Document ID: EPA-R06-OAR-2005-TX-0031-0001
Agency: epa
Document Type: Proposed Rule
Title: TX037.17 Approvals and Promulgations of Air Quality Implementation Plans: Texas; Revisions to Rules and Regulations for Controlof Air Pollution; Permitting of Grandfathered and Electing Electric Generating Facilities. 7 pages nxj
Posted Date: 2010-10-19T04:00Z

[Federal Register: October 19, 2010 (Volume 75, Number 201)]
[Proposed Rules]               
[Page 64235-64241]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19oc10-19]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2005-TX-0031; FRL-9215-1]

 
Approval and Promulgation of Air Quality Implementation Plans; 
Texas; Revisions to Rules and Regulations for Control of Air Pollution; 
Permitting of Grandfathered and Electing Electric Generating Facilities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to partially approve and partially 
disapprove revisions of the Texas State Implementation Plan (SIP) 
submitted by the Texas Commission on Environmental Quality (TCEQ, or 
Commission) on January 3, 2000, and July 31, 2002, as supplemented on 
August 5, 2009. These revisions are to regulations of the TCEQ which 
relate to application and permitting procedures for grandfathered 
electric generating facilities (EGFs). The revisions address a mandate 
by the Texas Legislature under Senate Bill 7 to achieve nitrogen oxide 
(NOX), sulfur dioxide (SO2) and particulate 
matter (PM) emission reductions from grandfathered EGFs. These 
emissions reductions will contribute to achieving attainment and help 
ensure attainment and continued maintenance of the National Ambient Air 
Quality Standards (NAAQS) for ozone, sulfur dioxide, and particulate 
matter in the State of Texas. As a result of these mandated emissions 
reductions, in accordance with section 110(l) of the Federal Clean Air 
Act, as amended (the Act, or CAA), partial approval of these revisions 
will not interfere with attainment of the NAAQS, reasonable further 
progress, or any other applicable requirement of the Act. EPA is 
proposing that the revisions, but for a severable provision, meet 
section 110, part C, and part D of the Federal Clean Air Act (the Act 
or CAA) and EPA's regulations. Therefore, EPA is proposing to approve 
the revisions but for a severable portion that allows collateral 
emissions increases of carbon monoxide (CO) created by the imposition 
of technology controls to be permitted under the State's Standard 
Permit (SP) for Pollution Control Projects (PCP). EPA is proposing to 
disapprove this severable portion concerning the issuance of a PCP SP 
for the CO collateral emissions increases. EPA is taking comments on 
this proposal and plans to follow with a final action.

DATES: Written comments must be received on or before November 18, 
2010.

ADDRESSES: Submit your comments, identified by Docket No. R06-OAR-2005-
TX-0031, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
     Follow the on-line instructions for submitting comments.
     U.S. EPA Region 6 ``Contact Us'' Web site: http://epa.gov/
region6/r6comment.htm. Please click on ``6PD (Multimedia)'' and select 
``Air'' before submitting comments.

[[Page 64236]]

     E-mail: Mr. Rick Barrett at: barrett.richard@epa.gov. 
Please also send a copy by e-mail to the person listed in the FOR 
FURTHER INFORMATION CONTACT section below.
     Fax: Mr. Rick Barrett, Air Permits Section (6PD-R), at fax 
number 214-665-7263.
     Mail: Mr. Rick Barrett, Air Permits Section (6PD-R), 
Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, 
Texas 75202-2733.
     Hand or Courier Delivery: Mr. Rick Barrett, Air Permits 
Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, 
Suite 1200, Dallas, Texas 75202-2733. Such deliveries are accepted only 
between the hours of 8 a.m. and 4 p.m. weekdays except for legal 
holidays. Special arrangements should be made for deliveries of boxed 
information.
    Instructions: Direct your comments to Docket No. EPA-R06-OAR-2005-
TX-0031. EPA's policy is that all comments received will be included in 
the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information the 
disclosure of which is restricted by statute. Do not submit information 
through http://www.regulations.gov or e-mail that you consider to be 
CBI or otherwise protected from disclosure. The http://
www.regulations.gov Web site is an ``anonymous access'' system, which 
means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an e-mail comment 
directly to EPA without going through http://www.regulations.gov, your 
e-mail address will be automatically captured and included as part of 
the comment that is placed in the public docket and made available on 
the Internet. If you submit an electronic comment, EPA recommends that 
you include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses.
    Docket: All documents in the docket are listed in the http://
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Air Permits 
Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733. The file will be made available by 
appointment for public inspection in the Region 6 FOIA Review Room 
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal 
holidays. Contact the person listed in the FOR FURTHER INFORMATION 
CONTACT paragraph below or Mr. Bill Deese at 214-665-7253 to make an 
appointment. If possible, please make the appointment at least two 
working days in advance of your visit. There will be a 15 cent per page 
fee for making photocopies of documents. On the day of the visit, 
please check in at the EPA Region 6 reception area at 1445 Ross Avenue, 
Suite 700, Dallas, Texas.
    The State submittal is also available for public inspection at the 
State Air Agency listedbelow during official business hours by 
appointment: Texas Commission on Environmental Quality, Office of Air 
Quality, 12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Mr. Rick Barrett, Air Permits Section 
(6PD-R), Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733, telephone 214-665-7227; fax number 
214-665-7263; e-mail address: barrett.richard@epa.gov.

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

Outline

I. Texas Senate Bill 7
II. What action is EPA proposing?
    A. January 3, 2000 Submittal
    B. July 31, 2002 Submittal
III. Why are we proposing to partially approve and partially 
disapprove this SIP submittal?
    A. January 3, 2000 Submittal
    B. July 31, 2002 Submittal
    C. CAA 110(l) Analysis
IV. Proposed Action
V. Statutory and Executive Order Reviews

I. Texas Senate Bill 7

    Texas Senate Bill 7 (SB 7), formed under the 76th Texas State 
Legislature, 1999, amended the Texas Utilities Code (TUC), Title 2, 
Public Utility Regulatory Act, Subtitle B, Electric Utilities, and 
created a new Texas Utilities Code Chapter 39, ``Restructuring of 
Electric Utility Industry.'' SB 7 requires the TCEQ to establish a 
regulatory program implementing the statute's mandatory emissions 
reductions for ``grandfathered facilities'' under the Texas Utilities 
Code section 39.264. A ``grandfathered facility'' is one that existed 
at the time the Legislature amended the Texas Clean Air Act (TCAA) in 
1971.
    These facilities were not required to comply with (i.e., 
grandfathered from) the then new requirement to obtain permits for 
construction or modifications of facilities that emit air contaminants. 
Texas began permitting new and modified sources in 1971, and sources 
built before Texas' permitting rules became effective were not required 
to obtain permits for air emissions as long as they were not modified 
as defined under Texas' New Source Review SIP program.
    Section 39.264 of the TUC now requires EGFs that existed on January 
1, 1999, to obtain a permit from the Commission even though these 
sources were not previously required to obtain a permit under the TCAA, 
section 382.0518(g).
    Section 39.264 of the TUC specifically requires owners or operators 
of grandfathered EGFs to apply for a permit to emit nitrogen oxides 
(NOX) and, for coal-fired grandfathered EGFs, sulfur dioxide 
(SO2) and particulate matter (PM) through opacity 
limitations. These applications were due on or before September 1, 
2000. A grandfathered EGF that does not obtain a permit may not operate 
after May 1, 2003, unless the Commission finds good cause for an 
extension. Section 39.264 of the TUC requires that for the 12-month 
period beginning May 1, 2003, and for each 12-month period following, 
annual emissions of NOX from grandfathered EGFs not exceed 
50% of the NOX emissions reported to the Commission for 
1997. Furthermore, it requires that emissions of SO2 from 
coal-fired grandfathered EGFs not exceed 75% of the SO2 
emissions reported to the Commission in 1997. In addition, TUC section 
39.264(e) requires electric generating facility permits (EGFPs) for 
coal-fired, grandfathered EGFs to contain appropriate opacity 
limitations provided by the commission's rules in 30 Texas 
Administrative Code (TAC) Ch.111.111, ``Requirements for Specified 
Sources.'' As described in more detail below, the emission limitations 
may be satisfied by using control technology or by participating in the 
banking and trading of allowances under Texas' Emission Banking and 
Trading of Allowances (EBTA) program.
    Overall, SB 7 mandates specific pollution reduction in an area, 
while

[[Page 64237]]

allowing individual sources flexibility in how they meet emissions 
reductions. As participants in the program, EGFs must obtain a permit 
allocating them a certain level of emissions which they cannot exceed. 
In each defined region, the total level of emissions is restricted, or 
capped, to a level consistent with the SB 7 statutory goals. The 
individual EGF, to meet its allocated emissions level, can either 
choose to install pollution controls, shut down operations, or purchase 
allowances from another source that already reduced emission levels 
below its permitted amount.
    To achieve SB 7's mandate, the TCEQ made revisions to 30 TAC 
Ch.116, ``Control of Air Pollution by Permits for New Construction or 
Modification,'' by establishing an allowance and permitting program for 
regulating grandfathered EGFs under Subchapter I. TCEQ concurrently 
adopted Chapter 101, Subchapter H, ``Emissions Banking and Trading,'' 
that establishes a regional cap and trade system to distribute emission 
allowances for use by EGFs. The new Division 2, Chapter 101, Subchapter 
H, concerning EBTA, sets out the allowance system to be used to assist 
grandfathered and electing EGFs in meeting the emission reduction 
requirements of TUC, section 39.264. Together, the two rules define 
categories of EGFs that are eligible to use the trading system. As 
discussed above, the first category consists of grandfathered 
facilities. The second category of EGFs consist of currently permitted 
EGFs that are not subject to the permitting requirements mandated by SB 
7, yet elect to participate in the allowance trading system. These are 
referred to as ``electing'' EGFs and participation in the permitting 
program will allow electing EGFs to obtain allowances under the EBTA.
    The purpose of the proposed rulemaking by EPA is to partially 
approve and partially disapprove the TCEQ's permit and emission control 
requirements for grandfathered and electing EGFs and related permit 
application, monitoring, reporting and public notice procedures. 
Specifically, the permit application requirements, methods for 
monitoring and reporting emissions and public notice procedures for 
grandfathered and electing EGFs are the subject of this proposal 
action. Please note that EPA's action on 30 TAC Chapter 101, Subchapter 
H, Division 2, concerning Emissions Banking and Trading of Allowances, 
is being proposed in a separate notice and is evaluated in a separate 
TSD. (RME Docket R06-OAR-2005-TX-0012).
    The revisions to TCEQ's 30 TAC, Chapter 116, concerning the 
permitting of grandfathered EGFs, will achieve the Legislature's SB 7 
emissions reductions goals. Compliance with these revisions will cause 
decreased air emissions of NOX, SO2, and PM, due 
to the shutdown of the source, participation in the EBTA, or 
installation of pollution controls on grandfathered sources that had 
previously been exempt from having to use pollution controls. Because 
the revisions will cause additional emission reductions from these 
sources, they will better serve to protect the public health and 
welfare. The revisions will also continue to contribute to improvement 
of air quality and attainment or maintenance of the federal air quality 
standards. Overall, these provisions serve to improve the existing SIP.
    Lastly, these provisions meet the requirement in 40 CFR 51.160(a) 
that each plan include legally enforceable procedures to determine 
whether the construction or modification of a facility, building, 
structure, or installation, or combination of these will result in (1) 
A violation of applicable portions of the control strategy; or (2) 
interference with attainment or maintenance of a national standard in 
the State in which the proposed source (or modification) is located or 
in a neighboring State.

II. What action is EPA proposing?

    We are proposing to partially approve and partially disapprove the 
revision to Title 30, Chapter 116, of the TAC submitted by the State of 
Texas on January 3, 2000. We are also proposing to fully approve the 
revision to Title 30, Chapter 116, of the TAC submitted by the State of 
Texas on July 31, 2002. The January 3, 2000 submittal concerns 
Subchapter A: ``Definitions,'' section 116.18; and Subchapter I: 
``Electric Generating Facility Permits,'' sections 116.910-914, 
116.916, 116.920-922, 116.930, and 116.931. We are proposing to fully 
approve all of this 2000 submittal but for the severable reference in 
30 TAC 116.911(a)(2) that, if approved, would allow the use of a Texas 
PCP SP for the permitting of the CO collateral emissions increases. We 
are proposing to disapprove this reference in submitted 30 TAC 
116.911(a)(2) allowing the use of a PCP SP for the collateral CO 
emissions. The July 31, 2002 submittal concerns Subchapter A: 
``Definitions,'' sections 116.10 and 116.18; and Subchapter I: 
``Electric Generating Facility Permits,'' sections 116.910, 116.911, 
116.913, 116.917, 116.918, 116.921, 116.926, 116.928, and 116.930. The 
TCEQ adopted these revisions on December 16, 1999, and May 22, 2002, 
respectively.
    Please note that in the July 31, 2002 submittal concerning 
Subchapter A: ``Definitions,'' section 116.10 is severable and 
previously acted on as approvable in a separate rulemaking (see 
explanation below).
    EPA intends to take final action on the submitted SB 7 SIP by 
December 31, 2010, as provided in the Consent Decree entered on January 
21, 2010 in BCCA Appeal Group v. EPA, Case No. 3:08-cv-01491-N (N.D. 
Tex).

A. January 3, 2000 Submittal

    In the January 3, 2000 submittal, TCEQ submitted new rules to 
Chapter 116, including Subchapter A: ``Definitions,'' delineating 
certain definitions of words and terms used in Subchapter I; and 
Subchapter I: ``Electric Generating Facility Permits,'' implementing 
the applicability requirements for grandfathered and electing electric 
generating facilities. Representative sections of Subchapter I include: 
116.911, Electric Generating Facility Permit Application; 116.913, 
General and Special Conditions; 116.914, Emissions Monitoring and 
Reporting Requirements; and 116.921, Notice and Comment Hearings for 
Initial Issuance.
    In 116.911, owners or operators of grandfathered or electing EGFs 
shall submit an application to TCEQ to authorize nitrogen oxides 
(NOX) emissions and, if applicable, sulfur dioxide 
(SO2) and particulate matter (PM) emissions before September 
11, 2000. The section requires the application to specify various 
requirements under 116.911(a)(1)-(4), (b)(1)-(2), (c)-(d). Section 
116.911 contains one subsection, 116.911(a)(2), ``Control method,'' 
which references section 116.617, Standard Permits for Pollution 
Control Projects (PCPs). Under 116.911(a)(2), if an EGF permit 
applicant proposes the use of new control methods \1\ in its initial 
application, then compliance with particular subsections in 116.617 is 
required and TCEQ may require air dispersion modeling or ambient 
monitoring. The Texas PCP SP is not part of the Texas NSR SIP. 
Moreover, EPA has proposed to disapprove it on September 23, 2009. See 
74 FR 48467. Final action was signed on August 31, 2010, under the BCCA 
consent decree.

[[Page 64238]]

Furthermore, the DC Circuit Court of Appeals issued a court decision, 
New York v. EPA, No. 02-1387 (June 24, 2005) that addressed the use of 
PCPs and disapproved their use for Major NSR requirements. In that 
decision, the court vacated the provisions of the 2002 NSR Reform rule 
that specifically related to Clean Units and Pollution Control 
Projects.
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    \1\ TCEQ does not interpret ``new control methods'' to include 
the use of combustion techniques. Consequently, no PCP SP is 
required. Also, if a grandfathered facility chooses to impose add-on 
controls, this does not fall under the PCP SP requirement either. As 
a result, a PCP SP is required only for collateral emissions of CO.
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    In response to the court's decision, EPA filed a Petition for 
Rehearing or Rehearing En Banc and Request for Clarification on August 
8, 2005. In that Petition, EPA requested clarification that the court's 
ruling on PCP's applies only prospectively. On December 9, 2005, the DC 
Circuit ordered that ``EPA's request for clarification as to any 
retroactive effect of the ruling on Pollution Control Projects be 
denied.'' The court also stated that because there was no specific 
retroactive application of this provision before the court, it was 
premature to rule on this request. Based on TCEQ's Technical 
Supplement, EPA believes that any collateral emissions increases due to 
controls installed to limit NOX, SO2 or PM under 
the submitted 30 TAC 911(a)(2) are above the significance level for 
Prevention of Significant Deterioration (PSD) review for CO collateral 
emissions increases only, and that these collateral CO increases are 
located at only two PCP SP permitted plants. Therefore, in only two 
instances were there collateral CO emissions increases that obtained a 
Texas PCP SP rather than a Major NSR SIP permit. They obtained their 
PCP SP before the court decision was issued. Furthermore, based upon 
the Technical Supplement, EPA believes that all of the resultant 
collateral CO increases across the State of Texas (including those from 
the two plants) do not interfere with attainment or maintenance of the 
NAAQS for CO, et al., nor cause or contribute to increase in PSD 
increments, much less a violation of any NAAQS. Nevertheless, based on 
the above court decision and the PCP SP not being part of the Texas NSR 
SIP, the submitted subsection 116.911(a)(2) is not approvable, and 
therefore we are proposing to disapprove this submitted subsection for 
collateral increases of CO emissions. Note that the entire State of 
Texas is currently in attainment for CO.
    Section 116.913 contains general conditions applicable to every EGF 
permit, and allows the TCEQ to include special conditions in individual 
permits. Under 116.913, an EGF permit authorizes nitrogen oxides 
(NOX) emissions from all grandfathered or electing electric 
generating facilities (EGF); and sulfur dioxide (SO2) 
emissions and particulate matter emissions, through opacity 
limitations, for coal-fired grandfathered or electing EGFs. The 
grandfathered or electing EGF must comply with Chapter 101, Subchapter 
H, Division 2 of this title, relating to EBTA, including the 
requirement to maintain allowances in a compliance account. Facilities 
subject to the EBTA shall quantify and report emissions using the 
monitoring and reporting requirements of section 116.914. As noted 
previously, EPA's action on Chapter 101, Subchapter H, Division 2, is 
being proposed in a separate action (RME Docket R06-OAR-2005-TX-0012).
    Section 116.914, specifies the monitoring and reporting 
requirements for EGFPs. The rule authorizes the use of Continuous 
Emission Monitoring (CEM) under the Acid Rain Program, which contains 
monitoring requirements for SO2 for affected units. Since 
the acid rain program already requires extensive monitoring, this 
section authorizes the use of that monitoring for EGF's that are 
subject to the acid rain program for compliance with Subchapter I. EGFs 
not subject to the Acid Rain Program would have three choices in 
monitoring: the EGF may choose to meet either the Part 75 monitoring 
requirements, or the requirements of Title 40 CFR part 60; or, the EGF 
may provide an alternative monitoring plan that would be incorporated 
into the permit conditions. This alternate monitoring plan must meet 
state and federal requirements for approval. Monitoring and reporting 
requirements provisions related to the EBTA rule are set forth in 
section101.336(a), per 30 TAC Chapter 116.914.
    Section 116.921 contains the hearing requirements for the initial 
issuance of EGFPs. If a hearing is requested by a person who may be 
affected by emissions from the grandfathered or electing EGF, and that 
request is reasonable, the commission will hold a hearing. The section 
requires that notice of hearing on a draft EGFP be published in the 
public notice section of one issue of a newspaper of general 
circulation in the municipality or the nearest municipality where the 
EGF is located. The notice must be published at least 30 days prior to 
a hearing.
    The State of Texas submitted the SIP revision to EPA after adequate 
notice and public hearing on January 3, 2000. The Technical Supplement 
was submitted on August 5, 2009. See our Technical Support Document, 
Attachment C, for more details.

B. July 31, 2002 Submittal

    In the July 31, 2002 submittal, Texas submitted new and amended 
rules to Chapter 116, which include Subchapter A: ``Definitions,'' 
delineating certain definitions of words and terms used in Subchapter 
I; Subchapter H: ``Permits for Grandfathered Facilities,'' Division 1, 
``General Applicability;'' Division 2, ``Small Business Stationary 
Source Permits,'' ``Pipeline Facilities Permits,'' and ``Existing 
Facility Permits;'' Division 3, ``Existing Facility Flexible Permits;'' 
and Subchapter I: ``Electric Generating Facility Permits.'' In 
addition, Texas submitted TAC Chapter 39, ``Public Notice,'' which 
includes Subchapter H: ``Applicability and General Provisions,'' and 
Subchapter K: ``Public Notice of Air Quality Applications.''
    EPA is acting only on Subchapter A: ``Definitions,'' and Subchapter 
I: ``Electric Generating Facility Permits'' of Chapter 116 from the 
July 31, 2002 submittal. The above-referenced provisions contained in 
the Subchapter H of Ch. 116 and the Subchapter K of Chapter 39 are 
severable and not part of today's proposal action. Other revisions to 
Ch.116 establish requirements and procedures in Subchapter H for the 
permitting of grandfathered facilities in accordance with 5.02-5.04 of 
House Bill (HB) 2912, 77th Legislature, 2001, and Section 78 of HB 
2914, 77th Legislature, 2001, which establishes an incentive program 
for the reduction of emissions of nitrogen oxides from certain 
grandfathered reciprocating internal combustion engines associated with 
pipelines. These severable submittals will be acted on in separate 
rulemakings.
    The submitted amendments to Subchapter A, Section 116.10, ``General 
Definitions,'' revise the definition of ``grandfathered facility'' to 
be consistent with TCAA, section 382.0518(g). The revised definition 
clarifies that a grandfathered facility is one that is not a new 
facility, was constructed prior to August 30, 1971 (or no construction 
contract was executed on or before August 30, 1971 that specified a 
beginning construction date on or before February 29, 1972) and has not 
been modified since August 30, 1971. This definition is severable and 
previously acted on as approvable in a separate rulemaking (See 75 FR 
19468, April 14, 2010). Therefore, it now is part of the Texas NSR SIP 
already.
    The submitted amendments to Subchapter A, Section 116.18, 
``Electric Generating Facility Permits Definitions,'' add a definition 
for ``natural gas-fired electric generating facility'' for consistency 
only with the EGF permit

[[Page 64239]]

requirements of HB 2912. HB 2912 provides that a natural gas fired EGF 
includes a facility that was designed to burn both natural gas and fuel 
oil. The amendments also include a definition for ``normal annual 
operating schedule,'' to establish the normal annual operating schedule 
at an EGF site.
    The submitted amendments to Subchapter I, Electric Generating 
Facility Permits, implement the portions of TCAA, section 382.0518, 
which create a new EGF permit. Representative sections of Subchapter I 
include: 116.911, Electric Generating Facility Permit Application; 
116.913, General and Special Conditions; 116.917, Electric Generating 
Facility Permit Application for Certain Grandfathered Coal-Fired 
Electric Generating Facilities and Certain Grandfathered Facilities 
Located at Electric Generating Facility Sites; and 116.918, Additional 
General and Special Conditions for Grandfathered Coal-Fired Electric 
Generating Facilities and Certain Grandfathered Facilities Located at 
Electric Generating Facility Sites.
    Under amended section 116.911, Electric Generating Facility Permit 
Application, a new EGF permit will allow the owners or operators of 
EGFs who have already applied for a permit required by SB 7 to apply 
for a permit for: (1) Generators that do not generate electric energy 
for compensation and are not used more than 10% of the annual operating 
schedule; and (2) auxiliary fossil-fuel-fired combustion facilities 
that do not generate electric energy and do not emit more than 100 tpy 
of any air contaminant. The adopted changes will also allow coal-fired 
EGFs which were required to apply for a permit under SB 7 to apply for 
an EGF permit for criteria pollutants other than NOX, 
SO2, and PM as it relates to opacity.
    Section 116.913, General and Special Conditions, is amended to 
update the conditions of any permit issued under Subchapter I, 
including the pollutants or allowances that may be authorized for each 
permit, and the requirements of the SB 7 allowance trading program for 
the additional equipment which may be permitted under Subchapter I. The 
commission will issue a permit to these facilities.
    Section 116.917, Electric Generating Facility Permit Application 
for Certain Grandfathered Coal-Fired Electric Generating Facilities and 
Certain Grandfathered Facilities Located at Electric Generating 
Facility Sites outlines the application requirements for grandfathered 
coal-fired EGFs which choose to permit their additional criteria 
pollutants, and the auxiliary generators and the additional combustion 
equipment which can now be permitted under Subchapter I. To be 
consistent with the current review process for permits and applicable 
federal requirements, 116.917 requires the owner or operator of a 
grandfathered facility applying for an EGF permit to demonstrate that 
the facility meets applicable federal New Source Performance Standards 
(NSPS) and National Emission Standard for Hazardous Air Pollutants 
(NESHAP). If applicable, facilities would be required to comply with 
PSD and nonattainment review as specified in Chapter 116, Subchapter B, 
New Source Review Permits.
    Section 116.918, Additional General and Special Conditions for 
Grandfathered Coal-Fired Electric Generating Facilities and Certain 
Grandfathered Facilities Located at Electric Generating Facility Sites 
identifies some of the general and special conditions which may be 
included in any permit issued under the adopted section 116.917. The 
holders of a permit shall comply with all such conditions. General 
conditions include: Sampling requirements, equivalency of methods, 
recordkeeping, maximum allowable emission rates, maintenance of 
emission control, and compliance with rules. The holders of permits 
shall also comply with all special conditions contained in the permit 
document.
    The State of Texas submitted the SIP revision to EPA after adequate 
notice and public hearing on July 31, 2002. See our Technical Support 
Document, Attachment B, for more details.

III. Why are we proposing to partially approve and partially disapprove 
the January 3, 2000 submittal and approve the July 31, 2002 SIP 
submittal?

A. January 3, 2000 Submittal

    Regarding the January 3, 2000 submittal, it is the intent of SB 7 
that for the 12-month period beginning May 1, 2003, and for each 12-
month period following, annual emissions of NOX from 
grandfathered EGFs not exceed 50% of the NOX emissions 
reported to the Commission for 1997. Furthermore, it is the intent of 
the legislation that emissions of SO2 from coal-fired EGFs 
not exceed 75% of the SO2 emissions reported to the 
Commission in 1997, and to contain appropriate opacity limitations by 
way of permitting the emissions of particulate matter. These provisions 
will cause additional emission reductions and ensure better protection 
of public health and welfare, and improve the existing SIP. These 
provisions, with the exception of 116.911(a)(2) discussed above, meet 
the requirement in 40 CFR 51.160(a) that each plan include legally 
enforceable procedures to determine whether the construction or 
modification of a facility, building, structure, or installation, or 
combination of these will result in (1) A violation of applicable 
portions of the control strategy; or (2) interference with attainment 
or maintenance of a national standard in the State in which the 
proposed source (or modification) is located or in a neighboring State.
    The revision also meets 40 CFR 51.160(e) by identifying a type of 
facility that will be subject to review under 40 CFR 51.160(a). In this 
case, TCEQ specifically identified grandfathered and electing electric 
generating facilities. See our Technical Support Document, Attachment 
A, for more details.

B. July 31, 2002 Submittal

    Regarding the July 31, 2002 submittal, this rulemaking allows the 
owners or operators of previously grandfathered and electing EGFs who 
have already applied for a permit required by SB 7 to also obtain a 
permit for all air contaminants, certain generators and auxiliary 
fossil fuel fired combustion facilities The adopted changes will also 
allow coal fired EGFs which were required to apply for a permit under 
SB 7 to apply for an EGF permit for criteria pollutants other than 
NOX, SO2, and PM as it relates to opacity. The 
permits issued for these facilities are expected to result in reduced 
emissions of air contaminants and improved compliance with state and 
federal air pollution control requirements. Further, these permits 
should achieve better protection of public health and welfare, and 
improve the existing SIP. These provisions meet the requirement in 40 
CFR 51.160(a) that each plan include legally enforceable procedures to 
determine whether the construction or modification of a facility, 
building, structure, or installation, or combination of these will 
result in (1) a violation of applicable portions of the control 
strategy; or (2) interference with attainment or maintenance of a 
national standard in the state in which the proposed source (or 
modification) is located or in a neighboring state.
    The revision also meets 40 CFR 51.160(e) by identifying a type of 
facility that will be subject to review under 40 CFR 51.160(a). In this 
case, Texas specifically identified grandfathered and electing electric 
generating facilities. See our Technical Support Document, Attachment 
B, for more details.

[[Page 64240]]

C. CAA 110(l) Analysis

    Each revision to an implementation plan submitted by a State under 
this Act shall be adopted by such State after reasonable notice and 
public hearing. The Administrator shall not approve a revision of a 
plan if the revision would interfere with any applicable requirement 
concerning attainment and reasonable further progress (as defined in 
section 171), or any other applicable requirement of this Act. EPA is 
proposing to approve these revisions because they improve the SIP in 
accordance with Section 110 of the Act. The reductions achieved through 
the SB7 program are throughout the State of Texas and include reducing 
precursors to ozone (NOx), SO2 emissions, and PM emissions. The NOx 
emissions reductions in certain regions of the State were assumed in 
Texas' ozone attainment demonstration plans and will provide benefits 
in reducing ozone concentrations in nonattainment areas and near 
nonattainment areas, as well as attainment areas. There are no SO2 
nonattainment areas in Texas. The only PM-10 nonattainment area in 
Texas is the El Paso geographic area. Any reductions in PM10 emissions 
due to these revisions should contribute to attainment of the PM10 
NAAQS in that area. Further, EPA believes that any collateral emissions 
increases in carbon dioxide (CO) due to controls installed to limit NOx 
do not interfere with attainment or maintenance of the NAAQS for CO, 
nor cause or contribute to increase in any PSD increments. Texas is 
also currently in attainment for CO. Further, the permitting of 
grandfathered sources will benefit the public due to reductions of air 
contaminants emitted from affected EGFs, and present the opportunity 
for public participation and comment in the permitting procedures for 
formerly grandfathered EGFs and other participating EGFs. The program 
establishes requirements, procedures, deadlines and responsibilities 
for EGF permit applications for facilities formerly exempt from permit 
requirements.

IV. Proposed Action

    EPA is proposing to partially approve and partially disapprove 
revisions to the Texas SIP that include 30 TAC Chapter 116, Subchapter 
A: ``Definitions,'' section 116.18; and Subchapter I: ``Electric 
Generating Facility Permits,'' sections 116.910-914, 116.916, 116.920-
922, 116.930, and 116.931, which Texas submitted on January 3, 2000.
    EPA is proposing to approve all of the January 3, 2000, SIP 
revision submittal as part of the Texas NSR SIP but for 30 TAC 
116.911(a)(2). EPA is proposing to disapprove the submitted severable 
30 TAC 116.911(a)(2) for collateral emissions increases of CO that are 
allowed to be permitted under the Texas PCP SP.
    Further, EPA is proposing to approve revisions to the Texas SIP 
that include 30 TAC Chapter 116, Subchapter A: ``Definitions,'' section 
116.18; and Subchapter I: ``Electric Generating Facility Permits,'' 
sections 116.910, 116.911, 116.913, 116.917, 116.918, 116.921, 116.926, 
116.928, and 116.930, which Texas submitted on July 31, 2002. We are 
proposing to take no action on Chapter 116, Subchapter H: ``Permits for 
Grandfathered Facilities,'' which Texas submitted on July 31, 2002. The 
State understands that EPA will take future action on Subchapter H 
because it is independent from Subchapters A and I, and action is not 
necessary at this time.
    The January 3, 2000 and July 31, 2002 submittals address the 
applicability and permitting requirements for grandfathered and 
electing electric generating facilities. The revisions will contribute 
to improvement in overall air quality in Texas. There will be no 
increase in ozone, SO2, and PM concentration levels because of 
approving the revisions. We have evaluated the State's submittal, 
determined that it meets the applicable requirements of the CAA and EPA 
air quality regulations, and is consistent with EPA policy.

V. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

    This action is not a ``significant regulatory action'' under the 
terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is 
therefore not subject to review under the Executive Order.

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
because this proposed SIP disapproval under section 110 and subchapter 
I, part D of the Clean Air Act will not in-and-of itself create any new 
information collection burdens but simply disapproves certain State 
requirements for inclusion into the SIP. Burden is defined at 5 CFR 
1320.3(b).

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions. For purposes of assessing the impacts of today's rule on 
small entities, small entity is defined as: (1) A small business as 
defined by the Small Business Administration's (SBA) regulations at 13 
CFR 121.201; (2) a small governmental jurisdiction that is a government 
of a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of today's proposed rule on 
small entities, I certify that this action will not have a significant 
impact on a substantial number of small entities. This rule does not 
impose any requirements or create impacts on small entities. This 
proposed SIP disapproval under section 110 and subchapter I, part D of 
the Clean Air Act will not in-and-of itself create any new requirements 
but simply disapproves certain State requirements for inclusion into 
the SIP. Accordingly, it affords no opportunity for EPA to fashion for 
small entities less burdensome compliance or reporting requirements or 
timetables or exemptions from all or part of the rule. The fact that 
the Clean Air Act prescribes that various consequences (e.g., higher 
offset requirements) may or will flow from this disapproval does not 
mean that EPA either can or must conduct a regulatory flexibility 
analysis for this action. Therefore, this action will not have a 
significant economic impact on a substantial number of small entities.
    We continue to be interested in the potential impacts of this 
proposed rule on small entities and welcome comments on issues related 
to such impacts.

D. Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of 
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1531-1538 ``for State, local, or tribal governments or the private 
sector.'' EPA has determined that the proposed

[[Page 64241]]

disapproval action does not include a Federal mandate that may result 
in estimated costs of $100 million or more to either State, local, or 
tribal governments in the aggregate, or to the private sector. This 
action proposes to disapprove pre-existing requirements under State or 
local law, and imposes no new requirements. Accordingly, no additional 
costs to State, local, or tribal governments, or to the private sector, 
result from this action.

E. Executive Order 13132, Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This 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, as 
specified in Executive Order 13132, because it merely disapproves 
certain State requirements for inclusion into the SIP and does not 
alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. Thus, Executive 
Order 13132 does not apply to this action.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (59 FR 22951, November 9, 2000), because the SIP 
EPA is proposing to disapprove would not apply in Indian country 
located in the State, and EPA notes that it will not impose substantial 
direct costs on tribal governments or preempt tribal law. Thus, 
Executive Order 13175 does not apply to this action.

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

    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 Executive Order has the potential to influence the regulation. This 
action is not subject to Executive Order 13045 because it is not an 
economically significant regulatory action based on health or safety 
risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). 
This proposed SIP disapproval under section 110 and subchapter I, part 
D of the Clean Air Act will not in-and-of itself create any new 
regulations but simply disapproves certain State requirements for 
inclusion into the SIP.

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

    This proposed rule is not subject to Executive Order 13211 (66 FR 
28355, May 22, 2001) because it is not a significant regulatory action 
under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. NTTAA directs EPA to 
provide Congress, through OMB, explanations when the Agency decides not 
to use available and applicable voluntary consensus standards.
    The EPA believes that this action is not subject to requirements of 
Section 12(d) of NTTAA because application of those requirements would 
be inconsistent with the Clean Air Act.

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

    Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA lacks the discretionary authority to address environmental 
justice in this proposed action. In reviewing SIP submissions, EPA's 
role is to approve or disapprove state choices, based on the criteria 
of the Clean Air Act. Accordingly, this action merely proposes to 
disapprove certain State requirements for inclusion into the SIP under 
section 110 and subchapter I, part D of the Clean Air Act and will not 
in-and-of itself create any new requirements. Accordingly, it does not 
provide EPA with the discretionary authority to address, as 
appropriate, disproportionate human health or environmental effects, 
using practicable and legally permissible methods, under Executive 
Order 12898.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Intergovernmental relations, Nitrogen oxides, Nonattainment, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
dioxide.

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

    Dated: October 8, 2010.
Lawrence E. Starfield,
Acting Regional Administrator, Region 6.
[FR Doc. 2010-26259 Filed 10-18-10; 8:45 am]
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