductions 
of CSAPR NOX Ozone Season Group 1 allowances under the CSAPR 
NOX Ozone Season Group 1 Trading Program. Such allowances 
are allocated, auctioned, recorded, held, transferred, or deducted only 
as whole allowances.
* * * * *
    Allowance transfer deadline means, for a control period in 2015 or 
2016, midnight of December 1, 2015 or December 1, 2016, respectively, 
or for a control period in any other given year, 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 after such 
control period and is the deadline by which a CSAPR NOX 
Ozone Season Group 1 allowance transfer must be submitted for 
recordation in a CSAPR NOX Ozone Season Group 1 source's 
compliance account in order to be available for use in complying with 
the source's CSAPR NOX Ozone Season Group 1 emissions 
limitation for such control period in accordance with Sec. Sec.  97.506 
and 97.524.
* * * * *
    Auction means, with regard to CSAPR NOX Ozone Season 
Group 1 allowances, the sale to any person by a State or permitting 
authority, in accordance with a SIP revision submitted by the State and 
approved by the Administrator under Sec.  52.38(b)(4) or (5) of this 
chapter, of such CSAPR NOX Ozone Season Group 1 allowances 
to be initially recorded in an Allowance Management System account.
* * * * *
    CSAPR NOX Ozone Season Group 1 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with this subpart and Sec.  52.38(b)(1), 
(b)(2)(i) and (ii), (b)(3) through (5), and (b)(10) through (12) of 
this chapter (including such a program that is revised in a SIP 
revision approved by the Administrator under Sec.  52.38(b)(3) or (4) 
of this chapter or that is established in a SIP revision approved by 
the Administrator under Sec.  52.38(b)(5) of this chapter), as a means 
of mitigating interstate transport of ozone and NOX.
* * * * *
    CSAPR NOX Ozone Season Group 2 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under subpart EEEEE of this part or Sec.  97.526(c), or by a State or 
permitting authority under a SIP revision approved by the Administrator 
under Sec.  52.38(b)(6), (7), (8), or (9) of this chapter, to emit one 
ton of NOX during a control period of the specified calendar 
year for which the authorization is allocated or auctioned or of any 
calendar year thereafter under the CSAPR NOX Ozone Season 
Group 2 Trading Program.

[[Page 74609]]

    CSAPR NOX Ozone Season Group 2 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart EEEEE of this part and Sec.  
52.38(b)(1), (b)(2)(i) and (iii), (b)(6) through (11), and (b)(13) of 
this chapter (including such a program that is revised in a SIP 
revision approved by the Administrator under Sec.  52.38(b)(7) or (8) 
of this chapter or that is established in a SIP revision approved by 
the Administrator under Sec.  52.38(b)(6) or (9) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
    CSAPR SO2 Group 1 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with subpart CCCCC of this part and Sec.  
52.39(a), (b), (d) through (f), and (j) through (l) of this chapter 
(including such a program that is revised in a SIP revision approved by 
the Administrator under Sec.  52.39(d) or (e) of this chapter or that 
is established in a SIP revision approved by the Administrator under 
Sec.  52.39(f) of this chapter), as a means of mitigating interstate 
transport of fine particulates and SO2.
    CSAPR SO2 Group 2 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with subpart DDDDD of this part and Sec.  
52.39(a), (c), (g) through (k), and (m) of this chapter (including such 
a program that is revised in a SIP revision approved by the 
Administrator under Sec.  52.39(g) or (h) of this chapter or that is 
established in a SIP revision approved by the Administrator under Sec.  
52.39(i) of this chapter), as a means of mitigating interstate 
transport of fine particulates and SO2.
* * * * *
    Heat input means, for a unit for a specified period of unit 
operating time, the product (in mmBtu) of the gross calorific value of 
the fuel (in mmBtu/lb) fed into the unit multiplied by the fuel feed 
rate (in lb of fuel/time) and unit operating time, as measured, 
recorded, and reported to the Administrator by the designated 
representative and as modified by the Administrator in accordance with 
this subpart and excluding the heat derived from preheated combustion 
air, recirculated flue gases, or exhaust.
    Heat input rate means, for a unit, the quotient (in mmBtu/hr) of 
the amount of heat input for a specified period of unit operating time 
(in mmBtu) divided by unit operating time (in hr) or, for a unit and 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.
    Heat rate means, for a unit, the quotient (in mmBtu/unit of load) 
of the unit's maximum design heat input rate (in Btu/hr) divided by the 
product of 1,000,000 Btu/mmBtu and the unit's maximum hourly load.
* * * * *
    Potential electrical output capacity means, for a unit (in MWh/yr), 
33 percent of the unit's maximum design heat input rate (in Btu/hr), 
divided by 3,413 Btu/kWh, divided by 1,000 kWh/MWh, and multiplied by 
8,760 hr/yr.
* * * * *
    State means one of the States that is subject to the CSAPR 
NOX Ozone Season Group 1 Trading Program pursuant to Sec.  
52.38(b)(1), (b)(2)(i) and (ii), (b)(3) through (5), and (b)(10) 
through (12) of this chapter.
* * * * *

Sec.  97.503   [Amended]

0
83. Section 97.503 is amended by:
0
a. Adding in alphabetical order the list entry ``CSAPR--Cross-State Air 
Pollution Rule'';
0
b. Removing the list entry ``kW--kilowatt electrical'';
0
c. Removing the list entry ``kWh--kilowatt hour'' and adding in its 
place the entry ``kWh--kilowatt-hour'';
0
d. Removing the list entry ``MWh--megawatt hour'' and adding in its 
place the entry ``MWh--megawatt-hour''; and
0
e. Adding in alphabetical order the list entries ``SIP--State 
implementation plan'' and ``TR--Transport Rule''.

Sec.  97.504   [Amended]

0
84. Section 97.504 is amended by:
0
a. In paragraph (b)(1)(i)(B), removing the word ``electric'' and adding 
in its place the word ``electrical'';
0
b. In paragraph (b)(2)(ii), removing the text ``paragraph (b)(1)(i)'' 
and adding in its place the text ``paragraph (b)(2)(i)'', and removing 
the text ``NOX'' and adding in its place the text 
``NOX''; and
0
c. Italicizing the headings of paragraphs (c)(1) and (2).

Sec.  97.505   [Amended]

0
85. Section 97.505, paragraph (b) is amended by italicizing the 
heading.

Sec.  97.506   [Amended]

0
86. Section 97.506 is amended by:
0
a. Italicizing the headings of paragraphs (c), (c)(1) and (2), and 
(c)(4) through (7);
0
b. In paragraph (c)(2)(ii), after the words ``immediately after'' 
adding the words ``the year of'';
0
c. In paragraph (c)(3)(i), after the paragraph designation ``(i)'' 
adding a space;
0
d. In paragraph (c)(4) heading, after the words ``Vintage of'' adding 
the text ``CSAPR NOX Ozone Season Group 1''; and
0
e. In paragraphs (c)(4)(i) and (ii), after the word ``allocated'' 
adding the words ``or auctioned''.

0
87. Section 97.510 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraph (a) introductory text;
0
c. In paragraphs (a)(1) through (25):
0
i. Removing the words ``ozone season trading'' wherever they appear and 
adding in their place the text ``Ozone Season Group 1 trading'';
0
ii. Removing the text ``NOX ozone season new'' wherever it 
appears and adding in its place the word ``new''; and
0
iii. Removing the text ``NOX ozone season Indian'' wherever 
it appears and adding in its place the word ``Indian'';
0
d. Adding and reserving paragraphs (a)(2)(vi), (a)(13)(vi), 
(a)(17)(vi), and (a)(18)(vi);
0
e. Revising paragraph (b) introductory text;
0
f. In paragraphs (b)(1) through (25), removing the text 
``NOX ozone season''; and
0
g. Revising paragraph (c).
    The revisions read as follows:

Sec.  97.510  State NOX Ozone Season Group 1 trading budgets, new unit 
set-asides, Indian country new unit set-asides, and variability limits.

    (a) The State NOX Ozone Season Group 1 trading budgets, 
new unit set-asides, and Indian country new unit set-asides for 
allocations of CSAPR NOX Ozone Season Group 1 allowances for 
the control periods in 2015 and thereafter are as follows:
* * * * *
    (b) The States' variability limits for the State NOX 
Ozone Season Group 1 trading budgets for the control periods in 2017 
and thereafter are as follows:
* * * * *
    (c) Each State NOX Ozone Season Group 1 trading budget 
in this section includes any tons in a new unit set-aside or Indian 
country new unit set-aside but does not include any tons in a 
variability limit.

0
88. Section 97.511 is amended by:
0
a. Revising the section heading;
0
b. Italicizing the headings of paragraphs (b)(1) and (2);
0
c. Revising paragraph (b)(1)(iii);
0
d. In paragraph (b)(1)(iv)(B), removing the words ``the each'' and 
adding in their place the word ``each'', and revising the second 
sentence;
0
e. Revising paragraph (b)(2)(iii);
0
f. In paragraph (b)(2)(iv)(B), removing the words ``the each'' and 
adding in

[[Page 74610]]

their place the word ``each'', revising the second sentence, and after 
the newly revised second sentence adding a paragraph break before the 
paragraph designation ``(v)'' for the following paragraph (b)(2)(v);
0
g. In paragraph (c)(1)(ii), removing the text ``Sec.  52.38(b)(3), (4), 
or (5)'' and adding in its place the text ``Sec.  52.38(b)(4) or (5)'', 
and removing the text ``January 1'' and adding in its place the text 
``May 1'';
0
h. In paragraph (c)(5)(i)(B), after the text ``Sec.  52.38(b)(4) or 
(5)'' adding the words ``of this chapter'', and removing the word 
``Annual'' and adding in its place the text ``Ozone Season Group 1'';
0
i. In paragraph (c)(5)(ii) introductory text, removing the words ``this 
paragraph'' and adding in their place the words ``this section'';
0
j. In paragraph (c)(5)(ii)(B), after the text ``Sec.  52.38(b)(4) or 
(5)'' adding the words ``of this chapter''; and
0
k. In paragraph (c)(5)(iii), removing the words ``this paragraph'' and 
adding in their place the words ``this section''.
    The revisions read as follows:

Sec.  97.511  Timing requirements for CSAPR NOX Ozone Season Group 1 
allowance allocations.

* * * * *
    (b) * * *
    (1) * * *
    (iii)(A) If the new unit set-aside for the control period in 2015 
or 2016 contains any CSAPR NOX Ozone Season Group 1 
allowances that have not been allocated in the applicable notice of 
data availability required in paragraph (b)(1)(ii) of this section, the 
Administrator will promulgate, by September 15 immediately after such 
notice, a notice of data availability that identifies any CSAPR 
NOX Ozone Season Group 1 units that commenced commercial 
operation during the period starting May 1 of the year before the year 
of such control period and ending August 31 of the year of such control 
period.
    (B) If the new unit set-aside for the control period in 2017 or any 
subsequent year contains any CSAPR NOX Ozone Season Group 1 
allowances that have not been allocated in the applicable notice of 
data availability required in paragraph (b)(1)(ii) of this section, the 
Administrator will promulgate, by December 15 immediately after such 
notice, a notice of data availability that identifies any CSAPR 
NOX Ozone Season Group 1 units that commenced commercial 
operation during the period starting January 1 of the year before the 
year of such control period and ending November 30 of the year of such 
control period.
    (iv) * * *
    (B) * * * By November 15 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(1)(iii)(A) of 
this section, or by February 15 immediately after the promulgation of 
each notice of data availability required in paragraph (b)(1)(iii)(B) 
of this section, the Administrator will promulgate a notice of data 
availability of any adjustments of the identification of CSAPR 
NOX Ozone Season Group 1 units that the Administrator 
determines to be necessary, the reasons for accepting or rejecting any 
objections submitted in accordance with paragraph (b)(1)(iv)(A) of this 
section, and the results of such calculations.
* * * * *
    (2) * * *
    (iii)(A) If the Indian country new unit set-aside for the control 
period in 2015 or 2016 contains any CSAPR NOX Ozone Season 
Group 1 allowances that have not been allocated in the applicable 
notice of data availability required in paragraph (b)(2)(ii) of this 
section, the Administrator will promulgate, by September 15 immediately 
after such notice, a notice of data availability that identifies any 
CSAPR NOX Ozone Season Group 1 units that commenced 
commercial operation during the period starting May 1 of the year 
before the year of such control period and ending August 31 of the year 
of such control period.
    (B) If the Indian country new unit set-aside for the control period 
in 2017 or any subsequent year contains any CSAPR NOX Ozone 
Season Group 1 allowances that have not been allocated in the 
applicable notice of data availability required in paragraph (b)(2)(ii) 
of this section, the Administrator will promulgate, by December 15 
immediately after such notice, a notice of data availability that 
identifies any CSAPR NOX Ozone Season Group 1 units that 
commenced commercial operation during the period starting January 1 of 
the year before the year of such control period and ending November 30 
of the year of such control period.
    (iv) * * *
    (B) * * * By November 15 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(2)(iii)(A) of 
this section, or by February 15 immediately after the promulgation of 
each notice of data availability required in paragraph (b)(2)(iii)(B) 
of this section, the Administrator will promulgate a notice of data 
availability of any adjustments of the identification of CSAPR 
NOX Ozone Season Group 1 units that the Administrator 
determines to be necessary, the reasons for accepting or rejecting any 
objections submitted in accordance with paragraph (b)(2)(iv)(A) of this 
section, and the results of such calculations.
* * * * *

0
89. Section 97.512 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(2), removing the text ``Sec. Sec.  '' and adding in 
its place the text ``Sec.  '';
0
c. In paragraph (a)(4)(i), removing the text ``paragraph (a)(1)(i) 
through (iii)'' and adding in its place the text ``paragraphs (a)(1)(i) 
through (iii)'';
0
d. In paragraph (a)(4)(ii), after the text ``paragraph (a)(4)(i)'' 
adding the words ``of this section'';
0
e. Revising paragraph (a)(9)(i);
0
f. In paragraph (b)(4)(ii), after the text ``paragraph (b)(4)(i)'' 
adding the words ``of this section'';
0
g. Revising paragraph (b)(9)(i); and
0
h. In paragraph (b)(10)(ii), after the text ``Sec.  52.38(b)(4) or 
(5)'' adding the words ``of this chapter''.
    The revisions read as follows:

Sec.  97.512  CSAPR NOX Ozone Season Group 1 allowance allocations to 
new units.

    (a) * * *
    (9) * * *
    (i)(A) For the control period in 2015 or 2016, the Administrator 
will determine, for each unit described in paragraph (a)(1) of this 
section that commenced commercial operation during the period starting 
May 1 of the year before the year of such control period and ending 
August 31 of the year of such control period, the positive difference 
(if any) between the unit's emissions during such control period and 
the amount of CSAPR NOX Ozone Season Group 1 allowances 
referenced in the notice of data availability required under Sec.  
97.511(b)(1)(ii) for the unit for such control period;
    (B) For the control period in 2017 or any subsequent year, the 
Administrator will determine, for each unit described in paragraph 
(a)(1) of this section that commenced commercial operation during the 
period starting January 1 of the year before the year of such control 
period and ending November 30 of the year of such control period, the 
positive difference (if any) between the unit's emissions during such 
control period and the amount of CSAPR NOX Ozone Season 
Group 1 allowances referenced in the notice of data availability 
required under Sec.  97.511(b)(1)(ii) for the unit for such control 
period;
* * * * *
    (b) * * *

[[Page 74611]]

    (9) * * *
    (i)(A) For the control period in 2015 or 2016, the Administrator 
will determine, for each unit described in paragraph (b)(1) of this 
section that commenced commercial operation during the period starting 
May 1 of the year before the year of such control period and ending 
August 31 of the year of such control period, the positive difference 
(if any) between the unit's emissions during such control period and 
the amount of CSAPR NOX Ozone Season Group 1 allowances 
referenced in the notice of data availability required under Sec.  
97.511(b)(2)(ii) for the unit for such control period;
    (B) For the control period in 2017 or any subsequent year, the 
Administrator will determine, for each unit described in paragraph 
(b)(1) of this section that commenced commercial operation during the 
period starting January 1 of the year before the year of such control 
period and ending November 30 of the year of such control period, the 
positive difference (if any) between the unit's emissions during such 
control period and the amount of CSAPR NOX Ozone Season 
Group 1 allowances referenced in the notice of data availability 
required under Sec.  97.511(b)(2)(ii) for the unit for such control 
period;
* * * * *

0
90. Section 97.516 is amended by:
0
a. In paragraph (a)(1), removing the word ``Country'' and adding in its 
place the word ``country''; and
0
b. Adding paragraph (c).
    The addition reads as follows:

Sec.  97.516  Certificate of representation.

* * * * *
    (c) A certificate of representation under this section that 
complies with the provisions of paragraph (a) of this section except 
that it contains the phrase ``TR NOX Ozone Season'' in place 
of the phrase ``CSAPR NOX Ozone Season Group 1'' in the 
required certification statements will be considered a complete 
certificate of representation under this section, and the certification 
statements included in such certificate of representation will be 
interpreted for purposes of this subpart as if the phrase ``CSAPR 
NOX Ozone Season Group 1'' appeared in place of the phrase 
``TR NOX Ozone Season''.

0
91. Section 97.520 is amended by:
0
a. Italicizing the headings of paragraphs (c)(1) through (6);
0
b. Adding paragraph (c)(1)(iv);
0
c. In paragraph (c)(2)(i) introductory text, removing the text 
``paragraph (b)(1)'' and adding in its place the text ``paragraph 
(c)(1)'';
0
d. Adding paragraph (c)(2)(iv);
0
e. In paragraph (c)(4)(i), removing the text ``paragraph (b)(1)'' and 
adding in its place the text ``paragraph (c)(1)'';
0
f. In paragraph (c)(5)(iii)(D), removing the words ``authorized 
representative'' and adding in their place the words ``authorized 
account representative''; and
0
g. In paragraph (c)(5)(v), removing the word ``designated'' two times 
and adding in its place the words ``authorized account''.
    The additions read as follows:

Sec.  97.520  Establishment of compliance accounts, assurance accounts, 
and general accounts.

* * * * *
    (c) * * *
    (1) * * *
    (iv) An application for a general account under paragraph (c)(1) of 
this section that complies with the provisions of such paragraph except 
that it contains the phrase ``TR NOX Ozone Season'' in place 
of the phrase ``CSAPR NOX Ozone Season Group 1'' in the 
required certification statement will be considered a complete 
application for a general account under such paragraph, and the 
certification statement included in such application for a general 
account will be interpreted for purposes of this subpart as if the 
phrase ``CSAPR NOX Ozone Season Group 1'' appeared in place 
of the phrase ``TR NOX Ozone Season''.
    (2) * * *
    (iv) A certification statement submitted in accordance with 
paragraph (c)(2)(ii) of this section that contains the phrase ``TR 
NOX Ozone Season'' will be interpreted for purposes of this 
subpart as if the phrase ``CSAPR NOX Ozone Season Group 1'' 
appeared in place of the phrase ``TR NOX Ozone Season''.
* * * * *

0
92. Section 97.521 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraph (c);
0
c. In paragraphs (d) and (e), removing the word ``period'' and adding 
in its place the word ``periods'';
0
d. Revising paragraphs (i) and (j); and
0
e. Redesignating paragraph (k) as paragraph (l) and adding a new 
paragraph (k).
    The revisions and additions read as follows:

Sec.  97.521  Recordation of CSAPR NOX Ozone Season Group 1 allowance 
allocations and auction results.

* * * * *
    (c) By January 9, 2017, the Administrator will record in each CSAPR 
NOX Ozone Season Group 1 source's compliance account the 
CSAPR NOX Ozone Season Group 1 allowances allocated to the 
CSAPR NOX Ozone Season Group 1 units at the source, or in 
each appropriate Allowance Management System account the CSAPR 
NOX Ozone Season Group 1 allowances auctioned to CSAPR 
NOX Ozone Season Group 1 units, in accordance with Sec.  
97.511(a), or with a SIP revision approved under Sec.  52.38(b)(4) or 
(5) of this chapter, for the control periods in 2017 and 2018.
* * * * *
    (i)(1) By November 15, 2015 and November 15, 2016, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 1 source's compliance account the CSAPR NOX Ozone 
Season Group 1 allowances allocated to the CSAPR NOX Ozone 
Season Group 1 units at the source in accordance with Sec.  
97.512(a)(9) through (12) for the control period in the year of the 
applicable recordation deadline under this paragraph.
    (2) By February 15, 2018 and February 15 of each year thereafter, 
the Administrator will record in each CSAPR NOX Ozone Season 
Group 1 source's compliance account the CSAPR NOX Ozone 
Season Group 1 allowances allocated to the CSAPR NOX Ozone 
Season Group 1 units at the source in accordance with Sec.  
97.512(a)(9) through (12) for the control period in the year before the 
year of the applicable recordation deadline under this paragraph.
    (j)(1) By November 15, 2015 and November 15, 2016, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 1 source's compliance account the CSAPR NOX Ozone 
Season Group 1 allowances allocated to the CSAPR NOX Ozone 
Season Group 1 units at the source in accordance with Sec.  
97.512(b)(9) through (12) for the control period in the year of the 
applicable recordation deadline under this paragraph.
    (2) By February 15, 2018 and February 15 of each year thereafter, 
the Administrator will record in each CSAPR NOX Ozone Season 
Group 1 source's compliance account the CSAPR NOX Ozone 
Season Group 1 allowances allocated to the CSAPR NOX Ozone 
Season Group 1 units at the source in accordance with Sec.  
97.512(b)(9) through (12) for the control period in the year before the 
year of the applicable recordation deadline under this paragraph.
    (k) By the date 15 days after the date on which any allocation or 
auction results, other than an allocation or auction results described 
in paragraphs (a) through (j) of this section, of CSAPR NOX 
Ozone Season Group 1 allowances

[[Page 74612]]

to a recipient is made by or are submitted to the Administrator in 
accordance with Sec.  97.511 or Sec.  97.512 or with a SIP revision 
approved under Sec.  52.38(b)(4) or (5) of this chapter, the 
Administrator will record such allocation or auction results in the 
appropriate Allowance Management System account.
* * * * *

0
93. Section 97.522 is amended by revising the section heading to read 
as follows:

Sec.  97.522  Submission of CSAPR NOX Ozone Season Group 1 allowance 
transfers.

* * * * *

0
94. Section 97.523 is amended by:
0
a. Revising the section heading; and
0
b. In paragraph (b), after the word ``allocated'' adding the words ``or 
auctioned''.
    The revision reads as follows:

Sec.  97.523  Recordation of CSAPR NOX Ozone Season Group 1 allowance 
transfers.

* * * * *

0
95. Section 97.524 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), after the word ``allocated'' adding the words 
``or auctioned'';
0
c. Revising paragraphs (c)(2)(i) and (ii); and
0
d. In paragraph (d), after the word ``allocated'' adding the words ``or 
auctioned''.
    The revisions read as follows:

Sec.  97.524  Compliance with CSAPR NOX Ozone Season Group 1 emissions 
limitation.

* * * * *
    (c) * * *
    (2) * * *
    (i) Any CSAPR NOX Ozone Season Group 1 allowances that 
were recorded in the compliance account pursuant to Sec.  97.521 and 
not transferred out of the compliance account, in the order of 
recordation; and then
    (ii) Any other CSAPR NOX Ozone Season Group 1 allowances 
that were transferred to and recorded in the compliance account 
pursuant to this subpart, in the order of recordation.
* * * * *

0
96. Section 97.525 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), after the word ``allocated'' adding the words 
``or auctioned'';
0
c. In paragraph (b)(2)(iii) introductory text, removing the text 
``paragraph (b)(1)(i)'' and adding in its place the text ``paragraph 
(b)(1)(ii)'';
0
d. In paragraph (b)(2)(iii)(B), after the words ``availability of'' 
adding the words ``the calculations incorporating'';
0
e. In paragraph (b)(4)(i), after the words ``established for'' removing 
the word ``the''; and
0
f. In paragraph (b)(6)(iii)(B), after the word ``appropriate'' removing 
the word ``at''.
    The revision reads as follows:

Sec.  97.525  Compliance with CSAPR NOX Ozone Season Group 1 assurance 
provisions.

* * * * *

0
97. Section 97.526 is amended by:
0
a. In paragraph (b), removing the text ``Sec.  97.528'' and adding in 
its place the text ``Sec.  97.528 or removed under paragraph (c) of 
this section''; and
0
b. Adding paragraph (c).
    The addition reads as follows:

Sec.  97.526  Banking.

* * * * *
    (c) Replacement of CSAPR NOX Ozone Season Group 1 allowances with 
CSAPR NOX Ozone Season Group 2 allowances. Notwithstanding any other 
provision of this subpart or any provision of a SIP revision approved 
under Sec.  52.38(b)(4) or (5) of this chapter, the Administrator will 
remove CSAPR NOX Ozone Season Group 1 allowances from 
compliance accounts and general accounts and allocate in their place 
amounts of CSAPR NOX Ozone Season Group 2 allowances as 
provided in paragraphs (c)(1) through (5) of this section and will 
record CSAPR NOX Ozone Season Group 2 allowances in lieu of 
initially recording CSAPR NOX Ozone Season Group 1 
allowances as provided in paragraph (c)(6) of this section.
    (1) As soon as practicable after the completion of deductions under 
Sec.  97.524 for the control period in 2016, but not later than March 
1, 2018, the Administrator will temporarily suspend acceptance of CSAPR 
NOX Ozone Season Group 1 allowance transfers submitted under 
Sec.  97.522 and, before resuming acceptance of such transfers, will 
take the following actions with regard to every general account and 
every compliance account except a compliance account for a CSAPR 
NOX Ozone Season Group 1 source located in a State listed in 
Sec.  52.38(b)(2)(i) of this chapter or Indian country within the 
borders of such a State:
    (i) The Administrator will remove all CSAPR NOX Ozone 
Season Group 1 allowances allocated for the control periods in 2015 and 
2016 from each such account.
    (ii) The Administrator will determine a conversion factor equal to 
the greater of 1.0000 or the quotient, expressed to four decimal 
places, of the sum of all CSAPR NOX Ozone Season Group 1 
allowances removed from all such accounts under paragraph (c)(1)(i) of 
this section divided by the product of 1.5 times the sum of the 
variability limits for the control period in 2017 set forth in Sec.  
97.810(b) for all States except a State listed in Sec.  52.38(b)(2)(i) 
of this chapter.
    (iii) The Administrator will allocate to and record in each such 
account an amount of CSAPR NOX Ozone Season Group 2 
allowances for the control period in 2017, where such amount is 
determined as the quotient of the number of CSAPR NOX Ozone 
Season Group 1 allowances removed from such account under paragraph 
(c)(1)(i) of this section divided by the conversion factor determined 
under paragraph (c)(1)(ii) of this section, rounded up to the nearest 
whole allowance, except as provided in paragraphs (c)(4) and (5) of 
this section.
    (2) As soon as practicable after approval of a SIP revision under 
Sec.  52.38(b)(6) of this chapter for a State listed in Sec.  
52.38(b)(2)(i) of this chapter, but not later than the allowance 
transfer deadline defined under Sec.  97.802 for the initial control 
period described with regard to such SIP revision in Sec.  
52.38(b)(6)(ii)(A) of this chapter, the Administrator will temporarily 
suspend acceptance of CSAPR NOX Ozone Season Group 1 
allowance transfers submitted under Sec.  97.522 and, before resuming 
acceptance of such transfers, will take the following actions with 
regard to every general account and every compliance account, unless 
otherwise provided in such approval of the SIP revision:
    (i) The Administrator will remove from each such account all CSAPR 
NOX Ozone Season Group 1 allowances for such initial control 
period and each subsequent control period that were allocated to units 
located in such State under this subpart or that were allocated or 
auctioned to any entity under a SIP revision for such State approved by 
the Administrator under Sec.  52.38(b)(4) or (5) of this chapter, 
whether such CSAPR NOX Ozone Season Group 1 allowances were 
initially recorded in such account or were transferred to such account 
from another account.
    (ii) The Administrator will determine a conversion factor equal to 
the greater of 1.0000 or the quotient, expressed to four decimal 
places, of the NOX Ozone Season Group 1 trading budget set 
forth for such State in Sec.  97.510(a) divided by the NOX 
Ozone Season Group 2 trading budget set forth for such State in Sec.  
97.810(a).
    (iii) The Administrator will allocate to and record in each such 
account an amount of CSAPR NOX Ozone Season Group 2 
allowances for each control

[[Page 74613]]

period for which CSAPR NOX Ozone Season Group 1 allowances 
were removed from such account, where each such amount is determined as 
the quotient of the number of CSAPR NOX Ozone Season Group 1 
allowances for such control period removed from such account under 
paragraph (c)(2)(i) of this section divided by the conversion factor 
determined under paragraph (c)(2)(ii) of this section, rounded up to 
the nearest whole allowance, except as provided in paragraphs (c)(4) 
and (5) of this section.
    (3) As soon as practicable after approval of a SIP revision under 
Sec.  52.38(b)(6) of this chapter for a State listed in Sec.  
52.38(b)(2)(i) of this chapter, but not before the completion of 
deductions under Sec.  97.524 for the control period before the initial 
control period described with regard to such SIP revision in Sec.  
52.38(b)(6)(ii)(A) of this chapter and not later than the allowance 
transfer deadline defined under Sec.  97.802 for such initial control 
period, the Administrator will temporarily suspend acceptance of CSAPR 
NOX Ozone Season Group 1 allowance transfers submitted under 
Sec.  97.522 and, before resuming acceptance of such transfers, will 
take the following actions with regard to every compliance account for 
a CSAPR NOX Ozone Season Group 1 source located in such 
State, provided that if the provisions of Sec.  52.38(b)(2)(i) of this 
chapter or a SIP revision approved under Sec.  52.38(b)(5) of this 
chapter will no longer apply to any source in any State or Indian 
country within the borders of any State with regard to emissions 
occurring in such initial control period or any subsequent control 
period, the Administrator instead will permanently end acceptance of 
CSAPR NOX Ozone Season Group 1 allowance transfers submitted 
under Sec.  97.522 and will take the following actions with regard to 
every general account and every compliance account:
    (i) The Administrator will remove from each such account all CSAPR 
NOX Ozone Season Group 1 allowances allocated for all 
control periods before such initial control period.
    (ii) The Administrator will determine a conversion factor equal to 
the greater of 1.0000 or the quotient, expressed to four decimal 
places, of the sum of all CSAPR NOX Ozone Season Group 1 
allowances removed from all such accounts under paragraph (c)(3)(i) of 
this section divided by the product of 1.5 times the variability limit 
for such initial control period set forth for such State in Sec.  
97.810(b).
    (iii) The Administrator will allocate to and record in each such 
account an amount of CSAPR NOX Ozone Season Group 2 
allowances for such initial control period, where such amount is 
determined as the quotient of the number of CSAPR NOX Ozone 
Season Group 1 allowances removed from such account under paragraph 
(c)(3)(i) of this section divided by the conversion factor determined 
under paragraph (c)(3)(ii) of this section, rounded up to the nearest 
whole allowance, except as provided in paragraphs (c)(4) and (5) of 
this section.
    (4) Where, pursuant to paragraph (c)(1)(i), (c)(2)(i), or (c)(3)(i) 
of this section, the Administrator removes CSAPR NOX Ozone 
Season Group 1 allowances from the compliance account for a source 
located in a State not listed in Sec.  52.38(b)(2)(iii) of this chapter 
or Indian country within the borders of such a State, the Administrator 
will not record CSAPR NOX Ozone Season Group 2 allowances in 
that account but instead will allocate to and record in another 
compliance account or general account CSAPR NOX Ozone Season 
Group 2 allowances for the control periods and in the amounts 
determined in accordance with paragraph (c)(1)(iii), (c)(2)(iii), or 
(c)(3)(iii) of this section, respectively, provided that the designated 
representative for such source identifies such other account in a 
submission to the Administrator and further provided that any 
compliance account identified in such a submission is for a source 
located in a State listed in Sec.  52.38(b)(2)(iii) of this chapter or 
Indian country within the borders of such a State.
    (5)(i) In computing any amounts of CSAPR NOX Ozone 
Season Group 2 allowances to be allocated to and recorded in general 
accounts under paragraph (c)(1)(iii), (c)(2)(iii), or (c)(3)(iii) of 
this section, the Administrator may group multiple general accounts 
whose ownership interests are held by the same or related persons or 
entities and treat the group of accounts as a single account for 
purposes of such computation.
    (ii) Following a computation for a group of general accounts in 
accordance with paragraph (c)(5)(i) of this section, the Administrator 
will allocate to and record in each individual account in such group a 
proportional share of the quantity of CSAPR NOX Ozone Season 
Group 2 allowances computed for such group, basing such shares on the 
respective quantities of CSAPR NOX Ozone Season Group 1 
allowances removed from such individual accounts under paragraph 
(c)(1)(i), (c)(2)(i), or (c)(3)(i) of this section, as applicable.
    (iii) In determining the proportional shares under paragraph 
(c)(5)(ii) of this section, the Administrator may employ any reasonable 
adjustment methodology to truncate or round each such share up or down 
to a whole number and to cause the total of such whole numbers to equal 
the amount of CSAPR NOX Ozone Season Group 2 allowances 
computed for such group of accounts in accordance with paragraph 
(c)(5)(i) of this section, even where such adjustments cause the 
numbers of CSAPR NOX Ozone Season Group 2 allowances 
allocated to some individual accounts to equal zero.
    (6) After the Administrator has carried out the procedures set 
forth in paragraph (c)(1), (2), or (3) of this section, upon any 
determination that would otherwise result in the initial recordation of 
any CSAPR NOX Ozone Season Group 1 allowances in any 
account, where if such allowances had been recorded before the 
Administrator had carried out such procedures the allowances would have 
been removed from such account under paragraph (c)(1)(i), (c)(2)(i), or 
(c)(3)(i) of this section, respectively, the Administrator will not 
record such CSAPR NOX Ozone Season Group 1 allowances but 
instead will record CSAPR NOX Ozone Season Group 2 
allowances for the control periods and in the amounts determined in 
accordance with paragraph (c)(1)(iii), (c)(2)(iii), or (c)(3)(iii) of 
this section, respectively, in such account or another account 
identified in accordance with paragraph (c)(4) of this section.
    (7) Notwithstanding any other provision of this subpart or subpart 
EEEEE of this part, CSAPR NOX Ozone Season Group 2 
allowances may be used to satisfy requirements to hold CSAPR 
NOX Ozone Season Group 1 allowances under this subpart as 
follows, provided that nothing in this paragraph alters the time as of 
which any such allowance holding requirement must be met or limits any 
consequence of a failure to timely meet any such allowance holding 
requirement:
    (i) After the Administrator has carried out the procedures set 
forth in paragraph (c)(1) of this section, the owner or operator of a 
CSAPR NOX Ozone Season Group 1 unit in a State listed in 
Sec.  52.38(b)(2)(iii) of this chapter or Indian country within the 
borders of such a State may satisfy a requirement to hold a given 
number of CSAPR NOX Ozone Season Group 1 allowances for the 
control period in 2015 or 2016 by holding instead, in a general account 
established for this sole purpose, an amount of CSAPR NOX 
Ozone Season Group 2 allowances for the control period in 2017, where 
such amount of CSAPR NOX Ozone Season Group 2 allowances is 
computed as the quotient of such given number of CSAPR NOX

[[Page 74614]]

Ozone Season Group 1 allowances divided by the conversion factor 
determined under paragraph (c)(1)(ii) of this section, rounded up to 
the nearest whole allowance.
    (ii) After the Administrator has carried out the procedures set 
forth in paragraph (c)(3) of this section, the owner or operator of a 
CSAPR NOX Ozone Season Group 1 unit in a State listed in 
Sec.  52.38(b)(2)(i) of this chapter may satisfy a requirement to hold 
a given number of CSAPR NOX Ozone Season Group 1 allowances 
for a control period before the initial control period described with 
regard to the State's SIP revision in Sec.  52.38(b)(6)(ii)(A) of this 
chapter by holding instead, in a general account established for this 
sole purpose, an amount of CSAPR NOX Ozone Season Group 2 
allowances for such initial control period or any previous control 
period, where such amount of CSAPR NOX Ozone Season Group 2 
allowances is computed as the quotient of such given number of CSAPR 
NOX Ozone Season Group 1 allowances divided by the 
conversion factor determined under paragraph (c)(3)(ii) of this 
section, rounded up to the nearest whole allowance.

Sec.  97.528   [Amended]

0
98. Section 97.528, paragraph (b) is amended by removing the text 
``paragraph (a)(1)'' and adding in its place the text ``paragraph 
(a)''.

0
99. Section 97.530 is amended by:
0
a. Revising paragraph (b) introductory text and paragraphs (b)(1) 
through (3);
0
b. In paragraph (b)(4) introductory text, removing the text 
``Sec. Sec.  75.4 (e)(1) through (e)(4)'' and adding in its place the 
text ``Sec.  75.4 (e)(1) through (4)''; and
0
c. In paragraph (b)(4)(iii), after the text ``Sec.  75.66'' adding the 
words ``of this chapter''.
    The revisions read as follows:

Sec.  97.530  General monitoring, recordkeeping, and reporting 
requirements.

* * * * *
    (b) Compliance deadlines. Except as provided in paragraph (e) of 
this section, the owner or operator of a CSAPR NOX Ozone 
Season Group 1 unit shall meet the monitoring system certification and 
other requirements of paragraphs (a)(1) and (2) of this section on or 
before the latest of the following dates and shall record, report, and 
quality-assure the data from the monitoring systems under paragraph 
(a)(1) of this section on and after the latest of the following dates:
    (1) May 1, 2015;
    (2) 180 calendar days after the date on which the unit commences 
commercial operation; or
    (3) Where data for the unit are reported on a control period basis 
under Sec.  97.534(d)(1)(ii)(B), and where the compliance date under 
paragraph (b)(2) of this section is not in a month from May through 
September, May 1 immediately after the compliance date under paragraph 
(b)(2) of this section.
* * * * *

Sec.  97.531   [Amended]

0
100. Section 97.531 is amended by:
0
a. Italicizing the headings of paragraphs (d)(1) through (3), (d)(3)(i) 
through (iv), (d)(3)(iv)(A) through (D), and (d)(3)(v);
0
b. In paragraph (d)(3) introductory text, removing the text 
``Sec. Sec.  '' and adding in its place the text ``Sec.  ''; and
0
c. Redesignating paragraphs (d)(3)(v)(A)(1) through (5) as paragraphs 
(d)(3)(v)(A)(1) through (5).

0
101. Section 97.534 is amended by:
0
a. In paragraph (b), after the words ``comply with'' adding the word 
``the'';
0
b. Revising paragraphs (d)(1) and (2);
0
c. Redesignating paragraph (d)(6) as paragraph (d)(5)(ii); and
0
d. In paragraph (e)(3), removing the text ``paragraph (d)(2)(ii)'' and 
adding in its place the text ``paragraph (d)(1)(ii)(B)''.
    The revisions read as follows:

Sec.  97.534  Recordkeeping and reporting.

* * * * *
    (d) * * *
    (1)(i) If a CSAPR NOX Ozone Season Group 1 unit is 
subject to the Acid Rain Program or the CSAPR NOX Annual 
Trading Program or if the owner or operator of such unit chooses to 
report on an annual basis under this subpart, then the designated 
representative shall meet the requirements of subpart H of part 75 of 
this chapter (concerning monitoring of NOX mass emissions) 
for such unit for the entire year and report the NOX mass 
emissions data and heat input data for such unit for the entire year.
    (ii) If a CSAPR NOX Ozone Season Group 1 unit is not 
subject to the Acid Rain Program or the CSAPR NOX Annual 
Trading Program, then the designated representative shall either:
    (A) Meet the requirements of subpart H of part 75 of this chapter 
for such unit for the entire year and report the NOX mass 
emissions data and heat input data for such unit for the entire year in 
accordance with paragraph (d)(1)(i) of this section; or
    (B) Meet the requirements of subpart H of part 75 of this chapter 
(including the requirements in Sec.  75.74(c) of this chapter) for such 
unit for the control period and report the NOX mass 
emissions data and heat input data (including the data described in 
Sec.  75.74(c)(6) of this chapter) for such unit only for the control 
period of each year.
    (2) The designated representative shall report the NOX 
mass emissions data and heat input data for a CSAPR NOX 
Ozone Season Group 1 unit, in an electronic quarterly report in a 
format prescribed by the Administrator, for each calendar quarter 
indicated under paragraph (d)(1) of this section beginning by the 
latest of:
    (i) The calendar quarter covering May 1, 2015 through June 30, 
2015;
    (ii) The calendar quarter corresponding to the earlier of the date 
of provisional certification or the applicable deadline for initial 
certification under Sec.  97.530(b); or
    (iii) For a unit that reports on a control period basis under 
paragraph (d)(1)(ii)(B) of this section, if the calendar quarter under 
paragraph (d)(2)(ii) of this section does not include a month from May 
through September, the calendar quarter covering May 1 through June 30 
immediately after the calendar quarter under paragraph (d)(2)(ii) of 
this section.
* * * * *

Sec.  97.535   [Amended]

0
102. Section 97.535 is amended by:
0
a. Redesignating paragraphs (b)(i) through (v) as paragraphs (b)(1) 
through (5); and
0
b. In the newly redesignated paragraph (b)(4), removing the colon and 
adding in its place a semicolon.

Subpart CCCCC--CSAPR SO2 Group 1 Trading Program

0
103. The heading of subpart CCCCC of part 97 is revised to read as set 
forth above.

Sec.  97.601   [Amended]

0
104. Section 97.601 is amended by removing the text ``Transport Rule 
(TR) SO2 Group 1 Trading Program'' and adding in its place 
the text ``Cross-State Air Pollution Rule (CSAPR) SO2 Group 
1 Trading Program''.

Sec. Sec.  97.602 through 97.635   [Amended]

0
105. Sections 97.602 through 97.635 are amended by removing the text 
``TR'' wherever it appears and adding in its place the text ``CSAPR''.

0
106. Section 97.602 is amended by:
0
a. Revising the introductory text and the definitions ``Allowable 
SO2 emission rate'' and ``Allowance Management System'';
0
b. In the definition ``Allowance Management System account'',

[[Page 74615]]

removing the word ``holding'' and adding in its place the text 
``auction, holding'';
0
c. Revising the definition ``Alternate designated representative'';
0
d. Adding in alphabetical order the definition ``Auction'';
0
e. In the definition ``Cogeneration system'', removing the words 
``steam turbine'';
0
f. In the definition ``Commence commercial operation'', paragraph (2) 
introductory text, after the words ``defined in'' adding the word 
``the'';
0
g. In the definition ``Common designated representative's share'', 
paragraph (2), removing the words ``and of the total'' and adding in 
their place the words ``and the total'';
0
h. Placing the newly amended definitions ``CSAPR NOX Annual 
Trading Program'', ``CSAPR NOX Ozone Season Trading 
Program'', ``CSAPR SO2 Group 1 allowance'', ``CSAPR 
SO2 Group 1 allowance deduction or deduct CSAPR 
SO2 Group 1 allowances'', ``CSAPR SO2 Group 1 
allowances held or hold CSAPR SO2 Group 1 allowances'', 
``CSAPR SO2 Group 1 emissions limitation'', ``CSAPR 
SO2 Group 1 source'', ``CSAPR SO2 Group 1 Trading 
Program'', and ``CSAPR SO2 Group 1 unit'' in alphabetical 
order in the section;
0
i. Removing the newly amended definition ``CSAPR NOX Ozone 
Season Trading Program'';
0
j. Adding in alphabetical order the definitions ``CSAPR NOX 
Ozone Season Group 1 Trading Program'' and ``CSAPR NOX Ozone 
Season Group 2 Trading Program'';
0
k. Revising the newly amended definition ``CSAPR SO2 Group 1 
Trading Program'' and the definition ``Designated representative'';
0
l. In the definition ``Fossil fuel'', paragraph (2), removing the text 
``Sec. Sec.  '' and adding in its place the text ``Sec.  '';
0
m. Removing the definition ``Gross electrical output'';
0
n. Revising the definitions ``Heat input'', ``Heat input rate'', and 
``Heat rate'';
0
o. In the definition heading ``Maximum design heat input'', after the 
words ``heat input'' adding the word ``rate'';
0
p. Revising the definition ``Potential electrical output capacity'';
0
q. In the definition ``Sequential use of energy'', paragraph (2), after 
the word ``from'' adding the word ``a''; and
0
r. Revising the definition ``State''.
    The revisions and additions read as follows:

Sec.  97.602  Definitions.

    The terms used in this subpart shall have the meanings set forth in 
this section as follows, provided that any term that includes the 
acronym ``CSAPR'' shall be considered synonymous with a term that is 
used in a SIP revision approved by the Administrator under Sec.  52.38 
or Sec.  52.39 of this chapter and that is substantively identical 
except for the inclusion of the acronym ``TR'' in place of the acronym 
``CSAPR'':
* * * * *
    Allowable SO2 emission rate means, for a unit, the most stringent 
State or federal SO2 emission rate limit (in lb/MWh or, if 
in lb/mmBtu, converted to lb/MWh by multiplying it by the unit's heat 
rate in mmBtu/MWh) that is applicable to the unit and covers the 
longest averaging period not exceeding one year.
    Allowance Management System means the system by which the 
Administrator records allocations, auctions, transfers, and deductions 
of CSAPR SO2 Group 1 allowances under the CSAPR 
SO2 Group 1 Trading Program. Such allowances are allocated, 
auctioned, recorded, held, transferred, or deducted only as whole 
allowances.
* * * * *
    Alternate designated representative means, for a CSAPR 
SO2 Group 1 source and each CSAPR SO2 Group 1 
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 this subpart, to act on behalf of the designated 
representative in matters pertaining to the CSAPR SO2 Group 
1 Trading Program. If the CSAPR SO2 Group 1 source is also 
subject to the Acid Rain Program, CSAPR NOX Annual Trading 
Program, CSAPR NOX Ozone Season Group 1 Trading Program, or 
CSAPR NOX Ozone Season Group 2 Trading Program, then this 
natural person shall be the same natural person as the alternate 
designated representative as defined in the respective program.
* * * * *
    Auction means, with regard to CSAPR SO2 Group 1 
allowances, the sale to any person by a State or permitting authority, 
in accordance with a SIP revision submitted by the State and approved 
by the Administrator under Sec.  52.39(e) or (f) of this chapter, of 
such CSAPR SO2 Group 1 allowances to be initially recorded 
in an Allowance Management System account.
* * * * *
    CSAPR NOX Ozone Season Group 1 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart BBBBB of this part and Sec.  
52.38(b)(1), (b)(2)(i) and (ii), (b)(3) through (5), and (b)(10) 
through (12) of this chapter (including such a program that is revised 
in a SIP revision approved by the Administrator under Sec.  52.38(b)(3) 
or (4) of this chapter or that is established in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(5) of this chapter), 
as a means of mitigating interstate transport of ozone and 
NOX.
    CSAPR NOX Ozone Season Group 2 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart EEEEE of this part and Sec.  
52.38(b)(1), (b)(2)(i) and (iii), (b)(6) through (11), and (b)(13) of 
this chapter (including such a program that is revised in a SIP 
revision approved by the Administrator under Sec.  52.38(b)(7) or (8) 
of this chapter or that is established in a SIP revision approved by 
the Administrator under Sec.  52.38(b)(6) or (9) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
* * * * *
    CSAPR SO2 Group 1 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with this subpart and Sec.  52.39(a), (b), 
(d) through (f), and (j) through (l) of this chapter (including such a 
program that is revised in a SIP revision approved by the Administrator 
under Sec.  52.39(d) or (e) of this chapter or that is established in a 
SIP revision approved by the Administrator under Sec.  52.39(f) of this 
chapter), as a means of mitigating interstate transport of fine 
particulates and SO2.
* * * * *
    Designated representative means, for a CSAPR SO2 Group 1 
source and each CSAPR SO2 Group 1 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 this 
subpart, to represent and legally bind each owner and operator in 
matters pertaining to the CSAPR SO2 Group 1 Trading Program. 
If the CSAPR SO2 Group 1 source is also subject to the Acid 
Rain Program, CSAPR NOX Annual Trading Program, CSAPR 
NOX Ozone Season Group 1 Trading Program, or CSAPR 
NOX Ozone Season Group 2 Trading Program, then this natural 
person shall be the same natural person as the designated 
representative as defined in the respective program.
* * * * *
    Heat input means, for a unit for a specified period of unit 
operating time, the product (in mmBtu) of the gross calorific value of 
the fuel (in mmBtu/lb) fed into the unit multiplied by the fuel feed 
rate (in lb of fuel/time) and unit

[[Page 74616]]

operating time, as measured, recorded, and reported to the 
Administrator by the designated representative and as modified by the 
Administrator in accordance with this subpart and excluding the heat 
derived from preheated combustion air, recirculated flue gases, or 
exhaust.
    Heat input rate means, for a unit, the quotient (in mmBtu/hr) of 
the amount of heat input for a specified period of unit operating time 
(in mmBtu) divided by unit operating time (in hr) or, for a unit and 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.
    Heat rate means, for a unit, the quotient (in mmBtu/unit of load) 
of the unit's maximum design heat input rate (in Btu/hr) divided by the 
product of 1,000,000 Btu/mmBtu and the unit's maximum hourly load.
* * * * *
    Potential electrical output capacity means, for a unit (in MWh/yr), 
33 percent of the unit's maximum design heat input rate (in Btu/hr), 
divided by 3,413 Btu/kWh, divided by 1,000 kWh/MWh, and multiplied by 
8,760 hr/yr.
* * * * *
    State means one of the States that is subject to the CSAPR 
SO2 Group 1 Trading Program pursuant to Sec.  52.39(a), (b), 
(d) through (f), and (j) through (l) of this chapter.
* * * * *

Sec.  97.603   [Amended]

0
107. Section 97.603 is amended by:
0
a. Adding in alphabetical order the list entry ``CSAPR--Cross-State Air 
Pollution Rule'';
0
b. Removing the list entry ``kW--kilowatt electrical'';
0
c. Removing the list entry ``kWh--kilowatt hour'' and adding in its 
place the entry ``kWh--kilowatt-hour'';
0
d. Removing the list entry ``MWh--megawatt hour'' and adding in its 
place the entry ``MWh--megawatt-hour''; and
0
e. Adding in alphabetical order the list entries ``SIP--State 
implementation plan'' and ``TR--Transport Rule''.

Sec.  97.604   [Amended]

0
108. Section 97.604 is amended by:
0
a. In paragraph (b)(1)(i)(B), removing the word ``electric'' and adding 
in its place the word ``electrical'';
0
b. In paragraph (b)(2)(ii), removing the text ``paragraph (b)(1)(i)'' 
and adding in its place the text ``paragraph (b)(2)(i)''; and
0
c. Italicizing the headings of paragraphs (c)(1) and (2).

Sec.  97.605   [Amended]

0
109. Section 97.605, paragraph (b) is amended by italicizing the 
heading.

Sec.  97.606   [Amended]

0
110. Section 97.606 is amended by:
0
a. Italicizing the headings of paragraphs (c)(1) and (2) and (c)(4) 
through (7);
0
b. In paragraph (c)(2)(ii), after the words ``immediately after'' 
adding the words ``the year of'';
0
c. In paragraph (c)(4) heading, after the words ``Vintage of'' adding 
the text ``CSAPR SO2 Group 1'';
0
d. In paragraphs (c)(4)(i) and (ii), after the word ``allocated'' 
adding the words ``or auctioned''; and
0
e. In paragraph (d)(2), removing the text ``subpart H'' and adding in 
its place the text ``subpart B''.

0
111. Section 97.610 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraph (a) introductory text;
0
c. In paragraphs (a)(1) through (16):
0
i. Removing the word ``trading'' wherever it appears and adding in its 
place the text ``Group 1 trading'';
0
ii. Removing the text ``SO2 new'' wherever it appears and 
adding in its place the word ``new''; and
0
iii. Removing the text ``SO2 Indian'' wherever it appears 
and adding in its place the word ``Indian'';
0
d. Adding and reserving paragraphs (a)(2)(vi) and (a)(11)(vi);
0
e. In paragraphs (b)(1) through (16), removing the text 
``SO2''; and
0
f. Revising paragraph (c).
    The revisions read as follows:

Sec.  97.610  State SO2 Group 1 trading budgets, new unit set-asides, 
Indian country new unit set-asides, and variability limits.

    (a) The State SO2 Group 1 trading budgets, new unit set-
asides, and Indian country new unit set-asides for allocations of CSAPR 
SO2 Group 1 allowances for the control periods in 2015 and 
thereafter are as follows:
* * * * *
    (c) Each State SO2 Group 1 trading budget in this 
section includes any tons in a new unit set-aside or Indian country new 
unit set-aside but does not include any tons in a variability limit.

0
112. Section 97.611 is amended by:
0
a. Revising the section heading;
0
b. Italicizing the headings of paragraphs (b)(1) and (2);
0
c. In paragraphs (b)(1)(iii) and (b)(2)(iii), after the text ``November 
30 of'' adding the word ``the'';
0
d. In paragraph (b)(2)(v), removing the text ``NOX Annual'' 
and adding in its place the text ``SO2 Group 1'';
0
e. In paragraph (c)(1)(ii), removing the text ``Sec.  52.39(d), (e), or 
(f)'' and adding in its place the text ``Sec.  52.39(e) or (f)'';
0
f. In paragraph (c)(5)(i)(B), after the text ``Sec.  52.39(e) or (f)'' 
adding the words ``of this chapter'';
0
g. In paragraph (c)(5)(ii) introductory text, removing the words ``this 
paragraph'' and adding in their place the words ``this section'';
0
h. In paragraph (c)(5)(ii)(B), after the text ``Sec.  52.39(e) or (f)'' 
adding the words ``of this chapter''; and
0
i. In paragraph (c)(5)(iii), removing the words ``this paragraph'' and 
adding in their place the words ``this section''.
    The revision reads as follows:

Sec.  97.611  Timing requirements for CSAPR SO2 Group 1 allowance 
allocations.

* * * * *

0
113. Section 97.612 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(2), removing the text ``Sec. Sec.  '' and adding in 
its place the text ``Sec.  '';
0
c. In paragraph (a)(4)(i), removing the text ``paragraph (a)(1)(i) 
through (iii)'' and adding in its place the text ``paragraphs (a)(1)(i) 
through (iii)'';
0
d. In paragraph (a)(4)(ii), after the text ``paragraph (a)(4)(i)'' 
adding the words ``of this section'';
0
e. In paragraph (a)(9)(i), after the text ``November 30 of'' adding the 
word ``the'';
0
f. In paragraph (b)(4)(ii), after the text ``paragraph (b)(4)(i)'' 
adding the words ``of this section'';
0
g. In paragraph (b)(9)(i), after the text ``November 30 of'' adding the 
word ``the'';
0
h. In paragraph (b)(10)(ii), removing the text ``Sec.  52.39(d), (e), 
or (f)'' and adding in its place the text ``Sec.  52.39(e) or (f)''; 
and
0
i. In paragraph (b)(11), after the text ``paragraphs (b)(9), (10) and 
(12)'' adding the words ``of this section''.
    The revision reads as follows:

Sec.  97.612   CSAPR SO2 Group 1 allowance allocations to new units.

* * * * *

0
114. Section 97.616 is amended by:
0
a. In paragraph (a)(1), removing the word ``Country'' and adding in its 
place the word ``country''; and
0
b. Adding paragraph (c).
    The additions read as follows:

Sec.  97.616  Certificate of representation.

* * * * *
    (c) A certificate of representation under this section that 
complies with the provisions of paragraph (a) of this section except 
that it contains the acronym ``TR'' in place of the acronym ``CSAPR'' 
in the required certification

[[Page 74617]]

statements will be considered a complete certificate of representation 
under this section, and the certification statements included in such 
certificate of representation will be interpreted as if the acronym 
``CSAPR'' appeared in place of the acronym ``TR''.

0
115. Section 97.620 is amended by:
0
a. Italicizing the headings of paragraphs (c)(1) through (6);
0
b. Adding paragraph (c)(1)(iv);
0
c. In paragraph (c)(2)(i) introductory text, removing the text 
``paragraph (b)(1)'' and adding in its place the text ``paragraph 
(c)(1)'';
0
d. Adding paragraph (c)(2)(iv);
0
e. In paragraph (c)(4)(i), removing the text ``paragraph (b)(1)'' and 
adding in its place the text ``paragraph (c)(1)'';
0
f. In paragraph (c)(5)(iii)(D), removing the words ``authorized 
representative'' and adding in their place the words ``authorized 
account representative''; and
0
g. In paragraph (c)(5)(v), removing the word ``designated'' two times 
and adding in its place the words ``authorized account''.
    The additions read as follows:

Sec.  97.620  Establishment of compliance accounts, assurance accounts, 
and general accounts.

* * * * *
    (c) * * *
    (1) * * *
    (iv) An application for a general account under paragraph (c)(1) of 
this section that complies with the provisions of such paragraph except 
that it contains the acronym ``TR'' in place of the acronym ``CSAPR'' 
in the required certification statement will be considered a complete 
application for a general account under such paragraph, and the 
certification statement included in such application for a general 
account will be interpreted as if the acronym ``CSAPR'' appeared in 
place of the acronym ``TR''.
    (2) * * *
    (iv) A certification statement submitted in accordance with 
paragraph (c)(2)(ii) of this section that contains the acronym ``TR'' 
will be interpreted as if the acronym ``CSAPR'' appeared in place of 
the acronym ``TR''.
* * * * *

0
116. Section 97.621 is amended by:
0
a. Revising the section heading;
0
b. In paragraphs (c), (d), and (e), removing the word ``period'' and 
adding in its place the word ``periods'';
0
c. In paragraphs (f) and (g), removing the text ``Sec.  52.39(e) and 
(f)'' and adding in its place the text ``Sec.  52.39(e) or (f)'';
0
d. In paragraph (i), after the text ``through (12)'' removing the 
comma;
0
e. Revising paragraph (j); and
0
f. Redesignating paragraph (k) as paragraph (l) and adding a new 
paragraph (k).
    The revisions and additions read as follows:

Sec.  97.621  Recordation of CSAPR SO2 Group 1 allowance allocations 
and auction results.

* * * * *
    (j) By February 15, 2016 and February 15 of each year thereafter, 
the Administrator will record in each CSAPR SO2 Group 1 
source's compliance account the CSAPR SO2 Group 1 allowances 
allocated to the CSAPR SO2 Group 1 units at the source in 
accordance with Sec.  97.612(b)(9) through (12) for the control period 
in the year before the year of the applicable recordation deadline 
under this paragraph.
    (k) By the date 15 days after the date on which any allocation or 
auction results, other than an allocation or auction results described 
in paragraphs (a) through (j) of this section, of CSAPR SO2 
Group 1 allowances to a recipient is made by or are submitted to the 
Administrator in accordance with Sec.  97.611 or Sec.  97.612 or with a 
SIP revision approved under Sec.  52.39(e) or (f) of this chapter, the 
Administrator will record such allocation or auction results in the 
appropriate Allowance Management System account.
* * * * *

0
117. Section 97.622 is amended by revising the section heading to read 
as follows:

Sec.  97.622  Submission of CSAPR SO2 Group 1 allowance transfers.

* * * * *

0
118. Section 97.623 is amended by:
0
a. Revising the section heading; and
0
b. In paragraph (b), after the word ``allocated'' adding the words ``or 
auctioned''.
    The revision reads as follows:

Sec.  97.623  Recordation of CSAPR SO2 Group 1 allowance transfers.

* * * * *

0
119. Section 97.624 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), after the word ``allocated'' adding the words 
``or auctioned'';
0
c. Revising paragraphs (c)(2)(i) and (ii); and
0
d. In paragraph (d), after the word ``allocated'' adding the words ``or 
auctioned''.
    The revisions read as follows:

Sec.  97.624  Compliance with CSAPR SO2 Group 1 emissions limitation.

* * * * *
    (c) * * *
    (2) * * *
    (i) Any CSAPR SO2 Group 1 allowances that were recorded 
in the compliance account pursuant to Sec.  97.621 and not transferred 
out of the compliance account, in the order of recordation; and then
    (ii) Any other CSAPR SO2 Group 1 allowances that were 
transferred to and recorded in the compliance account pursuant to this 
subpart, in the order of recordation.
* * * * *

0
120. Section 97.625 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), after the word ``allocated'' adding the words 
``or auctioned'';
0
c. In paragraph (b)(2)(iii) introductory text, removing the text 
``paragraph (b)(1)(i)'' and adding in its place the text ``paragraph 
(b)(1)(ii)''; and
0
d. In paragraph (b)(2)(iii)(B), after the words ``availability of'' 
adding the words ``the calculations incorporating''.
    The revision reads as follows:

Sec.  97.625  Compliance with CSAPR SO2 Group 1 assurance provisions.

* * * * *

Sec.  97.628   [Amended]

0
121. Section 97.628, paragraph (b) is amended by removing the text 
``paragraph (a)(1)'' and adding in its place the text ``paragraph 
(a)''.

0
122. Section 97.630 is amended by:
0
a. Revising paragraph (b) introductory text and paragraphs (b)(1) and 
(2);
0
b. In paragraph (b)(3) introductory text, removing the text 
``Sec. Sec.  75.4(e)(1) through (e)(4)'' and adding in its place the 
text ``Sec.  75.4(e)(1) through (4)''; and
0
c. In paragraph (b)(3)(iii), after the text ``Sec.  75.66'' adding the 
words ``of this chapter''.
    The revisions read as follows:

Sec.  97.630  General monitoring, recordkeeping, and reporting 
requirements.

* * * * *
    (b) Compliance deadlines. Except as provided in paragraph (e) of 
this section, the owner or operator of a CSAPR SO2 Group 1 
unit shall meet the monitoring system certification and other 
requirements of paragraphs (a)(1) and (2) of this section on or before 
the later of the following dates and shall record, report, and quality-
assure the data from the monitoring systems under paragraph (a)(1) of 
this section on and after the later of the following dates:
    (1) January 1, 2015; or
    (2) 180 calendar days after the date on which the unit commences 
commercial operation.
* * * * *

[[Page 74618]]

Sec.  97.631   [Amended]

0
123. Section 97.631 is amended by:
0
a. Italicizing the headings of paragraphs (d)(1) through (3), (d)(3)(i) 
through (iv), (d)(3)(iv)(A) through (D), and (d)(3)(v);
0
b. In paragraph (d)(3) introductory text, removing the text 
``Sec. Sec.  '' and adding in its place the text ``Sec.  ''; and
0
c. Redesignating paragraphs (d)(3)(v)(A)(1) through (3) as paragraphs 
(d)(3)(v)(A)(1) through (3).

0
124. Section 97.634 is amended by:
0
a. In paragraph (b), after the words ``comply with'' adding the word 
``the''; and
0
b. Revising paragraphs (d)(1) and (3).
    The revisions read as follows:

Sec.  97.634  Recordkeeping and reporting.

* * * * *
    (d) * * *
    (1) The designated representative shall report the SO2 
mass emissions data and heat input data for a CSAPR SO2 
Group 1 unit, in an electronic quarterly report in a format prescribed 
by the Administrator, for each calendar quarter beginning with the 
later of:
    (i) The calendar quarter covering January 1, 2015 through March 31, 
2015; or
    (ii) The calendar quarter corresponding to the earlier of the date 
of provisional certification or the applicable deadline for initial 
certification under Sec.  97.630(b).
* * * * *
    (3) For CSAPR SO2 Group 1 units that are also subject to 
the Acid Rain Program, CSAPR NOX Annual Trading Program, 
CSAPR NOX Ozone Season Group 1 Trading Program, or CSAPR 
NOX Ozone Season Group 2 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 SO2 mass emission data, heat input data, and other 
information required by this subpart.
* * * * *

Sec.  97.635   [Amended]

0
125. Section 97.635 is amended by redesignating paragraphs (b)(i) 
through (v) as paragraphs (b)(1) through (5).

Subpart DDDDD--CSAPR SO2 Group 2 Trading Program

0
126. The heading of subpart DDDDD of part 97 is revised to read as set 
forth above.

Sec.  97.701   [Amended]

0
127. Section 97.701 is amended by removing the text ``Transport Rule 
(TR) SO2 Group 2 Trading Program'' and adding in its place 
the text ``Cross-State Air Pollution Rule (CSAPR) SO2 Group 
2 Trading Program''.

Sec. Sec.  97.702 through 97.735   [Amended]

0
128. Sections 97.702 through 97.735 are amended by removing the text 
``TR'' wherever it appears and adding in its place the text ``CSAPR''.

0
129. Section 97.702 is amended by:
0
a. Revising the introductory text and the definitions ``Allowable 
SO2 emission rate'' and ``Allowance Management System'';
0
b. In the definition ``Allowance Management System account'', removing 
the word ``holding'' and adding in its place the text ``auction, 
holding'';
0
c. Revising the definition ``Alternate designated representative'';
0
d. Adding in alphabetical order the definition ``Auction'';
0
e. In the definition ``Cogeneration system'', removing the words 
``steam turbine'';
0
f. In the definition ``Commence commercial operation'', paragraph (2) 
introductory text, after the words ``defined in'' adding the word 
``the'';
0
g. In the definition ``Common designated representative's share'', 
paragraph (2), removing the words ``and of the total'' and adding in 
their place the words ``and the total'';
0
h. Placing the newly amended definitions ``CSAPR NOX Annual 
Trading Program'', ``CSAPR NOX Ozone Season Trading 
Program'', ``CSAPR SO2 Group 2 allowance'', ``CSAPR 
SO2 Group 2 allowance deduction or deduct CSAPR 
SO2 Group 2 allowances'', ``CSAPR SO2 Group 2 
allowances held or hold CSAPR SO2 Group 2 allowances'', 
``CSAPR SO2 Group 2 emissions limitation'', ``CSAPR 
SO2 Group 2 source'', ``CSAPR SO2 Group 2 Trading 
Program'', and ``CSAPR SO2 Group 2 unit'' in alphabetical 
order in the section;
0
i. Removing the newly amended definition ``CSAPR NOX Ozone 
Season Trading Program'';
0
j. Adding in alphabetical order the definitions ``CSAPR NOX 
Ozone Season Group 1 Trading Program'' and ``CSAPR NOX Ozone 
Season Group 2 Trading Program'';
0
k. Italicizing the newly amended definition headings ``CSAPR 
SO2 Group 2 allowance deduction or deduct CSAPR 
SO2 Group 2 allowances'' and ``CSAPR SO2 Group 2 
allowances held or hold CSAPR SO2 Group 2 allowances'';
0
l. Revising the newly amended definition ``CSAPR SO2 Group 2 
Trading Program'' and the definition ``Designated representative'';
0
m. In the definition ``Fossil fuel'', paragraph (2), removing the text 
``Sec. Sec.  '' and adding in its place the text ``Sec.  '';
0
n. Removing the definition ``Gross electrical output'';
0
o. Revising the definitions ``Heat input'', ``Heat input rate'', and 
``Heat rate'';
0
p. In the definition heading ``Maximum design heat input'', after the 
words ``heat input'' adding the word ``rate'';
0
q. Revising the definition ``Potential electrical output capacity'';
0
r. In the definition ``Sequential use of energy'', paragraph (2), after 
the word ``from'' adding the word ``a''; and
0
s. Revising the definition ``State''.
    The revisions and additions read as follows:

Sec.  97.702  Definitions.

    The terms used in this subpart shall have the meanings set forth in 
this section as follows, provided that any term that includes the 
acronym ``CSAPR'' shall be considered synonymous with a term that is 
used in a SIP revision approved by the Administrator under Sec.  52.38 
or Sec.  52.39 of this chapter and that is substantively identical 
except for the inclusion of the acronym ``TR'' in place of the acronym 
``CSAPR'':
* * * * *
    Allowable SO2 emission rate means, for a unit, the most stringent 
State or federal SO2 emission rate limit (in lb/MWh or, if 
in lb/mmBtu, converted to lb/MWh by multiplying it by the unit's heat 
rate in mmBtu/MWh) that is applicable to the unit and covers the 
longest averaging period not exceeding one year.
    Allowance Management System means the system by which the 
Administrator records allocations, auctions, transfers, and deductions 
of CSAPR SO2 Group 2 allowances under the CSAPR 
SO2 Group 2 Trading Program. Such allowances are allocated, 
auctioned, recorded, held, transferred, or deducted only as whole 
allowances.
* * * * *
    Alternate designated representative means, for a CSAPR 
SO2 Group 2 source and each CSAPR SO2 Group 2 
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 this subpart, to act on behalf of the designated 
representative in matters pertaining to the CSAPR SO2 Group 
2 Trading Program. If the CSAPR SO2 Group 2 source is also 
subject to the Acid Rain Program, CSAPR NOX Annual Trading 
Program, CSAPR NOX Ozone Season

[[Page 74619]]

Group 1 Trading Program, or CSAPR NOX Ozone Season Group 2 
Trading Program, then this natural person shall be the same natural 
person as the alternate designated representative as defined in the 
respective program.
* * * * *
    Auction means, with regard to CSAPR SO2 Group 2 
allowances, the sale to any person by a State or permitting authority, 
in accordance with a SIP revision submitted by the State and approved 
by the Administrator under Sec.  52.39(h) or (i) of this chapter, of 
such CSAPR SO2 Group 2 allowances to be initially recorded 
in an Allowance Management System account.
* * * * *
    CSAPR NOX Ozone Season Group 1 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart BBBBB of this part and Sec.  
52.38(b)(1), (b)(2)(i) and (ii), (b)(3) through (5), and (b)(10) 
through (12) of this chapter (including such a program that is revised 
in a SIP revision approved by the Administrator under Sec.  52.38(b)(3) 
or (4) of this chapter or that is established in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(5) of this chapter), 
as a means of mitigating interstate transport of ozone and 
NOX.
    CSAPR NOX Ozone Season Group 2 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart EEEEE of this part and Sec.  
52.38(b)(1), (b)(2)(i) and (iii), (b)(6) through (11), and (b)(13) of 
this chapter (including such a program that is revised in a SIP 
revision approved by the Administrator under Sec.  52.38(b)(7) or (8) 
of this chapter or that is established in a SIP revision approved by 
the Administrator under Sec.  52.38(b)(6) or (9) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
* * * * *
    CSAPR SO2 Group 2 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with this subpart and Sec.  52.39(a), (c), 
(g) through (k), and (m) of this chapter (including such a program that 
is revised in a SIP revision approved by the Administrator under Sec.  
52.39(g) or (h) of this chapter or that is established in a SIP 
revision approved by the Administrator under Sec.  52.39(i) of this 
chapter), as a means of mitigating interstate transport of fine 
particulates and SO2.
* * * * *
    Designated representative means, for a CSAPR SO2 Group 2 
source and each CSAPR SO2 Group 2 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 this 
subpart, to represent and legally bind each owner and operator in 
matters pertaining to the CSAPR SO2 Group 2 Trading Program. 
If the CSAPR SO2 Group 2 source is also subject to the Acid 
Rain Program, CSAPR NOX Annual Trading Program, CSAPR 
NOX Ozone Season Group 1 Trading Program, or CSAPR 
NOX Ozone Season Group 2 Trading Program, then this natural 
person shall be the same natural person as the designated 
representative as defined in the respective program.
* * * * *
    Heat input means, for a unit for a specified period of unit 
operating time, the product (in mmBtu) of the gross calorific value of 
the fuel (in mmBtu/lb) fed into the unit multiplied by the fuel feed 
rate (in lb of fuel/time) and unit operating time, as measured, 
recorded, and reported to the Administrator by the designated 
representative and as modified by the Administrator in accordance with 
this subpart and excluding the heat derived from preheated combustion 
air, recirculated flue gases, or exhaust.
    Heat input rate means, for a unit, the quotient (in mmBtu/hr) of 
the amount of heat input for a specified period of unit operating time 
(in mmBtu) divided by unit operating time (in hr) or, for a unit and 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.
    Heat rate means, for a unit, the quotient (in mmBtu/unit of load) 
of the unit's maximum design heat input rate (in Btu/hr) divided by the 
product of 1,000,000 Btu/mmBtu and the unit's maximum hourly load.
* * * * *
    Potential electrical output capacity means, for a unit (in MWh/yr), 
33 percent of the unit's maximum design heat input rate (in Btu/hr), 
divided by 3,413 Btu/kWh, divided by 1,000 kWh/MWh, and multiplied by 
8,760 hr/yr.
* * * * *
    State means one of the States that is subject to the CSAPR 
SO2 Group 2 Trading Program pursuant to Sec.  52.39(a), (c), 
(g) through (k), and (m) of this chapter.
* * * * *

Sec.  97.703   [Amended]

0
130. Section 97.703 is amended by:
0
a. Adding in alphabetical order the list entry ``CSAPR--Cross-State Air 
Pollution Rule'';
0
b. Removing the list entry ``kW--kilowatt electrical'';
0
c. Removing the list entry ``kWh--kilowatt hour'' and adding in its 
place the entry ``kWh--kilowatt-hour'';
0
d. Removing the list entry ``MWh--megawatt hour'' and adding in its 
place the entry ``MWh--megawatt-hour''; and
0
e. Adding in alphabetical order the list entries ``SIP--State 
implementation plan'' and ``TR--Transport Rule''.

Sec.  97.704   [Amended]

0
131. Section 97.704 is amended by:
0
a. In paragraph (b)(1)(i)(B), removing the word ``electric'' and adding 
in its place the word ``electrical'';
0
b. In paragraph (b)(2)(ii), removing the text ``paragraph (b)(1)(i)'' 
and adding in its place the text ``paragraph (b)(2)(i)''; and
0
c. Italicizing the headings of paragraphs (c)(1) and (2).

Sec.  97.705   [Amended]

0
132. Section 97.705, paragraph (b) is amended by italicizing the 
heading.

Sec.  97.706   [Amended]

0
133. Section 97.706 is amended by:
0
a. Italicizing the headings of paragraphs (c)(1) and (2) and (c)(4) 
through (7);
0
b. In paragraph (c)(2)(ii), after the words ``immediately after'' 
adding the words ``the year of'';
0
c. In paragraph (c)(4) heading, after the words ``Vintage of'' adding 
the text ``CSAPR SO2 Group 2'';
0
d. In paragraphs (c)(4)(i) and (ii), after the word ``allocated'' 
adding the words ``or auctioned''; and
0
e. In paragraph (d)(2), removing the text ``subpart H'' and adding in 
its place the text ``subpart B''.

0
134. Section 97.710 is amended by:
0
a. Revising the section heading;
0
b. Revising paragraph (a) introductory text;
0
c. In paragraphs (a)(1) through (7):
0
i. Removing the word ``trading'' wherever it appears and adding in its 
place the text ``Group 2 trading'';
0
ii. Removing the text ``SO2 new'' wherever it appears and 
adding in its place the word ``new''; and
0
iii. Removing the text ``SO2 Indian'' wherever it appears 
and adding in its place the word ``Indian'';
0
d. In paragraphs (b)(1) through (7), removing the text 
``SO2''; and
0
e. Revising paragraph (c).
    The revisions read as follows:

Sec.  97.710  State SO2 Group 2 trading budgets, new unit set-asides, 
Indian country new unit set-asides, and variability limits.

    (a) The State SO2 Group 2 trading budgets, new unit set-
asides, and Indian

[[Page 74620]]

country new unit set-asides for allocations of CSAPR SO2 
Group 1 allowances for the control periods in 2015 and thereafter are 
as follows:
* * * * *
    (c) Each State SO2 Group 2 trading budget in this 
section includes any tons in a new unit set-aside or Indian country new 
unit set-aside but does not include any tons in a variability limit.

0
135. Section 97.711 is amended by:
0
a. Revising the section heading;
0
b. Italicizing the headings of paragraphs (b)(1) and (2);
0
c. In paragraph (b)(1)(iii), after the text ``November 30 of'' adding 
the word ``the'';
0
d. In paragraph (b)(1)(iv)(B), removing the words ``the each'' and 
adding in their place the word ``each'';
0
e. In paragraph (b)(2)(iii), after the text ``November 30 of'' adding 
the word ``the'';
0
f. In paragraph (b)(2)(iv)(B), removing the words ``the each'' and 
adding in their place the word ``each'';
0
g. In paragraph (c)(1) introductory text, removing the word 
``approved'' two times and adding in its place the words ``approved 
under'';
0
h. In paragraph (c)(1)(ii), removing the text ``Sec.  52.39(g), (h), or 
(i)'' and adding in its place the text ``Sec.  52.39(h) or (i)'';
0
i. In paragraph (c)(5)(i)(B), after the text ``Sec.  52.39(h) or (i)'' 
adding the words ``of this chapter'';
0
j. In paragraph (c)(5)(ii) introductory text, removing the words ``this 
paragraph'' and adding in their place the words ``this section'';
0
k. In paragraph (c)(5)(ii)(B), after the text ``Sec.  52.39(h) or (i)'' 
adding the words ``of this chapter''; and
0
l. In paragraph (c)(5)(iii), removing the words ``this paragraph'' and 
adding in their place the words ``this section''.
    The revision reads as follows:

Sec.  97.711  Timing requirements for CSAPR SO2 Group 2 allowance 
allocations.

* * * * *

0
136. Section 97.712 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(2), removing the text ``Sec. Sec.  '' and adding in 
its place the text ``Sec.  '';
0
c. In paragraph (a)(4)(i), removing the text ``paragraph (a)(1)(i) 
through (iii)'' and adding in its place the text ``paragraphs (a)(1)(i) 
through (iii)'';
0
d. In paragraph (a)(4)(ii), after the text ``paragraph (a)(4)(i)'' 
adding the words ``of this section'';
0
e. In paragraph (a)(9)(i), after the text ``November 30 of'' adding the 
word ``the'';
0
f. In paragraph (b)(4)(ii), after the text ``paragraph (b)(4)(i)'' 
adding the words ``of this section'';
0
g. In paragraph (b)(9)(i), after the text ``November 30 of'' adding the 
word ``the''; and
0
h. In paragraph (b)(10)(ii), removing the text ``Sec.  52.39(g), (h), 
or (i)'' and adding in its place the text ``Sec.  52.39(h) or (i)''.
    The revision reads as follows:

Sec.  97.712  CSAPR SO2 Group 2 allowance allocations to new units.

* * * * *

0
137. Section 97.716 is amended by:
0
a. In paragraph (a)(1), removing the word ``Country'' and adding in its 
place the word ``country''; and
0
b. Adding paragraph (c).
    The additions read as follows:

Sec.  97.716  Certificate of representation.

* * * * *
    (c) A certificate of representation under this section that 
complies with the provisions of paragraph (a) of this section except 
that it contains the acronym ``TR'' in place of the acronym ``CSAPR'' 
in the required certification statements will be considered a complete 
certificate of representation under this section, and the certification 
statements included in such certificate of representation will be 
interpreted as if the acronym ``CSAPR'' appeared in place of the 
acronym ``TR''.

0
138. Section 97.720 is amended by:
0
a. Italicizing the headings of paragraphs (c)(1) through (6);
0
b. Adding paragraph (c)(1)(iv);
0
c. In paragraph (c)(2)(i) introductory text, removing the text 
``paragraph (b)(1)'' and adding in its place the text ``paragraph 
(c)(1)'';
0
d. Adding paragraph (c)(2)(iv);
0
e. In paragraph (c)(4)(i), removing the text ``paragraph (b)(1)'' and 
adding in its place the text ``paragraph (c)(1)'';
0
f. In paragraph (c)(5)(iii)(D), removing the words ``authorized 
representative'' and adding in their place the words ``authorized 
account representative''; and
0
g. In paragraph (c)(5)(v), removing the word ``designated'' two times 
and adding in its place the words ``authorized account''.
    The additions read as follows:

Sec.  97.720  Establishment of compliance accounts, assurance accounts, 
and general accounts.

* * * * *
    (c) * * *
    (1) * * *
    (iv) An application for a general account under paragraph (c)(1) of 
this section that complies with the provisions of such paragraph except 
that it contains the acronym ``TR'' in place of the acronym ``CSAPR'' 
in the required certification statement will be considered a complete 
application for a general account under such paragraph, and the 
certification statement included in such application for a general 
account will be interpreted as if the acronym ``CSAPR'' appeared in 
place of the acronym ``TR''.
    (2) * * *
    (iv) A certification statement submitted in accordance with 
paragraph (c)(2)(ii) of this section that contains the acronym ``TR'' 
will be interpreted as if the acronym ``CSAPR'' appeared in place of 
the acronym ``TR''.
* * * * *

0
139. Section 97.721 is amended by:
0
a. Revising the section heading;
0
b. In paragraphs (c), (d), and (e), removing the word ``period'' and 
adding in its place the word ``periods''`;
0
c. In paragraphs (f) and (g), removing the text ``Sec.  52.39(h) and 
(i)'' and adding in its place the text ``Sec.  52.39(h) or (i)'';
0
d. In paragraph (i), after the text ``through (12)'' removing the 
comma;
0
e. Revising paragraph (j); and
0
f. Redesignating paragraph (k) as paragraph (l) and adding a new 
paragraph (k).
    The revisions and additions read as follows:

Sec.  97.721  Recordation of CSAPR SO2 Group 2 allowance allocations 
and auction results.

* * * * *
    (j) By February 15, 2016 and February 15 of each year thereafter, 
the Administrator will record in each CSAPR SO2 Group 2 
source's compliance account the CSAPR SO2 Group 2 allowances 
allocated to the CSAPR SO2 Group 2 units at the source in 
accordance with Sec.  97.712(b)(9) through (12) for the control period 
in the year before the year of the applicable recordation deadline 
under this paragraph.
    (k) By the date 15 days after the date on which any allocation or 
auction results, other than an allocation or auction results described 
in paragraphs (a) through (j) of this section, of CSAPR SO2 
Group 2 allowances to a recipient is made by or are submitted to the 
Administrator in accordance with Sec.  97.711 or Sec.  97.712 or with a 
SIP revision approved under Sec.  52.39(h) or (i) of this chapter, the 
Administrator will record such allocation or auction results in the 
appropriate Allowance Management System account.
* * * * *

0
140. Section 97.722 is amended by revising the section heading to read 
as follows:

Sec.  97.722  Submission of CSAPR SO2 Group 2 allowance transfers.

* * * * *

[[Page 74621]]

0
141. Section 97.723 is amended by:
0
a. Revising the section heading; and
0
b. In paragraph (b), after the word ``allocated'' adding the words ``or 
auctioned''.
    The revision reads as follows:

Sec.  97.723  Recordation of CSAPR SO2 Group 2 allowance transfers.

* * * * *

0
142. Section 97.724 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), after the word ``allocated'' adding the words 
``or auctioned'';
0
c. Revising paragraphs (c)(2)(i) and (ii); and
0
d. In paragraph (d), after the word ``allocated'' adding the words ``or 
auctioned''.
    The revisions read as follows:

Sec.  97.724  Compliance with CSAPR SO2 Group 2 emissions limitation.

* * * * *
    (c) * * *
    (2) * * *
    (i) Any CSAPR SO2 Group 2 allowances that were recorded 
in the compliance account pursuant to Sec.  97.721 and not transferred 
out of the compliance account, in the order of recordation; and then
    (ii) Any other CSAPR SO2 Group 2 allowances that were 
transferred to and recorded in the compliance account pursuant to this 
subpart, in the order of recordation.
* * * * *

0
143. Section 97.725 is amended by:
0
a. Revising the section heading;
0
b. In paragraph (a)(1), after the word ``allocated'' adding the words 
``or auctioned'';
0
c. In paragraph (b)(2)(iii) introductory text, removing the text 
``paragraph (b)(1)(i)'' and adding in its place the text ``paragraph 
(b)(1)(ii)'';
0
d. In paragraph (b)(2)(iii)(B), after the words ``availability of'' 
adding the words ``the calculations incorporating''; and
0
e. In paragraph (b)(6)(iii)(B), after the word ``appropriate'' removing 
the word ``at''.
    The revision reads as follows:

Sec.  97.725  Compliance with CSAPR SO2 Group 2 assurance provisions.

* * * * *

Sec.  97.728   [Amended]

0
144. Section 97.728, paragraph (b) is amended by removing the text 
``paragraph (a)(1)'' and adding in its place the text ``paragraph 
(a)''.

0
145. Section 97.730 is amended by:
0
a. Italicizing the heading of paragraph (a);
0
b. Revising paragraph (b) introductory text and paragraphs (b)(1) and 
(2);
0
c. In paragraph (b)(3) introductory text, removing the text 
``Sec. Sec.  75.4(e)(1) through (e)(4)'' and adding in its place the 
text ``Sec.  75.4(e)(1) through (4)''; and
0
d. In paragraph (b)(3)(iii), after the text ``Sec.  75.66'' adding the 
words ``of this chapter''.
    The revisions read as follows:

Sec.  97.730  General monitoring, recordkeeping, and reporting 
requirements.

* * * * *
    (b) Compliance deadlines. Except as provided in paragraph (e) of 
this section, the owner or operator of a CSAPR SO2 Group 2 
unit shall meet the monitoring system certification and other 
requirements of paragraphs (a)(1) and (2) of this section on or before 
the later of the following dates and shall record, report, and quality-
assure the data from the monitoring systems under paragraph (a)(1) of 
this section on and after the later of the following dates:
    (1) January 1, 2015; or
    (2) 180 calendar days after the date on which the unit commences 
commercial operation.
* * * * *

Sec.  97.731   [Amended]

0
146. Section 97.731 is amended by:
0
a. Italicizing the headings of paragraphs (d)(1) through (3), (d)(3)(i) 
through (iv), (d)(3)(iv)(A) through (D), and (d)(3)(v);
0
b. In paragraph (d)(3) introductory text, removing the text 
``Sec. Sec.  '' and adding in its place the text ``Sec.  ''; and
0
c. Redesignating paragraphs (d)(3)(v)(A)(1) through (3) as paragraphs 
(d)(3)(v)(A)(1) through (3).

0
147. Section 97.734 is amended by:
0
a. In paragraph (b), after the words ``comply with'' adding the word 
``the''; and
0
b. Revising paragraphs (d)(1) and (3).
    The revisions read as follows:

Sec.  97.734  Recordkeeping and reporting.

* * * * *
    (d) * * *
    (1) The designated representative shall report the SO2 
mass emissions data and heat input data for a CSAPR SO2 
Group 2 unit, in an electronic quarterly report in a format prescribed 
by the Administrator, for each calendar quarter beginning with the 
later of:
    (i) The calendar quarter covering January 1, 2015 through March 31, 
2015; or
    (ii) The calendar quarter corresponding to the earlier of the date 
of provisional certification or the applicable deadline for initial 
certification under Sec.  97.730(b).
* * * * *
    (3) For CSAPR SO2 Group 2 units that are also subject to 
the Acid Rain Program, CSAPR NOX Annual Trading Program, 
CSAPR NOX Ozone Season Group 1 Trading Program, or CSAPR 
NOX Ozone Season Group 2 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 SO2 mass emission data, heat input data, and other 
information required by this subpart.
* * * * *

Sec.  97.735  [Amended]

0
148. Section 97.735 is amended by redesignating paragraphs (b)(i) 
through (v) as paragraphs (b)(1) through (5).

0
149. Part 97 is amended by adding subpart EEEEE, consisting of 
Sec. Sec.  97.801 through 97.835, to read as follows:

Subpart EEEEE--CSAPR NOX Ozone Season Group 2 Trading Program

Sec.
97.801 Purpose.
97.802 Definitions.
97.803 Measurements, abbreviations, and acronyms.
97.804 Applicability.
97.805 Retired unit exemption.
97.806 Standard requirements.
97.807 Computation of time.
97.808 Administrative appeal procedures.
97.809 [Reserved]
97.810 State NOX Ozone Season Group 2 trading budgets, new unit set-
asides, Indian country new unit set-asides, and variability limits.
97.811 Timing requirements for CSAPR NOX Ozone Season Group 2 
allowance allocations.
97.812 CSAPR NOX Ozone Season Group 2 allowance allocations to new 
units.
97.813 Authorization of designated representative and alternate 
designated representative.
97.814 Responsibilities of designated representative and alternate 
designated representative.
97.815 Changing designated representative and alternate designated 
representative; changes in owners and operators; changes in units at 
the source.
97.816 Certificate of representation.
97.817 Objections concerning designated representative and alternate 
designated representative.
97.818 Delegation by designated representative and alternate 
designated representative.
97.819 [Reserved]
97.820 Establishment of compliance accounts, assurance accounts, and 
general accounts.
97.821 Recordation of CSAPR NOX Ozone Season Group 2 allowance 
allocations and auction results.
97.822 Submission of CSAPR NOX Ozone Season Group 2 allowance 
transfers.
97.823 Recordation of CSAPR NOX Ozone Season Group 2 allowance 
transfers.
97.824 Compliance with CSAPR NOX Ozone Season Group 2 emissions 
limitation.

[[Page 74622]]

97.825 Compliance with CSAPR NOX Ozone Season Group 2 assurance 
provisions.
97.826 Banking.
97.827 Account error.
97.828 Administrator's action on submissions.
97.829 [Reserved]
97.830 General monitoring, recordkeeping, and reporting 
requirements.
97.831 Initial monitoring system certification and recertification 
procedures.
97.832 Monitoring system out-of-control periods.
97.833 Notifications concerning monitoring.
97.834 Recordkeeping and reporting.
97.835 Petitions for alternatives to monitoring, recordkeeping, or 
reporting requirements.

Subpart EEEEE--CSAPR NOX Ozone Season Group 2 Trading Program

Sec.  97.801  Purpose.

    This subpart sets forth the general, designated representative, 
allowance, and monitoring provisions for the Cross-State Air Pollution 
Rule (CSAPR) NOX Ozone Season Group 2 Trading Program, under 
section 110 of the Clean Air Act and Sec.  52.38 of this chapter, as a 
means of mitigating interstate transport of ozone and nitrogen oxides.

Sec.  97.802  Definitions.

    The terms used in this subpart shall have the meanings set forth in 
this section as follows, provided that any term that includes the 
acronym ``CSAPR'' shall be considered synonymous with a term that is 
used in a SIP revision approved by the Administrator under Sec.  52.38 
or Sec.  52.39 of this chapter and that is substantively identical 
except for the inclusion of the acronym ``TR'' in place of the acronym 
``CSAPR'':
    Acid Rain Program means a multi-state SO2 and 
NOX air pollution control and emission reduction program 
established by the Administrator under title IV of the Clean Air Act 
and parts 72 through 78 of this chapter.
    Administrator means the Administrator of the United States 
Environmental Protection Agency or the Director of the Clean Air 
Markets Division (or its successor determined by the Administrator) of 
the United States Environmental Protection Agency, the Administrator's 
duly authorized representative under this subpart.
    Allocate or allocation means, with regard to CSAPR NOX 
Ozone Season Group 2 allowances, the determination by the 
Administrator, State, or permitting authority, in accordance with this 
subpart, Sec.  97.526(c), and any SIP revision submitted by the State 
and approved by the Administrator under Sec.  52.38(b)(6), (7), (8), or 
(9) of this chapter, of the amount of such CSAPR NOX Ozone 
Season Group 2 allowances to be initially credited, at no cost to the 
recipient, to:
    (1) A CSAPR NOX Ozone Season Group 2 unit;
    (2) A new unit set-aside;
    (3) An Indian country new unit set-aside; or
    (4) An entity not listed in paragraphs (1) through (3) of this 
definition;
    (5) Provided that, if the Administrator, State, or permitting 
authority initially credits, to a CSAPR NOX Ozone Season 
Group 2 unit qualifying for an initial credit, a credit in the amount 
of zero CSAPR NOX Ozone Season Group 2 allowances, the CSAPR 
NOX Ozone Season Group 2 unit will be treated as being 
allocated an amount (i.e., zero) of CSAPR NOX Ozone Season 
Group 2 allowances.
    Allowable NOX emission rate means, for a unit, the most stringent 
State or federal NOX emission rate limit (in lb/MWh or, if 
in lb/mmBtu, converted to lb/MWh by multiplying it by the unit's heat 
rate in mmBtu/MWh) that is applicable to the unit and covers the 
longest averaging period not exceeding one year.
    Allowance Management System means the system by which the 
Administrator records allocations, auctions, transfers, and deductions 
of CSAPR NOX Ozone Season Group 2 allowances under the CSAPR 
NOX Ozone Season Group 2 Trading Program. Such allowances 
are allocated, auctioned, recorded, held, transferred, or deducted only 
as whole allowances.
    Allowance Management System account means an account in the 
Allowance Management System established by the Administrator for 
purposes of recording the allocation, auction, holding, transfer, or 
deduction of CSAPR NOX Ozone Season Group 2 allowances.
    Allowance transfer deadline means, for a control period in a given 
year, 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 after such control period and is the deadline by which a 
CSAPR NOX Ozone Season Group 2 allowance transfer must be 
submitted for recordation in a CSAPR NOX Ozone Season Group 
2 source's compliance account in order to be available for use in 
complying with the source's CSAPR NOX Ozone Season Group 2 
emissions limitation for such control period in accordance with 
Sec. Sec.  97.806 and 97.824.
    Alternate designated representative means, for a CSAPR 
NOX Ozone Season Group 2 source and each CSAPR 
NOX Ozone Season Group 2 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 this subpart, to act 
on behalf of the designated representative in matters pertaining to the 
CSAPR NOX Ozone Season Group 2 Trading Program. If the CSAPR 
NOX Ozone Season Group 2 source is also subject to the Acid 
Rain Program, CSAPR NOX Annual Trading Program, CSAPR 
SO2 Group 1 Trading Program, or CSAPR SO2 Group 2 
Trading Program, then this natural person shall be the same natural 
person as the alternate designated representative as defined in the 
respective program.
    Assurance account means an Allowance Management System account, 
established by the Administrator under Sec.  97.825(b)(3) for certain 
owners and operators of a group of one or more base CSAPR 
NOX Ozone Season Group 2 sources and units in a given State 
(and Indian country within the borders of such State), in which are 
held CSAPR NOX Ozone Season Group 2 allowances available for 
use for a control period in a given year in complying with the CSAPR 
NOX Ozone Season Group 2 assurance provisions in accordance 
with Sec. Sec.  97.806 and 97.825.
    Auction means, with regard to CSAPR NOX Ozone Season 
Group 2 allowances, the sale to any person by a State or permitting 
authority, in accordance with a SIP revision submitted by the State and 
approved by the Administrator under Sec.  52.38(b)(6), (8), or (9) of 
this chapter, of such CSAPR NOX Ozone Season Group 2 
allowances to be initially recorded in an Allowance Management System 
account.
    Authorized account representative means, for a general account, the 
natural person who is authorized, in accordance with this subpart, to 
transfer and otherwise dispose of CSAPR NOX Ozone Season 
Group 2 allowances held in the general account and, for a CSAPR 
NOX Ozone Season Group 2 source's compliance account, the 
designated representative of the source.
    Automated data acquisition and handling system or DAHS means the 
component of the continuous emission monitoring system, or other 
emissions monitoring system approved for use under this subpart, 
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

[[Page 74623]]

parameters in the measurement units required by this subpart.
    Base CSAPR NOX Ozone Season Group 2 source means a source that 
includes one or more base CSAPR NOX Ozone Season Group 2 
units.
    Base CSAPR NOX Ozone Season Group 2 unit means a CSAPR 
NOX Ozone Season Group 2 unit, provided that any unit that 
would not be a CSAPR NOX Ozone Season Group 2 unit under 
Sec.  97.804(a) and (b) is not a base CSAPR NOX Ozone Season 
Group 2 unit notwithstanding the provisions of any SIP revision 
approved by the Administrator under Sec.  52.38(b)(6), (8), or (9) of 
this chapter.
    Biomass means--
    (1) Any organic material grown for the purpose of being converted 
to energy;
    (2) Any organic byproduct of agriculture that can be converted into 
energy; or
    (3) Any material that can be converted into energy and is 
nonmerchantable for other purposes, that is segregated from other 
material that is nonmerchantable for other purposes, and that is;
    (i) A forest-related organic resource, including mill residues, 
precommercial thinnings, slash, brush, or byproduct from conversion of 
trees to merchantable material; or
    (ii) A wood material, including pallets, crates, dunnage, 
manufacturing and construction materials (other than pressure-treated, 
chemically-treated, or painted wood products), and landscape or right-
of-way tree trimmings.
    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 unit means a unit in which the energy input to the 
unit is first used to produce useful thermal energy, where at least 
some of the reject heat from the useful thermal energy application or 
process is then used for electricity production.
    Business day means a day that does not fall on a weekend or a 
federal holiday.
    Certifying official means a natural person who is:
    (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 means the Clean Air Act, 42 U.S.C. 7401, et seq.
    Coal means ``coal'' as defined in Sec.  72.2 of this chapter.
    Coal-derived fuel means any fuel (whether in a solid, liquid, or 
gaseous state) produced by the mechanical, thermal, or chemical 
processing of coal.
    Cogeneration system means an integrated group, at a source, of 
equipment (including a boiler, or combustion turbine, and a generator) 
designed to produce useful thermal energy for industrial, commercial, 
heating, or cooling purposes and electricity through the sequential use 
of energy.
    Cogeneration unit means a stationary, fossil-fuel-fired boiler or 
stationary, fossil-fuel-fired combustion turbine that is a topping-
cycle unit or a bottoming-cycle unit:
    (1) Operating as part of a cogeneration system; and
    (2) Producing on an annual average basis--
    (i) For a topping-cycle 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 than 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 unit, useful power not less than 45 
percent of total energy input;
    (3) Provided that the requirements in paragraph (2) of this 
definition shall not apply to a calendar year referenced in paragraph 
(2) of this definition during which the unit did not operate at all;
    (4) Provided that the total energy input under paragraphs (2)(i)(B) 
and (2)(ii) of this definition shall equal the unit's total energy 
input from all fuel, except biomass if the unit is a boiler; and
    (5) Provided that, if, throughout its operation during the 12-month 
period or a calendar year referenced in paragraph (2) of this 
definition, a unit is operated as part of a cogeneration system and the 
cogeneration system meets on a system-wide basis the requirement in 
paragraph (2)(i)(B) or (2)(ii) of this definition, the unit shall be 
deemed to meet such requirement during that 12-month period or calendar 
year.
    Combustion turbine means an enclosed device comprising:
    (1) If the device is simple cycle, a compressor, a combustor, and a 
turbine and in which the flue gas resulting from the combustion of fuel 
in the combustor passes through the turbine, rotating the turbine; and
    (2) If the device is combined cycle, the equipment described in 
paragraph (1) of this definition and any associated duct burner, heat 
recovery steam generator, and steam turbine.
    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.  97.805.
    (i) For a unit that is a CSAPR NOX Ozone Season Group 2 
unit under Sec.  97.804 on the later of January 1, 2005 or the date the 
unit commences commercial operation as defined in the introductory text 
of paragraph (1) of this definition and that subsequently undergoes a 
physical change or is moved to a new location or 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 CSAPR NOX Ozone Season Group 2 
unit under Sec.  97.804 on the later of January 1, 2005 or the date the 
unit commences commercial operation as defined in the introductory text 
of paragraph (1) of this definition and that is subsequently replaced 
by a unit at the same or a different source, 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.  97.805, for a unit that is not a CSAPR NOX 
Ozone Season Group 2 unit under Sec.  97.804 on the later of January 1, 
2005 or the date the unit commences commercial operation as defined in 
the introductory text of paragraph (1) of this definition, the unit's 
date for commencement of commercial operation shall be the date on 
which the unit becomes a CSAPR NOX Ozone Season Group 2 unit 
under Sec.  97.804.
    (i) For a unit with a date for commencement of commercial operation 
as defined in the introductory text of paragraph (2) of this definition 
and that subsequently undergoes a physical change or is moved to a 
different location or source, such date shall remain the date of 
commencement of commercial operation of the unit,

[[Page 74624]]

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 the introductory text of paragraph (2) of this 
definition and that is subsequently replaced by a unit at the same or a 
different source, 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.
    Common designated representative means, with regard to a control 
period in a given year, a designated representative where, as of April 
1 immediately after the allowance transfer deadline for such control 
period, the same natural person is authorized under Sec. Sec.  
97.813(a) and 97.815(a) as the designated representative for a group of 
one or more base CSAPR NOX Ozone Season Group 2 sources and 
units located in a State (and Indian country within the borders of such 
State).
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.806(c)(2)(iii), the common designated 
representative's share of the State NOX Ozone Season Group 2 
trading budget with the variability limit for the State for such 
control period.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year:
    (1) With regard to a total amount of NOX emissions from 
all base CSAPR NOX Ozone Season Group 2 units in a State 
(and Indian country within the borders of such State) during such 
control period, the total tonnage of NOX emissions during 
such control period from a group of one or more base CSAPR 
NOX Ozone Season Group 2 units located in such State (and 
such Indian country) and having the common designated representative 
for such control period;
    (2) With regard to a State NOX Ozone Season Group 2 
trading budget with the variability limit for such control period, the 
amount (rounded to the nearest allowance) equal to the sum of the total 
amount of CSAPR NOX Ozone Season Group 2 allowances 
allocated for such control period to a group of one or more base CSAPR 
NOX Ozone Season Group 2 units located in the State (and 
Indian country within the borders of such State) and having the common 
designated representative for such control period and the total amount 
of CSAPR NOX Ozone Season Group 2 allowances purchased by an 
owner or operator of such base CSAPR NOX Ozone Season Group 
2 units in an auction for such control period and submitted by the 
State or the permitting authority to the Administrator for recordation 
in the compliance accounts for such base CSAPR NOX Ozone 
Season Group 2 units in accordance with the CSAPR NOX Ozone 
Season Group 2 allowance auction provisions in a SIP revision approved 
by the Administrator under Sec.  52.38(b)(6), (8), or (9) of this 
chapter, multiplied by the sum of the State NOX Ozone Season 
Group 2 trading budget under Sec.  97.810(a) and the State's 
variability limit under Sec.  97.810(b) for such control period and 
divided by the greater of such State NOX Ozone Season Group 
2 trading budget or the sum of all amounts of CSAPR NOX 
Ozone Season Group 2 allowances for such control period treated for 
purposes of this definition as having been allocated to or purchased in 
the State's auction for all such base CSAPR NOX Ozone Season 
Group 2 units, provided that--
    (i) The allocations of CSAPR NOX Ozone Season Group 2 
allowances for any control period taken into account for purposes of 
this definition exclude any CSAPR NOX Ozone Season Group 2 
allowances allocated for such control period under Sec.  97.526(c)(1) 
or (3), or under Sec.  97.526(c)(4) or (5) pursuant to an exception 
under Sec.  97.526(c)(1) or (3);
    (ii) In the case of the base CSAPR NOX Ozone Season 
Group 2 units at a base CSAPR NOX Ozone Season Group 2 
source in a State with regard to which CSAPR NOX Ozone 
Season Group 2 allowances have been allocated under Sec.  97.526(c)(2) 
for a given control period, the units at each such source will be 
treated, solely for purposes of this definition, as having been 
allocated under Sec.  97.526(c)(2), or under Sec.  97.526(c)(4) or (5) 
pursuant to an exception under Sec.  97.526(c)(2), an amount of CSAPR 
NOX Ozone Season Group 2 allowances for such control period 
equal to the sum of the total amount of CSAPR NOX Ozone 
Season Group 1 allowances allocated for such control period to such 
units and the total amount of CSAPR NOX Ozone Season Group 1 
allowances purchased by an owner or operator of such units in an 
auction for such control period and submitted by the State or the 
permitting authority to the Administrator for recordation in the 
compliance account for such source in accordance with the CSAPR 
NOX Ozone Season Group 1 allowance auction provisions in a 
SIP revision approved by the Administrator under Sec.  52.38(b)(4) or 
(5) of this chapter, divided by the conversion factor determined under 
Sec.  97.526(c)(2)(ii) with regard to the State's SIP revision under 
Sec.  52.38(b)(6) of this chapter, and rounded up to the nearest whole 
allowance; and
    (iii) In the case of a base CSAPR NOX Ozone Season Group 
2 unit that operates during, but has no amount of CSAPR NOX 
Ozone Season Group 2 allowances allocated under Sec. Sec.  97.811 and 
97.812 for, such control period, the unit shall be treated, solely for 
purposes of this definition, as being allocated an amount (rounded to 
the nearest allowance) of CSAPR NOX Ozone Season Group 2 
allowances for such control period equal to the unit's allowable 
NOX emission rate applicable to such control period, 
multiplied by a capacity factor of 0.92 (if the unit is a boiler 
combusting any amount of coal or coal-derived fuel during such control 
period), 0.32 (if the unit is a simple combustion turbine during such 
control period), 0.71 (if the unit is a combined cycle turbine during 
such control period), 0.73 (if the unit is an integrated coal 
gasification combined cycle unit during such control period), or 0.44 
(for any other unit), multiplied by the unit's maximum hourly load as 
reported in accordance with this subpart and by 3,672 hours/control 
period, and divided by 2,000 lb/ton.
    Common stack means a single flue through which emissions from 2 or 
more units are exhausted.
    Compliance account means an Allowance Management System account, 
established by the Administrator for a CSAPR NOX Ozone 
Season Group 2 source under this subpart, in which any CSAPR 
NOX Ozone Season Group 2 allowance allocations to the CSAPR 
NOX Ozone Season Group 2 units at the source are recorded 
and in which are held any CSAPR NOX Ozone Season Group 2 
allowances available for use for a control period in a given year in 
complying with the source's CSAPR NOX Ozone Season Group 2 
emissions limitation in accordance with Sec. Sec.  97.806 and 97.824.
    Continuous emission monitoring system or CEMS means the equipment 
required under this subpart to sample, analyze, measure, and provide, 
by means of readings recorded at least once every 15 minutes and using 
an automated data acquisition and handling system (DAHS), a permanent 
record of NOX emissions, stack gas volumetric flow rate, 
stack gas moisture

[[Page 74625]]

content, and O2 or CO2 concentration (as 
applicable), in a manner consistent with part 75 of this chapter and 
Sec. Sec.  97.830 through 97.835. The following systems are the 
principal types of continuous emission monitoring systems:
    (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 NOX concentration monitoring system, consisting of 
a NOX pollutant concentration monitor and an automated data 
acquisition and handling system and providing a permanent, continuous 
record of NOX emissions, in parts per million (ppm);
    (3) A NOX emission rate (or NOX-diluent) 
monitoring system, consisting of a NOX pollutant 
concentration monitor, a diluent gas (CO2 or O2) 
monitor, and an automated data acquisition and handling system and 
providing a permanent, continuous record of NOX 
concentration, in parts per million (ppm), diluent gas concentration, 
in percent CO2 or O2, and NOX emission 
rate, in pounds per million British thermal units (lb/mmBtu);
    (4) 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;
    (5) A CO2 monitoring system, consisting of a 
CO2 pollutant concentration monitor (or an O2 
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
    (6) An O2 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 starting May 1 of a calendar year, 
except as provided in Sec.  97.806(c)(3), and ending on September 30 of 
the same year, inclusive.
    CSAPR NOX Annual Trading Program means a multi-state NOX 
air pollution control and emission reduction program established in 
accordance with subpart AAAAA of this part and Sec.  52.38(a) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(a)(3) or (4) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(a)(5) of this chapter), as a means of 
mitigating interstate transport of fine particulates and 
NOX.
    CSAPR NOX Ozone Season Group 1 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under subpart BBBBB of this part, or by a State or permitting authority 
under a SIP revision approved by the Administrator under Sec.  
52.38(b)(3), (4), or (5) of this chapter, to emit one ton of 
NOX during a control period of the specified calendar year 
for which the authorization is allocated or auctioned or of any 
calendar year thereafter under the CSAPR NOX Ozone Season 
Group 1 Trading Program.
    CSAPR NOX Ozone Season Group 1 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart BBBBB of this part and Sec.  
52.38(b)(1), (b)(2)(i) and (ii), (b)(3) through (5), and (b)(10) 
through (12) of this chapter (including such a program that is revised 
in a SIP revision approved by the Administrator under Sec.  52.38(b)(3) 
or (4) of this chapter or that is established in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(5) of this chapter), 
as a means of mitigating interstate transport of ozone and 
NOX.
    CSAPR NOX Ozone Season Group 2 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under this subpart or Sec.  97.526(c), or by a State or permitting 
authority under a SIP revision approved by the Administrator under 
Sec.  52.38(b)(6), (7), (8), or (9) of this chapter, to emit one ton of 
NOX during a control period of the specified calendar year 
for which the authorization is allocated or auctioned or of any 
calendar year thereafter under the CSAPR NOX Ozone Season 
Group 2 Trading Program.
    CSAPR NOX Ozone Season Group 2 allowance deduction or deduct CSAPR 
NOX Ozone Season Group 2 allowances means the permanent 
withdrawal of CSAPR NOX Ozone Season Group 2 allowances by 
the Administrator from a compliance account (e.g., in order to account 
for compliance with the CSAPR NOX Ozone Season Group 2 
emissions limitation) or from an assurance account (e.g., in order to 
account for compliance with the assurance provisions under Sec. Sec.  
97.806 and 97.825).
    CSAPR NOX Ozone Season Group 2 allowances held or hold CSAPR 
NOX Ozone Season Group 2 allowances means the CSAPR 
NOX Ozone Season Group 2 allowances treated as included in 
an Allowance Management System account as of a specified point in time 
because at that time they:
    (1) Have been recorded by the Administrator in the account or 
transferred into the account by a correctly submitted, but not yet 
recorded, CSAPR NOX Ozone Season Group 2 allowance transfer 
in accordance with this subpart; and
    (2) Have not been transferred out of the account by a correctly 
submitted, but not yet recorded, CSAPR NOX Ozone Season 
Group 2 allowance transfer in accordance with this subpart.
    CSAPR NOX Ozone Season Group 2 emissions limitation means, for a 
CSAPR NOX Ozone Season Group 2 source, the tonnage of 
NOX emissions authorized in a control period in a given year 
by the CSAPR NOX Ozone Season Group 2 allowances available 
for deduction for the source under Sec.  97.824(a) for such control 
period.
    CSAPR NOX Ozone Season Group 2 source means a source that includes 
one or more CSAPR NOX Ozone Season Group 2 units.
    CSAPR NOX Ozone Season Group 2 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with this subpart and Sec.  52.38(b)(1), 
(b)(2)(i) and (iii), (b)(6) through (11), and (b)(13) of this chapter 
(including such a program that is revised in a SIP revision approved by 
the Administrator under Sec.  52.38(b)(7) or (8) of this chapter or 
that is established in a SIP revision approved by the Administrator 
under Sec.  52.38(b)(6) or (9) of this chapter), as a means of 
mitigating interstate transport of ozone and NOX.
    CSAPR NOX Ozone Season Group 2 unit means a unit that is subject to 
the CSAPR NOX Ozone Season Group 2 Trading Program.
    CSAPR SO2 Group 1 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with subpart CCCCC of this part and Sec.  
52.39 (a), (b), (d) through (f), and (j) through (l) of this chapter 
(including such a program that is revised in a SIP revision approved by 
the Administrator under Sec.  52.39(d) or (e) of this chapter or that 
is established in a SIP revision approved by the Administrator under 
Sec.  52.39(f) of this chapter), as a means of mitigating interstate 
transport of fine particulates and SO2.
    CSAPR SO2 Group 2 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with subpart DDDDD of this part and Sec.  
52.39(a), (c), (g) through (k), and (m) of this chapter (including such 
a program that is revised in a SIP revision approved by

[[Page 74626]]

the Administrator under Sec.  52.39(g) or (h) of this chapter or that 
is established in a SIP revision approved by the Administrator under 
Sec.  52.39(i) of this chapter), as a means of mitigating interstate 
transport of fine particulates and SO2.
    Designated representative means, for a CSAPR NOX Ozone 
Season Group 2 source and each CSAPR NOX Ozone Season Group 
2 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 this subpart, to represent and legally bind each owner 
and operator in matters pertaining to the CSAPR NOX Ozone 
Season Group 2 Trading Program. If the CSAPR NOX Ozone 
Season Group 2 source is also subject to the Acid Rain Program, CSAPR 
NOX Annual Trading Program, CSAPR SO2 Group 1 
Trading Program, or CSAPR SO2 Group 2 Trading Program, then 
this natural person shall be the same natural person as the designated 
representative as defined in the respective program.
    Emissions means air pollutants exhausted from a unit or source into 
the atmosphere, as measured, recorded, and reported to the 
Administrator by the designated representative, and as modified by the 
Administrator:
    (1) In accordance with this subpart; and
    (2) With regard to a period before the unit or source is required 
to measure, record, and report such air pollutants in accordance with 
this subpart, in accordance with part 75 of this chapter.
    Excess emissions means any ton of emissions from the CSAPR 
NOX Ozone Season Group 2 units at a CSAPR NOX 
Ozone Season Group 2 source during a control period in a given year 
that exceeds the CSAPR NOX Ozone Season Group 2 emissions 
limitation for the source for such control period.
    Fossil fuel means--
    (1) Natural gas, petroleum, coal, or any form of solid, liquid, or 
gaseous fuel derived from such material; or
    (2) For purposes of applying the limitation on ``average annual 
fuel consumption of fossil fuel'' in Sec.  97.804(b)(2)(i)(B) and 
(b)(2)(ii), natural gas, petroleum, coal, or any form of solid, liquid, 
or gaseous fuel derived from such material for the purpose of creating 
useful heat.
    Fossil-fuel-fired means, with regard to a unit, combusting any 
amount of fossil fuel in 2005 or any calendar year thereafter.
    General account means an Allowance Management System account, 
established under this subpart, that is not a compliance account or an 
assurance account.
    Generator means a device that produces electricity.
    Heat input means, for a unit for a specified period of unit 
operating time, the product (in mmBtu) of the gross calorific value of 
the fuel (in mmBtu/lb) fed into the unit multiplied by the fuel feed 
rate (in lb of fuel/time) and unit operating time, as measured, 
recorded, and reported to the Administrator by the designated 
representative and as modified by the Administrator in accordance with 
this subpart and excluding the heat derived from preheated combustion 
air, recirculated flue gases, or exhaust.
    Heat input rate means, for a unit, the quotient (in mmBtu/hr) of 
the amount of heat input for a specified period of unit operating time 
(in mmBtu) divided by unit operating time (in hr) or, for a unit and 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.
    Heat rate means, for a unit, the quotient (in mmBtu/unit of load) 
of the unit's maximum design heat input rate (in Btu/hr) divided by the 
product of 1,000,000 Btu/mmBtu and the unit's maximum hourly load.
    Indian country means ``Indian country'' as defined in 18 U.S.C. 
1151.
    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.
    Maximum design heat input rate means, for a unit, the maximum 
amount of fuel per hour (in Btu/hr) that the 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 this subpart, including a continuous emission 
monitoring system, an alternative monitoring system, or an excepted 
monitoring system under part 75 of this chapter.
    Nameplate capacity means, starting from the initial installation of 
a generator, the maximum electrical generating output (in MWe, rounded 
to the nearest tenth) 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 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 (in MWe, rounded to the nearest tenth) as of 
such completion as specified by the person conducting the physical 
change.
    Natural gas means ``natural gas'' as defined in Sec.  72.2 of this 
chapter.
    Newly affected CSAPR NOX Ozone Season Group 2 unit means a unit 
that was not a CSAPR NOX Ozone Season Group 2 unit when it 
began operating but that thereafter becomes a CSAPR NOX 
Ozone Season Group 2 unit.
    Operate or operation means, with regard to a unit, to combust fuel.
    Operator means, for a CSAPR NOX Ozone Season Group 2 
source or a CSAPR NOX Ozone Season Group 2 unit at a source 
respectively, any person who operates, controls, or supervises a CSAPR 
NOX Ozone Season Group 2 unit at the source or the CSAPR 
NOX Ozone Season Group 2 unit and shall include, but not be 
limited to, any holding company, utility system, or plant manager of 
such source or unit.
    Owner means, for a CSAPR NOX Ozone Season Group 2 source 
or a CSAPR NOX Ozone Season Group 2 unit at a source 
respectively, any of the following persons:
    (1) Any holder of any portion of the legal or equitable title in a 
CSAPR NOX Ozone Season Group 2 unit at the source or the 
CSAPR NOX Ozone Season Group 2 unit;
    (2) Any holder of a leasehold interest in a CSAPR NOX 
Ozone Season Group 2 unit at the source or the CSAPR NOX 
Ozone Season Group 2 unit, 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)

[[Page 74627]]

on the revenues or income from such CSAPR NOX Ozone Season 
Group 2 unit; and
    (3) Any purchaser of power from a CSAPR NOX Ozone Season 
Group 2 unit at the source or the CSAPR NOX Ozone Season 
Group 2 unit under a life-of-the-unit, firm power contractual 
arrangement.
    Permanently retired means, with regard to a unit, a unit that is 
unavailable for service and that the unit's owners and operators do not 
expect to return to service in the future.
    Permitting authority means ``permitting authority'' as defined in 
Sec. Sec.  70.2 and 71.2 of this chapter.
    Potential electrical output capacity means, for a unit (in MWh/yr), 
33 percent of the unit's maximum design heat input rate (in Btu/hr), 
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 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 Administrator in the regular 
course of business.
    Recordation, record, or recorded means, with regard to CSAPR 
NOX Ozone Season Group 2 allowances, the moving of CSAPR 
NOX Ozone Season Group 2 allowances by the Administrator 
into, out of, or between Allowance Management System accounts, for 
purposes of allocation, auction, 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 retirement and permanent 
disabling of a unit, and the construction of another unit (the 
replacement unit) to be used instead of the demolished or retired unit 
(the replaced unit).
    Sequential use of energy means:
    (1) The use of reject heat from electricity production in a useful 
thermal energy application or process; or
    (2) The use of reject heat from a useful thermal energy application 
or process in electricity production.
    Serial number means, for a CSAPR NOX Ozone Season Group 
2 allowance, the unique identification number assigned to each CSAPR 
NOX Ozone Season Group 2 allowance by the Administrator.
    Solid waste incineration unit means a stationary, fossil-fuel-fired 
boiler or stationary, fossil-fuel-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. This definition does not change or 
otherwise affect the definition of ``major source'', ``stationary 
source'', or ``source'' as set forth and implemented in a title V 
operating permit program or any other program under the Clean Air Act.
    State means one of the States that is subject to the CSAPR 
NOX Ozone Season Group 2 Trading Program pursuant to Sec.  
52.38(b)(1), (2)(i) and (iii), (6) through (11), and (13) of this 
chapter.
    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;
    (4) Provided that compliance with any ``submission'' or ``service'' 
deadline shall be determined by the date of dispatch, transmission, or 
mailing and not the date of receipt.
    Topping-cycle unit means a unit in which the energy input to the 
unit is first used to produce useful power, including electricity, 
where at least some of the reject heat from the electricity production 
is then used to provide useful thermal energy.
    Total energy input means, for a unit, total energy of all forms 
supplied to the unit, excluding energy produced by the unit. Each form 
of energy supplied shall be measured by the lower heating value of that 
form of energy calculated as follows:

LHV = HHV - 10.55 (W + 9H)

where:

LHV = lower heating value of the form of energy in Btu/lb,
HHV = higher heating value of the form of energy in Btu/lb,
W = weight % of moisture in the form of energy, and
H = weight % of hydrogen in the form of energy.

    Total energy output means, for a unit, the sum of useful power and 
useful thermal energy produced by the unit.
    Unit means a stationary, fossil-fuel-fired boiler, stationary, 
fossil-fuel-fired combustion turbine, or other stationary, fossil-fuel-
fired combustion device. A unit that undergoes a physical change or is 
moved to a different location or source shall continue to be treated as 
the same unit. A unit (the replaced unit) that is replaced by another 
unit (the replacement unit) at the same or a different source shall 
continue to be treated as the same unit, and the replacement unit shall 
be treated as a separate unit.
    Unit operating day means, with regard to a unit, a calendar day in 
which the unit combusts any fuel.
    Unit operating hour or hour of unit operation means, with regard to 
a unit, an hour in which the unit combusts any fuel.
    Useful power means, with regard to a unit, electricity or 
mechanical energy that the unit makes 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 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., in 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.  97.803  Measurements, abbreviations, and acronyms.

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

Btu--British thermal unit
CO2--carbon dioxide
CSAPR--Cross-State Air Pollution Rule
H2O--water
hr--hour
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
SIP--State implementation plan
SO2--sulfur dioxide
TR--Transport Rule
yr--year

Sec.  97.804  Applicability.

    (a) Except as provided in paragraph (b) of this section:

[[Page 74628]]

    (1) The following units in a State (and Indian country within the 
borders of such State) shall be CSAPR NOX Ozone Season Group 
2 units, and any source that includes one or more such units shall be a 
CSAPR NOX Ozone Season Group 2 source, subject to the 
requirements of this subpart: Any stationary, fossil-fuel-fired boiler 
or stationary, fossil-fuel-fired combustion turbine serving at any 
time, on or after January 1, 2005, 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 CSAPR NOX 
Ozone Season Group 2 unit begins to combust fossil fuel or to serve a 
generator with nameplate capacity of more than 25 MWe producing 
electricity for sale, the unit shall become a CSAPR NOX 
Ozone Season Group 2 unit as provided in paragraph (a)(1) of this 
section on the first date on which it both combusts fossil fuel and 
serves such generator.
    (b) Any unit in a State (and Indian country within the borders of 
such State) that otherwise is a CSAPR NOX Ozone Season Group 
2 unit under paragraph (a) of this section and that meets the 
requirements set forth in paragraph (b)(1)(i) or (b)(2)(i) of this 
section shall not be a CSAPR NOX Ozone Season Group 2 unit:
    (1)(i) Any unit:
    (A) Qualifying as a cogeneration unit throughout the later of 2005 
or the 12-month period starting on the date the unit first produces 
electricity and continuing to qualify as a cogeneration unit throughout 
each calendar year ending after the later of 2005 or such 12-month 
period; and
    (B) Not supplying in 2005 or any calendar year thereafter more than 
one-third of the unit's potential electrical output capacity or 219,000 
MWh, whichever is greater, to any utility power distribution system for 
sale.
    (ii) If, after qualifying under paragraph (b)(1)(i) of this section 
as not being a CSAPR NOX Ozone Season Group 2 unit, a unit 
subsequently no longer meets all the requirements of paragraph 
(b)(1)(i) of this section, the unit shall become a CSAPR NOX 
Ozone Season Group 2 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. The unit shall thereafter continue to be 
a CSAPR NOX Ozone Season Group 2 unit.
    (2)(i) Any unit:
    (A) Qualifying as a solid waste incineration unit throughout the 
later of 2005 or the 12-month period starting on the date the unit 
first produces electricity and continuing to qualify as a solid waste 
incineration unit throughout each calendar year ending after the later 
of 2005 or such 12-month period; and
    (B) With an average annual fuel consumption of fossil fuel for the 
first 3 consecutive calendar years of operation starting no earlier 
than 2005 of less than 20 percent (on a Btu basis) and an average 
annual fuel consumption of fossil fuel for any 3 consecutive calendar 
years thereafter of less than 20 percent (on a Btu basis).
    (ii) If, after qualifying under paragraph (b)(2)(i) of this section 
as not being a CSAPR NOX Ozone Season Group 2 unit, a unit 
subsequently no longer meets all the requirements of paragraph 
(b)(2)(i) of this section, the unit shall become a CSAPR NOX 
Ozone Season Group 2 unit starting on the earlier of January 1 after 
the first calendar year during which the unit first no longer qualifies 
as a solid waste incineration unit or January 1 after the first 3 
consecutive calendar years after 2005 for which the unit has an average 
annual fuel consumption of fossil fuel of 20 percent or more. The unit 
shall thereafter continue to be a CSAPR NOX Ozone Season 
Group 2 unit.
    (c) A certifying official of an owner or operator of any unit or 
other equipment may submit a petition (including any supporting 
documents) to the Administrator at any time for a determination 
concerning the applicability, under paragraphs (a) and (b) of this 
section or a SIP revision approved under Sec.  52.38(b)(6), (8), or (9) 
of this chapter, of the CSAPR NOX Ozone Season Group 2 
Trading Program to the unit or other equipment.
    (1) Petition content. The petition shall be in writing and include 
the identification of the unit or other equipment and the relevant 
facts about the unit or other equipment. 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 unit or other equipment 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) Response. The Administrator will issue a written response to 
the petition and may request supplemental information determined by the 
Administrator to be relevant to such petition. The Administrator's 
determination concerning the applicability, under paragraphs (a) and 
(b) of this section, of the CSAPR NOX Ozone Season Group 2 
Trading Program to the unit or other equipment shall be binding on any 
State or permitting authority unless the Administrator determines that 
the petition or other documents or information provided in connection 
with the petition contained significant, relevant errors or omissions.

Sec.  97.805  Retired unit exemption.

    (a)(1) Any CSAPR NOX Ozone Season Group 2 unit that is 
permanently retired shall be exempt from Sec.  97.806(b) and (c)(1), 
Sec.  97.824, and Sec. Sec.  97.830 through 97.835.
    (2) The exemption under paragraph (a)(1) of this section shall 
become effective the day on which the CSAPR NOX Ozone Season 
Group 2 unit is permanently retired. Within 30 days of the unit's 
permanent retirement, the designated representative shall submit a 
statement to the Administrator. The statement shall state, in a format 
prescribed by the Administrator, that the unit was permanently retired 
on a specified date and will comply with the requirements of paragraph 
(b) of this section.
    (b) Special provisions. (1) A unit exempt under paragraph (a) of 
this section shall not emit any NOX, starting on the date 
that the exemption takes effect.
    (2) 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 Administrator. The owners and 
operators bear the burden of proof that the unit is permanently 
retired.
    (3) The owners and operators and, to the extent applicable, the 
designated representative of a unit exempt under paragraph (a) of this 
section shall

[[Page 74629]]

comply with the requirements of the CSAPR NOX Ozone Season 
Group 2 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.
    (4) A unit exempt under paragraph (a) of this section shall lose 
its exemption on the first date on which the unit resumes operation. 
Such unit shall be treated, for purposes of applying allocation, 
monitoring, reporting, and recordkeeping requirements under this 
subpart, as a unit that commences commercial operation on the first 
date on which the unit resumes operation.

Sec.  97.806  Standard requirements.

    (a) Designated representative requirements. The owners and 
operators shall comply with the requirement to have a designated 
representative, and may have an alternate designated representative, in 
accordance with Sec. Sec.  97.813 through 97.818.
    (b) Emissions monitoring, reporting, and recordkeeping 
requirements. (1) The owners and operators, and the designated 
representative, of each CSAPR NOX Ozone Season Group 2 
source and each CSAPR NOX Ozone Season Group 2 unit at the 
source shall comply with the monitoring, reporting, and recordkeeping 
requirements of Sec. Sec.  97.830 through 97.835.
    (2) The emissions data determined in accordance with Sec. Sec.  
97.830 through 97.835 shall be used to calculate allocations of CSAPR 
NOX Ozone Season Group 2 allowances under Sec. Sec.  
97.811(a)(2) and (b) and 97.812 and to determine compliance with the 
CSAPR NOX Ozone Season Group 2 emissions limitation and 
assurance provisions under paragraph (c) of this section, provided 
that, for each monitoring location from which mass emissions are 
reported, the mass emissions amount used in calculating such 
allocations and determining such compliance shall be the mass emissions 
amount for the monitoring location determined in accordance with 
Sec. Sec.  97.830 through 97.835 and rounded to the nearest ton, with 
any fraction of a ton less than 0.50 being deemed to be zero.
    (c) NOX emissions requirements--(1) CSAPR NOX Ozone Season Group 2 
emissions limitation. (i) As of the allowance transfer deadline for a 
control period in a given year, the owners and operators of each CSAPR 
NOX Ozone Season Group 2 source and each CSAPR 
NOX Ozone Season Group 2 unit at the source shall hold, in 
the source's compliance account, CSAPR NOX Ozone Season 
Group 2 allowances available for deduction for such control period 
under Sec.  97.824(a) in an amount not less than the tons of total 
NOX emissions for such control period from all CSAPR 
NOX Ozone Season Group 2 units at the source.
    (ii) If total NOX emissions during a control period in a 
given year from the CSAPR NOX Ozone Season Group 2 units at 
a CSAPR NOX Ozone Season Group 2 source are in excess of the 
CSAPR NOX Ozone Season Group 2 emissions limitation set 
forth in paragraph (c)(1)(i) of this section, then:
    (A) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 2 unit at the source shall hold the 
CSAPR NOX Ozone Season Group 2 allowances required for 
deduction under Sec.  97.824(d); and
    (B) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 2 unit at the source shall pay any 
fine, penalty, or assessment or comply with any other remedy imposed, 
for the same violations, under the Clean Air Act, and each ton of such 
excess emissions and each day of such control period shall constitute a 
separate violation of this subpart and the Clean Air Act.
    (2) CSAPR NOX Ozone Season Group 2 assurance provisions. (i) If 
total NOX emissions during a control period in a given year 
from all base CSAPR NOX Ozone Season Group 2 units at base 
CSAPR NOX Ozone Season Group 2 sources in a State (and 
Indian country within the borders of such State) exceed the State 
assurance level, then the owners and operators of such sources and 
units in each group of one or more sources and units having a common 
designated representative for such control period, where the common 
designated representative's share of such NOX emissions 
during such control period exceeds the common designated 
representative's assurance level for the State and such control period, 
shall hold (in the assurance account established for the owners and 
operators of such group) CSAPR NOX Ozone Season Group 2 
allowances available for deduction for such control period under Sec.  
97.825(a) in an amount equal to two times the product (rounded to the 
nearest whole number), as determined by the Administrator in accordance 
with Sec.  97.825(b), of multiplying--
    (A) The quotient of the amount by which the common designated 
representative's share of such NOX emissions exceeds the 
common designated representative's assurance level divided by the sum 
of the amounts, determined for all common designated representatives 
for such sources and units in the State (and Indian country within the 
borders of such State) for such control period, by which each common 
designated representative's share of such NOX emissions 
exceeds the respective common designated representative's assurance 
level; and
    (B) The amount by which total NOX emissions from all 
base CSAPR NOX Ozone Season Group 2 units at base CSAPR 
NOX Ozone Season Group 2 sources in the State (and Indian 
country within the borders of such State) for such control period 
exceed the State assurance level.
    (ii) The owners and operators shall hold the CSAPR NOX 
Ozone Season Group 2 allowances required under paragraph (c)(2)(i) of 
this section, as of midnight of November 1 (if it is a business day), 
or midnight of the first business day thereafter (if November 1 is not 
a business day), immediately after the year of such control period.
    (iii) Total NOX emissions from all base CSAPR 
NOX Ozone Season Group 2 units at base CSAPR NOX 
Ozone Season Group 2 sources in a State (and Indian country within the 
borders of such State) during a control period in a given year exceed 
the State assurance level if such total NOX emissions exceed 
the sum, for such control period, of the State NOX Ozone 
Season Group 2 trading budget under Sec.  97.810(a) and the State's 
variability limit under Sec.  97.810(b).
    (iv) It shall not be a violation of this subpart or of the Clean 
Air Act if total NOX emissions from all base CSAPR 
NOX Ozone Season Group 2 units at base CSAPR NOX 
Ozone Season Group 2 sources in a State (and Indian country within the 
borders of such State) during a control period exceed the State 
assurance level or if a common designated representative's share of 
total NOX emissions from the base CSAPR NOX Ozone 
Season Group 2 units at base CSAPR NOX Ozone Season Group 2 
sources in a State (and Indian country within the borders of such 
State) during a control period exceeds the common designated 
representative's assurance level.
    (v) To the extent the owners and operators fail to hold CSAPR 
NOX Ozone Season Group 2 allowances for a control period in 
a given year in accordance with paragraphs (c)(2)(i) through (iii) of 
this section,
    (A) The owners and operators shall pay any fine, penalty, or 
assessment or comply with any other remedy imposed under the Clean Air 
Act; and
    (B) Each CSAPR NOX Ozone Season Group 2 allowance that 
the owners and operators fail to hold for such control

[[Page 74630]]

period in accordance with paragraphs (c)(2)(i) through (iii) of this 
section and each day of such control period shall constitute a separate 
violation of this subpart and the Clean Air Act.
    (3) Compliance periods. (i) A CSAPR NOX Ozone Season 
Group 2 unit shall be subject to the requirements under paragraph 
(c)(1) of this section for the control period starting on the later of 
May 1, 2017 or the deadline for meeting the unit's monitor 
certification requirements under Sec.  97.830(b) and for each control 
period thereafter.
    (ii) A base CSAPR NOX Ozone Season Group 2 unit shall be 
subject to the requirements under paragraph (c)(2) of this section for 
the control period starting on the later of May 1, 2017 or the deadline 
for meeting the unit's monitor certification requirements under Sec.  
97.830(b) and for each control period thereafter.
    (4) Vintage of CSAPR NOX Ozone Season Group 2 allowances held for 
compliance. (i) A CSAPR NOX Ozone Season Group 2 allowance 
held for compliance with the requirements under paragraph (c)(1)(i) of 
this section for a control period in a given year must be a CSAPR 
NOX Ozone Season Group 2 allowance that was allocated or 
auctioned for such control period or a control period in a prior year.
    (ii) A CSAPR NOX Ozone Season Group 2 allowance held for 
compliance with the requirements under paragraphs (c)(1)(ii)(A) and 
(c)(2)(i) through (iii) of this section for a control period in a given 
year must be a CSAPR NOX Ozone Season Group 2 allowance that 
was allocated or auctioned for a control period in a prior year or the 
control period in the given year or in the immediately following year.
    (5) Allowance Management System requirements. Each CSAPR 
NOX Ozone Season Group 2 allowance shall be held in, 
deducted from, or transferred into, out of, or between Allowance 
Management System accounts in accordance with this subpart.
    (6) Limited authorization. A CSAPR NOX Ozone Season 
Group 2 allowance is a limited authorization to emit one ton of 
NOX during the control period in one year. Such 
authorization is limited in its use and duration as follows:
    (i) Such authorization shall only be used in accordance with the 
CSAPR NOX Ozone Season Group 2 Trading Program; and
    (ii) Notwithstanding any other provision of this subpart, the 
Administrator has the authority to terminate or limit the use and 
duration of such authorization to the extent the Administrator 
determines is necessary or appropriate to implement any provision of 
the Clean Air Act.
    (7) Property right. A CSAPR NOX Ozone Season Group 2 
allowance does not constitute a property right.
    (d) Title V permit requirements. (1) No title V permit revision 
shall be required for any allocation, holding, deduction, or transfer 
of CSAPR NOX Ozone Season Group 2 allowances in accordance 
with this subpart.
    (2) A description of whether a unit is required to monitor and 
report NOX emissions using a continuous emission monitoring 
system (under subpart H of part 75 of this chapter), an excepted 
monitoring system (under appendices D and E to part 75 of this 
chapter), a low mass emissions excepted monitoring methodology (under 
Sec.  75.19 of this chapter), or an alternative monitoring system 
(under subpart E of part 75 of this chapter) in accordance with 
Sec. Sec.  97.830 through 97.835 may be added to, or changed in, a 
title V permit using minor permit modification procedures in accordance 
with Sec. Sec.  70.7(e)(2) and 71.7(e)(1) of this chapter, provided 
that the requirements applicable to the described monitoring and 
reporting (as added or changed, respectively) are already incorporated 
in such permit. This paragraph explicitly provides that the addition 
of, or change to, a unit's description as described in the prior 
sentence is eligible for minor permit modification procedures in 
accordance with Sec. Sec.  70.7(e)(2)(i)(B) and 71.7(e)(1)(i)(B) of 
this chapter.
    (e) Additional recordkeeping and reporting requirements. (1) Unless 
otherwise provided, the owners and operators of each CSAPR 
NOX Ozone Season Group 2 source and each CSAPR 
NOX Ozone Season Group 2 unit at the source shall keep on 
site at the source each of the following documents (in hardcopy or 
electronic format) 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 Administrator.
    (i) The certificate of representation under Sec.  97.816 for the 
designated representative for the source and each CSAPR NOX 
Ozone Season Group 2 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 
certificate of representation and documents are superseded because of 
the submission of a new certificate of representation under Sec.  
97.816 changing the designated representative.
    (ii) All emissions monitoring information, in accordance with this 
subpart.
    (iii) Copies of all reports, compliance certifications, and other 
submissions and all records made or required under, or to demonstrate 
compliance with the requirements of, the CSAPR NOX Ozone 
Season Group 2 Trading Program.
    (2) The designated representative of a CSAPR NOX Ozone 
Season Group 2 source and each CSAPR NOX Ozone Season Group 
2 unit at the source shall make all submissions required under the 
CSAPR NOX Ozone Season Group 2 Trading Program, except as 
provided in Sec.  97.818. This requirement does not change, create an 
exemption from, or otherwise affect the responsible official submission 
requirements under a title V operating permit program in parts 70 and 
71 of this chapter.
    (f) Liability. (1) Any provision of the CSAPR NOX Ozone 
Season Group 2 Trading Program that applies to a CSAPR NOX 
Ozone Season Group 2 source or the designated representative of a CSAPR 
NOX Ozone Season Group 2 source shall also apply to the 
owners and operators of such source and of the CSAPR NOX 
Ozone Season Group 2 units at the source.
    (2) Any provision of the CSAPR NOX Ozone Season Group 2 
Trading Program that applies to a CSAPR NOX Ozone Season 
Group 2 unit or the designated representative of a CSAPR NOX 
Ozone Season Group 2 unit shall also apply to the owners and operators 
of such unit.
    (g) Effect on other authorities. No provision of the CSAPR 
NOX Ozone Season Group 2 Trading Program or exemption under 
Sec.  97.805 shall be construed as exempting or excluding the owners 
and operators, and the designated representative, of a CSAPR 
NOX Ozone Season Group 2 source or CSAPR NOX 
Ozone Season Group 2 unit from compliance with any other provision of 
the applicable, approved State implementation plan, a federally 
enforceable permit, or the Clean Air Act.

Sec.  97.807  Computation of time.

    (a) Unless otherwise stated, any time period scheduled, under the 
CSAPR NOX Ozone Season Group 2 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 
CSAPR NOX Ozone Season Group 2 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

[[Page 74631]]

CSAPR NOX Ozone Season Group 2 Trading Program, is not a 
business day, the time period shall be extended to the next business 
day.

Sec.  97.808  Administrative appeal procedures.

    The administrative appeal procedures for decisions of the 
Administrator under the CSAPR NOX Ozone Season Group 2 
Trading Program are set forth in part 78 of this chapter.

Sec.  97.809   [Reserved]

Sec.  97.810  State NOX Ozone Season Group 2 trading budgets, new unit 
set-asides, Indian country new unit set-asides, and variability limits.

    (a) The State NOX Ozone Season Group 2 trading budgets, 
new unit set-asides, and Indian country new unit set-asides for 
allocations of CSAPR NOX Ozone Season Group 2 allowances for 
the control periods in 2017 and thereafter are as follows:
    (1) Alabama. (i) The NOX Ozone Season Group 2 trading 
budget is 13,211 tons.
    (ii) The new unit set-aside is 255 tons.
    (iii) The Indian country new unit set-aside is 13 tons.
    (2) Arkansas. (i) The NOX Ozone Season Group 2 trading 
budget for 2017 is 12,048 tons and for 2018 and thereafter is 9,210 
tons.
    (ii) The new unit set-aside for 2017 is 240 tons and for 2018 and 
thereafter is 185 tons.
    (iii) [Reserved]
    (3) Georgia. (i) The NOX Ozone Season Group 2 trading 
budget is 8,481 tons.
    (ii) The new unit set-aside is 168 tons.
    (iii) [Reserved]
    (4) Illinois. (i) The NOX Ozone Season Group 2 trading 
budget is 14,601 tons.
    (ii) The new unit set-aside is 302 tons.
    (iii) [Reserved]
    (5) Indiana. (i) The NOX Ozone Season Group 2 trading 
budget is 23,303 tons.
    (ii) The new unit set-aside is 468 tons.
    (iii) [Reserved]
    (6) Iowa. (i) The NOX Ozone Season Group 2 trading 
budget is 11,272 tons.
    (ii) The new unit set-aside is 324 tons.
    (iii) The Indian country new unit set-aside is 11 tons.
    (7) Kansas. (i) The NOX Ozone Season Group 2 trading 
budget is 8,027 tons.
    (ii) The new unit set-aside is 148 tons.
    (iii) The Indian country new unit set-aside is 8 tons.
    (8) Kentucky. (i) The NOX Ozone Season Group 2 trading 
budget is 21,115 tons.
    (ii) The new unit set-aside is 426 tons.
    (iii) [Reserved]
    (9) Louisiana. (i) The NOX Ozone Season Group 2 trading 
budget is 18,639 tons.
    (ii) The new unit set-aside is 352 tons.
    (iii) The Indian country new unit set-aside is 19 tons.
    (10) Maryland. (i) The NOX Ozone Season Group 2 trading 
budget is 3,828 tons.
    (ii) The new unit set-aside is 152 tons.
    (iii) [Reserved]
    (11) Michigan. (i) The NOX Ozone Season Group 2 trading 
budget is 17,023 tons.
    (ii) The new unit set-aside is 665 tons.
    (iii) The Indian country new unit set-aside is 17 tons.
    (12) Mississippi. (i) The NOX Ozone Season Group 2 
trading budget is 6,315 tons.
    (ii) The new unit set-aside is 120 tons.
    (iii) The Indian country new unit set-aside is 6 tons.
    (13) Missouri. (i) The NOX Ozone Season Group 2 trading 
budget is 15,780 tons.
    (ii) The new unit set-aside is 324 tons.
    (iii) [Reserved]
    (14) New Jersey. (i) The NOX Ozone Season Group 2 
trading budget is 2,062 tons.
    (ii) The new unit set-aside is 192 tons.
    (iii) [Reserved]
    (15) New York. (i) The NOX Ozone Season Group 2 trading 
budget is 5,135 tons.
    (ii) The new unit set-aside is 252 tons.
    (iii) The Indian country new unit set-aside is 5 tons.
    (16) Ohio. (i) The NOX Ozone Season Group 2 trading 
budget is 19,522 tons.
    (ii) The new unit set-aside is 401 tons.
    (iii) [Reserved]
    (17) Oklahoma. (i) The NOX Ozone Season Group 2 trading 
budget is 11,641 tons.
    (ii) The new unit set-aside is 221 tons.
    (iii) The Indian country new unit set-aside is 12 tons.
    (18) Pennsylvania. (i) The NOX Ozone Season Group 2 
trading budget is 17,952 tons.
    (ii) The new unit set-aside is 541 tons.
    (iii) [Reserved]
    (19) Tennessee. (i) The NOX Ozone Season Group 2 trading 
budget is 7,736 tons.
    (ii) The new unit set-aside is 156 tons.
    (iii) [Reserved]
    (20) Texas. (i) The NOX Ozone Season Group 2 trading 
budget is 52,301 tons.
    (ii) The new unit set-aside is 998 tons.
    (iii) The Indian country new unit set-aside is 52 tons.
    (21) Virginia. (i) The NOX Ozone Season Group 2 trading 
budget is 9,223 tons.
    (ii) The new unit set-aside is 562 tons.
    (iii) [Reserved]
    (22) West Virginia. (i) The NOX Ozone Season Group 2 
trading budget is 17,815 tons.
    (ii) The new unit set-aside is 356 tons.
    (iii) [Reserved]
    (23) Wisconsin. (i) The NOX Ozone Season Group 2 trading 
budget is 7,915 tons.
    (ii) The new unit set-aside is 151 tons.
    (iii) The Indian country new unit set-aside is 8 tons.
    (b) The States' variability limits for the State NOX 
Ozone Season Group 2 trading budgets for the control periods in 2017 
and thereafter are as follows:
    (1) The variability limit for Alabama is 2,774 tons.
    (2) The variability limit for Arkansas for 2017 is 2,530 tons and 
for 2018 and thereafter is 1,934 tons.
    (3) The variability limit for Georgia is 1,781 tons.
    (4) The variability limit for Illinois is 3,066 tons.
    (5) The variability limit for Indiana is 4,894 tons.
    (6) The variability limit for Iowa is 2,367 tons.
    (7) The variability limit for Kansas is 1,686 tons.
    (8) The variability limit for Kentucky is 4,434 tons.
    (9) The variability limit for Louisiana is 3,914 tons.
    (10) The variability limit for Maryland is 804 tons.
    (11) The variability limit for Michigan is 3,575 tons.
    (12) The variability limit for Mississippi is 1,326 tons.
    (13) The variability limit for Missouri is 3,314 tons.
    (14) The variability limit for New Jersey is 433 tons.
    (15) The variability limit for New York is 1,078 tons.
    (16) The variability limit for Ohio is 4,100 tons.
    (17) The variability limit for Oklahoma is 2,445 tons.
    (18) The variability limit for Pennsylvania is 3,770 tons.
    (19) The variability limit for Tennessee is 1,625 tons.
    (20) The variability limit for Texas is 10,983 tons.
    (21) The variability limit for Virginia is 1,937 tons.
    (22) The variability limit for West Virginia is 3,741 tons.
    (23) The variability limit for Wisconsin is 1,662 tons.
    (c) Each State NOX Ozone Season Group 2 trading budget 
in this section includes any tons in a new unit set-aside or Indian 
country new unit set-aside but does not include any tons in a 
variability limit.

Sec.  97.811  Timing requirements for CSAPR NOX Ozone Season Group 2 
allowance allocations.

    (a) Existing units. (1) CSAPR NOX Ozone Season Group 2 
allowances are

[[Page 74632]]

allocated, for the control periods in 2017 and each year thereafter, as 
provided in a notice of data availability issued by the Administrator. 
Providing an allocation to a unit in such notice does not constitute a 
determination that the unit is a CSAPR NOX Ozone Season 
Group 2 unit, and not providing an allocation to a unit in such notice 
does not constitute a determination that the unit is not a CSAPR 
NOX Ozone Season Group 2 unit.
    (2) Notwithstanding paragraph (a)(1) of this section, if a unit 
provided an allocation in the notice of data availability issued under 
paragraph (a)(1) of this section does not operate, starting after 2016, 
during the control period in two consecutive years, such unit will not 
be allocated the CSAPR NOX Ozone Season Group 2 allowances 
provided in such notice for the unit for the control periods in the 
fifth year after the first such year and in each year after that fifth 
year. All CSAPR NOX Ozone Season Group 2 allowances that 
would otherwise have been allocated to such unit will be allocated to 
the new unit set-aside for the State where such unit is located and for 
the respective years involved. If such unit resumes operation, the 
Administrator will allocate CSAPR NOX Ozone Season Group 2 
allowances to the unit in accordance with paragraph (b) of this 
section.
    (b) New units--(1) New unit set-asides. (i) By June 1, 2017 and 
June 1 of each year thereafter, the Administrator will calculate the 
CSAPR NOX Ozone Season Group 2 allowance allocation to each 
CSAPR NOX Ozone Season Group 2 unit in a State, in 
accordance with Sec.  97.812(a)(2) through (7) and (12), for the 
control period in the year of the applicable calculation deadline under 
this paragraph and will promulgate a notice of data availability of the 
results of the calculations.
    (ii) For each notice of data availability required in paragraph 
(b)(1)(i) of this section, the Administrator will provide an 
opportunity for submission of objections to the calculations referenced 
in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(1)(i) of this 
section and shall be limited to addressing whether the calculations 
(including the identification of the CSAPR NOX Ozone Season 
Group 2 units) are in accordance with Sec.  97.812(a)(2) through (7) 
and (12) and Sec. Sec.  97.806(b)(2) and 97.830 through 97.835.
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(1)(ii)(A) of this section. By August 1 
immediately after the promulgation of each notice of data availability 
required in paragraph (b)(1)(i) of this section, the Administrator will 
promulgate a notice of data availability of any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under Sec.  97.812(a)(2) through (7) and (12) and the reasons for 
accepting or rejecting any objections submitted in accordance with 
paragraph (b)(1)(ii)(A) of this section.
    (iii) If the new unit set-aside for such control period contains 
any CSAPR NOX Ozone Season Group 2 allowances that have not 
been allocated in the applicable notice of data availability required 
in paragraph (b)(1)(ii) of this section, the Administrator will 
promulgate, by December 15 immediately after such notice, a notice of 
data availability that identifies any CSAPR NOX Ozone Season 
Group 2 units that commenced commercial operation during the period 
starting January 1 of the year before the year of such control period 
and ending November 30 of the year of such control period.
    (iv) For each notice of data availability required in paragraph 
(b)(1)(iii) of this section, the Administrator will provide an 
opportunity for submission of objections to the identification of CSAPR 
NOX Ozone Season Group 2 units in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(1)(iii) of this 
section and shall be limited to addressing whether the identification 
of CSAPR NOX Ozone Season Group 2 units in such notice is in 
accordance with paragraph (b)(1)(iii) of this section.
    (B) The Administrator will adjust the identification of CSAPR 
NOX Ozone Season Group 2 units in each notice of data 
availability required in paragraph (b)(1)(iii) of this section to the 
extent necessary to ensure that it is in accordance with paragraph 
(b)(1)(iii) of this section and will calculate the CSAPR NOX 
Ozone Season Group 2 allowance allocation to each CSAPR NOX 
Ozone Season Group 2 unit in accordance with Sec.  97.812(a)(9), (10), 
and (12) and Sec. Sec.  97.806(b)(2) and 97.830 through 97.835. By 
February 15 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(1)(iii) of this section, the 
Administrator will promulgate a notice of data availability of any 
adjustments of the identification of CSAPR NOX Ozone Season 
Group 2 units that the Administrator determines to be necessary, the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(1)(iv)(A) of this section, and the 
results of such calculations.
    (v) To the extent any CSAPR NOX Ozone Season Group 2 
allowances are added to the new unit set-aside after promulgation of 
each notice of data availability required in paragraph (b)(1)(iv) of 
this section, the Administrator will promulgate additional notices of 
data availability, as deemed appropriate, of the allocation of such 
CSAPR NOX Ozone Season Group 2 allowances in accordance with 
Sec.  97.812(a)(10).
    (2) Indian country new unit set-asides. (i) By June 1, 2017 and 
June 1 of each year thereafter, the Administrator will calculate the 
CSAPR NOX Ozone Season Group 2 allowance allocation to each 
CSAPR NOX Ozone Season Group 2 unit in Indian country within 
the borders of a State, in accordance with Sec.  97.812(b)(2) through 
(7) and (12), for the control period in the year of the applicable 
calculation deadline under this paragraph and will promulgate a notice 
of data availability of the results of the calculations.
    (ii) For each notice of data availability required in paragraph 
(b)(2)(i) of this section, the Administrator will provide an 
opportunity for submission of objections to the calculations referenced 
in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(2)(i) of this 
section and shall be limited to addressing whether the calculations 
(including the identification of the CSAPR NOX Ozone Season 
Group 2 units) are in accordance with Sec.  97.812(b)(2) through (7) 
and (12) and Sec. Sec.  97.806(b)(2) and 97.830 through 97.835.
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(ii)(A) of this section. By August 1 
immediately after the promulgation of each notice of data availability 
required in paragraph (b)(2)(i) of this section, the Administrator will 
promulgate a notice of data availability of any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under Sec.  97.812(b)(2) through (7) and (12) and the reasons for 
accepting or rejecting any objections submitted in accordance with 
paragraph (b)(2)(ii)(A) of this section.
    (iii) If the Indian country new unit set-aside for such control 
period contains any CSAPR NOX Ozone Season

[[Page 74633]]

Group 2 allowances that have not been allocated in the applicable 
notice of data availability required in paragraph (b)(2)(ii) of this 
section, the Administrator will promulgate, by December 15 immediately 
after such notice, a notice of data availability that identifies any 
CSAPR NOX Ozone Season Group 2 units that commenced 
commercial operation during the period starting January 1 of the year 
before the year of such control period and ending November 30 of the 
year of such control period.
    (iv) For each notice of data availability required in paragraph 
(b)(2)(iii) of this section, the Administrator will provide an 
opportunity for submission of objections to the identification of CSAPR 
NOX Ozone Season Group 2 units in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(2)(iii) of this 
section and shall be limited to addressing whether the identification 
of CSAPR NOX Ozone Season Group 2 units in such notice is in 
accordance with paragraph (b)(2)(iii) of this section.
    (B) The Administrator will adjust the identification of CSAPR 
NOX Ozone Season Group 2 units in each notice of data 
availability required in paragraph (b)(2)(iii) of this section to the 
extent necessary to ensure that it is in accordance with paragraph 
(b)(2)(iii) of this section and will calculate the CSAPR NOX 
Ozone Season Group 2 allowance allocation to each CSAPR NOX 
Ozone Season Group 2 unit in accordance with Sec.  97.812(b)(9), (10), 
and (12) and Sec. Sec.  97.806(b)(2) and 97.830 through 97.835. By 
February 15 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(2)(iii) of this section, the 
Administrator will promulgate a notice of data availability of any 
adjustments of the identification of CSAPR NOX Ozone Season 
Group 2 units that the Administrator determines to be necessary, the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(2)(iv)(A) of this section, and the 
results of such calculations.
    (v) To the extent any CSAPR NOX Ozone Season Group 2 
allowances are added to the Indian country new unit set-aside after 
promulgation of each notice of data availability required in paragraph 
(b)(2)(iv) of this section, the Administrator will promulgate 
additional notices of data availability, as deemed appropriate, of the 
allocation of such CSAPR NOX Ozone Season Group 2 allowances 
in accordance with Sec.  97.812(b)(10).
    (c) Units incorrectly allocated CSAPR NOX Ozone Season 
Group 2 allowances. (1) For each control period in 2017 and thereafter, 
if the Administrator determines that CSAPR NOX Ozone Season 
Group 2 allowances were allocated under paragraph (a) of this section, 
or under a provision of a SIP revision approved under Sec.  
52.38(b)(6), (7), (8), or (9) of this chapter, where such control 
period and the recipient are covered by the provisions of paragraph 
(c)(1)(i) of this section or were allocated under Sec.  97.812(a)(2) 
through (7), (9), and (12) and (b)(2) through (7), (9), and (12), or 
under a provision of a SIP revision approved under Sec.  52.38(b)(6), 
(8), or (9) of this chapter, where such control period and the 
recipient are covered by the provisions of paragraph (c)(1)(ii) of this 
section, then the Administrator will notify the designated 
representative of the recipient and will act in accordance with the 
procedures set forth in paragraphs (c)(2) through (5) of this section:
    (i)(A) The recipient is not actually a CSAPR NOX Ozone 
Season Group 2 unit under Sec.  97.804 as of May 1, 2017 and is 
allocated CSAPR NOX Ozone Season Group 2 allowances for such 
control period or, in the case of an allocation under a provision of a 
SIP revision approved under Sec.  52.38(b)(6), (7), (8), or (9) of this 
chapter, the recipient is not actually a CSAPR NOX Ozone 
Season Group 2 unit as of May 1, 2017 and is allocated CSAPR 
NOX Ozone Season Group 2 allowances for such control period 
that the SIP revision provides should be allocated only to recipients 
that are CSAPR NOX Ozone Season Group 2 units as of May 1, 
2017; or
    (B) The recipient is not located as of May 1 of the control period 
in the State from whose NOX Ozone Season Group 2 trading 
budget the CSAPR NOX Ozone Season Group 2 allowances 
allocated under paragraph (a) of this section, or under a provision of 
a SIP revision approved under Sec.  52.38(b)(6), (7), (8), or (9) of 
this chapter, were allocated for such control period.
    (ii) The recipient is not actually a CSAPR NOX Ozone 
Season Group 2 unit under Sec.  97.804 as of May 1 of such control 
period and is allocated CSAPR NOX Ozone Season Group 2 
allowances for such control period or, in the case of an allocation 
under a provision of a SIP revision approved under Sec.  52.38(b)(6), 
(8), or (9) of this chapter, the recipient is not actually a CSAPR 
NOX Ozone Season Group 2 unit as of May 1 of such control 
period and is allocated CSAPR NOX Ozone Season Group 2 
allowances for such control period that the SIP revision provides 
should be allocated only to recipients that are CSAPR NOX 
Ozone Season Group 2 units as of May 1 of such control period.
    (2) Except as provided in paragraph (c)(3) or (4) of this section, 
the Administrator will not record such CSAPR NOX Ozone 
Season Group 2 allowances under Sec.  97.821.
    (3) If the Administrator already recorded such CSAPR NOX 
Ozone Season Group 2 allowances under Sec.  97.821 and if the 
Administrator makes the determination under paragraph (c)(1) of this 
section before making deductions for the source that includes such 
recipient under Sec.  97.824(b) for such control period, then the 
Administrator will deduct from the account in which such CSAPR 
NOX Ozone Season Group 2 allowances were recorded an amount 
of CSAPR NOX Ozone Season Group 2 allowances allocated for 
the same or a prior control period equal to the amount of such already 
recorded CSAPR NOX Ozone Season Group 2 allowances. The 
authorized account representative shall ensure that there are 
sufficient CSAPR NOX Ozone Season Group 2 allowances in such 
account for completion of the deduction.
    (4) If the Administrator already recorded such CSAPR NOX 
Ozone Season Group 2 allowances under Sec.  97.821 and if the 
Administrator makes the determination under paragraph (c)(1) of this 
section after making deductions for the source that includes such 
recipient under Sec.  97.824(b) for such control period, then the 
Administrator will not make any deduction to take account of such 
already recorded CSAPR NOX Ozone Season Group 2 allowances.
    (5)(i) With regard to the CSAPR NOX Ozone Season Group 2 
allowances that are not recorded, or that are deducted as an incorrect 
allocation, in accordance with paragraphs (c)(2) and (3) of this 
section for a recipient under paragraph (c)(1)(i) of this section, the 
Administrator will:
    (A) Transfer such CSAPR NOX Ozone Season Group 2 
allowances to the new unit set-aside for such control period for the 
State from whose NOX Ozone Season Group 2 trading budget the 
CSAPR NOX Ozone Season Group 2 allowances were allocated; or
    (B) If the State has a SIP revision approved under Sec.  
52.38(b)(6), (8), or (9) of this chapter covering such control period, 
include such CSAPR NOX Ozone Season Group 2 allowances in 
the portion of the State NOX Ozone Season Group 2 trading 
budget that may

[[Page 74634]]

be allocated for such control period in accordance with such SIP 
revision.
    (ii) With regard to the CSAPR NOX Ozone Season Group 2 
allowances that were not allocated from the Indian country new unit 
set-aside for such control period and that are not recorded, or that 
are deducted as an incorrect allocation, in accordance with paragraphs 
(c)(2) and (3) of this section for a recipient under paragraph 
(c)(1)(ii) of this section, the Administrator will:
    (A) Transfer such CSAPR NOX Ozone Season Group 2 
allowances to the new unit set-aside for such control period; or
    (B) If the State has a SIP revision approved under Sec.  
52.38(b)(6), (8), or (9) of this chapter covering such control period, 
include such CSAPR NOX Ozone Season Group 2 allowances in 
the portion of the State NOX Ozone Season Group 2 trading 
budget that may be allocated for such control period in accordance with 
such SIP revision.
    (iii) With regard to the CSAPR NOX Ozone Season Group 2 
allowances that were allocated from the Indian country new unit set-
aside for such control period and that are not recorded, or that are 
deducted as an incorrect allocation, in accordance with paragraphs 
(c)(2) and (3) of this section for a recipient under paragraph 
(c)(1)(ii) of this section, the Administrator will transfer such CSAPR 
NOX Ozone Season Group 2 allowances to the Indian country 
new unit set-aside for such control period.

Sec.  97.812  CSAPR NOX Ozone Season Group 2 allowance allocations to 
new units.

    (a) For each control period in 2017 and thereafter and for the 
CSAPR NOX Ozone Season Group 2 units in each State, the 
Administrator will allocate CSAPR NOX Ozone Season Group 2 
allowances to the CSAPR NOX Ozone Season Group 2 units as 
follows:
    (1) The CSAPR NOX Ozone Season Group 2 allowances will 
be allocated to the following CSAPR NOX Ozone Season Group 2 
units, except as provided in paragraph (a)(10) of this section:
    (i) CSAPR NOX Ozone Season Group 2 units that are not 
allocated an amount of CSAPR NOX Ozone Season Group 2 
allowances in the notice of data availability issued under Sec.  
97.811(a)(1);
    (ii) CSAPR NOX Ozone Season Group 2 units whose 
allocation of an amount of CSAPR NOX Ozone Season Group 2 
allowances for such control period in the notice of data availability 
issued under Sec.  97.811(a)(1) is covered by Sec.  97.811(c)(2) or 
(3);
    (iii) CSAPR NOX Ozone Season Group 2 units that are 
allocated an amount of CSAPR NOX Ozone Season Group 2 
allowances for such control period in the notice of data availability 
issued under Sec.  97.811(a)(1), which allocation is terminated for 
such control period pursuant to Sec.  97.811(a)(2), and that operate 
during the control period immediately preceding such control period; or
    (iv) For purposes of paragraph (a)(9) of this section, CSAPR 
NOX Ozone Season Group 2 units under Sec.  97.811(c)(1)(ii) 
whose allocation of an amount of CSAPR NOX Ozone Season 
Group 2 allowances for such control period in the notice of data 
availability issued under Sec.  97.811(b)(1)(ii)(B) is covered by Sec.  
97.811(c)(2) or (3).
    (2) The Administrator will establish a separate new unit set-aside 
for the State for each such control period. Each such new unit set-
aside will be allocated CSAPR NOX Ozone Season Group 2 
allowances in an amount equal to the applicable amount of tons of 
NOX emissions as set forth in Sec.  97.810(a) and will be 
allocated additional CSAPR NOX Ozone Season Group 2 
allowances (if any) in accordance with Sec.  97.811(a)(2) and (c)(5) 
and paragraph (b)(10) of this section.
    (3) The Administrator will determine, for each CSAPR NOX 
Ozone Season Group 2 unit described in paragraph (a)(1) of this 
section, an allocation of CSAPR NOX Ozone Season Group 2 
allowances for the later of the following control periods and for each 
subsequent control period:
    (i) The control period in 2017;
    (ii) The first control period after the control period in which the 
CSAPR NOX Ozone Season Group 2 unit commences commercial 
operation;
    (iii) For a unit described in paragraph (a)(1)(ii) of this section, 
the first control period in which the CSAPR NOX Ozone Season 
Group 2 unit operates in the State after operating in another 
jurisdiction and for which the unit is not already allocated one or 
more CSAPR NOX Ozone Season Group 2 allowances; and
    (iv) For a unit described in paragraph (a)(1)(iii) of this section, 
the first control period after the control period in which the unit 
resumes operation.
    (4)(i) The allocation to each CSAPR NOX Ozone Season 
Group 2 unit described in paragraphs (a)(1)(i) through (iii) of this 
section and for each control period described in paragraph (a)(3) of 
this section will be an amount equal to the unit's total tons of 
NOX emissions during the immediately preceding control 
period.
    (ii) The Administrator will adjust the allocation amount in 
paragraph (a)(4)(i) of this section in accordance with paragraphs 
(a)(5) through (7) and (12) of this section.
    (5) The Administrator will calculate the sum of the CSAPR 
NOX Ozone Season Group 2 allowances determined for all such 
CSAPR NOX Ozone Season Group 2 units under paragraph 
(a)(4)(i) of this section in the State for such control period.
    (6) If the amount of CSAPR NOX Ozone Season Group 2 
allowances in the new unit set-aside for the State for such control 
period is greater than or equal to the sum under paragraph (a)(5) of 
this section, then the Administrator will allocate the amount of CSAPR 
NOX Ozone Season Group 2 allowances determined for each such 
CSAPR NOX Ozone Season Group 2 unit under paragraph 
(a)(4)(i) of this section.
    (7) If the amount of CSAPR NOX Ozone Season Group 2 
allowances in the new unit set-aside for the State for such control 
period is less than the sum under paragraph (a)(5) of this section, 
then the Administrator will allocate to each such CSAPR NOX 
Ozone Season Group 2 unit the amount of the CSAPR NOX Ozone 
Season Group 2 allowances determined under paragraph (a)(4)(i) of this 
section for the unit, multiplied by the amount of CSAPR NOX 
Ozone Season Group 2 allowances in the new unit set-aside for such 
control period, divided by the sum under paragraph (a)(5) of this 
section, and rounded to the nearest allowance.
    (8) The Administrator will notify the public, through the 
promulgation of the notices of data availability described in Sec.  
97.811(b)(1)(i) and (ii), of the amount of CSAPR NOX Ozone 
Season Group 2 allowances allocated under paragraphs (a)(2) through (7) 
and (12) of this section for such control period to each CSAPR 
NOX Ozone Season Group 2 unit eligible for such allocation.
    (9) If, after completion of the procedures under paragraphs (a)(5) 
through (8) of this section for such control period, any unallocated 
CSAPR NOX Ozone Season Group 2 allowances remain in the new 
unit set-aside for the State for such control period, the Administrator 
will allocate such CSAPR NOX Ozone Season Group 2 allowances 
as follows--
    (i) The Administrator will determine, for each unit described in 
paragraph (a)(1) of this section that commenced commercial operation 
during the period starting January 1 of the year before the year of 
such control period and ending November 30 of the year of such control 
period, the positive difference (if any) between the unit's emissions 
during such control period and the amount of CSAPR NOX Ozone 
Season Group 2 allowances referenced in the notice of data availability 
required under

[[Page 74635]]

Sec.  97.811(b)(1)(ii) for the unit for such control period;
    (ii) The Administrator will determine the sum of the positive 
differences determined under paragraph (a)(9)(i) of this section;
    (iii) If the amount of unallocated CSAPR NOX Ozone 
Season Group 2 allowances remaining in the new unit set-aside for the 
State for such control period is greater than or equal to the sum 
determined under paragraph (a)(9)(ii) of this section, then the 
Administrator will allocate the amount of CSAPR NOX Ozone 
Season Group 2 allowances determined for each such CSAPR NOX 
Ozone Season Group 2 unit under paragraph (a)(9)(i) of this section; 
and
    (iv) If the amount of unallocated CSAPR NOX Ozone Season 
Group 2 allowances remaining in the new unit set-aside for the State 
for such control period is less than the sum under paragraph (a)(9)(ii) 
of this section, then the Administrator will allocate to each such 
CSAPR NOX Ozone Season Group 2 unit the amount of the CSAPR 
NOX Ozone Season Group 2 allowances determined under 
paragraph (a)(9)(i) of this section for the unit, multiplied by the 
amount of unallocated CSAPR NOX Ozone Season Group 2 
allowances remaining in the new unit set-aside for such control period, 
divided by the sum under paragraph (a)(9)(ii) of this section, and 
rounded to the nearest allowance.
    (10) If, after completion of the procedures under paragraphs (a)(9) 
and (12) of this section for such control period, any unallocated CSAPR 
NOX Ozone Season Group 2 allowances remain in the new unit 
set-aside for the State for such control period, the Administrator will 
allocate to each CSAPR NOX Ozone Season Group 2 unit that is 
in the State, is allocated an amount of CSAPR NOX Ozone 
Season Group 2 allowances in the notice of data availability issued 
under Sec.  97.811(a)(1), and continues to be allocated CSAPR 
NOX Ozone Season Group 2 allowances for such control period 
in accordance with Sec.  97.811(a)(2), an amount of CSAPR 
NOX Ozone Season Group 2 allowances equal to the following: 
The total amount of such remaining unallocated CSAPR NOX 
Ozone Season Group 2 allowances in such new unit set-aside, multiplied 
by the unit's allocation under Sec.  97.811(a) for such control period, 
divided by the remainder of the amount of tons in the applicable State 
NOX Ozone Season Group 2 trading budget minus the sum of the 
amounts of tons in such new unit set-aside and the Indian country new 
unit set-aside for the State for such control period, and rounded to 
the nearest allowance.
    (11) The Administrator will notify the public, through the 
promulgation of the notices of data availability described in Sec.  
97.811(b)(1)(iii), (iv), and (v), of the amount of CSAPR NOX 
Ozone Season Group 2 allowances allocated under paragraphs (a)(9), 
(10), and (12) of this section for such control period to each CSAPR 
NOX Ozone Season Group 2 unit eligible for such allocation.
    (12)(i) Notwithstanding the requirements of paragraphs (a)(2) 
through (11) of this section, if the calculations of allocations of a 
new unit set-aside for a control period in a given year under paragraph 
(a)(7) of this section, paragraphs (a)(6) and (a)(9)(iv) of this 
section, or paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section 
would otherwise result in total allocations of such new unit set-aside 
exceeding the total amount of such new unit set-aside, then the 
Administrator will adjust the results of the calculations under 
paragraph (a)(7), (a)(9)(iv), or (a)(10) of this section, as 
applicable, as follows. The Administrator will list the CSAPR 
NOX Ozone Season Group 2 units in descending order based on 
the amount of such units' allocations under paragraph (a)(7), 
(a)(9)(iv), or (a)(10) of this section, as applicable, and, in cases of 
equal allocation amounts, in alphabetical order of the relevant 
source's name and numerical order of the relevant unit's identification 
number, and will reduce each unit's allocation under paragraph (a)(7), 
(a)(9)(iv), or (a)(10) of this section, as applicable, by one CSAPR 
NOX Ozone Season Group 2 allowance (but not below zero) in 
the order in which the units are listed and will repeat this reduction 
process as necessary, until the total allocations of such new unit set-
aside equal the total amount of such new unit set-aside.
    (ii) Notwithstanding the requirements of paragraphs (a)(10) and 
(11) of this section, if the calculations of allocations of a new unit 
set-aside for a control period in a given year under paragraphs (a)(6), 
(a)(9)(iii), and (a)(10) of this section would otherwise result in a 
total allocations of such new unit set-aside less than the total amount 
of such new unit set-aside, then the Administrator will adjust the 
results of the calculations under paragraph (a)(10) of this section, as 
follows. The Administrator will list the CSAPR NOX Ozone 
Season Group 2 units in descending order based on the amount of such 
units' allocations under paragraph (a)(10) of this section and, in 
cases of equal allocation amounts, in alphabetical order of the 
relevant source's name and numerical order of the relevant unit's 
identification number, and will increase each unit's allocation under 
paragraph (a)(10) of this section by one CSAPR NOX Ozone 
Season Group 2 allowance in the order in which the units are listed and 
will repeat this increase process as necessary, until the total 
allocations of such new unit set-aside equal the total amount of such 
new unit set-aside.
    (b) For each control period in 2017 and thereafter and for the 
CSAPR NOX Ozone Season Group 2 units located in Indian 
country within the borders of each State, the Administrator will 
allocate CSAPR NOX Ozone Season Group 2 allowances to the 
CSAPR NOX Ozone Season Group 2 units as follows:
    (1) The CSAPR NOX Ozone Season Group 2 allowances will 
be allocated to the following CSAPR NOX Ozone Season Group 2 
units, except as provided in paragraph (b)(10) of this section:
    (i) CSAPR NOX Ozone Season Group 2 units that are not 
allocated an amount of CSAPR NOX Ozone Season Group 2 
allowances in the notice of data availability issued under Sec.  
97.811(a)(1); or
    (ii) For purposes of paragraph (b)(9) of this section, CSAPR 
NOX Ozone Season Group 2 units under Sec.  97.811(c)(1)(ii) 
whose allocation of an amount of CSAPR NOX Ozone Season 
Group 2 allowances for such control period in the notice of data 
availability issued under Sec.  97.811(b)(2)(ii)(B) is covered by Sec.  
97.811(c)(2) or (3).
    (2) The Administrator will establish a separate Indian country new 
unit set-aside for the State for each such control period. Each such 
Indian country new unit set-aside will be allocated CSAPR 
NOX Ozone Season Group 2 allowances in an amount equal to 
the applicable amount of tons of NOX emissions as set forth 
in Sec.  97.810(a) and will be allocated additional CSAPR 
NOX Ozone Season Group 2 allowances (if any) in accordance 
with Sec.  97.811(c)(5).
    (3) The Administrator will determine, for each CSAPR NOX 
Ozone Season Group 2 unit described in paragraph (b)(1) of this 
section, an allocation of CSAPR NOX Ozone Season Group 2 
allowances for the later of the following control periods and for each 
subsequent control period:
    (i) The control period in 2017; and
    (ii) The first control period after the control period in which the 
CSAPR NOX Ozone Season Group 2 unit commences commercial 
operation.
    (4)(i) The allocation to each CSAPR NOX Ozone Season 
Group 2 unit described in paragraph (b)(1)(i) of this section and for 
each control period described in paragraph (b)(3) of this

[[Page 74636]]

section will be an amount equal to the unit's total tons of 
NOX emissions during the immediately preceding control 
period.
    (ii) The Administrator will adjust the allocation amount in 
paragraph (b)(4)(i) of this section in accordance with paragraphs 
(b)(5) through (7) and (12) of this section.
    (5) The Administrator will calculate the sum of the CSAPR 
NOX Ozone Season Group 2 allowances determined for all such 
CSAPR NOX Ozone Season Group 2 units under paragraph 
(b)(4)(i) of this section in Indian country within the borders of the 
State for such control period.
    (6) If the amount of CSAPR NOX Ozone Season Group 2 
allowances in the Indian country new unit set-aside for the State for 
such control period is greater than or equal to the sum under paragraph 
(b)(5) of this section, then the Administrator will allocate the amount 
of CSAPR NOX Ozone Season Group 2 allowances determined for 
each such CSAPR NOX Ozone Season Group 2 unit under 
paragraph (b)(4)(i) of this section.
    (7) If the amount of CSAPR NOX Ozone Season Group 2 
allowances in the Indian country new unit set-aside for the State for 
such control period is less than the sum under paragraph (b)(5) of this 
section, then the Administrator will allocate to each such CSAPR 
NOX Ozone Season Group 2 unit the amount of the CSAPR 
NOX Ozone Season Group 2 allowances determined under 
paragraph (b)(4)(i) of this section for the unit, multiplied by the 
amount of CSAPR NOX Ozone Season Group 2 allowances in the 
Indian country new unit set-aside for such control period, divided by 
the sum under paragraph (b)(5) of this section, and rounded to the 
nearest allowance.
    (8) The Administrator will notify the public, through the 
promulgation of the notices of data availability described in Sec.  
97.811(b)(2)(i) and (ii), of the amount of CSAPR NOX Ozone 
Season Group 2 allowances allocated under paragraphs (b)(2) through (7) 
and (12) of this section for such control period to each CSAPR 
NOX Ozone Season Group 2 unit eligible for such allocation.
    (9) If, after completion of the procedures under paragraphs (b)(5) 
through (8) of this section for such control period, any unallocated 
CSAPR NOX Ozone Season Group 2 allowances remain in the 
Indian country new unit set-aside for the State for such control 
period, the Administrator will allocate such CSAPR NOX Ozone 
Season Group 2 allowances as follows--
    (i) The Administrator will determine, for each unit described in 
paragraph (b)(1) of this section that commenced commercial operation 
during the period starting January 1 of the year before the year of 
such control period and ending November 30 of the year of such control 
period, the positive difference (if any) between the unit's emissions 
during such control period and the amount of CSAPR NOX Ozone 
Season Group 2 allowances referenced in the notice of data availability 
required under Sec.  97.811(b)(2)(ii) for the unit for such control 
period;
    (ii) The Administrator will determine the sum of the positive 
differences determined under paragraph (b)(9)(i) of this section;
    (iii) If the amount of unallocated CSAPR NOX Ozone 
Season Group 2 allowances remaining in the Indian country new unit set-
aside for the State for such control period is greater than or equal to 
the sum determined under paragraph (b)(9)(ii) of this section, then the 
Administrator will allocate the amount of CSAPR NOX Ozone 
Season Group 2 allowances determined for each such CSAPR NOX 
Ozone Season Group 2 unit under paragraph (b)(9)(i) of this section; 
and
    (iv) If the amount of unallocated CSAPR NOX Ozone Season 
Group 2 allowances remaining in the Indian country new unit set-aside 
for the State for such control period is less than the sum under 
paragraph (b)(9)(ii) of this section, then the Administrator will 
allocate to each such CSAPR NOX Ozone Season Group 2 unit 
the amount of the CSAPR NOX Ozone Season Group 2 allowances 
determined under paragraph (b)(9)(i) of this section for the unit, 
multiplied by the amount of unallocated CSAPR NOX Ozone 
Season Group 2 allowances remaining in the Indian country new unit set-
aside for such control period, divided by the sum under paragraph 
(b)(9)(ii) of this section, and rounded to the nearest allowance.
    (10) If, after completion of the procedures under paragraphs (b)(9) 
and (12) of this section for such control period, any unallocated CSAPR 
NOX Ozone Season Group 2 allowances remain in the Indian 
country new unit set-aside for the State for such control period, the 
Administrator will:
    (i) Transfer such unallocated CSAPR NOX Ozone Season 
Group 2 allowances to the new unit set-aside for the State for such 
control period; or
    (ii) If the State has a SIP revision approved under Sec.  
52.38(b)(6), (8), or (9) of this chapter covering such control period, 
include such unallocated CSAPR NOX Ozone Season Group 2 
allowances in the portion of the State NOX Ozone Season 
Group 2 trading budget that may be allocated for such control period in 
accordance with such SIP revision.
    (11) The Administrator will notify the public, through the 
promulgation of the notices of data availability described in Sec.  
97.811(b)(2)(iii), (iv), and (v), of the amount of CSAPR NOX 
Ozone Season Group 2 allowances allocated under paragraphs (b)(9), 
(10), and (12) of this section for such control period to each CSAPR 
NOX Ozone Season Group 2 unit eligible for such allocation.
    (12)(i) Notwithstanding the requirements of paragraphs (b)(2) 
through (11) of this section, if the calculations of allocations of an 
Indian country new unit set-aside for a control period in a given year 
under paragraph (b)(7) of this section, paragraphs (b)(6) and 
(b)(9)(iv) of this section, or paragraphs (b)(6), (b)(9)(iii), and 
(b)(10) of this section would otherwise result in total allocations of 
such Indian country new unit set-aside exceeding the total amount of 
such Indian country new unit set-aside, then the Administrator will 
adjust the results of the calculations under paragraph (b)(7), 
(b)(9)(iv), or (b)(10) of this section, as applicable, as follows. The 
Administrator will list the CSAPR NOX Ozone Season Group 2 
units in descending order based on the amount of such units' 
allocations under paragraph (b)(7), (b)(9)(iv), or (b)(10) of this 
section, as applicable, and, in cases of equal allocation amounts, in 
alphabetical order of the relevant source's name and numerical order of 
the relevant unit's identification number, and will reduce each unit's 
allocation under paragraph (b)(7), (b)(9)(iv), or (b)(10) of this 
section, as applicable, by one CSAPR NOX Ozone Season Group 
2 allowance (but not below zero) in the order in which the units are 
listed and will repeat this reduction process as necessary, until the 
total allocations of such Indian country new unit set-aside equal the 
total amount of such Indian country new unit set-aside.
    (ii) Notwithstanding the requirements of paragraphs (b)(10) and 
(11) of this section, if the calculations of allocations of an Indian 
country new unit set-aside for a control period in a given year under 
paragraphs (b)(6), (b)(9)(iii), and (b)(10) of this section would 
otherwise result in a total allocations of such Indian country new unit 
set-aside less than the total amount of such Indian country new unit 
set-aside, then the Administrator will adjust the results of the 
calculations under paragraph (b)(10) of this section, as follows. The 
Administrator will list the CSAPR NOX Ozone Season Group 2 
units in descending order based on the amount of such units' 
allocations under

[[Page 74637]]

paragraph (b)(10) of this section and, in cases of equal allocation 
amounts, in alphabetical order of the relevant source's name and 
numerical order of the relevant unit's identification number, and will 
increase each unit's allocation under paragraph (b)(10) of this section 
by one CSAPR NOX Ozone Season Group 2 allowance in the order 
in which the units are listed and will repeat this increase process as 
necessary, until the total allocations of such Indian country new unit 
set-aside equal the total amount of such Indian country new unit set-
aside.

Sec.  97.813  Authorization of designated representative and alternate 
designated representative.

    (a) Except as provided under Sec.  97.815, each CSAPR 
NOX Ozone Season Group 2 source, including all CSAPR 
NOX Ozone Season Group 2 units at the source, shall have one 
and only one designated representative, with regard to all matters 
under the CSAPR NOX Ozone Season Group 2 Trading Program.
    (1) The designated representative shall be selected by an agreement 
binding on the owners and operators of the source and all CSAPR 
NOX Ozone Season Group 2 units at the source and shall act 
in accordance with the certification statement in Sec.  
97.816(a)(4)(iii).
    (2) Upon and after receipt by the Administrator of a complete 
certificate of representation under Sec.  97.816:
    (i) The designated representative shall be authorized and shall 
represent and, by his or her representations, actions, inactions, or 
submissions, legally bind each owner and operator of the source and 
each CSAPR NOX Ozone Season Group 2 unit at the source in 
all matters pertaining to the CSAPR NOX Ozone Season Group 2 
Trading Program, notwithstanding any agreement between the designated 
representative and such owners and operators; and
    (ii) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 2 unit at the source shall be bound 
by any decision or order issued to the designated representative by the 
Administrator regarding the source or any such unit.
    (b) Except as provided under Sec.  97.815, each CSAPR 
NOX Ozone Season Group 2 source may have one and only one 
alternate designated representative, who may act on behalf of the 
designated representative. The agreement by which the alternate 
designated representative is selected shall include a procedure for 
authorizing the alternate designated representative to act in lieu of 
the designated representative.
    (1) The alternate designated representative shall be selected by an 
agreement binding on the owners and operators of the source and all 
CSAPR NOX Ozone Season Group 2 units at the source and shall 
act in accordance with the certification statement in Sec.  
97.816(a)(4)(iii).
    (2) Upon and after receipt by the Administrator of a complete 
certificate of representation under Sec.  97.816,
    (i) The alternate designated representative shall be authorized;
    (ii) Any representation, action, inaction, or submission by the 
alternate designated representative shall be deemed to be a 
representation, action, inaction, or submission by the designated 
representative; and
    (iii) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 2 unit at the source shall be bound 
by any decision or order issued to the alternate designated 
representative by the Administrator regarding the source or any such 
unit.
    (c) Except in this section, Sec.  97.802, and Sec. Sec.  97.814 
through 97.818, whenever the term ``designated representative'' (as 
distinguished from the term ``common designated representative'') is 
used in this subpart, the term shall be construed to include the 
designated representative or any alternate designated representative.

Sec.  97.814  Responsibilities of designated representative and 
alternate designated representative.

    (a) Except as provided under Sec.  97.818 concerning delegation of 
authority to make submissions, each submission under the CSAPR 
NOX Ozone Season Group 2 Trading Program shall be made, 
signed, and certified by the designated representative or alternate 
designated representative for each CSAPR NOX Ozone Season 
Group 2 source and CSAPR NOX Ozone Season Group 2 unit for 
which the submission is made. Each such submission shall include the 
following certification statement by the designated representative or 
alternate 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.''
    (b) The Administrator will accept or act on a submission made for a 
CSAPR NOX Ozone Season Group 2 source or a CSAPR 
NOX Ozone Season Group 2 unit only if the submission has 
been made, signed, and certified in accordance with paragraph (a) of 
this section and Sec.  97.818.

Sec.  97.815  Changing designated representative and alternate 
designated representative; changes in owners and operators; changes in 
units at the source.

    (a) Changing designated representative. The designated 
representative may be changed at any time upon receipt by the 
Administrator of a superseding complete certificate of representation 
under Sec.  97.816. Notwithstanding any such change, all 
representations, actions, inactions, and submissions by the previous 
designated representative before the time and date when the 
Administrator receives the superseding certificate of representation 
shall be binding on the new designated representative and the owners 
and operators of the CSAPR NOX Ozone Season Group 2 source 
and the CSAPR NOX Ozone Season Group 2 units at the source.
    (b) Changing alternate designated representative. The alternate 
designated representative may be changed at any time upon receipt by 
the Administrator of a superseding complete certificate of 
representation under Sec.  97.816. Notwithstanding any such change, all 
representations, actions, inactions, and submissions by the previous 
alternate designated representative before the time and date when the 
Administrator receives the superseding certificate of representation 
shall be binding on the new alternate designated representative, the 
designated representative, and the owners and operators of the CSAPR 
NOX Ozone Season Group 2 source and the CSAPR NOX 
Ozone Season Group 2 units at the source.
    (c) Changes in owners and operators. (1) In the event an owner or 
operator of a CSAPR NOX Ozone Season Group 2 source or a 
CSAPR NOX Ozone Season Group 2 unit at the source is not 
included in the list of owners and operators in the certificate of 
representation under Sec.  97.816, 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 
designated representative and any alternate designated representative 
of

[[Page 74638]]

the source or unit, and the decisions and orders of the Administrator, 
as if the owner or operator were included in such list.
    (2) Within 30 days after any change in the owners and operators of 
a CSAPR NOX Ozone Season Group 2 source or a CSAPR 
NOX Ozone Season Group 2 unit at the source, including the 
addition or removal of an owner or operator, the designated 
representative or any alternate designated representative shall submit 
a revision to the certificate of representation under Sec.  97.816 
amending the list of owners and operators to reflect the change.
    (d) Changes in units at the source. Within 30 days of any change in 
which units are located at a CSAPR NOX Ozone Season Group 2 
source (including the addition or removal of a unit), the designated 
representative or any alternate designated representative shall submit 
a certificate of representation under Sec.  97.816 amending the list of 
units to reflect the change.
    (1) If the change is the addition of a unit that operated (other 
than for purposes of testing by the manufacturer before initial 
installation) before being located at the source, then the certificate 
of representation shall identify, in a format prescribed by the 
Administrator, the entity from whom the unit was purchased or otherwise 
obtained (including name, address, telephone number, and facsimile 
number (if any)), the date on which the unit was purchased or otherwise 
obtained, and the date on which the unit became located at the source.
    (2) If the change is the removal of a unit, then the certificate of 
representation shall identify, in a format prescribed by the 
Administrator, the entity to which the unit was sold or that otherwise 
obtained the unit (including name, address, telephone number, and 
facsimile number (if any)), the date on which the unit was sold or 
otherwise obtained, and the date on which the unit became no longer 
located at the source.

Sec.  97.816  Certificate of representation.

    (a) A complete certificate of representation for a designated 
representative or an alternate designated representative shall include 
the following elements in a format prescribed by the Administrator:
    (1) Identification of the CSAPR NOX Ozone Season Group 2 
source, and each CSAPR NOX Ozone Season Group 2 unit at the 
source, for which the certificate of representation is submitted, 
including source name, source category and NAICS code (or, in the 
absence of a NAICS code, an equivalent code), State, plant code, 
county, latitude and longitude, unit identification number and type, 
identification number and nameplate capacity (in MWe, rounded to the 
nearest tenth) of each generator served by each such unit, actual or 
projected date of commencement of commercial operation, and a statement 
of whether such source is located in Indian country. If a projected 
date of commencement of commercial operation is provided, the actual 
date of commencement of commercial operation shall be provided when 
such information becomes available.
    (2) The name, address, email address (if any), telephone number, 
and facsimile transmission number (if any) of the designated 
representative and any alternate designated representative.
    (3) A list of the owners and operators of the CSAPR NOX 
Ozone Season Group 2 source and of each CSAPR NOX Ozone 
Season Group 2 unit at the source.
    (4) The following certification statements by the designated 
representative and any alternate designated representative--
    (i) ``I certify that I was selected as the designated 
representative or alternate designated representative, as applicable, 
by an agreement binding on the owners and operators of the source and 
each CSAPR NOX Ozone Season Group 2 unit at the source.''
    (ii) ``I certify that I have all the necessary authority to carry 
out my duties and responsibilities under the CSAPR NOX Ozone 
Season Group 2 Trading Program on behalf of the owners and operators of 
the source and of each CSAPR NOX Ozone Season Group 2 unit 
at the source and that each such owner and operator shall be fully 
bound by my representations, actions, inactions, or submissions and by 
any decision or order issued to me by the Administrator regarding the 
source or unit.''
    (iii) ``Where there are multiple holders of a legal or equitable 
title to, or a leasehold interest in, a CSAPR NOX Ozone 
Season Group 2 unit, or where a utility or industrial customer 
purchases power from a CSAPR NOX Ozone Season Group 2 unit 
under a life-of-the-unit, firm power contractual arrangement, I certify 
that: I have given a written notice of my selection as the `designated 
representative' or `alternate designated representative', as 
applicable, and of the agreement by which I was selected to each owner 
and operator of the source and of each CSAPR NOX Ozone 
Season Group 2 unit at the source; and CSAPR NOX Ozone 
Season Group 2 allowances and proceeds of transactions involving CSAPR 
NOX Ozone Season Group 2 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 CSAPR NOX Ozone Season Group 2 allowances by 
contract, CSAPR NOX Ozone Season Group 2 allowances and 
proceeds of transactions involving CSAPR NOX Ozone Season 
Group 2 allowances will be deemed to be held or distributed in 
accordance with the contract.''
    (5) The signature of the designated representative and any 
alternate designated representative and the dates signed.
    (b) Unless otherwise required by the Administrator, documents of 
agreement referred to in the certificate of representation shall not be 
submitted to the Administrator. The Administrator shall not be under 
any obligation to review or evaluate the sufficiency of such documents, 
if submitted.
    (c) A certificate of representation under this section or Sec.  
97.516 that complies with the provisions of paragraph (a) of this 
section except that it contains the phrase ``TR NOX Ozone 
Season'' in place of the phrase ``CSAPR NOX Ozone Season 
Group 2'' in the required certification statements will be considered a 
complete certificate of representation under this section, and the 
certification statements included in such certificate of representation 
will be interpreted for purposes of this subpart as if the phrase 
``CSAPR NOX Ozone Season Group 2'' appeared in place of the 
phrase ``TR NOX Ozone Season''.

Sec.  97.817  Objections concerning designated representative and 
alternate designated representative.

    (a) Once a complete certificate of representation under Sec.  
97.816 has been submitted and received, the Administrator will rely on 
the certificate of representation unless and until a superseding 
complete certificate of representation under Sec.  97.816 is received 
by the Administrator.
    (b) Except as provided in paragraph (a) of this section, no 
objection or other communication submitted to the Administrator 
concerning the authorization, or any representation, action, inaction, 
or submission, of a designated representative or alternate designated 
representative shall affect any representation, action, inaction, or 
submission of the designated representative or alternate designated 
representative or the finality of any decision or order by the 
Administrator under the CSAPR NOX Ozone Season Group 2 
Trading Program.

[[Page 74639]]

    (c) The Administrator will not adjudicate any private legal dispute 
concerning the authorization or any representation, action, inaction, 
or submission of any designated representative or alternate designated 
representative, including private legal disputes concerning the 
proceeds of CSAPR NOX Ozone Season Group 2 allowance 
transfers.

Sec.  97.818  Delegation by designated representative and alternate 
designated representative.

    (a) A 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 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 a natural person to make an 
electronic submission to the Administrator in accordance with paragraph 
(a) or (b) of this section, the designated representative or alternate 
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, email address, telephone number, and 
facsimile transmission number (if any) of such designated 
representative or alternate designated representative;
    (2) The name, address, email address, telephone number, and 
facsimile transmission number (if any) of each such natural person 
(referred to in this section 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 designated 
representative or alternate designated representative:
    (i) ``I agree that any electronic submission to the Administrator 
that is made 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 designated representative or alternate designated 
representative, as appropriate, and before this notice of delegation is 
superseded by another notice of delegation under 40 CFR 97.818(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 97.818(d), I agree to maintain an 
email account and to notify the Administrator immediately of any change 
in my email address unless all delegation of authority by me under 40 
CFR 97.818 is terminated.''.
    (d) A notice of delegation submitted under paragraph (c) of this 
section shall be effective, with regard to the designated 
representative or alternate 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 designated representative or alternate 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 designated 
representative or alternate designated representative submitting such 
notice of delegation.
    (f) A notice of delegation submitted under paragraph (c) of this 
section or Sec.  97.518(c) that complies with the provisions of 
paragraph (c) of this section except that it contains the terms ``40 
CFR 97.518(d)'' and ``40 CFR 97.518'' in place of the terms ``40 CFR 
97.818(d)'' and ``40 CFR 97.818'', respectively, in the required 
certification statements will be considered a valid notice of 
delegation submitted under paragraph (c) of this section, and the 
certification statements included in such notice of delegation will be 
interpreted for purposes of this subpart as if the terms ``40 CFR 
97.818(d)'' and ``40 CFR 97.818'' appeared in place of the terms ``40 
CFR 97.518(d)'' and ``40 CFR 97.518'', respectively.

Sec.  97.819   [Reserved]

Sec.  97.820  Establishment of compliance accounts, assurance accounts, 
and general accounts.

    (a) Compliance accounts. Upon receipt of a complete certificate of 
representation under Sec.  97.816, the Administrator will establish a 
compliance account for the CSAPR NOX Ozone Season Group 2 
source for which the certificate of representation was submitted, 
unless the source already has a compliance account. The designated 
representative and any alternate designated representative of the 
source shall be the authorized account representative and the alternate 
authorized account representative respectively of the compliance 
account.
    (b) Assurance accounts. The Administrator will establish assurance 
accounts for certain owners and operators and States in accordance with 
Sec.  97.825(b)(3).
    (c) General accounts--(1) Application for general account. (i) Any 
person may apply to open a general account, for the purpose of holding 
and transferring CSAPR NOX Ozone Season Group 2 allowances, 
by submitting to the Administrator a complete application for a general 
account. Such application shall designate one and only one authorized 
account representative and may designate one and only one alternate 
authorized account representative who may act on behalf of the 
authorized account representative.
    (A) The authorized account representative and alternate authorized 
account representative shall be selected by an agreement binding on the 
persons who have an ownership interest with respect to CSAPR 
NOX Ozone Season Group 2 allowances held in the general 
account.
    (B) The agreement by which the alternate authorized account 
representative is selected shall include a procedure for authorizing 
the alternate authorized account representative to act in lieu of the 
authorized account representative.
    (ii) A complete application for a general account shall include the 
following elements in a format prescribed by the Administrator:
    (A) Name, mailing address, email address (if any), telephone 
number, and facsimile transmission number (if any) of the authorized 
account representative and any alternate authorized account 
representative;
    (B) An identifying name for the general account;
    (C) A list of all persons subject to a binding agreement for the 
authorized account representative and any alternate authorized account 
representative to represent their ownership interest with respect to 
the CSAPR NOX Ozone Season Group 2 allowances held in the 
general account;
    (D) The following certification statement by the authorized account 
representative and any alternate authorized account representative: ``I 
certify that I was selected as the authorized account representative or 
the alternate authorized account

[[Page 74640]]

representative, as applicable, by an agreement that is binding on all 
persons who have an ownership interest with respect to CSAPR 
NOX Ozone Season Group 2 allowances held in the general 
account. I certify that I have all the necessary authority to carry out 
my duties and responsibilities under the CSAPR NOX Ozone 
Season Group 2 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 decision or order issued to me by 
the Administrator regarding the general account.''
    (E) The signature of the authorized account representative and any 
alternate authorized account representative and the dates signed.
    (iii) Unless otherwise required by the Administrator, documents of 
agreement referred to in the application for a general account shall 
not be submitted to the Administrator. The Administrator shall not be 
under any obligation to review or evaluate the sufficiency of such 
documents, if submitted.
    (iv) An application for a general account under paragraph (c)(1) of 
this section or Sec.  97.520(c)(1) that complies with the provisions of 
paragraph (c)(1) of this section except that it contains the phrase 
``TR NOX Ozone Season'' in place of the phrase ``CSAPR 
NOX Ozone Season Group 2'' in the required certification 
statement will be considered a complete application for a general 
account under paragraph (c)(1) of this section, and the certification 
statement included in such application for a general account will be 
interpreted for purposes of this subpart as if the phrase ``CSAPR 
NOX Ozone Season Group 2'' appeared in place of the phrase 
``TR NOX Ozone Season''.
    (2) Authorization of authorized account representative and 
alternate authorized account representative. (i) Upon receipt by the 
Administrator of a complete application for a general account under 
paragraph (c)(1) of this section, the Administrator will establish a 
general account for the person or persons for whom the application is 
submitted, and upon and after such receipt by the Administrator:
    (A) The authorized account representative of the general account 
shall be authorized and shall represent and, by his or her 
representations, actions, inactions, or submissions, legally bind each 
person who has an ownership interest with respect to CSAPR 
NOX Ozone Season Group 2 allowances held in the general 
account in all matters pertaining to the CSAPR NOX Ozone 
Season Group 2 Trading Program, notwithstanding any agreement between 
the authorized account representative and such person.
    (B) Any alternate authorized account representative shall be 
authorized, and any representation, action, inaction, or submission by 
any alternate authorized account representative shall be deemed to be a 
representation, action, inaction, or submission by the authorized 
account representative.
    (C) Each person who has an ownership interest with respect to CSAPR 
NOX Ozone Season Group 2 allowances held in the general 
account shall be bound by any decision or order issued to the 
authorized account representative or alternate authorized account 
representative by the Administrator regarding the general account.
    (ii) Except as provided in paragraph (c)(5) of this section 
concerning delegation of authority to make submissions, each submission 
concerning the general account shall be made, signed, and certified by 
the authorized account representative or any alternate authorized 
account representative for the persons having an ownership interest 
with respect to CSAPR NOX Ozone Season Group 2 allowances 
held in the general account. Each such submission shall include the 
following certification statement by the authorized account 
representative or any alternate authorized account representative: ``I 
am authorized to make this submission on behalf of the persons having 
an ownership interest with respect to the CSAPR NOX Ozone 
Season Group 2 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) Except in this section, whenever the term ``authorized 
account representative'' is used in this subpart, the term shall be 
construed to include the authorized account representative or any 
alternate authorized account representative.
    (iv) A certification statement submitted in accordance with 
paragraph (c)(2)(ii) of this section that contains the phrase ``TR 
NOX Ozone Season'' will be interpreted for purposes of this 
subpart as if the phrase ``CSAPR NOX Ozone Season Group 2'' 
appeared in place of the phrase ``TR NOX Ozone Season''.
    (3) Changing authorized account representative and alternate 
authorized account representative; changes in persons with ownership 
interest. (i) The authorized account representative of 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 (c)(1) of this section. Notwithstanding any such change, all 
representations, actions, inactions, and submissions by the previous 
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 authorized account representative 
and the persons with an ownership interest with respect to the CSAPR 
NOX Ozone Season Group 2 allowances in the general account.
    (ii) The alternate authorized account representative of 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 (c)(1) of this section. Notwithstanding any such change, all 
representations, actions, inactions, and submissions by the previous 
alternate 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 authorized 
account representative, the authorized account representative, and the 
persons with an ownership interest with respect to the CSAPR 
NOX Ozone Season Group 2 allowances in the general account.
    (iii)(A) In the event a person having an ownership interest with 
respect to CSAPR NOX Ozone Season Group 2 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 authorized 
account representative and any alternate authorized account 
representative of the account, and the decisions and orders of the 
Administrator, as if the person were included in such list.
    (B) Within 30 days after any change in the persons having an 
ownership interest with respect to NOX Ozone Season Group 2 
allowances in the general account, including the addition or removal of 
a person, the authorized account representative or any alternate 
authorized account representative shall

[[Page 74641]]

submit a revision to the application for a general account amending the 
list of persons having an ownership interest with respect to the CSAPR 
NOX Ozone Season Group 2 allowances in the general account 
to include the change.
    (4) Objections concerning authorized account representative and 
alternate authorized account representative. (i) Once a complete 
application for a general account under paragraph (c)(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 (c)(1) of this section is received by 
the Administrator.
    (ii) Except as provided in paragraph (c)(4)(i) of this section, no 
objection or other communication submitted to the Administrator 
concerning the authorization, or any representation, action, inaction, 
or submission of the authorized account representative or any alternate 
authorized account representative of a general account shall affect any 
representation, action, inaction, or submission of the authorized 
account representative or any alternate authorized account 
representative or the finality of any decision or order by the 
Administrator under the CSAPR NOX Ozone Season Group 2 
Trading Program.
    (iii) The Administrator will not adjudicate any private legal 
dispute concerning the authorization or any representation, action, 
inaction, or submission of the authorized account representative or any 
alternate authorized account representative of a general account, 
including private legal disputes concerning the proceeds of CSAPR 
NOX Ozone Season Group 2 allowance transfers.
    (5) Delegation by authorized account representative and alternate 
authorized account representative. (i) An authorized account 
representative of a general account 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.
    (ii) An alternate authorized account representative of a general 
account 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.
    (iii) In order to delegate authority to a natural person to make an 
electronic submission to the Administrator in accordance with paragraph 
(c)(5)(i) or (ii) of this section, the authorized account 
representative or alternate 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, email address, telephone number, and 
facsimile transmission number (if any) of such authorized account 
representative or alternate authorized account representative;
    (B) The name, address, email address, telephone number, and 
facsimile transmission number (if any) of each such natural person 
(referred to in this section as an ``agent'');
    (C) For each such natural person, a list of the type or types of 
electronic submissions under paragraph (c)(5)(i) or (ii) of this 
section for which authority is delegated to him or her;
    (D) The following certification statement by such authorized 
account representative or alternate authorized account representative: 
``I agree that any electronic submission to the Administrator that is 
made 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 an authorized account representative or alternate authorized 
account representative, as appropriate, and before this notice of 
delegation is superseded by another notice of delegation under 40 CFR 
97.820(c)(5)(iv) shall be deemed to be an electronic submission by 
me.''; and
    (E) The following certification statement by such authorized 
account representative or alternate authorized account representative: 
``Until this notice of delegation is superseded by another notice of 
delegation under 40 CFR 97.820(c)(5)(iv), I agree to maintain an email 
account and to notify the Administrator immediately of any change in my 
email address unless all delegation of authority by me under 40 CFR 
97.820(c)(5) is terminated.''.
    (iv) A notice of delegation submitted under paragraph (c)(5)(iii) 
of this section shall be effective, with regard to the authorized 
account representative or alternate 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 authorized account 
representative or alternate 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 (c)(5)(iii)(D) of this section and made in accordance with a 
notice of delegation effective under paragraph (c)(5)(iv) of this 
section shall be deemed to be an electronic submission by the 
authorized account representative or alternate authorized account 
representative submitting such notice of delegation.
    (vi) A notice of delegation submitted under paragraph (c)(5)(iii) 
of this section or Sec.  97.520(c)(5)(iii) that complies with the 
provisions of paragraph (c)(5)(iii) of this section except that it 
contains the terms ``40 CFR 97.520(c)(5)(iv)'' and ``40 CFR 
97.520(c)(5)'' in place of the terms ``40 CFR 97.820(c)(5)(iv)'' and 
``40 CFR 97.820(c)(5)'', respectively, in the required certification 
statements will be considered a valid notice of delegation submitted 
under paragraph (c)(5)(iii) of this section, and the certification 
statements included in such notice of delegation will be interpreted 
for purposes of this subpart as if the terms ``40 CFR 
97.820(c)(5)(iv)'' and ``40 CFR 97.820(c)(5)'' appeared in place of the 
terms ``40 CFR 97.520(c)(5)(iv)'' and ``40 CFR 97.520(c)(5)'', 
respectively.
    (6) Closing a general account. (i) The authorized account 
representative or alternate authorized account representative of a 
general account may submit to the Administrator a request to close the 
account. Such request shall include a correctly submitted CSAPR 
NOX Ozone Season Group 2 allowance transfer under Sec.  
97.822 for any CSAPR NOX Ozone Season Group 2 allowances in 
the account to one or more other Allowance Management System accounts.
    (ii) If a general account has no CSAPR NOX Ozone Season 
Group 2 allowance transfers to or from the account for a 12-month 
period or longer and does not contain any CSAPR NOX Ozone 
Season Group 2 allowances, the Administrator may notify the authorized 
account representative for the account that the account will be closed 
after 30 days after the notice is sent. The account will be closed 
after the 30-day period unless, before the end of the 30-day period, 
the Administrator receives a correctly submitted CSAPR NOX 
Ozone Season Group 2 allowance transfer under Sec.  97.822 to the 
account or a statement submitted by the authorized account 
representative or alternate authorized account representative 
demonstrating to the satisfaction of the Administrator good cause as to 
why the account should not be closed.
    (d) Account identification. The Administrator will assign a unique 
identifying number to each account

[[Page 74642]]

established under paragraph (a), (b), or (c) of this section.
    (e) Responsibilities of authorized account representative and 
alternate authorized account representative. After the establishment of 
a compliance account or general account, the Administrator will accept 
or act on a submission pertaining to the account, including, but not 
limited to, submissions concerning the deduction or transfer of CSAPR 
NOX Ozone Season Group 2 allowances in the account, only if 
the submission has been made, signed, and certified in accordance with 
Sec. Sec.  97.814(a) and 97.818 or paragraphs (c)(2)(ii) and (c)(5) of 
this section.

Sec.  97.821  Recordation of CSAPR NOX Ozone Season Group 2 allowance 
allocations and auction results.

    (a) By January 9, 2017, the Administrator will record in each CSAPR 
NOX Ozone Season Group 2 source's compliance account the 
CSAPR NOX Ozone Season Group 2 allowances allocated to the 
CSAPR NOX Ozone Season Group 2 units at the source in 
accordance with Sec.  97.811(a) for the control period in 2017.
    (b) By January 9, 2017, the Administrator will record in each CSAPR 
NOX Ozone Season Group 2 source's compliance account the 
CSAPR NOX Ozone Season Group 2 allowances allocated to the 
CSAPR NOX Ozone Season Group 2 units at the source in 
accordance with Sec.  97.811(a) for the control period in 2018, unless 
the State in which the source is located notifies the Administrator in 
writing by December 27, 2016 of the State's intent to submit to the 
Administrator a complete SIP revision by April 1, 2017 meeting the 
requirements of Sec.  52.38(b)(7)(i) through (iv) of this chapter.
    (1) If, by April 1, 2017 the State does not submit to the 
Administrator such complete SIP revision, the Administrator will record 
by April 15, 2017 in each CSAPR NOX Ozone Season Group 2 
source's compliance account the CSAPR NOX Ozone Season Group 
2 allowances allocated to the CSAPR NOX Ozone Season Group 2 
units at the source in accordance with Sec.  97.811(a) for the control 
period in 2018.
    (2) If the State submits to the Administrator by April 1, 2017 and 
the Administrator approves by October 1, 2017 such complete SIP 
revision, the Administrator will record by October 1, 2017 in each 
CSAPR NOX Ozone Season Group 2 source's compliance account 
the CSAPR NOX Ozone Season Group 2 allowances allocated to 
the CSAPR NOX Ozone Season Group 2 units at the source as 
provided in such approved, complete SIP revision for the control period 
in 2018.
    (3) If the State submits to the Administrator by April 1, 2017 and 
the Administrator does not approve by October 1, 2017 such complete SIP 
revision, the Administrator will record by October 1, 2017 in each 
CSAPR NOX Ozone Season Group 2 source's compliance account 
the CSAPR NOX Ozone Season Group 2 allowances allocated to 
the CSAPR NOX Ozone Season Group 2 units at the source in 
accordance with Sec.  97.811(a) for the control period in 2018.
    (c) By July 1, 2018, the Administrator will record in each CSAPR 
NOX Ozone Season Group 2 source's compliance account the 
CSAPR NOX Ozone Season Group 2 allowances allocated to the 
CSAPR NOX Ozone Season Group 2 units at the source, or in 
each appropriate Allowance Management System account the CSAPR 
NOX Ozone Season Group 2 allowances auctioned to CSAPR 
NOX Ozone Season Group 2 units, in accordance with Sec.  
97.811(a), or with a SIP revision approved under Sec.  52.38(b)(6), 
(8), or (9) of this chapter, for the control periods in 2019 and 2020.
    (d) By July 1, 2019, the Administrator will record in each CSAPR 
NOX Ozone Season Group 2 source's compliance account the 
CSAPR NOX Ozone Season Group 2 allowances allocated to the 
CSAPR NOX Ozone Season Group 2 units at the source, or in 
each appropriate Allowance Management System account the CSAPR 
NOX Ozone Season Group 2 allowances auctioned to CSAPR 
NOX Ozone Season Group 2 units, in accordance with Sec.  
97.811(a), or with a SIP revision approved under Sec.  52.38(b)(6), 
(8), or (9) of this chapter, for the control periods in 2021 and 2022.
    (e) By July 1, 2020, the Administrator will record in each CSAPR 
NOX Ozone Season Group 2 source's compliance account the 
CSAPR NOX Ozone Season Group 2 allowances allocated to the 
CSAPR NOX Ozone Season Group 2 units at the source, or in 
each appropriate Allowance Management System account the CSAPR 
NOX Ozone Season Group 2 allowances auctioned to CSAPR 
NOX Ozone Season Group 2 units, in accordance with Sec.  
97.811(a), or with a SIP revision approved under Sec.  52.38(b)(6), 
(8), or (9) of this chapter, for the control periods in 2023 and 2024.
    (f) By July 1, 2021 and July 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 2 source's compliance account the CSAPR NOX Ozone 
Season Group 2 allowances allocated to the CSAPR NOX Ozone 
Season Group 2 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 2 
allowances auctioned to CSAPR NOX Ozone Season Group 2 
units, in accordance with Sec.  97.811(a), or with a SIP revision 
approved under Sec.  52.38(b)(6), (8), or (9) of this chapter, for the 
control period in the fourth year after the year of the applicable 
recordation deadline under this paragraph.
    (g) By August 1, 2017 and August 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 2 source's compliance account the CSAPR NOX Ozone 
Season Group 2 allowances allocated to the CSAPR NOX Ozone 
Season Group 2 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 2 
allowances auctioned to CSAPR NOX Ozone Season Group 2 
units, in accordance with Sec.  97.812(a)(2) through (8) and (12), or 
with a SIP revision approved under Sec.  52.38(b)(6), (8), or (9) of 
this chapter, for the control period in the year of the applicable 
recordation deadline under this paragraph.
    (h) By August 1, 2017 and August 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 2 source's compliance account the CSAPR NOX Ozone 
Season Group 2 allowances allocated to the CSAPR NOX Ozone 
Season Group 2 units at the source in accordance with Sec.  
97.812(b)(2) through (8) and (12) for the control period in the year of 
the applicable recordation deadline under this paragraph.
    (i) By February 15, 2018 and February 15 of each year thereafter, 
the Administrator will record in each CSAPR NOX Ozone Season 
Group 2 source's compliance account the CSAPR NOX Ozone 
Season Group 2 allowances allocated to the CSAPR NOX Ozone 
Season Group 2 units at the source in accordance with Sec.  
97.812(a)(9) through (12) for the control period in the year before the 
year of the applicable recordation deadline under this paragraph.
    (j) By February 15, 2018 and February 15 of each year thereafter, 
the Administrator will record in each CSAPR NOX Ozone Season 
Group 2 source's compliance account the CSAPR NOX Ozone 
Season Group 2 allowances allocated to the CSAPR NOX Ozone 
Season Group 2 units at the source in accordance with Sec.  
97.812(b)(9) through (12) for the control period in the year before the 
year of the applicable

[[Page 74643]]

recordation deadline under this paragraph.
    (k) By the date 15 days after the date on which any allocation or 
auction results, other than an allocation or auction results described 
in paragraphs (a) through (j) of this section, of CSAPR NOX 
Ozone Season Group 2 allowances to a recipient is made by or are 
submitted to the Administrator in accordance with Sec.  97.811 or Sec.  
97.812 or with a SIP revision approved under Sec.  52.38(b)(6), (8), or 
(9) of this chapter, the Administrator will record such allocation or 
auction results in the appropriate Allowance Management System account.
    (l) When recording the allocation or auction of CSAPR 
NOX Ozone Season Group 2 allowances to a CSAPR 
NOX Ozone Season Group 2 unit or other entity in an 
Allowance Management System account, the Administrator will assign each 
CSAPR NOX Ozone Season Group 2 allowance a unique 
identification number that will include digits identifying the year of 
the control period for which the CSAPR NOX Ozone Season 
Group 2 allowance is allocated or auctioned.

Sec.  97.822  Submission of CSAPR NOX Ozone Season Group 2 allowance 
transfers.

    (a) An authorized account representative seeking recordation of a 
CSAPR NOX Ozone Season Group 2 allowance transfer shall 
submit the transfer to the Administrator.
    (b) A CSAPR NOX Ozone Season Group 2 allowance transfer 
shall be correctly submitted if:
    (1) The transfer includes the following elements, in a format 
prescribed by the Administrator:
    (i) The account numbers established by the Administrator for both 
the transferor and transferee accounts;
    (ii) The serial number of each CSAPR NOX Ozone Season 
Group 2 allowance that is in the transferor account and is to be 
transferred; and
    (iii) The name and signature of the authorized account 
representative of the transferor account and the date signed; and
    (2) When the Administrator attempts to record the transfer, the 
transferor account includes each CSAPR NOX Ozone Season 
Group 2 allowance identified by serial number in the transfer.

Sec.  97.823  Recordation of CSAPR NOX Ozone Season Group 2 allowance 
transfers.

    (a) Within 5 business days (except as provided in paragraph (b) of 
this section) of receiving a CSAPR NOX Ozone Season Group 2 
allowance transfer that is correctly submitted under Sec.  97.822, the 
Administrator will record a CSAPR NOX Ozone Season Group 2 
allowance transfer by moving each CSAPR NOX Ozone Season 
Group 2 allowance from the transferor account to the transferee account 
as specified in the transfer.
    (b) A CSAPR NOX Ozone Season Group 2 allowance transfer 
to or from a compliance account that is submitted for recordation after 
the allowance transfer deadline for a control period and that includes 
any CSAPR NOX Ozone Season Group 2 allowances allocated or 
auctioned for any control period before such allowance transfer 
deadline will not be recorded until after the Administrator completes 
the deductions from such compliance account under Sec.  97.824 for the 
control period immediately before such allowance transfer deadline.
    (c) Where a CSAPR NOX Ozone Season Group 2 allowance 
transfer is not correctly submitted under Sec.  97.822, the 
Administrator will not record such transfer.
    (d) Within 5 business days of recordation of a CSAPR NOX 
Ozone Season Group 2 allowance transfer under paragraphs (a) and (b) of 
the section, the Administrator will notify the authorized account 
representatives of both the transferor and transferee accounts.
    (e) Within 10 business days of receipt of a CSAPR NOX 
Ozone Season Group 2 allowance transfer that is not correctly submitted 
under Sec.  97.822, the Administrator will notify the 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.

Sec.  97.824  Compliance with CSAPR NOX Ozone Season Group 2 emissions 
limitation.

    (a) Availability for deduction for compliance. CSAPR NOX 
Ozone Season Group 2 allowances are available to be deducted for 
compliance with a source's CSAPR NOX Ozone Season Group 2 
emissions limitation for a control period in a given year only if the 
CSAPR NOX Ozone Season Group 2 allowances:
    (1) Were allocated or auctioned for such control period or a 
control period in a prior year; and
    (2) Are held in the source's compliance account as of the allowance 
transfer deadline for such control period.
    (b) Deductions for compliance. After the recordation, in accordance 
with Sec.  97.823, of CSAPR NOX Ozone Season Group 2 
allowance transfers submitted by the allowance transfer deadline for a 
control period in a given year, the Administrator will deduct from each 
source's compliance account CSAPR NOX Ozone Season Group 2 
allowances available under paragraph (a) of this section in order to 
determine whether the source meets the CSAPR NOX Ozone 
Season Group 2 emissions limitation for such control period, as 
follows:
    (1) Until the amount of CSAPR NOX Ozone Season Group 2 
allowances deducted equals the number of tons of total NOX 
emissions from all CSAPR NOX Ozone Season Group 2 units at 
the source for such control period; or
    (2) If there are insufficient CSAPR NOX Ozone Season 
Group 2 allowances to complete the deductions in paragraph (b)(1) of 
this section, until no more CSAPR NOX Ozone Season Group 2 
allowances available under paragraph (a) of this section remain in the 
compliance account.
    (c)(1) Identification of CSAPR NOX Ozone Season Group 2 
allowances by serial number. The authorized account representative for 
a source's compliance account may request that specific CSAPR 
NOX Ozone Season Group 2 allowances, identified by serial 
number, in the compliance account be deducted for emissions or excess 
emissions for a control period in a given year in accordance with 
paragraph (b) or (d) of this section. In order to be complete, such 
request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the CSAPR 
NOX Ozone Season Group 2 source and the appropriate serial 
numbers.
    (2) First-in, first-out. The Administrator will deduct CSAPR 
NOX Ozone Season Group 2 allowances under paragraph (b) or 
(d) of this section from the source's compliance account in accordance 
with a complete request under paragraph (c)(1) of this section or, in 
the absence of such request or in the case of identification of an 
insufficient amount of CSAPR NOX Ozone Season Group 2 
allowances in such request, on a first-in, first-out accounting basis 
in the following order:
    (i) Any CSAPR NOX Ozone Season Group 2 allowances that 
were recorded in the compliance account pursuant to Sec.  97.821 and 
not transferred out of the compliance account, in the order of 
recordation; and then
    (ii) Any other CSAPR NOX Ozone Season Group 2 allowances 
that were transferred to and recorded in the compliance account 
pursuant to this subpart or that were recorded in the

[[Page 74644]]

compliance account pursuant to Sec.  97.526(c), in the order of 
recordation.
    (d) Deductions for excess emissions. After making the deductions 
for compliance under paragraph (b) of this section for a control period 
in a year in which the CSAPR NOX Ozone Season Group 2 source 
has excess emissions, the Administrator will deduct from the source's 
compliance account an amount of CSAPR NOX Ozone Season Group 
2 allowances, allocated or auctioned for a control period in a prior 
year or the control period in the year of the excess emissions or in 
the immediately following year, equal to two times the number of tons 
of the source's excess emissions.
    (e) Recordation of deductions. The Administrator will record in the 
appropriate compliance account all deductions from such an account 
under paragraphs (b) and (d) of this section.

Sec.  97.825  Compliance with CSAPR NOX Ozone Season Group 2 assurance 
provisions.

    (a) Availability for deduction. CSAPR NOX Ozone Season 
Group 2 allowances are available to be deducted for compliance with the 
CSAPR NOX Ozone Season Group 2 assurance provisions for a 
control period in a given year by the owners and operators of a group 
of one or more base CSAPR NOX Ozone Season Group 2 sources 
and units in a State (and Indian country within the borders of such 
State) only if the CSAPR NOX Ozone Season Group 2 
allowances:
    (1) Were allocated or auctioned for a control period in a prior 
year or the control period in the given year or in the immediately 
following year; and
    (2) Are held in the assurance account, established by the 
Administrator for such owners and operators of such group of base CSAPR 
NOX Ozone Season Group 2 sources and units in such State 
(and Indian country within the borders of such State) under paragraph 
(b)(3) of this section, as of the deadline established in paragraph 
(b)(4) of this section.
    (b) Deductions for compliance. The Administrator will deduct CSAPR 
NOX Ozone Season Group 2 allowances available under 
paragraph (a) of this section for compliance with the CSAPR 
NOX Ozone Season Group 2 assurance provisions for a State 
for a control period in a given year in accordance with the following 
procedures:
    (1) By June 1, 2018 and June 1 of each year thereafter, the 
Administrator will:
    (i) Calculate, for each State (and Indian country within the 
borders of such State), the total NOX emissions from all 
base CSAPR NOX Ozone Season Group 2 units at base CSAPR 
NOX Ozone Season Group 2 sources in the State (and Indian 
country within the borders of such State) during the control period in 
the year before the year of this calculation deadline and the amount, 
if any, by which such total NOX emissions exceed the State 
assurance level as described in Sec.  97.806(c)(2)(iii); and
    (ii) Promulgate a notice of data availability of the results of the 
calculations required in paragraph (b)(1)(i) of this section, including 
separate calculations of the NOX emissions from each base 
CSAPR NOX Ozone Season Group 2 source.
    (2) For each notice of data availability required in paragraph 
(b)(1)(ii) of this section and for any State (and Indian country within 
the borders of such State) identified in such notice as having base 
CSAPR NOX Ozone Season Group 2 units with total 
NOX emissions exceeding the State assurance level for a 
control period in a given year, as described in Sec.  
97.806(c)(2)(iii):
    (i) By July 1 immediately after the promulgation of such notice, 
the designated representative of each base CSAPR NOX Ozone 
Season Group 2 source in each such State (and Indian country within the 
borders of such State) shall submit a statement, in a format prescribed 
by the Administrator, providing for each base CSAPR NOX 
Ozone Season Group 2 unit (if any) at the source that operates during, 
but is not allocated an amount of CSAPR NOX Ozone Season 
Group 2 allowances for, such control period, the unit's allowable 
NOX emission rate for such control period and, if such rate 
is expressed in lb per mmBtu, the unit's heat rate.
    (ii) By August 1 immediately after the promulgation of such notice, 
the Administrator will calculate, for each such State (and Indian 
country within the borders of such State) and such control period and 
each common designated representative for such control period for a 
group of one or more base CSAPR NOX Ozone Season Group 2 
sources and units in the State (and Indian country within the borders 
of such State), the common designated representative's share of the 
total NOX emissions from all base CSAPR NOX Ozone 
Season Group 2 units at base CSAPR NOX Ozone Season Group 2 
sources in the State (and Indian country within the borders of such 
State), the common designated representative's assurance level, and the 
amount (if any) of CSAPR NOX Ozone Season Group 2 allowances 
that the owners and operators of such group of sources and units must 
hold in accordance with the calculation formula in Sec.  
97.806(c)(2)(i) and will promulgate a notice of data availability of 
the results of these calculations.
    (iii) The Administrator will provide an opportunity for submission 
of objections to the calculations referenced by the notice of data 
availability required in paragraph (b)(2)(ii) of this section and the 
calculations referenced by the relevant notice of data availability 
required in paragraph (b)(1)(ii) of this section.
    (A) Objections shall be submitted by the deadline specified in such 
notice and shall be limited to addressing whether the calculations 
referenced in the relevant notice required under paragraph (b)(1)(ii) 
of this section and referenced in the notice required under paragraph 
(b)(2)(ii) of this section are in accordance with Sec.  
97.806(c)(2)(iii), Sec. Sec.  97.806(b) and 97.830 through 97.835, the 
definitions of ``common designated representative'', ``common 
designated representative's assurance level'', and ``common designated 
representative's share'' in Sec.  97.802, and the calculation formula 
in Sec.  97.806(c)(2)(i).
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(iii)(A) of this section. By October 1 
immediately after the promulgation of such notice, the Administrator 
will promulgate a notice of data availability of the calculations 
incorporating any adjustments that the Administrator determines to be 
necessary and the reasons for accepting or rejecting any objections 
submitted in accordance with paragraph (b)(2)(iii)(A) of this section.
    (3) For any State (and Indian country within the borders of such 
State) referenced in each notice of data availability required in 
paragraph (b)(2)(iii)(B) of this section as having base CSAPR 
NOX Ozone Season Group 2 units with total NOX 
emissions exceeding the State assurance level for a control period in a 
given year, the Administrator will establish one assurance account for 
each set of owners and operators referenced, in the notice of data 
availability required under paragraph (b)(2)(iii)(B) of this section, 
as all of the owners and operators of a group of base CSAPR 
NOX Ozone Season Group 2 sources and units in the State (and 
Indian country within the borders of such State) having a common 
designated representative for such control period and as being required 
to hold CSAPR NOX Ozone Season Group 2 allowances.
    (4)(i) As of midnight of November 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(2)(iii)(B) of this section, the owners and operators described in

[[Page 74645]]

paragraph (b)(3) of this section shall hold in the assurance account 
established for them and for the appropriate base CSAPR NOX 
Ozone Season Group 2 sources, base CSAPR NOX Ozone Season 
Group 2 units, and State (and Indian country within the borders of such 
State) under paragraph (b)(3) of this section a total amount of CSAPR 
NOX Ozone Season Group 2 allowances, available for deduction 
under paragraph (a) of this section, equal to the amount such owners 
and operators are required to hold with regard to such sources, units 
and State (and Indian country within the borders of such State) as 
calculated by the Administrator and referenced in such notice.
    (ii) Notwithstanding the allowance-holding deadline specified in 
paragraph (b)(4)(i) of this section, if November 1 is not a business 
day, then such allowance-holding deadline shall be midnight of the 
first business day thereafter.
    (5) After November 1 (or the date described in paragraph (b)(4)(ii) 
of this section) immediately after the promulgation of each notice of 
data availability required in paragraph (b)(2)(iii)(B) of this section 
and after the recordation, in accordance with Sec.  97.823, of CSAPR 
NOX Ozone Season Group 2 allowance transfers submitted by 
midnight of such date, the Administrator will determine whether the 
owners and operators described in paragraph (b)(3) of this section 
hold, in the assurance account for the appropriate base CSAPR 
NOX Ozone Season Group 2 sources, base CSAPR NOX 
Ozone Season Group 2 units, and State (and Indian country within the 
borders of such State) established under paragraph (b)(3) of this 
section, the amount of CSAPR NOX Ozone Season Group 2 
allowances available under paragraph (a) of this section that the 
owners and operators are required to hold with regard to such sources, 
units, and State (and Indian country within the borders of such State) 
as calculated by the Administrator and referenced in the notice 
required in paragraph (b)(2)(iii)(B) of this section.
    (6) Notwithstanding any other provision of this subpart and any 
revision, made by or submitted to the Administrator after the 
promulgation of the notice of data availability required in paragraph 
(b)(2)(iii)(B) of this section for a control period in a given year, of 
any data used in making the calculations referenced in such notice, the 
amounts of CSAPR NOX Ozone Season Group 2 allowances that 
the owners and operators are required to hold in accordance with Sec.  
97.806(c)(2)(i) for such control period shall continue to be such 
amounts as calculated by the Administrator and referenced in such 
notice required in paragraph (b)(2)(iii)(B) of this section, except as 
follows:
    (i) If any such data are revised by the Administrator as a result 
of a decision in or settlement of litigation concerning such data on 
appeal under part 78 of this chapter of such notice, or on appeal under 
section 307 of the Clean Air Act of a decision rendered under part 78 
of this chapter on appeal of such notice, then the Administrator will 
use the data as so revised to recalculate the amounts of CSAPR 
NOX Ozone Season Group 2 allowances that owners and 
operators are required to hold in accordance with the calculation 
formula in Sec.  97.806(c)(2)(i) for such control period with regard to 
the base CSAPR NOX Ozone Season Group 2 sources, base CSAPR 
NOX Ozone Season Group 2 units, and State (and Indian 
country within the borders of such State) involved, provided that such 
litigation under part 78 of this chapter, or the proceeding under part 
78 of this chapter that resulted in the decision appealed in such 
litigation under section 307 of the Clean Air Act, was initiated no 
later than 30 days after promulgation of such notice required in 
paragraph (b)(2)(iii)(B) of this section.
    (ii) If any such data are revised by the owners and operators of a 
base CSAPR NOX Ozone Season Group 2 source and base CSAPR 
NOX Ozone Season Group 2 unit whose designated 
representative submitted such data under paragraph (b)(2)(i) of this 
section, as a result of a decision in or settlement of litigation 
concerning such submission, then the Administrator will use the data as 
so revised to recalculate the amounts of CSAPR NOX Ozone 
Season Group 2 allowances that owners and operators are required to 
hold in accordance with the calculation formula in Sec.  
97.806(c)(2)(i) for such control period with regard to the base CSAPR 
NOX Ozone Season Group 2 sources, base CSAPR NOX 
Ozone Season Group 2 units, and State (and Indian country within the 
borders of such State) involved, provided that such litigation was 
initiated no later than 30 days after promulgation of such notice 
required in paragraph (b)(2)(iii)(B) of this section.
    (iii) If the revised data are used to recalculate, in accordance 
with paragraphs (b)(6)(i) and (ii) of this section, the amount of CSAPR 
NOX Ozone Season Group 2 allowances that the owners and 
operators are required to hold for such control period with regard to 
the base CSAPR NOX Ozone Season Group 2 sources, base CSAPR 
NOX Ozone Season Group 2 units, and State (and Indian 
country within the borders of such State) involved--
    (A) Where the amount of CSAPR NOX Ozone Season Group 2 
allowances that the owners and operators are required to hold increases 
as a result of the use of all such revised data, the Administrator will 
establish a new, reasonable deadline on which the owners and operators 
shall hold the additional amount of CSAPR NOX Ozone Season 
Group 2 allowances in the assurance account established by the 
Administrator for the appropriate base CSAPR NOX Ozone 
Season Group 2 sources, base CSAPR NOX Ozone Season Group 2 
units, and State (and Indian country within the borders of such State) 
under paragraph (b)(3) of this section. The owners' and operators' 
failure to hold such additional amount, as required, before the new 
deadline shall not be a violation of the Clean Air Act. The owners' and 
operators' failure to hold such additional amount, as required, as of 
the new deadline shall be a violation of the Clean Air Act. Each CSAPR 
NOX Ozone Season Group 2 allowance that the owners and 
operators fail to hold as required as of the new deadline, and each day 
in such control period, shall be a separate violation of the Clean Air 
Act.
    (B) For the owners and operators for which the amount of CSAPR 
NOX Ozone Season Group 2 allowances required to be held 
decreases as a result of the use of all such revised data, the 
Administrator will record, in all accounts from which CSAPR 
NOX Ozone Season Group 2 allowances were transferred by such 
owners and operators for such control period to the assurance account 
established by the Administrator for the appropriate base CSAPR 
NOX Ozone Season Group 2 sources, base CSAPR NOX 
Ozone Season Group 2 units, and State (and Indian country within the 
borders of such State) under paragraph (b)(3) of this section, a total 
amount of the CSAPR NOX Ozone Season Group 2 allowances held 
in such assurance account equal to the amount of the decrease. If CSAPR 
NOX Ozone Season Group 2 allowances were transferred to such 
assurance account from more than one account, the amount of CSAPR 
NOX Ozone Season Group 2 allowances recorded in each such 
transferor account will be in proportion to the percentage of the total 
amount of CSAPR NOX Ozone Season Group 2 allowances 
transferred to such assurance account for such control period from such 
transferor account.
    (C) Each CSAPR NOX Ozone Season Group 2 allowance held 
under

[[Page 74646]]

paragraph (b)(6)(iii)(A) of this section as a result of recalculation 
of requirements under the CSAPR NOX Ozone Season Group 2 
assurance provisions for such control period must be a CSAPR 
NOX Ozone Season Group 2 allowance allocated for a control 
period in a year before or the year immediately following, or in the 
same year as, the year of such control period.

Sec.  97.826  Banking.

    (a) A CSAPR NOX Ozone Season Group 2 allowance 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 CSAPR NOX Ozone Season Group 2 allowance that is 
held in a compliance account or a general account will remain in such 
account unless and until the CSAPR NOX Ozone Season Group 2 
allowance is deducted or transferred under Sec.  97.811(c), Sec.  
97.823, Sec.  97.824, Sec.  97.825, Sec.  97.827, or Sec.  97.828.

Sec.  97.827  Account error.

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

Sec.  97.828  Administrator's action on submissions.

    (a) The Administrator may review and conduct independent audits 
concerning any submission under the CSAPR NOX Ozone Season 
Group 2 Trading Program and make appropriate adjustments of the 
information in the submission.
    (b) The Administrator may deduct CSAPR NOX Ozone Season 
Group 2 allowances from or transfer CSAPR NOX Ozone Season 
Group 2 allowances to a compliance account or an assurance account, 
based on the information in a submission, as adjusted under paragraph 
(a) of this section, and record such deductions and transfers.

Sec.  97.829   [Reserved]

Sec.  97.830  General monitoring, recordkeeping, and reporting 
requirements.

    The owners and operators, and to the extent applicable, the 
designated representative, of a CSAPR NOX Ozone Season Group 
2 unit, shall comply with the monitoring, recordkeeping, and reporting 
requirements as provided in this subpart and subpart H of part 75 of 
this chapter. For purposes of applying such requirements, the 
definitions in Sec.  97.802 and in Sec.  72.2 of this chapter shall 
apply, 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 ``CSAPR 
NOX Ozone Season Group 2 unit,'' ``designated 
representative,'' and ``continuous emission monitoring system'' (or 
``CEMS'') respectively as defined in Sec.  97.802, and the term ``newly 
affected unit'' shall be deemed to mean ``newly affected CSAPR 
NOX Ozone Season Group 2 unit''. The owner or operator of a 
unit that is not a CSAPR NOX Ozone Season Group 2 unit but 
that is monitored under Sec.  75.72(b)(2)(ii) of this chapter shall 
comply with the same monitoring, recordkeeping, and reporting 
requirements as a CSAPR NOX Ozone Season Group 2 unit.
    (a) Requirements for installation, certification, and data 
accounting. The owner or operator of each CSAPR NOX Ozone 
Season Group 2 unit shall:
    (1) Install all monitoring systems required under this subpart for 
monitoring NOX mass emissions and individual unit heat input 
(including all systems required to monitor NOX emission 
rate, NOX concentration, stack gas moisture content, stack 
gas flow rate, CO2 or O2 concentration, and fuel 
flow rate, as applicable, in accordance with Sec. Sec.  75.71 and 75.72 
of this chapter);
    (2) Successfully complete all certification tests required under 
Sec.  97.831 and meet all other requirements of this subpart and 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 of a CSAPR NOX Ozone 
Season Group 2 unit shall meet the monitoring system certification and 
other requirements of paragraphs (a)(1) and (2) of this section on or 
before the latest of the following dates and shall record, report, and 
quality-assure the data from the monitoring systems under paragraph 
(a)(1) of this section on and after the latest of the following dates:
    (1) May 1, 2017;
    (2) 180 calendar days after the date on which the unit commences 
commercial operation; or
    (3) Where data for the unit are reported on a control period basis 
under Sec.  97.834(d)(1)(ii)(B), and where the compliance date under 
paragraph (b)(2) of this section is not in a month from May through 
September, May 1 immediately after the compliance date under paragraph 
(b)(2) of this section.
    (4) The owner or operator of a CSAPR NOX Ozone Season 
Group 2 unit for which construction of a new stack or flue or 
installation of add-on NOX emission controls is completed 
after the applicable deadline under paragraph (b)(1), (2), or (3) of 
this section shall meet the requirements of Sec.  75.4(e)(1) through 
(4) of this chapter, except that:
    (i) Such requirements shall apply to the monitoring systems 
required under Sec.  97.830 through Sec.  97.835, rather than the 
monitoring systems required under part 75 of this chapter;
    (ii) NOX emission rate, NOX concentration, 
stack gas moisture content, stack gas volumetric flow rate, and 
O2 or CO2 concentration data shall be determined 
and reported, rather than the data listed in Sec.  75.4(e)(2) of this 
chapter; and
    (iii) Any petition for another procedure under Sec.  75.4(e)(2) of 
this chapter shall be submitted under Sec.  97.835, rather than Sec.  
75.66 of this chapter.
    (c) Reporting data. The owner or operator of a CSAPR NOX 
Ozone Season Group 2 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 NOX 
concentration, NOX emission rate, stack gas flow rate, stack 
gas moisture content, fuel flow rate, and any other parameters required 
to determine NOX mass emissions and heat input in accordance 
with Sec.  75.31(b)(2) or (c)(3) of this chapter, section 2.4 of 
appendix D to part 75 of this chapter, or section 2.5 of appendix E to 
part 75 of this chapter, as applicable.
    (d) Prohibitions. (1) No owner or operator of a CSAPR 
NOX Ozone Season Group 2 unit shall use any alternative 
monitoring system, alternative reference method, or any other 
alternative to any requirement of this subpart without having obtained 
prior written approval in accordance with Sec.  97.835.
    (2) No owner or operator of a CSAPR NOX Ozone Season 
Group 2 unit shall operate the unit so as to discharge, or allow to be 
discharged, NOX to the atmosphere without accounting for all 
such NOX in accordance with the applicable provisions of 
this subpart and part 75 of this chapter.
    (3) No owner or operator of a CSAPR NOX Ozone Season 
Group 2 unit shall disrupt the continuous emission monitoring system, 
any portion thereof, or any other approved emission

[[Page 74647]]

monitoring method, and thereby avoid monitoring and recording 
NOX mass 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 subpart and part 75 of this 
chapter.
    (4) No owner or operator of a CSAPR NOX Ozone Season 
Group 2 unit shall retire or permanently discontinue use of the 
continuous emission monitoring system, any component thereof, or any 
other approved monitoring system under this subpart, except under any 
one of the following circumstances:
    (i) During the period that the unit is covered by an exemption 
under Sec.  97.805 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 subpart and 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 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.  
97.831(d)(3)(i).
    (e) Long-term cold storage. The owner or operator of a CSAPR 
NOX Ozone Season Group 2 unit is subject to the applicable 
provisions of Sec.  75.4(d) of this chapter concerning units in long-
term cold storage.

Sec.  97.831  Initial monitoring system certification and 
recertification procedures.

    (a) The owner or operator of a CSAPR NOX Ozone Season 
Group 2 unit shall be exempt from the initial certification 
requirements of this section for a monitoring system under Sec.  
97.830(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 appendices B, D, and E 
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.  97.830(a)(1) that is exempt from initial 
certification requirements under paragraph (a) of this section.
    (c) If the Administrator has previously approved a petition under 
Sec.  75.17(a) or (b) of this chapter for apportioning the 
NOX emission rate measured in a common stack or a petition 
under Sec.  75.66 of this chapter for an alternative to a requirement 
in Sec.  75.12 or Sec.  75.17 of this chapter, the designated 
representative shall resubmit the petition to the Administrator under 
Sec.  97.835 to determine whether the approval applies under the CSAPR 
NOX Ozone Season Group 2 Trading Program.
    (d) Except as provided in paragraph (a) of this section, the owner 
or operator of a CSAPR NOX Ozone Season Group 2 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 under 
appendices D and E to part 75 of this chapter) under Sec.  
97.830(a)(1). The owner or operator of a unit that qualifies to use the 
low mass emissions excepted monitoring methodology under Sec.  75.19 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 (e) or (f) of this section respectively.
    (1) Requirements for initial certification. The owner or operator 
shall ensure that each continuous monitoring system under Sec.  
97.830(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.  97.830(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 under Sec.  97.830(a)(1) that may 
significantly affect the ability of the system to accurately measure or 
record NOX 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 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. Any fuel flowmeter system, and any excepted 
NOX monitoring system under appendix E to part 75 of this 
chapter, under Sec.  97.830(a)(1) are subject to the recertification 
requirements in Sec.  75.20(g)(6) of this chapter.
    (3) Approval process for initial certification and recertification. 
For initial certification of a continuous monitoring system under Sec.  
97.830(a)(1), paragraphs (d)(3)(i) through (v) of this section apply. 
For recertifications of such monitoring systems, paragraphs (d)(3)(i) 
through (iv) of this section and the procedures in Sec.  75.20(b)(5) 
and (g)(7) of this chapter (in lieu of the procedures in paragraph 
(d)(3)(v) of this section) apply, provided that in applying paragraphs 
(d)(3)(i) through (iv) of this section, the words ``certification'' and 
``initial certification'' are replaced by the word ``recertification'' 
and the word ``certified'' is replaced by with the word 
``recertified''.
    (i) Notification of certification. The designated representative 
shall submit to the appropriate EPA Regional Office and the 
Administrator written notice of the dates of certification testing, in 
accordance with Sec.  97.833.
    (ii) Certification application. The 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 CSAPR NOX Ozone Season Group 2 
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 (d)(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

[[Page 74648]]

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 
(d)(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 CSAPR NOX Ozone Season Group 2 
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 designated 
representative must submit the additional information required to 
complete the certification application. If the 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 (d)(3)(iv)(C) of this section.
    (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 
(d)(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).
    (D) Audit decertification. The Administrator may issue a notice of 
disapproval of the certification status of a monitor in accordance with 
Sec.  97.832(b).
    (v) Procedures for loss of certification. If the Administrator 
issues a notice of disapproval of a certification application under 
paragraph (d)(3)(iv)(C) of this section or a notice of disapproval of 
certification status under paragraph (d)(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), Sec.  75.20(g)(7), or Sec.  75.21(e) of this chapter 
and continuing until the applicable date and hour specified under Sec.  
75.20(a)(5)(i) or (g)(7) of this chapter:
    (1) For a disapproved NOX emission rate (i.e., 
NOX-diluent) system, the maximum potential NOX 
emission rate, as defined in Sec.  72.2 of this chapter.
    (2) For a disapproved NOX pollutant concentration 
monitor and disapproved flow monitor, respectively, the maximum 
potential concentration of NOX and the maximum potential 
flow rate, as defined in sections 2.1.2.1 and 2.1.4.1 of appendix A to 
part 75 of this chapter.
    (3) 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.
    (4) For a disapproved fuel flowmeter system, the maximum potential 
fuel flow rate, as defined in section 2.4.2.1 of appendix D to part 75 
of this chapter.
    (5) For a disapproved excepted NOX monitoring system 
under appendix E to part 75 of this chapter, the fuel-specific maximum 
potential NOX emission rate, as defined in Sec.  72.2 of 
this chapter.
    (B) The designated representative shall submit a notification of 
certification retest dates and a new certification application in 
accordance with paragraphs (d)(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.
    (e) The owner or operator of a unit qualified to use the low mass 
emissions (LME) excepted methodology under Sec.  75.19 of this chapter 
shall meet the applicable certification and recertification 
requirements in Sec. Sec.  75.19(a)(2) and 75.20(h) of this chapter. If 
the owner or operator of such a unit elects to certify a fuel flowmeter 
system for heat input determination, the owner or operator shall also 
meet the certification and recertification requirements in Sec.  
75.20(g) of this chapter.
    (f) The 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.  97.832  Monitoring system out-of-control periods.

    (a) General provisions. 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 
or subpart H of, or appendix D or appendix E to, part 75 of this 
chapter.
    (b) Audit decertification. Whenever both an audit of a monitoring 
system 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.  97.831 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 Administrator or any 
State or permitting authority. 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

[[Page 74649]]

procedures in Sec.  97.831 for each disapproved monitoring system.

Sec.  97.833  Notifications concerning monitoring.

    The designated representative of a CSAPR NOX Ozone 
Season Group 2 unit shall submit written notice to the Administrator in 
accordance with Sec.  75.61 of this chapter.

Sec.  97.834  Recordkeeping and reporting.

    (a) General provisions. The designated representative shall comply 
with all recordkeeping and reporting requirements in paragraphs (b) 
through (e) of this section, the applicable recordkeeping and reporting 
requirements under Sec.  75.73 of this chapter, and the requirements of 
Sec.  97.814(a).
    (b) Monitoring plans. The owner or operator of a CSAPR 
NOX Ozone Season Group 2 unit shall comply with the 
requirements of Sec.  75.73(c) and (e) of this chapter.
    (c) Certification applications. The designated representative shall 
submit an application to the Administrator within 45 days after 
completing all initial certification or recertification tests required 
under Sec.  97.831, including the information required under Sec.  
75.63 of this chapter.
    (d) Quarterly reports. The designated representative shall submit 
quarterly reports, as follows:
    (1)(i) If a CSAPR NOX Ozone Season Group 2 unit is 
subject to the Acid Rain Program or the CSAPR NOX Annual 
Trading Program or if the owner or operator of such unit chooses to 
report on an annual basis under this subpart, then the designated 
representative shall meet the requirements of subpart H of part 75 of 
this chapter (concerning monitoring of NOX mass emissions) 
for such unit for the entire year and report the NOX mass 
emissions data and heat input data for such unit for the entire year.
    (ii) If a CSAPR NOX Ozone Season Group 2 unit is not 
subject to the Acid Rain Program or the CSAPR NOX Annual 
Trading Program, then the designated representative shall either:
    (A) Meet the requirements of subpart H of part 75 of this chapter 
for such unit for the entire year and report the NOX mass 
emissions data and heat input data for such unit for the entire year in 
accordance with paragraph (d)(1)(i) of this section; or
    (B) Meet the requirements of subpart H of part 75 of this chapter 
(including the requirements in Sec.  75.74(c) of this chapter) for such 
unit for the control period and report the NOX mass 
emissions data and heat input data (including the data described in 
Sec.  75.74(c)(6) of this chapter) for such unit only for the control 
period of each year.
    (2) The designated representative shall report the NOX 
mass emissions data and heat input data for a CSAPR NOX 
Ozone Season Group 2 unit, in an electronic quarterly report in a 
format prescribed by the Administrator, for each calendar quarter 
indicated under paragraph (d)(1) of this section beginning by the 
latest of:
    (i) The calendar quarter covering May 1, 2017 through June 30, 
2017;
    (ii) The calendar quarter corresponding to the earlier of the date 
of provisional certification or the applicable deadline for initial 
certification under Sec.  97.830(b); or
    (iii) For a unit that reports on a control period basis under 
paragraph (d)(1)(ii)(B) of this section, if the calendar quarter under 
paragraph (d)(2)(ii) of this section does not include a month from May 
through September, the calendar quarter covering May 1 through June 30 
immediately after the calendar quarter under paragraph (d)(2)(ii) of 
this section.
    (3) The designated representative shall submit each quarterly 
report to the Administrator within 30 days after the end of the 
calendar quarter covered by the report. Quarterly reports shall be 
submitted in the manner specified in Sec.  75.73(f) of this chapter.
    (4) For CSAPR NOX Ozone Season Group 2 units that are 
also subject to the Acid Rain Program, CSAPR NOX Annual 
Trading Program, CSAPR SO2 Group 1 Trading Program, or CSAPR 
SO2 Group 2 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 
NOX mass emission data, heat input data, and other 
information required by this subpart.
    (5) The Administrator may review and conduct independent audits of 
any quarterly report in order to determine whether the quarterly report 
meets the requirements of this subpart and part 75 of this chapter, 
including the requirement to use substitute data.
    (i) The Administrator will notify the designated representative of 
any determination that the quarterly report fails to meet any such 
requirements and specify in such notification any corrections that the 
Administrator believes are necessary to make through resubmission of 
the quarterly report and a reasonable time period within which the 
designated representative must respond. Upon request by the designated 
representative, the Administrator may specify reasonable extensions of 
such time period. Within the time period (including any such 
extensions) specified by the Administrator, the designated 
representative shall resubmit the quarterly report with the corrections 
specified by the Administrator, except to the extent the designated 
representative provides information demonstrating that a specified 
correction is not necessary because the quarterly report already meets 
the requirements of this subpart and part 75 of this chapter that are 
relevant to the specified correction.
    (ii) Any resubmission of a quarterly report shall meet the 
requirements applicable to the submission of a quarterly report under 
this subpart and part 75 of this chapter, except for the deadline set 
forth in paragraph (d)(3) of this section.
    (e) Compliance certification. The 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 of this subpart and part 75 of this 
chapter, including the quality assurance procedures and specifications;
    (2) For a unit with add-on NOX emission controls and for 
all hours where NOX data are substituted in accordance with 
Sec.  75.34(a)(1) of this chapter, the add-on emission controls were 
operating within the range of parameters listed in the quality 
assurance/quality control program under appendix B to part 75 of this 
chapter and the substitute data values do not systematically 
underestimate NOX emissions; and
    (3) For a unit that is reporting on a control period basis under 
paragraph (d)(1)(ii)(B) of this section, the NOX emission 
rate and NOX concentration values substituted for missing 
data under subpart D of part 75 of this chapter are calculated using 
only values from a control period and do not systematically 
underestimate NOX emissions.

Sec.  97.835  Petitions for alternatives to monitoring, recordkeeping, 
or reporting requirements.

    (a) The designated representative of a CSAPR NOX Ozone 
Season Group 2 unit may submit a petition under Sec.  75.66 of

[[Page 74650]]

this chapter to the Administrator, requesting approval to apply an 
alternative to any requirement of Sec. Sec.  97.830 through 97.834.
    (b) A petition submitted under paragraph (a) of this section shall 
include sufficient information for the evaluation of the petition, 
including, at a minimum, the following information:
    (1) Identification of each unit and source covered by the petition;
    (2) A detailed explanation of why the proposed alternative is being 
suggested in lieu of the requirement;
    (3) A description and diagram of any equipment and procedures used 
in the proposed alternative;
    (4) A demonstration that the proposed alternative is consistent 
with the purposes of the requirement for which the alternative is 
proposed and with the purposes of this subpart and part 75 of this 
chapter and that any adverse effect of approving the alternative will 
be de minimis; and
    (5) Any other relevant information that the Administrator may 
require.
    (c) Use of an alternative to any requirement referenced in 
paragraph (a) of this section is in accordance with this subpart only 
to the extent that the petition is approved in writing by the 
Administrator and that such use is in accordance with such approval.

Appendices A through D to Part 97 [Redesignated]

0
150. Appendices A, B, C, and D to part 97 are redesignated as 
appendices A, B, C, and D to subpart E of part 97.

[FR Doc. 2016-22240 Filed 10-25-16; 8:45 am]
 BILLING CODE 6560-50-P