Document ID: EPA-R06-OAR-2016-0611-0086
Agency: epa
Document Type: Rule
Title: TX187.086  Air Quality State Implementation Plans; Approval and Promulgation: State of Texas; Regional Haze and Interstate Visibility Transport Federal Implementation Plan, Final rule, 57 pages
Posted Date: 2017-10-17T04:00Z

[Federal Register Volume 82, Number 199 (Tuesday, October 17, 2017)]
[Rules and Regulations]
[Pages 48324-48380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21947]

[[Page 48323]]

Vol. 82

Tuesday,

No. 199

October 17, 2017

Part II

Environmental Protection Agency

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40 CFR Parts 52 and 97

Promulgation of Air Quality Implementation Plans; State of Texas; 
Regional Haze and Interstate Visibility Transport Federal 
Implementation Plan; Final Rule

  Federal Register / Vol. 82 , No. 199 / Tuesday, October 17, 2017 / 
Rules and Regulations  

[[Page 48324]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-R06-OAR-2016-0611; FRL-9969-07-Region 6]

Promulgation of Air Quality Implementation Plans; State of Texas; 
Regional Haze and Interstate Visibility Transport Federal 
Implementation Plan

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Pursuant to the Federal Clean Air Act (CAA or Act), the 
Environmental Protection Agency (EPA) is finalizing a partial approval 
of the 2009 Texas Regional Haze State Implementation Plan (SIP) 
submission and a Federal Implementation Plan (FIP) for Texas to address 
certain outstanding requirements. Specifically, the EPA is finalizing 
determinations regarding best available retrofit technology (BART) for 
electric generating units (EGUs) in the State of Texas. To address the 
BART requirement for sulfur dioxide (SO2), the EPA is 
finalizing an alternative to BART that consists of an intrastate 
trading program addressing the SO2 emissions from certain 
EGUs. To address the BART requirement for oxides of nitrogen 
(NOX), we are finalizing our proposed determination that 
Texas' participation in the Cross-State Air Pollution Rule's (CSAPR) 
trading program for ozone-season NOX qualifies as an 
alternative to BART. We are approving Texas' determination that its 
EGUs are not subject to BART for particulate matter (PM). Finally, we 
are disapproving portions of several SIP revisions submitted to satisfy 
the CAA requirement to address interstate visibility transport for six 
national ambient air quality standards (NAAQS): 1997 8-hour ozone, 1997 
fine particulate matter (PM2.5) (annual and 24-hour), 2006 
PM2.5 (24-hour), 2008 8-hour ozone, 2010 1-hour nitrogen 
dioxide (NO2) and 2010 1-hour SO2. We are finding 
that the BART alternatives to address SO2 and NOX 
BART at Texas' EGUs meet the interstate visibility transport 
requirements for these NAAQS.

DATES: This final rule is effective on November 16, 2017.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-R06-OAR-2016-0611. All documents in the docket are 
listed on the http://www.regulations.gov Web site. Although listed in 
the index, some information is not publicly available, e.g., 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute therefore is not posted to 
regulations.gov. Certain other material, such as copyrighted material, 
is not placed on the Internet and will be publicly available only in 
hard copy. Publicly available docket materials are available either 
electronically through http://www.regulations.gov or in hard copy at 
EPA Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733.

FOR FURTHER INFORMATION CONTACT: Michael Feldman at 
Feldman.Michael@epa.gov or 214-665-9793

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,'' 
``us,'' or ``our'' is used, we mean the EPA.

Table of Contents

I. Background
    A. Regional Haze
    B. Interstate Transport of Pollutants That Affect Visibility
    C. Previous Actions Related to Texas Regional Haze
II. Our Proposed Actions
    A. Regional Haze
    B. Interstate Transport of Pollutants That Affect Visibility
III. Summary of Our Final Decisions
    A. Regional Haze
    1. BART-Eligible Units
    2. Subject-to-BART Sources
    3. SO2 BART
    4. PM BART
    5. NOX BART
    B. Interstate Transport of Pollutants That Affect Visibility
    C. Reasonable Progress
IV. Summary and Analysis of Major Issues Raised by Commenters
    A. Comments on Relying on CSAPR for SO2 BART or 
Developing an Intrastate SO2 Trading Program
    B. Comments on Source-Specific BART
    C. Comments on EPA's Proposed SIP Disapprovals
    D. Legal Comments
    E. Comments on Identification of BART-Eligible Sources
    F. Comments on PM BART
    G. Comments on EPA's Source-Specific SO2 BART Cost 
Analyses
    H. Comments on EPA's Modeling
    I. Comments on Affordability and Grid Reliability
V. SO2 Trading Program and Its Implications for 
Interstate Visibility Transport, EGU BART, and Reasonable Progress
    A. Background on CSAPR as an Alternative to BART Concept
    B. Texas SO2 Trading Program
    1. Identification of Sources Participating in the Trading 
Program
    2. Texas SO2 Trading Program as a BART Alternative
    C. Specific Texas SO2 Trading Program Features
VI. Final Action
VII. Statutory and Executive Order Reviews

I. Background

A. Regional Haze

    Regional haze is visibility impairment that is produced by a 
multitude of sources and activities that are located across a broad 
geographic area and emit PM2.5 (e.g., sulfates, nitrates, 
organic carbon (OC), elemental carbon (EC), and soil dust), and its 
precursors (e.g., SO2, NOX, and, in some cases, 
ammonia (NH3) and volatile organic compounds (VOCs)). Fine 
particle precursors react in the atmosphere to form PM2.5, 
which impairs visibility by scattering and absorbing light. Visibility 
impairment reduces the clarity, color, and visible distance that can be 
seen. PM2.5 can also cause serious health effects and 
mortality in humans and contributes to environmental effects, such as 
acid deposition and eutrophication.
    Data from the existing visibility monitoring network, the 
``Interagency Monitoring of Protected Visual Environments'' (IMPROVE) 
monitoring network, show that visibility impairment caused by air 
pollution occurs virtually all the time at most national parks and 
wilderness areas. In 1999, the average visual range \1\ in many Class I 
areas (i.e., national parks and memorial parks, wilderness areas, and 
international parks meeting certain size criteria) in the western 
United States was 100-150 kilometers, or about one-half to two-thirds 
of the visual range that would exist without anthropogenic air 
pollution. In most of the eastern Class I areas of the United States, 
the average visual range was less than 30 kilometers, or about one-
fifth of the visual range that would exist under estimated natural 
conditions.\2\ CAA programs have reduced some haze-causing pollution, 
lessening some visibility impairment and resulting in partially 
improved average visual ranges.\3\
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    \1\ Visual range is the greatest distance, in kilometers or 
miles, at which a dark object can be viewed against the sky.
    \2\ 64 FR 35715 (July 1, 1999).
    \3\ An interactive ``story map'' depicting efforts and recent 
progress by EPA and states to improve visibility at national parks 
and wilderness areas may be visited at: http://arcg.is/29tAbS3.
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    CAA requirements to address the problem of visibility impairment 
are continuing to be addressed and implemented. In Section 169A of the 
1977 Amendments to the CAA, Congress created a program for protecting 
visibility in the nation's national parks and wilderness areas. This 
section of the CAA establishes as a national goal the prevention of any 
future, and the remedying of any

[[Page 48325]]

existing man-made impairment of visibility in 156 national parks and 
wilderness areas designated as mandatory Class I Federal areas.\4\ On 
December 2, 1980, EPA promulgated regulations to address visibility 
impairment in Class I areas that is ``reasonably attributable'' to a 
single source or small group of sources, i.e., ``reasonably 
attributable visibility impairment.'' \5\ These regulations represented 
the first phase in addressing visibility impairment. EPA deferred 
action on regional haze that emanates from a variety of sources until 
monitoring, modeling, and scientific knowledge about the relationships 
between pollutants and visibility impairment were improved.
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    \4\ Areas designated as mandatory Class I Federal areas consist 
of National Parks exceeding 6,000 acres, wilderness areas and 
national memorial parks exceeding 5,000 acres, and all international 
parks that were in existence on August 7, 1977. 42 U.S.C. 7472(a). 
In accordance with section 169A of the CAA, EPA, in consultation 
with the Department of Interior, promulgated a list of 156 areas 
where visibility is identified as an important value. 44 FR 69122 
(November 30, 1979). The extent of a mandatory Class I area includes 
subsequent changes in boundaries, such as park expansions. 42 U.S.C. 
7472(a). Although states and tribes may designate as Class I 
additional areas which they consider to have visibility as an 
important value, the requirements of the visibility program set 
forth in section 169A of the CAA apply only to ``mandatory Class I 
Federal areas.'' Each mandatory Class I Federal area is the 
responsibility of a ``Federal Land Manager.'' 42 U.S.C. 7602(i). 
When we use the term ``Class I area'' in this action, we mean a 
``mandatory Class I Federal area.''
    \5\ 45 FR 80084 (Dec. 2, 1980).
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    Congress added section 169B to the CAA in 1990 to address regional 
haze issues, and we promulgated regulations addressing regional haze in 
1999.\6\ The Regional Haze Rule revised the existing visibility 
regulations to integrate into the regulations provisions addressing 
regional haze impairment and established a comprehensive visibility 
protection program for Class I areas. The requirements for regional 
haze, found at 40 CFR 51.308 and 51.309, are included in our visibility 
protection regulations at 40 CFR 51.300-51.309. The requirement to 
submit a regional haze SIP applies to all 50 states, the District of 
Columbia, and the Virgin Islands. States were required to submit the 
first implementation plan addressing regional haze visibility 
impairment no later than December 17, 2007.\7\
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    \6\ 64 FR 35714 (July 1, 1999), codified at 40 CFR part 51, 
subpart P (Regional Haze Rule).
    \7\ See 40 CFR 51.308(b). EPA's regional haze regulations 
require subsequent updates to the regional haze SIPs. 40 CFR 
51.308(g)-(i).
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    Section 169A of the CAA directs states to evaluate the use of 
retrofit controls at certain larger, often under-controlled, older 
stationary sources in order to address visibility impacts from these 
sources. Specifically, section 169A(b)(2)(A) of the CAA requires states 
to revise their SIPs to contain such measures as may be necessary to 
make reasonable progress toward the natural visibility goal, including 
a requirement that certain categories of existing major stationary 
sources \8\ built between 1962 and 1977 procure, install and operate 
the ``Best Available Retrofit Technology'' (BART). Larger ``fossil-fuel 
fired steam electric plants'' are included among the BART source 
categories. Under the Regional Haze Rule, states are directed to 
conduct BART determinations for ``BART-eligible'' sources that may be 
anticipated to cause or contribute to any visibility impairment in a 
Class I area. The evaluation of BART for EGUs that are located at 
fossil-fuel-fired power plants having a generating capacity in excess 
of 750 megawatts must follow the ``Guidelines for BART Determinations 
Under the Regional Haze Rule'' at appendix Y to 40 CFR part 51 
(hereinafter referred to as the ``BART Guidelines''). Rather than 
requiring source-specific BART controls, states also have the 
flexibility to adopt an emissions trading program or alternative 
program as long as the alternative provides greater reasonable progress 
towards improving visibility than BART. 40 CFR 51.308(e)(2) specifies 
how a state must conduct the demonstration to show that an alternative 
program will achieve greater reasonable progress than the installation 
and operation of BART. 40 CFR 51.308(e)(2)(i)(E) requires a 
determination under 40 CFR 51.308 (e)(3) or otherwise based on the 
clear weight of evidence that the trading program or other alternative 
measure achieves greater reasonable progress than would be achieved 
through the installation and operation of BART at the covered sources. 
Specific criteria for determining if an alternative measure achieves 
greater reasonable progress than source-specific BART are set out in 40 
CFR 51.308(e)(3). Finally, 40 CFR 51.308(e)(4) states that states 
participating in CSAPR need not require BART-eligible fossil fuel-fired 
steam electric plants to install, operate, and maintain BART for the 
pollutant covered by CSAPR.
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    \8\ See 42 U.S.C. 7491(g)(7) (listing the set of ``major 
stationary sources'' potentially subject-to-BART).
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    Under section 110(c) of the CAA, whenever we disapprove a mandatory 
SIP submission in whole or in part, we are required to promulgate a FIP 
within two years unless the state corrects the deficiency and we 
approve the new SIP submittal.

B. Interstate Transport of Pollutants That Affect Visibility

    Section 110(a) of the CAA directs states to submit a SIP that 
provides for the implementation, maintenance, and enforcement of each 
NAAQS, which is commonly referred to as an infrastructure SIP. Among 
other things, CAA section 110(a)(2)(D)(i)(II) requires that SIPs 
contain adequate provisions to prohibit interference with measures 
required to protect visibility in other states. This is referred to as 
``interstate visibility transport.'' SIPs addressing interstate 
visibility transport are due to the EPA within three years after the 
promulgation of a new or revised NAAQS (or within such shorter period 
as we may prescribe). A state's failure to submit a complete, 
approvable SIP for interstate visibility transport creates an 
obligation for the EPA to promulgate a FIP to address this requirement.

C. Previous Actions Related to Texas Regional Haze

    On March 31, 2009, Texas submitted a regional haze SIP to the EPA 
that included reliance on Texas' participation in the Clean Air 
Interstate Rule (CAIR) as an alternative to BART for SO2 and 
NOX emissions from EGUs.\9\ This reliance was consistent 
with the EPA's regulations at the time that Texas developed its 
regional haze plan,\10\ but at the time that Texas submitted this SIP 
to the EPA, the D.C. Circuit had remanded CAIR (without vacatur).\11\ 
The court left CAIR and our CAIR FIPs in place in order to 
``temporarily preserve the environmental values covered by CAIR'' until 
we could, by rulemaking, replace CAIR consistent with the court's 
opinion. The EPA promulgated CSAPR, a revised multi-state trading 
program to replace CAIR, in 2011 \12\ (and revised it in 2012 \13\). 
CSAPR established FIP requirements for a number of states, including 
Texas, to address the states' interstate transport obligation under CAA 
section 110(a)(2)(D)(i)(I). CSAPR requires affected EGUs in these 
states to

[[Page 48326]]

participate in the CSAPR trading programs and establishes emissions 
budgets that apply to the EGUs' collective annual emissions of 
SO2 and NOX, as well as seasonal emissions of 
NOX. Following issuance of CSAPR, the EPA determined that 
CSAPR would achieve greater reasonable progress towards improving 
visibility than would source-specific BART in CSAPR states.\14\ We 
revised the Regional Haze Rule to allow states that participate in 
CSAPR to rely on participation in the trading programs in lieu of 
requiring EGUs in the state to install BART controls.
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    \9\ CAIR required certain states, including Texas, to reduce 
emissions of SO2 and NOX that significantly 
contribute to downwind nonattainment of the 1997 NAAQS for fine 
particulate matter and ozone. See 70 FR 25152 (May 12, 2005).
    \10\ See 70 FR 39104 (July 6, 2005).
    \11\ See North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), 
modified, 550 F.3d 1176 (D.C. Cir. 2008).
    \12\ 76 FR 48207 (Aug. 8, 2011).
    \13\ CSAPR was amended three times in 2011 and 2012 to add five 
states to the seasonal NOX program and to increase 
certain state budgets. 76 FR 80760 (December 27, 2011); 77 FR 10324 
(February 21, 2012); 77 FR 34830 (June 12, 2012).
    \14\ 77 FR 33641 (June 7, 2012).
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    In the same action that EPA determined that states could rely on 
CSAPR to address the BART requirements for EGUs, EPA issued a limited 
disapproval of a number of states' regional haze SIPs, including the 
2009 SIP submittal from Texas, due to the states' reliance on CAIR, 
which had been replaced by CSAPR.\15\ The EPA did not immediately 
promulgate a FIP to address the limited disapproval of Texas' regional 
haze SIP in order to allow more time for the EPA to assess the 
remaining elements of the 2009 Texas SIP submittal. In December 2014, 
we proposed an action to address the remaining regional haze 
obligations for Texas.\16\ In that action, we proposed, among other 
things, to rely on CSAPR to satisfy the NOX and 
SO2 BART requirements for Texas' EGUs; we also proposed to 
approve the portions of the SIP addressing PM BART requirements for the 
state's EGUs. Before that rule was finalized, however, the D.C. Circuit 
issued a decision on a number of challenges to CSAPR, denying most 
claims, but remanding the CSAPR emissions budgets of several states to 
the EPA for reconsideration, including the Phase 2 SO2 and 
seasonal NOX budget for Texas.\17\ Due to potential impacts 
of the remanded budgets on the EPA's 2012 determination that CSAPR 
would provide for greater reasonable progress than BART, we did not 
finalize our decision to rely on CSAPR to satisfy the SO2 
and NOX BART requirements for Texas EGUs.\18\ Additionally, 
because our proposed action on the PM BART provisions for EGUs was 
dependent on how SO2 and NOX BART were satisfied, 
we did not take final action on the PM BART elements of Texas' regional 
haze SIP. In January 2016, we finalized action on the remaining aspects 
of the December 2014 proposal. That rulemaking was challenged, however, 
and in December 2016, following the submittal of a request by the EPA 
for a voluntary remand of the parts of the rule under challenge, the 
Fifth Circuit Court of Appeals remanded the rule in its entirety.\19\
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    \15\ Id.
    \16\ 79 FR 74818 (Dec. 16, 2014).
    \17\ EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 132 
(D.C. Cir. 2015).
    \18\ 81 FR 296 (Jan. 5, 2016).
    \19\ Texas v. EPA, 829 F.3d 405 (5th Cir. 2016).
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    On October 26, 2016, the EPA finalized an update to CSAPR to 
address the interstate transport requirements of CAA section 
110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS (CSAPR 
Update).\20\ The EPA also responded to the D.C. Circuit's remand of 
certain CSAPR seasonal NOX budgets in that action. As to 
Texas, the EPA withdrew Texas's seasonal NOX budget 
finalized in CSAPR to address the 1997 ozone NAAQS. However, in that 
same action, the EPA promulgated a FIP with a revised seasonal 
NOX budget for Texas to address the 2008 ozone NAAQS.\21\ 
Accordingly, Texas remains subject to the CSAPR seasonal NOX 
requirements.
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    \20\ 81 FR 74504 (Oct. 26, 2016).
    \21\ 81 FR 74504, 74524-25.
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    On November 10, 2016, in response to the D.C. Circuit's remand of 
Texas's CSAPR SO2 budget, we proposed to withdraw the FIP 
provisions requiring EGUs in Texas to participate in the CSAPR trading 
programs for annual emissions of SO2 and NOX.\22\ 
We also proposed to reaffirm that CSAPR continues to provide for 
greater reasonable progress than BART following our actions taken to 
address the D.C. Circuit's remand of several CSAPR emissions budgets. 
On September 21, 2017, we finalized the withdrawal of the FIP 
provisions for annual emissions of SO2 and NOX 
for EGUs in Texas \23\ and affirmed our proposed finding that the EPA's 
2012 analytical demonstration remains valid and that participation in 
CSAPR as it now exists meets the Regional Haze Rule's criteria for an 
alternative to BART.
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    \22\ 81 FR 78954.
    \23\ Texas continues to participate in CSAPR for ozone season 
NOX. See final action signed September 21, 2017 available 
at regulations.gov in Docket No. EPA-HQ-OAR-2016-0598.
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II. Our Proposed Actions

A. Regional Haze

    On January 4, 2017, we proposed a FIP to address the BART 
requirements for Texas' EGUs. In that action, we proposed to replace 
Texas' reliance on CAIR with reliance on CSAPR to address the 
NOX BART requirements for EGUs.\24\ This portion of our 
proposal was based on the CSAPR Update and our separate November 10, 
2016 proposed finding that the EPA's actions in response to the D.C. 
Circuit's remand would not adversely impact our 2012 demonstration that 
participation in CSAPR meets the Regional Haze Rule's criteria for 
alternatives to BART.\25\ We noted that we could not finalize this 
portion of our proposed FIP unless and until we finalized our proposed 
finding that the set of actions taken by the EPA in response to the 
D.C. Circuit's remand of certain CSAPR budgets would not adversely 
impact our prior determination that CSAPR provides for greater 
reasonable progress than BART. As noted in section I.C, on September 
21, 2017, we finalized our proposed finding that EPA's 2012 analytical 
demonstration remains valid and that participation in CSAPR as it now 
exists meets the Regional Haze Rule's criteria for an alternative to 
BART.
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    \24\ 82 FR 912, 914-15 (Jan. 4, 2017).
    \25\ 81 FR 74504 (Nov. 10, 2016).
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    Also as noted in section I.C, as part of our November 10, 2016 
proposed action in response to the D.C. Circuit's remand of Texas' 
SO2 CSAPR budget, we also proposed to withdraw the FIP 
provisions requiring EGUs in Texas to participate in the CSAPR trading 
programs for annual emissions of SO2 and NOX.\26\ 
In our January 4, 2017 proposed action on BART requirements for Texas 
EGUs, we accordingly proposed that because Texas would no longer be 
participating in the CSAPR program for SO2, and thus would 
no longer be eligible to rely on participation in CSAPR as an 
alternative to source-specific EGU BART for SO2 under 40 CFR 
51.308(e)(4), our regional haze FIP would need to include the 
identification of BART-eligible EGU sources, screening of sources to 
identify subject-to-BART sources, and source-by-source determinations 
of SO2 BART controls as appropriate. For those EGU sources 
we proposed to find subject to BART, we proposed to promulgate source-
specific SO2 requirements. We also proposed to disapprove 
Texas' BART determinations for PM from EGUs. In place of these 
determinations, we proposed to promulgate source-specific PM BART 
requirements for EGUs that we proposed to find subject to BART. 
Previously, we proposed to approve the EGU BART determinations for PM 
in the Texas regional haze SIP and this proposal has never been 
withdrawn.\27\ At that time, CSAPR was an appropriate alternative for 
SO2 and NOX BART for EGUs. The Texas Regional 
Haze SIP included a pollutant-specific screening analysis for PM to

[[Page 48327]]

demonstrate that Texas EGUs were not subject to BART for PM. In a 2006 
guidance document,\28\ the EPA stated that pollutant-specific screening 
can be appropriate where a state is relying on a BART alternative to 
address both NOX and SO2 BART.
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    \26\ 81 FR 78954.
    \27\ 79 FR 74817, 74853-54 (Dec. 16, 2014).
    \28\ See discussion in Memorandum from Joseph Paisie to Kay 
Prince, ``Regional Haze Regulations and Guidelines for Best 
Available Retrofit Technology (BART) Determinations,'' July 19, 
2006.
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B. Interstate Transport of Pollutants That Affect Visibility

    In our January 5, 2016 final action \29\ we disapproved the portion 
of Texas' SIP revisions intended to address interstate visibility 
transport for six NAAQS, including the 1997 8-hour ozone and 1997 
PM2.5.\30\ That rulemaking was challenged, however, and in 
December 2016, following the submittal of a request by the EPA for a 
voluntary remand of the parts of the rule under challenge, the Fifth 
Circuit Court of Appeals remanded the rule in its entirety without 
vacatur.\31\ In our January 4, 2017 proposed action we proposed to 
reconsider the basis of our prior disapproval of Texas' SIP revisions 
addressing interstate visibility transport under CAA section 
110(a)(2)(D)(i)(II) for six NAAQS. We proposed that Texas' SIP 
submittals addressing interstate visibility transport for the six NAAQS 
were not approvable because they relied solely on Texas' 2009 Regional 
Haze SIP to ensure that emissions from Texas did not interfere with 
required measures in other states. Texas' Regional Haze SIP, in turn, 
relied on the implementation of CAIR as an alternative to EGU BART for 
SO2 and NOX.\32\ We proposed a FIP to fully 
address Texas' interstate visibility transport obligations for: (1) 
1997 8-hour ozone, (2) 1997 PM2.5 (annual and 24-hour), (3) 
2006 PM2.5 (24-hour), (4) 2008 8-hour ozone, (5) 2010 1-hour 
NO2 and (6) 2010 1-hour SO2. The proposed FIP was 
based on our finding that our proposed action to fully address the BART 
requirements for Texas EGUs was adequate to ensure that emissions from 
Texas do not interfere with measures to protect visibility in nearby 
states in accordance with CAA section 110(a)(2)(D)(i)(II).
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    \29\ 81 FR 296 (Jan. 5, 2016).
    \30\ Specifically, we previously disapproved the relevant 
portion of these Texas' SIP submittals: April 4, 2008: 1997 8-hour 
Ozone, 1997 PM2.5 (24-hour and annual); May 1, 2008: 1997 
8-hour Ozone, 1997 PM2.5 (24-hour and annual); November 
23, 2009: 2006 24-hour PM2.5; December 7, 2012: 2010 
NO2; December 13, 2012: 2008 8-hour Ozone; May 6, 2013: 
2010 1-hour SO2 (Primary NAAQS). 79 FR 74818, 74821; 81 
FR 296, 302.
    \31\ Texas v. EPA, 829 F.3d 405 (5th Cir. 2016).
    \32\ EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 133-
34 (D.C. Cir. 2015) (holding that SIPs based on CAIR were 
unapprovable to fulfill good neighbor obligations).
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III. Summary of Our Final Decisions

A. Regional Haze

    When we finalized a limited disapproval of Texas' 2009 regional 
haze SIP for its reliance on CAIR participation as a BART alternative, 
we did not immediately finalize a CSAPR-better-than-BART FIP for Texas, 
as we had proposed for Texas and ultimately finalized for twelve other 
states. Instead of finalizing a CSAPR-better-than-BART FIP for Texas, 
the EPA acknowledged that we needed more time to assess the Texas 
regional haze SIP in regard to aspects other than its reliance on CAIR 
as an alternative to BART.\33\ As the EPA has continued to assess how 
best to address the regional haze obligations for Texas, Texas has not 
submitted a SIP revision to address the prior disapproval, so the EPA 
has a remaining obligation to address BART requirements for Texas EGUs.
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    \33\ 77 FR 33641, 33654 (June 7, 2012).
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    After assessing how we should address BART for Texas EGUs, we 
believe that our initial 2011 proposal, to treat Texas like other 
similarly situated CSAPR states, was an appropriate and regionally 
consistent approach. As discussed above, in 2014, we proposed that 
CSAPR would satisfy the NOX and SO2 BART 
requirements for Texas EGUs.\34\ However, we did not finalize this part 
of the 2014 proposal in the action taken on January 5, 2016.\35\ Given 
EPA's response to the D.C. Circuit remand of certain CSAPR emission 
budgets, we can no longer rely on CSAPR for Texas' SO2 BART 
requirements. Based on comments we received in response to our January 
2017 proposal, and giving particular weight to the views expressed by 
Texas, we are finalizing various determinations to ensure satisfaction 
of the BART requirement for EGUs in Texas. Of particular note, in 
making our final decision for the SO2 BART requirement for 
EGUs, we centered our focus on a timely comment letter received from 
the Texas Commission on Environmental Quality (TCEQ) and the Public 
Utility Commission of Texas (PUC). This comment urged us to consider as 
a BART alternative the concept of emission caps using CSAPR 
allocations. We also received similar comments from Luminant and 
American Electric Power (AEP). Based upon the comments, we are 
proceeding to address the SO2 BART requirement for EGUs 
under a BART alternative. The EPA finds that, because this BART 
alternative will result in SO2 emissions from Texas EGUs 
that will be similar to emissions anticipated under CSAPR, the 
alternative is an appropriate approach for addressing Texas' 
SO2 BART obligations.
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    \34\ 79 FR 74817, 74823 (December 16, 2014) (``We propose to 
replace Texas' reliance on CAIR to satisfy the BART requirement for 
EGUs with reliance on CSAPR.''). This part of the 2014 proposal was 
not finalized in the action taken on January 5, 2016, that has since 
been remanded by the Fifth Circuit Court of Appeals. 81 FR 295.
    \35\ Final action taken on January 5, 2016, that has since been 
remanded by the Fifth Circuit Court of Appeals. 81 FR 295.
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    Specifically, the BART alternative is justified ``based on the 
clear weight of the evidence'' that the alternative achieves greater 
reasonable progress than would be achieved through BART. See 40 CFR 
51.308(e)(2)(i)(E). The program is designed to accomplish environmental 
and visibility results by achieving emission levels that will be the 
same as or better than the emission levels that would have been 
obtained by state participation in the interstate CSAPR program as 
finalized and amended in 2011 and 2012, which EPA first deemed to be 
better than BART for NOX and SO2 in a 2012 
regulatory action.\36\ The TCEQ and EPA recently signed a memorandum of 
agreement (MOA) to work together to develop a SIP revision addressing 
interstate visibility transport requirements and BART requirements for 
EGUs with a BART alternative trading program starting from CSAPR as 
allowed under the Regional Haze Rule (40 CFR 51.308(e)).\37\ Texas 
envisions that the FIP measures that serve to satisfy this BART 
requirement will be replaced by a future SIP submission following the 
approach described in the MOA that may be approved as meeting the 
requirements of the CAA and the Regional Haze Rule. EPA policy 
consistently favors that states will exercise their SIP authority to 
avoid need for promulgation and continued implementation of measures 
under FIP authority. In the absence of a SIP to address the 
SO2 BART requirement for Texas EGUs, however, EPA finds it 
necessary to address the requirement under its FIP authority, and the 
details of how this is addressed and the accompanying justification are 
further discussed below under Section III.A.3, ``SO2 BART.''
---------------------------------------------------------------------------

    \36\ 77 FR 33641 (June 7, 2012).
    \37\ See Memorandum of Agreement Between the Texas Commission on 
Environmental Quality and the Environmental Protection Agency 
Regarding a State Implementation Plan to Address Certain Regional 
Haze and Interstate Visibility Transport Requirements Pursuant to 
Sections 110 and 169A of the Clean Air Act, Signed August 14, 2017.

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

[[Page 48328]]

    The Regional Haze Rule requires that SIP or FIP measures be in 
place to ensure that BART is satisfied for all subject-to-BART EGUs and 
all haze-causing pollutants. For ease of summarization, we will detail 
the relevant final decisions for each of the haze-causing pollutants: 
PM, NOX, and SO2.\38\ In our final decisions 
today, the relevant BART requirement for all BART-eligible coal-fired 
units and a number of BART-eligible gas- or gas/fuel oil-fired units 
will be encompassed by BART alternatives for NOX and 
SO2 such that we do not deem it necessary to finalize 
subject-to-BART findings for these EGUs for these pollutants. The 
remaining BART-eligible EGUs not covered by the SO2 BART 
alternative have been determined to be not subject to BART based on the 
methodologies utilizing model plants and CALPUFF modeling as described 
in our proposed rule and BART Screening technical support document 
(TSD). Therefore, we are approving the portion of the Texas Regional 
Haze SIP that addresses the BART requirement for EGUs for PM, we are 
relying upon Texas EGUs' continued participation in the CSAPR program 
to serve as a BART alternative for NOX, and we are 
promulgating an intrastate trading FIP to address the SO2 
BART requirements for EGUs.
---------------------------------------------------------------------------

    \38\ In this action, we did not consider VOCs and ammonia among 
visibility-impairing pollutants for several reasons, as discussed in 
the TSD.
---------------------------------------------------------------------------

1. BART-Eligible Units
    BART-eligible sources are those sources which have the potential to 
emit 250 tons per year or more of a visibility-impairing air pollutant, 
which were ``in existence'' on August 7, 1977 but not ``in operation'' 
before August 7, 1962, and whose operations fall within one or more of 
26 specifically listed source categories.\39\ As discussed in detail in 
our proposal and the BART FIP TSD, our analysis of BART-eligible EGUs 
started with the list of BART-eligible sources provided by TCEQ in the 
2009 Texas Regional Haze SIP. Based on additional information from 
potential BART-eligible sources and the U.S. Energy Information 
Administration (EIA), we converted Texas' facility-specific BART-
eligible EGU list to a unit-specific BART-eligible EGU list, eliminated 
those units that have retired, and verified the BART-eligibility of 
each remaining unit. We noted in our proposal that Texas' list omitted 
some sources that we had identified as BART-eligible. We are finalizing 
the identification of BART-eligible units as proposed. A ``BART-
eligible source'' is the collection of BART-eligible units at a 
facility. Table 1 shows the list of EGUs in Texas that are BART-
eligible:
---------------------------------------------------------------------------

    \39\ 40 CFR 51.301.
    \40\ Dynegy purchased the Coleto Creek power plant from Engie in 
February, 2017. Note that Coleto Creek may still be listed as being 
owned by Engie in some of our supporting documentation which was 
prepared before that sale.

                 Table 1--Summary of BART-Eligible Units
------------------------------------------------------------------------
                  Facility                               Unit
------------------------------------------------------------------------
Barney M. Davis (Talen/Topaz)...............  1.
Big Brown (Luminant)........................  1.
Big Brown (Luminant)........................  2.
Cedar Bayou (NRG)...........................  CBY1.
Cedar Bayou (NRG)...........................  CBY2.
Coleto Creek (Dynegy \40\)..................  1.
Dansby (City of Bryan)......................  1.
Decker Creek (Austin Energy)................  1.
Decker Creek (Austin Energy)................  2.
Fayette (LCRA)..............................  1.
Fayette (LCRA)..............................  2.
Graham (Luminant)...........................  2.
Greens Bayou (NRG)..........................  5.
Handley (Exelon)............................  3.
Handley (Exelon)............................  4.
Handley (Exelon)............................  5.
Harrington Station (Xcel)...................  061B.
Harrington Station (Xcel)...................  062B.
J T Deely (CPS Energy)......................  1.
J T Deely (CPS Energy)......................  2.
Jones Station (Xcel)........................  151B.
Jones Station (Xcel)........................  152B.
Knox Lee Power Plant (AEP)..................  5.
Lake Hubbard (Luminant).....................  1.
Lake Hubbard (Luminant).....................  2.
Lewis Creek (Entergy).......................  1.
Lewis Creek (Entergy).......................  2.
Martin Lake (Luminant)......................  1.
Martin Lake (Luminant)......................  2.
Martin Lake (Luminant)......................  3.
Monticello (Luminant).......................  1.
Monticello (Luminant).......................  2.
Monticello (Luminant).......................  3.
Newman (El Paso Electric)...................  2.
Newman (El Paso Electric)...................  3.
Newman (El Paso Electric)...................  4.
Nichols Station (Xcel)......................  143B.
O W Sommers (CPS Energy)....................  1.
O W Sommers (CPS Energy)....................  2.
Plant X (Xcel)..............................  4.
Powerlane (City of Greenville)..............  ST1.
Powerlane (City of Greenville)..............  ST2.
Powerlane (City of Greenville)..............  ST3.
R W Miller (Brazos Elec. Coop)..............  1.
R W Miller (Brazos Elec. Coop)..............  2.
R W Miller (Brazos Elec. Coop)..............  3.
Sabine (Entergy)............................  2.
Sabine (Entergy)............................  3.
Sabine (Entergy)............................  4.
Sabine (Entergy)............................  5.
Sim Gideon (LCRA)...........................  1.
Sim Gideon (LCRA)...........................  2.
Sim Gideon (LCRA)...........................  3.
Spencer (City of Garland)...................  4.
Spencer (City of Garland)...................  5.
Stryker Creek (Luminant)....................  ST2.
Trinidad (Luminant).........................  6.
Ty Cooke (City of Lubbock)..................  1.
Ty Cooke (City of Lubbock)..................  2.
V H Braunig (CPS Energy)....................  1.
V H Braunig (CPS Energy)....................  2.
V H Braunig (CPS Energy)....................  3.
WA Parish (NRG).............................  WAP4.
WA Parish (NRG).............................  WAP5.
WA Parish (NRG).............................  WAP6.
Welsh Power Plant (AEP).....................  1.
Welsh Power Plant (AEP).....................  2.
Wilkes Power Plant (AEP)....................  1.
Wilkes Power Plant (AEP)....................  2.
Wilkes Power Plant (AEP)....................  3.
------------------------------------------------------------------------

2. Subject-to-BART Sources
    As discussed elsewhere, it is unnecessary to finalize the subject-
to-BART determinations for BART-eligible sources that are covered by 
the BART alternatives for SO2 and NOX. The BART 
alternatives cover both BART-eligible and non-BART eligible sources. 
This combination provides for greater reasonable progress than source-
specific BART. Even if a unit were individually found to not be subject 
to BART, its participation in the BART alternative contributes to the 
finding that the program provides greater reasonable progress than 
BART. We note that all BART-eligible EGUs in Texas are either covered 
by the BART alternative or have screened out of being subject to BART. 
The section below that discusses our final SO2 BART 
determination lists those units covered by the BART alternative program 
and identifies which of those units are BART-eligible. As discussed in 
section III.A.4 below, we are approving the portion of the 2009 Texas 
Regional Haze SIP that determined that no PM BART determinations are 
needed for BART-eligible EGUs in Texas.
    For those BART-eligible EGUs that are not covered by the BART 
alternative for SO2, we are finalizing determinations that 
those EGUs are not subject-to-BART for NOX, SO2 
and PM as proposed, based on the methodologies utilizing model plants 
and CALPUFF modeling as described in our proposed rule and BART 
Screening TSD.
    The following sources are determined to be BART-eligible, but not 
subject-to-BART:

 Table 2--Sources Determined To Be BART-Eligible But Not Subject-to-BART
                          for NOX, SO2, and PM
------------------------------------------------------------------------
                Facility                              Units
------------------------------------------------------------------------
Barney M. Davis (Talen/Topaz)..........  1.
Cedar Bayou (NRG)......................  CBY1 & CBY2.
Dansby (City of Bryan).................  1.

[[Page 48329]]

 
Decker Creek (Austin Energy)...........  1 & 2.
Greens Bayou (NRG).....................  5.
Handley (Exelon).......................  3, 4 & 5.
Jones (Xcel)...........................  151B & 152B.
Knox Lee (AEP).........................  5.
Lake Hubbard (Luminant)................  1 & 2.
Lewis Creek (Entergy)..................  1 & 2.
Nichols Station (Xcel).................  143B.
Plant X (Xcel).........................  4.
Powerlane (City of Greenville).........  ST1, ST2 & ST3.
R W Miller (Brazos Elec. Coop).........  1, 2 & 3.
Sabine (Entergy).......................  2, 3, 4 & 5.
Sim Gideon (LCRA)......................  1, 2 & 3.
Spencer (City of Garland)..............  4 & 5.
Trinidad (Luminant)....................  6.
Ty Cooke (City of Lubbock).............  1 & 2.
V H Braunig (CPS Energy)...............  1, 2 & 3.
------------------------------------------------------------------------

3. SO2 BART
    The BART alternative will achieve SO2 emission levels 
that are functionally equivalent to those projected for Texas' 
participation in the original CSAPR program. The BART alternative 
applies the CSAPR allowance allocations for SO2 to all BART-
eligible coal-fired EGUs, several additional coal-fired EGUs, and 
several BART-eligible gas-fired and gas/fuel oil-fired EGUs. In 
addition to being a sufficient alternative to BART, it secures 
reductions consistent with visibility transport requirements and is 
part of the long-term strategy to meet the reasonable progress 
requirements of the Regional Haze Rule.
    The combination of the source coverage for this program, the total 
allocations for EGUs covered by the program, and recent and foreseeable 
emissions from EGUs not covered by the program will result in future 
EGU emissions in Texas that are similar to the SO2 emission 
levels forecast in the 2012 better-than-BART demonstration for Texas 
EGU emissions assuming CSAPR participation. In line with the comment 
from the TCEQ/PUC, we are finalizing a BART alternative that will 
encompass the SO2 BART requirements for coal-fired EGUs and 
a number of gas- and gas/fuel oil-fired EGUs under a program that will 
include the sources in the following table. See Section V.B for a 
discussion on identification of participating sources.

       Table 3--Texas EGUs Subject to the FIP SO2 Trading Program
------------------------------------------------------------------------
       Owner/operator                 Units             BART-eligible
------------------------------------------------------------------------
AEP.........................  Welsh Power Plant     Yes.
                               Unit 1.
                              Welsh Power Plant     Yes.
                               Unit 2.
                              Welsh Power Plant     No.
                               Unit 3.
                              H W Pirkey Power      No.
                               Plant Unit 1.
                              Wilkes Unit 1 *.....  Yes.
                              Wilkes Unit 2 *.....  Yes.
                              Wilkes Unit 3 *.....  Yes.
CPS Energy..................  JT Deely Unit 1.....  Yes.
                              JT Deely Unit 2.....  Yes.
                              Sommers Unit 1 *....  Yes.
                              Sommers Unit 2 *....  Yes.
Dynegy......................  Coleto Creek Unit 1.  Yes.
LCRA........................  Fayette/Sam Seymour   Yes.
                               Unit 1.
                              Fayette/Sam Seymour   Yes.
                               Unit 2.
Luminant....................  Big Brown Unit 1....  Yes.
                              Big Brown Unit 2....  Yes.
                              Martin Lake Unit 1..  Yes.
                              Martin Lake Unit 2..  Yes.
                              Martin Lake Unit 3..  Yes.
                              Monticello Unit 1...  Yes.
                              Monticello Unit 2...  Yes.
                              Monticello Unit 3...  Yes.
                              Sandow Unit 4.......  No.
                              Stryker ST2 *.......  Yes.
                              Graham Unit 2 *.....  Yes.
NRG.........................  Limestone Unit 1....  No.
                              Limestone Unit 2....  No.
                              WA Parish Unit WAP4   Yes.
                               *.
                              WA Parish Unit WAP5.  Yes.
                              WA Parish Unit WAP6.  Yes.
                              WA Parish Unit WAP7.  No.
Xcel........................  Tolk Station Unit     No.
                               171B.
                              Tolk Station Unit     No.
                               172B.
                              Harrington Unit 061B  Yes.
                              Harrington Unit 062B  Yes.
                              Harrington Unit 063B  No.
El Paso Electric............  Newman Unit 2 *.....  Yes.
                              Newman Unit 3 *.....  Yes.
                              Newman Unit 4 *.....  Yes.
------------------------------------------------------------------------
* Gas-fired or gas/fuel oil-fired units.

[[Page 48330]]

    This BART alternative includes all BART-eligible coal-fired units 
in Texas, additional coal-fired EGUs, and some additional BART-eligible 
gas and gas/fuel oil-fired units. Moreover, we believe that the 
differences in source coverage between CSAPR and this BART alternative 
are either not significant or, in fact, work to demonstrate the 
relative stringency of the BART alternative as compared to CSAPR (See 
Section V of this preamble for detailed information). This relative 
stringency can be understood in reference to the following points:
    A. Covered sources under the BART alternative in this FIP represent 
89% \41\ of all SO2 emissions from all Texas EGUs in 2016, 
and approximately 85% of CSAPR allocations for existing units in Texas.
---------------------------------------------------------------------------

    \41\ In 2016, 218,291 tons of SO2 were emitted from 
sources included in the program and 27,446 tons from other EGUs 
(11.1%).
---------------------------------------------------------------------------

    B. The remaining 11% (100 minus 89) of 2016 emissions from sources 
not covered by the BART alternative come from gas units that rarely 
burn fuel oil or coal-fired units that on average are better controlled 
for SO2 than the covered sources and generally are less 
relevant to visibility impairment. (A fuller discussion of this point 
is provided in Section V of this preamble.) As such, any shifting of 
generation to non-covered sources, as might occur if a covered source 
reduces its operation in order to remain within its SO2 
emissions allowance allocation, would result in less emissions to 
generate the same amount of electricity.
    C. Furthermore, the non-inclusion of a large number of gas-fired 
units that rarely burn fuel oil reduces the amount of available 
allowances for units that would typically and collectively be expected 
to use only a fraction of CSAPR emissions allowances. Many of these 
sources typically emit at levels much lower than their allocation 
level. Sources not participating in the program may choose to opt in, 
thereby increasing the number of available allowances. This will serve 
to make the program more closely resemble CSAPR.
    D. The BART alternative does not allow purchasing of allowances 
from out-of-state sources. Emission projections under CAIR and CSAPR 
showed that Texas sources were anticipated to purchase allowances from 
out-of-state sources.\42\
---------------------------------------------------------------------------

    \42\ See CAIR 2018 emission projections of approximately 350,000 
tons SO2 emitted from Texas EGUs compared to CAIR budget 
for Texas of 225,000 tons. See section 10 of the 2009 Texas Regional 
Haze SIP.
---------------------------------------------------------------------------

    Based on these points, and borrowing to the greatest extent 
possible from the rules and program design of CSAPR, but applying them 
for Texas only, we are proceeding with the commenters', including the 
State of Texas', suggested consideration for SO2 BART 
coverage for EGUs by means of a BART alternative under an intrastate 
trading program. As with any FIP, we also would welcome Texas 
submitting a future SIP, as discussed in the MOA, that meets the 
Regional Haze Rule and the Act's requirements so as to enable future 
withdrawal of this FIP-based BART alternative.\43\
---------------------------------------------------------------------------

    \43\ See Memorandum of Agreement Between the Texas Commission on 
Environmental Quality and the Environmental Protection Agency 
Regarding a State Implementation Plan to Address Certain Regional 
Haze and Interstate Visibility Transport Requirements Pursuant to 
Sections 110 and 169A of the Clean Air Act, signed August 14, 2017.
---------------------------------------------------------------------------

    In 2014 we had originally proposed that CSAPR would satisfy the 
SO2 BART requirement for Texas EGUs.\44\ Although we never 
finalized that proposal, functionally, the final decision relies on 
substantially the same technical elements. In contrast to the 2014 
proposal, however, we are not finalizing this SO2 BART 
alternative as meeting the terms of 40 CFR 51.308(e)(4), as amended, 
because that regulatory provision, by its terms, provides BART coverage 
for pollutants covered by the CSAPR trading program in the State but on 
September 21, 2017, EPA finalized its proposed action to remove Texas 
from the CSAPR SO2 trading program.\45\ Instead we are 
relying on the BART alternative option provided under 40 CFR 
51.308(e)(2). The BART alternative being finalized today is supported 
by our determination that the clear weight of the evidence is that the 
trading program achieves greater reasonable progress than BART. The 
BART alternative is designed to achieve SO2 emission levels 
from Texas sources similar to the SO2 emission levels that 
would have been achieved under CSAPR. By a quantitative and qualitative 
assessment of the operation of the BART alternative, we are able to 
conclude that emission levels will be on average no greater than the 
emission levels from Texas EGUs that would have been realized from the 
SO2 trading program under CSAPR. (See Section V of this 
preamble for detailed information). Accordingly, by the measure of 
CSAPR better than BART, the SO2 BART FIP for Texas' BART-
eligible EGUs participating in the trading program will achieve greater 
reasonable progress than BART with respect to SO2. BART-
eligible EGUs not participating in the program are demonstrated to not 
cause or contribute to visibility impairment, and we are finalizing our 
determination in this action that these units are not subject to BART.
---------------------------------------------------------------------------

    \44\ 79 FR 74817, 74823 (December 16, 2014) (``We propose to 
replace Texas' reliance on CAIR to satisfy the BART requirement for 
EGUs with reliance on CSAPR.''). This part of the 2014 proposal was 
not finalized in the action taken on January 5, 2016, that has since 
been remanded by the Fifth Circuit Court of Appeals. 81 FR 295.
    \45\ See final action signed September 21, 2017 available at 
regulations.gov in Docket No. EPA-HQ-OAR-2016-0598.
---------------------------------------------------------------------------

    The Regional Haze Rule at 40 CFR 51.308(e)(2)(iii) requires that 
the emission reductions from BART alternatives occur ``during the 
period of the first long-term strategy for regional haze.'' The 
SO2 BART alternative that EPA is finalizing here will be 
implemented beginning in January 2019, and thus emission reductions 
needed to meet the allowance allocations must take place by the end of 
2019. For the purpose of evaluating Texas's BART alternative, the end 
of the first planning period of the first long-term strategy for Texas 
is 2021. This is a result of recent changes to the regional haze 
regulation, revising the requirement for states to submit revisions to 
their long-term strategy from 2018 to 2021.\46\ Therefore, the emission 
reductions from the Texas SO2 trading program will be 
realized prior to that date and within the period of Texas' first long-
term strategy for regional haze.
---------------------------------------------------------------------------

    \46\ 82 FR 3078 (Jan. 10, 2017).
---------------------------------------------------------------------------

    In promulgating the regulatory terms and rules for implementing the 
BART alternative, we are mindful of the minimally required elements for 
a BART alternative emissions trading program that are specified in the 
provisions of 40 CFR 51.308(e)(2)(vi)(A)-(L). In general, these types 
of provisions are foundational, in a generic sense, to the 
establishment of allowance markets. CSAPR is a prominent example of 
such an allowance market, and by transferring and generally 
incorporating program rules and terms from the well-tested provisions 
of CSAPR we have ensured that the BART alternative will conform in 
detail and coverage to the breadth of provisions that are needed for an 
emissions trading program covered by a cap (See Section V of this 
preamble for additional discussion). To the extent that Texas would 
submit a future SIP revision under its SIP authority to implement 
SO2 BART or an SO2 BART alternative for its EGUs 
as described in the MOA to meet the Regional Haze Rule and CAA 
requirements, it may look to the provisions promulgated under FIP 
authority or it may examine its flexibilities and the extent of its

[[Page 48331]]

discretion regarding essential provisions detailed at 40 CFR 
51.308(e)(2)(vi).
4. PM BART
    In our January 2017 proposal, we proposed to disapprove Texas' 
technical evaluation and determination that PM BART emission limits are 
not required for any of Texas' EGUs. The Texas Regional Haze SIP 
included a pollutant-specific screening analysis for PM to demonstrate 
that Texas EGUs were not subject to BART for PM. This approach was 
consistent with a 2006 guidance document \47\ in which the EPA stated 
that pollutant-specific screening can be appropriate where a state is 
relying on a BART alternative to address both NOX and 
SO2 BART. Because we proposed to address SO2 BART 
on a source-specific basis, however, Texas' pollutant-specific 
screening was not appropriate and we proposed source-specific PM BART 
emission limits consistent with existing practices and controls. In 
this final action, we are not finalizing source-specific SO2 
BART determinations. Instead, for the majority of Texas' BART-eligible 
EGUs, we are relying on BART alternatives for both SO2 and 
NOX emissions. Therefore, we now conclude that Texas' 
pollutant-specific screening analysis was appropriate. All of the BART-
eligible sources participating in the intrastate trading program have 
visibility impacts from PM alone below the subject-to-BART threshold of 
0.5 deciviews (dv).\48\ Furthermore, the BART-eligible sources not 
participating in the intrastate trading program screened out of BART 
for all visibility impairing pollutants. As such, we are approving the 
portion of the Texas Regional Haze SIP that determined that PM BART 
emission limits are not required for any Texas EGUs.
---------------------------------------------------------------------------

    \47\ See discussion in Memorandum from Joseph Paisie to Kay 
Prince, ``Regional Haze Regulations and Guidelines for Best 
Available Retrofit Technology (BART) Determinations,'' July 19, 
2006.
    \48\ Stryker Creek is covered by CSAPR for NOX and by 
the SO2 trading program but was not included in the 2009 
Regional Haze SIP. How Stryker Creek is screened out for PM is 
discussed below.
---------------------------------------------------------------------------

    As we explained in the January 2017 proposal, the Texas Regional 
Haze SIP did not evaluate PM impacts from all BART-eligible EGUs. We 
have evaluated and determined this omission does not affect Texas' 
conclusion that no BART-eligible EGUs should be subject-to-BART for PM 
emissions. In our proposal, we identified several facilities as BART-
eligible that Texas did not identify as BART eligible in the Texas 
Regional Haze SIP. Specifically, we identified the following additional 
BART-eligible sources: Coleto Creek Unit 1 (Dynegy), Dansby Unit 1 
(City of Bryan), Greens Bayou Unit 5 (NRG), Handley Units 3,4, and 5 
(Excelon), Lake Hubbard Units 1 and 2 (Luminant), Plant X Unit 4 
(Xcel), Powerlane Units ST1, ST2, and ST3 (City of Greenville), R W 
Miller Units 1, 2, and 3 (Brazos Elec.), Spencer Units 4 and 5 (City of 
Garland), and Stryker Creek Unit ST2 (Luminant). In our proposal, we 
used CALPUFF modeling and a model-plant analysis and found that all of 
these facilities except Coleto Creek and Stryker Creek had impacts from 
NOX, SO2 and PM below the BART screening 
level.\49\ CALPUFF modeling showed that Stryker Creek Unit ST2 had a 
visibility impact of 0.786 dv from NOX, SO2 and 
PM. However, Stryker Creek Unit ST2 is now covered by a BART 
alternative for NOX and SO2, so we evaluated the 
visibility impact of Stryker Creek Unit ST2's PM emissions alone. The 
CALPUFF modeling files and spreadsheets included in our proposal 
indicate that light extinction from PM (PMFine and 
PMCoarse) is less than 1% of total light extinction at all 
Class I areas. Therefore, because the visibility impact of PM emissions 
from Stryker Creek Unit ST2 would be a small fraction of 0.786 dv 
(roughly 1%), the source is not subject to BART for PM under EPA's 2006 
guidance.
---------------------------------------------------------------------------

    \49\ EPA's Proposal screened out Dansby, Greens Bayou, Handley, 
Lake Hubbard, Plant X, Powerlane, R W Miller, and Spencer using 
CALPUFF direct modeling and Model Plants.
---------------------------------------------------------------------------

    We also evaluated the potential visibility impact of PM emissions 
from Coleto Creek Unit 1 using the CAMx modeling that Texas used for PM 
BART screening of its EGU sources in its SIP.\50\ Specifically, we 
evaluated the modeling results for two facilities (LCRA Fayette and 
Sommers Deely) with stack parameters similar to Coleto Creek's, but 
which are located closer to Class I Areas than Coleto Creek. Texas 
grouped the LCRA Fayette Facility in Group 2 of their PM screening 
modeling along with other sources and found that their maximum 
aggregate impacts at all Class I areas were less than 0.25 deciviews 
(dv). Texas also explicitly modeled the City Public Service Sommers 
Deely Facility's PM impacts. Maximum impacts at all Class I areas from 
Sommers Deely were less than 0.32 dv. To extend these model results to 
Coleto Creek, we used the Q/D ratio where Q is the maximum annual PM 
emissions \51\ and D is the distance to the nearest receptor of a Class 
I area. If the Q/D ratio of Coleto Creek is smaller than the ratios for 
the two modeling results (Fayette and Sommers Deely) then Coleto Creek 
impacts can be estimated as less than the impacts of these source(s) 
and thus be screened out. We evaluated the closest Class I Areas (Big 
Bend, Guadalupe Mountains, Carlsbad, Wichita Mountains, and Caney 
Creek) and the Q/D ratios were: Coleto Creek (0.59-0.86), Fayette 
(4.25-6.1), and Sommers Deely (6.0-10.05).\52\ The Q/D ratio for 
Fayette is 6 to 8 times larger than for Coleto Creek, while the Q/D 
ratio for Sommers Deely is 9 to 11.6 times higher than for Coleto 
Creek. Therefore, if we were to model the PM impacts from Coleto Creek, 
they would be an order of magnitude smaller than the impacts from these 
facilities, which are well below the threshold of 0.5 dv. Therefore, 
Coleto Creek is not subject to BART for PM emissions.
---------------------------------------------------------------------------

    \50\ Environ Report--``Final Report Screening Analysis of 
Potential BART-Eligible Sources in Texas'', September 27, 2006; 
``Addendum 1--BART Exemption Screening Analysis'', Draft December 6, 
2006; and ``BARTmodelingparameters V2.csv''.
    \51\ This is calculated by using the maximum daily 
PM10 daily emission rate, adding the maximum daily 
PM2.5 emission rate and then calculating the total 
emissions in tons per year if this max daily rate happened every 
day.
    \52\ See `Coleto_Creek_Screen_analysis.xlsx.'
---------------------------------------------------------------------------

    In finalizing an approval of Texas' determinations regarding PM 
BART, we offer one additional note. We originally proposed to approve 
Texas' screening approach in 2014,\53\ and our final action today 
essentially conforms to our technical evaluation in that proposal.
---------------------------------------------------------------------------

    \53\ See 79 FR 74817, 74848 (Dec. 16, 2014).
---------------------------------------------------------------------------

5. NOX BART
    We are finalizing our proposed determination that Texas EGUs' 
continued participation in the CSAPR program for interstate transport 
for ozone will serve as a BART alternative for NOX for EGUs 
in the State of Texas. Our action to address NOX BART for 
EGUs as it applies to Texas is based on two other recent rulemakings 
concerning CSAPR. The first is the rulemaking to update CSAPR to 
address interstate transport of ozone pollution with respect to the 
2008 ozone NAAQS, which established a new ozone season budget for 
NOX emissions in Texas.\54\ The second is the determination 
that CSAPR continues to be a better than BART alternative, on a 
pollutant specific basis, for states that participate in the CSAPR 
program as it now exists.\55\ Because our FIP relies on CSAPR as a BART 
alternative for NOX for Texas EGUs, we are not required in 
this action to promulgate source-specific

[[Page 48332]]

NOX BART determinations for those sources.
---------------------------------------------------------------------------

    \54\ 81 FR 74504 (Oct. 16, 2016).
    \55\ See final action signed September 21, 2017 available at 
regulations.gov in Docket No. EPA-HQ-OAR-2016-0598.
---------------------------------------------------------------------------

    We note that Texas may opt to use its SIP planning authority, as 
was noted in its 2009 Regional Haze SIP in a similar context, to 
address the NOX BART requirement for EGUs without relying on 
CSAPR. If Texas instead wishes to rely upon the CSAPR program to 
address the NOX BART requirement, it may submit a SIP 
revision to establish its reliance on the program to satisfy the 
requirement for NOX BART for EGUs. By using the SIP pathway, 
Texas would be exercising the primary responsibility for air pollution 
control that is embodied in the Act. See CAA section 101(a)(3). 
Recognizing that the 2009 Regional Haze SIP did not, by its terms, 
provide an approvable means to address the requirement, however, we are 
now required to exercise our FIP authority to address it.\56\ We are 
therefore finalizing the determination as proposed.
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    \56\ As explained in our proposal, our ongoing authority and 
obligation to address the NOX BART requirement for Texas 
EGUs under CAA section 110(c) traces to EPA's limited disapproval of 
the 2009 Texas Regional Haze SIP in 2012 due to the State's reliance 
on the remanded and replaced CAIR as an alternative to 
NOX BART. See also EME Homer City Generation, L.P. v. 
EPA, 795 F.3d 118, 133-34 (D.C. Cir. 2015) holding that SIPs based 
on CAIR were unapprovable to fulfill good neighbor obligations.
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B. Interstate Transport of Pollutants That Affect Visibility

    We are finalizing our proposal to disapprove Texas' SIP revisions 
addressing interstate visibility transport under CAA section 
110(a)(2)(D)(i)(II) for six NAAQS. As explained further in our 
proposal, Texas' infrastructure SIPs for these six NAAQS relied on the 
2009 Regional Haze SIP, including its reliance on CAIR as an 
alternative to EGU BART for SO2 and NOX to meet 
the interstate visibility transport requirements.\57\ We are finalizing 
a FIP to fully address Texas' interstate visibility transport 
obligations for the following six NAAQS: (1) 1997 8-hour ozone, (2) 
1997 PM2.5 (annual and 24 hour), (3) 2006 PM2.5 
(24-hour), (4) 2008 8-hour ozone, (5) 2010 1-hour NO2 and 
(6) 2010 1-hour SO2.
---------------------------------------------------------------------------

    \57\ 82 FR 912, 916 (Jan. 4, 2017).
---------------------------------------------------------------------------

    An EPA guidance document (2013 Guidance) on infrastructure SIP 
elements states that CAA section 110(a)(2)(D)(i)(II)'s interstate 
visibility transport requirements can be satisfied by approved SIP 
provisions that the EPA has found to adequately address a state's 
contribution to visibility impairment in other states.\58\ The EPA 
interprets interstate visibility transport to be pollutant-specific, 
such that the infrastructure SIP submission need only address the 
potential for interference with protection of visibility caused by the 
pollutant (including precursors) to which the new or revised NAAQS 
applies.\59\ The 2013 Guidance lays out two ways in which a state's 
infrastructure SIP submittal may satisfy interstate visibility 
transport. One way is through a state's confirmation in its 
infrastructure SIP submittal that it has an EPA approved regional haze 
SIP in place. In the absence of a fully approved regional haze SIP, a 
demonstration that emissions within a state's jurisdiction do not 
interfere with other states' plans to protect visibility meets this 
requirement. Such a demonstration should point to measures that limit 
visibility-impairing pollutants and ensure that the resulting 
reductions conform with any mutually agreed emission reductions under 
the relevant regional haze regional planning organization (RPO) 
process.\60\
---------------------------------------------------------------------------

    \58\ See ``Guidance on Infrastructure State Implementation Plan 
(SIP) Elements under Clean Air Act Sections 110(a)(1) and (2)'' 
included in the docket for this action.
    \59\ See Id., at 33.
    \60\ See Id., at 34, and 76 FR 22036 (April 20, 2011) containing 
EPA's approval of the visibility requirement of 110(a)(2)(D)(i)(II) 
based on a demonstration by Colorado that did not rely on the 
Colorado Regional Haze SIP.
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    To develop its 2009 Regional Haze SIP, TCEQ worked through its RPO, 
the Central Regional Air Planning Association (CENRAP), to develop 
strategies to address regional haze, which at that time were based on 
emissions reductions from CAIR. To help states in establishing 
reasonable progress goals for improving visibility in Class I areas, 
the CENRAP modeled future visibility conditions based on the mutually 
agreed emissions reductions from each state. The CENRAP states then 
relied on this modeling in setting their respective reasonable progress 
goals.
    This FIP is adequate to ensure that emissions from Texas do not 
interfere with measures to protect visibility in nearby states because 
the BART FIP emission reductions are consistent with the level of 
emissions reductions relied upon by other states during consultation. 
The 2009 Texas Regional Haze SIP relied on CAIR to meet SO2 
and NOX BART requirements. Under CAIR, Texas EGU sources 
were projected to emit approximately 350,000 tpy of SO2. As 
discussed elsewhere, Texas EGU emissions for sources covered by the 
trading program will be constrained by the number of available 
allowances. Average annual emissions for the covered sources will be 
less than or equal to 248,393 tons with some year to year variability 
constrained by the number of banked allowances and number of allowances 
that can be allocated in a control period from the supplemental pool. 
Sources not covered by the program emitted less than 27,500 tons of 
SO2 in 2016 and are not projected to significantly increase 
from this level. Any new units would be required to be well controlled 
and similar to the existing units not covered by the program, they 
would not significantly increase total emissions of SO2. 
Additionally, this FIP relies on CSAPR as an alternative to EGU BART 
for NOX, which exceeds the emissions reductions relied upon 
by other states during consultation. As such, this BART FIP is 
sufficient to address the interstate visibility transport requirement 
under CAA section 110(a)(2)(D)(i)(II) for the six NAAQS.

C. Reasonable Progress

    This final action is part of the long-term strategy for Texas and 
will contribute to making reasonable progress toward natural visibility 
conditions at Texas' and downwind Class I areas. However, the EPA is 
not determining at this time that this final action fully resolves the 
EPA's outstanding obligations with respect to reasonable progress that 
resulted from the Fifth Circuit's remand of our reasonable progress 
FIP. We intend to take future action to address the Fifth Circuit's 
remand.

IV. Summary and Analysis of Major Issues Raised by Commenters

    We received both written and oral comments at the public hearings 
we held in Austin. We also received comments by the internet and the 
mail. The full text of comments received from these commenters, except 
what was claimed as CBI, is included in the publicly posted docket 
associated with this action at www.regulations.gov. The CBI cannot be 
posted to www.regulations.gov, but is part of the record of this 
action. We reviewed all public comments that we received on the 
proposed action. Below we provide a summary of certain comments and our 
responses. First, we provide a summary of all of the relevant technical 
comments we received and our responses to these comments. We do not 
consider some of the technical comments as relevant to the final 
action. For these comments we provide a brief summary of the comments 
and a discussion as to why they are not relevant. Second, we provide a 
summary below of the more significant legal comments with a summary of 
our responses. All of the legal comments we received that are relevant 
to our final

[[Page 48333]]

action are found in a separate document, titled the Legal Response To 
Comments (RTC) document. Therefore, if additional information is 
desired concerning how we addressed a particular legal comment, the 
reader should refer to the Legal RTC document. Third, we provide a 
summary of the more significant/relevant modeling related comments with 
a summary of our responses. The entirety of the modeling comments and 
our responses thereto are contained in a separate document titled the 
Modeling RTC document.

A. Comments on Relying on CSAPR for SO2 BART or Developing an 
Intrastate SO2 Trading Program

    Comment: We received comments from TCEQ that our proposed 
SO2 controls for the coal-fired power plants represents more 
control than is necessary to satisfy BART. The EPA should consider an 
alternate control approach for these BART-affected units using source 
or system caps. Because the CSAPR level of control is better than BART, 
the EPA should have considered an equivalent control level in its BART 
analysis. For example, a potential alternative is the concept of 
system-wide emission caps using CSAPR allocations. A SO2 
system-cap approach for BART would be based on establishing a cap on 
all the BART subject units under common ownership and control based on 
CSAPR allocations to those specific units. System-wide caps for these 
BART subject units based on CSAPR allocations would provide flexibility 
while actually being more stringent than CSAPR because the companies 
would not have the ability to trade allocations with non-BART 
facilities or with companies in other states. Furthermore, the EPA has 
approved system-cap approaches under the TCEQ's Chapter 117 rules for 
NOX. If such an approach using CSAPR allocations or some 
other similar variation can be demonstrated to be more stringent than 
CSAPR itself, then the EPA's CSAPR-is-better-than-BART determination 
should satisfy some of the demonstration requirements for BART 
alternatives. Even if not based on CSAPR allocations, the EPA should 
consider a source-cap or system cap approach as an alternative to unit-
by-unit rate-based standards. Source and system cap strategies achieve 
equivalent reductions by setting mass-based limits (e.g., ton per day) 
for a group of units derived from rate-based standards and baseline 
levels of activity for the units. In this context, the rate-based 
standards used to set the caps would be the emission rates determined 
to represent BART. These types of cap approaches allow companies to 
consider a broader range of alternative strategies. Under a FIP with 
only unit-by-unit rate-based limits, as proposed by EPA, such an 
alternative strategy would not be allowed and EPA would have to revise 
its FIP to allow the company to pursue the alternative. A similar 
approach using system-caps would provide additional flexibility for 
companies. If the EPA is averse to creating a system-cap trading 
program for a single state, an alternative would be to allow for a 
state system-cap trading program that would allow companies to trade 
between systems once the EPA has approved the state program.
    We received a comment from American Electric Power (AEP) stating 
that in the proposed Texas BART FIP, EPA states that it encourages 
Texas to consider adopting SIP provisions that would allow EPA to fully 
approve the Regional Haze SIP with respect to Regional Haze and 
Interstate Visibility Transport. AEP also suggests that alternatively, 
Texas may also elect to satisfy its obligations by demonstrating an 
alternative. Although AEP views the most expeditious resolution for 
satisfying BART is finalization of CSAPR as a better-than-BART 
alternative, AEP would also welcome and support working with the State 
and EPA to develop a satisfactory BART compliance alternative. For 
example, AEP is open to consideration of a cap and trade program or 
other option for BART compliance. AEP is prepared to engage in such 
discussions as soon as possible.
    We also received a comment from Luminant stating that the EPA can 
and should address BART for Texas, not through EPA-mandated controls on 
individual units but through one of several available BART alternatives 
that will ensure equivalent or greater benefits at far less costs, as 
demonstrated by EPA's own prior analyses of Texas EGUs' emissions. 
Among those available alternatives is EPA's original proposed BART plan 
for EGUs in Texas--reliance on Texas EGUs' participation in the CSAPR 
annual SO2 and NOX trading programs as BART 
compliance. Since CSAPR became effective in 2015, SO2 
emissions from Texas EGUs have declined substantially and are well 
below the levels that EPA previously determined are ``better-than-
BART.'' EPA itself calculated ``major visibility improvements at Class 
I areas in and around Texas'' from the CSAPR-for-BART alternative for 
Texas. The CSAPR-for-BART alternative remains the most expeditious and 
cost effective path for finalizing a BART solution for Texas EGUs. 
Indeed, EPA's only lawful path forward to finalize a BART FIP for Texas 
by the current September 9, 2017 deadline in EPA's consent decree with 
Sierra Club is to finalize a CSAPR-for-BART FIP for Texas EGUs, as EPA 
proposed to do in December 2014. That proposal was not withdrawn, 
remains a valid and defensible alternative, is supported by the record 
and prior EPA technical analyses, and has been fully vetted with 
substantial public review and comments.
    Response: Due to these comments requesting a BART alternative in 
lieu of source-specific EGU BART, we are finalizing an intrastate 
SO2 trading program as an alternative to source-by-source 
BART and to meet the interstate visibility transport requirements. This 
program will provide the commenters, and other owners of covered EGUs, 
with many of the benefits that they attributed to CSAPR. The premise in 
the comment that Texas EGUs are subject to CSAPR's SO2 
trading program is no longer true, given our recent action to remove 
Texas from that trading program.\61\ Hence, we cannot take the 
commenter's recommended action of addressing SO2 BART 
through reliance on CSAPR.
---------------------------------------------------------------------------

    \61\ See final action signed September 21, 2017 available at 
regulations.gov in Docket No. EPA-HQ-OAR-2016-0598.
---------------------------------------------------------------------------

B. Comments on Source-Specific BART

    Comment: We received a number of comments in favor or against our 
proposals regarding BART-eligibility status, subject-to-BART status, 
and source-specific BART technologies and emission limits. Some were 
general and some were very specific.
    Response: Due to the comments we received requesting a BART 
alternative in lieu of source-specific BART determinations, we are 
finalizing an intrastate SO2 trading program as an 
alternative to source-by-source BART and to meet the interstate 
visibility transport requirements. As a consequence, we believe that it 
is not necessary to respond to comments concerning the merits of the 
proposed source-specific BART technologies and emission limits. 
Comments related to BART-eligibility status and subject-to-BART status 
are addressed elsewhere in this preamble.

C. Comments on EPA's Proposed SIP Disapprovals

    Comment: The root of EPA's flawed proposal is EPA's departure from 
the cooperative federalism principles underlying the Clean Air Act. The 
State of Texas developed its regional haze SIP

[[Page 48334]]

after years of work, technical analysis, and coordination with other 
States. For BART, Texas relied on the participation of Texas EGUs in 
CAIR and EPA's determination that CAIR was better-than-BART. EPA should 
have approved Texas's SIP at the time because it complied with all 
statutory requirements and was supported by EPA's own modeling. In no 
way does the Proposed Texas BART FIP--which starts over from scratch 
and creates an entirely new approach to BART for Texas EGUs--respect 
the State's primary role under the statute. At a minimum, to more 
closely align with the State of Texas's original choice to meet BART 
through a regional trading program, EPA should now finalize its prior 
proposal that CSAPR serve as a complete BART alternative for Texas 
EGUs.
    Response: Our action in 2012 to disapprove Texas' 2009 SIP 
submission due to its reliance on CAIR is not the subject of this 
rulemaking and we do not address here the comment opposing that final 
action. We agree that CSAPR continues to be available on a pollutant-
specific basis as a BART alternative for participating states for those 
pollutants subject to trading by CSAPR program participation; hence, we 
are finalizing a determination that CSAPR is better than BART for 
NOX at Texas EGUs. However, the premise in the comment that 
Texas EGUs are subject to CSAPR's SO2 trading program is no 
longer true, given our recent action to remove them from that trading 
program.\62\ Hence, we cannot take the specific action recommended in 
this comment. Due to these comments requesting a BART alternative in 
lieu of source-specific EGU BART determinations, we are, however, 
finalizing a SO2 trading program as an alternative to 
source-by-source BART and as meeting the interstate visibility 
requirements.
---------------------------------------------------------------------------

    \62\ See final action signed September 21, 2017 available at 
regulations.gov in Docket No. EPA-HQ-OAR-2016-0598.
---------------------------------------------------------------------------

D. Legal Comments

    We received comments addressing EPA's authority to promulgate a 
Federal Implementation Plan (FIP), the use of CSAPR as a better-than-
BART alternative, cooperative federalism, deference to the State, the 
new Administration's policies, Executive Orders, and litigation. These 
comments, and the response to comments, can be found in the document 
titled Legal RTC in the docket for this action. Below is a summary of 
some of the more significant comments we received. For a detailed 
review of all legal comments and responses, we refer the reader to this 
separate document.
1. EPA's Obligation and Authority To Promulgate a FIP
    Comment: Texas' and industry's challenge to CSAPR does not relieve 
EPA of its mandatory duty to issue a source-specific BART FIP for 
Texas. Although EPA would have permitted Texas to rely on CSAPR's 
modest cap-and-trade program to avoid source-specific BART controls, 
Texas, Luminant, AEP, and Southwestern Public Service Company all chose 
to challenge CSAPR. They were ultimately successful in defeating EPA's 
inclusion of Texas in the program for SO2 and ozone-season 
NOX. Ever since the D.C. Circuit remanded the Texas 
NOX and SO2 budgets to EPA in July 2015, Texas 
has been on notice that source-specific BART could well be necessary to 
meet its BART obligations. Yet Texas has not put forward either a new 
interstate transport SIP to replace CSAPR or a new BART SIP to address 
the Regional Haze Rule.
    Response: We agree that we have a mandatory duty to address the 
BART requirements for Texas EGUs but we do not agree that we must 
address these requirements through a FIP establishing source specific 
BART limits. We understand the comment to be referencing the court 
action, EME Homer City Generation v. EPA, 795 F.3d 118 (D.C. Cir., July 
28, 2015). At all times since the original submission of the 2009 
Regional Haze SIP, Texas has been entitled to submit updated or new SIP 
revisions to address BART or interstate transport. A State is also 
entitled to submit a SIP that may be approved to replace a FIP after a 
FIP's promulgation. When and whether Texas has been ``on notice'' 
regarding a potential need for source-specific BART is not material to 
the present need to address the EGU BART requirements through either a 
SIP or FIP. We do note that the 2009 Regional Haze SIP stated, ``The 
TCEQ will take appropriate action if CAIR is not replaced with a system 
that the US EPA considers to be equivalent to BART.'' See 2009 SIP at 
9-1. The 2009 SIP further acknowledged, ``Some EGUs may become subject 
to BART pending resolution of the CAIR at the federal level.'' See 2009 
SIP at 9-17. As circumstances now apply to Texas (and, as this comment 
suggests, may have been earlier projected), the State can take 
appropriate action to develop a SIP to address the EGU BART and 
interstate visibility transport requirements. The TCEQ and EPA recently 
signed a MOA to work together to develop a SIP revision addressing 
interstate visibility transport requirements and BART requirements for 
EGUs with a BART alternative trading program starting from CSAPR.\63\ 
However, without such a SIP, the Clean Air Act requires a promulgation 
of a FIP to address the outstanding BART and interstate transport 
requirements.
---------------------------------------------------------------------------

    \63\ See Memorandum of Agreement Between the Texas Commission on 
Environmental Quality and the Environmental Protection Agency 
Regarding a State Implementation Plan to Address Certain Regional 
Haze and Interstate Visibility Transport Requirements Pursuant to 
Sections 110 and 169A of the Clean Air Act, Signed August 14, 2017.
---------------------------------------------------------------------------

    Comment: Texas's decision to not meet the BART requirements for its 
EGUs through voluntary participation in CSAPR does not relieve EPA of 
its mandatory duty to issue a source-specific BART FIP for Texas. Even 
if Texas were willing to voluntarily incorporate EPA's invalidated 
CSAPR emission budgets into its SIP, the state cannot simply opt in and 
avoid source-specific BART. Because Texas cannot reverse course and 
adopt emissions budgets that it demonstrated were unnecessary, as a 
matter of law, and because the agency cannot achieve ``all'' of the 
CSAPR reductions by 2018 (the end of the first planning period), it 
cannot voluntarily adopt CSAPR.
    Response: We agree that we have a mandatory duty to address the 
BART requirement for Texas EGUs, but we do not agree that we must 
address it through a source-specific BART FIP. We understand this 
comment to refer to a hypothetical scenario based on the development 
and submission of a SIP by Texas providing for voluntary participation 
in CSAPR as a means of addressing the SO2 and/or 
NOX BART requirements for Texas EGUs. The possibility of 
such an option was detailed in a June 27, 2016 memorandum entitled, 
``The U.S. Environmental Protection Agency's Plan for Responding to the 
Remand of the Cross-State Air Pollution Rule Phase 2 SO2 
Budgets for Alabama, Georgia, South Carolina and Texas.'' That 
memorandum was provided and available to Texas and other states. 
Several other states have pursued this option, but Texas has not, and 
it is not within the scope of our proposal. We are not opining on the 
operation of state law or otherwise responding to this comment. We 
address the issue of whether emission reductions from a BART 
alternative must be achieved by 2018 in our response to another 
comment.
    Comment: EPA withdrawal of Texas from CSAPR does not relieve EPA of 
its mandatory duty to issue a source-specific BART FIP for Texas. After

[[Page 48335]]

having given Texas four months' notice of its intent to fully withdraw 
the state from the CSAPR program, and made clear the implication that 
there would no longer be any doubt that Texas sources would need to 
comply with source-specific BART obligations, EPA formally issued its 
proposal to withdraw its federal plan to include Texas in the CSAPR 
emissions trading program one month before issuing the BART proposal. 
81 FR 78954 (Nov. 10, 2016). EPA again made clear the situation: ``[I]f 
and when this [CSAPR withdrawal] proposal is finalized, Texas will no 
longer be eligible to rely on CSAPR participation as an alternative to 
certain regional haze obligations including the determination and 
application of source-specific SO2 BART. Any such remaining 
obligations are not addressed in this proposed action and would be 
addressed through other state implementation plan (SIP) or FIP actions 
as appropriate.'' Id. at 78,956. EPA has informed the U.S. District 
Court for the District of Columbia that it intends to finalize this 
proposal by October 31, 2017.
    After challenging the state's inclusion in CSAPR for years, 
industry has done an about face in response to EPA's Texas BART 
Proposal and now opposes EPA's withdrawal of Texas from CSAPR. But EPA 
has gone on record that the agency does not currently have an 
analytical basis to support new CSAPR budgets for Texas. As EPA has 
noted, there was no such thing as a legally compliant CSAPR budget for 
Texas following the remand. Texas has had many years to submit a state 
SIP equivalent to CSAPR or other BART alternative to avoid source-
specific BART, but Texas has taken no action to address its 
contribution to interstate pollution or regional haze.
    Response: We agree that we have a mandatory duty to address the 
BART requirement for Texas EGUs, but we do not agree that we must 
address it through a source-specific BART FIP. We also have a mandatory 
duty to address the interstate visibility transport requirements.
    Comment: We have strongly opposed the CSAPR-Better-than-BART rule 
since its inception. It is unlawful and unsupported by the scientific 
record. Legal challenges to EPA's rule which purports to authorize 
reliance on CSAPR to satisfy BART are currently pending in the D.C. 
Circuit Court of Appeals. Until the D.C. Circuit rules on the validity 
of the CSAPR-Better-than-BART rule, neither EPA nor Texas should assume 
that CSAPR is an appropriate substitute for BART.
    Response: The legal and technical determinations of the CSAPR-
Better-than-BART rule are subject to judicial review under existing 
challenges and a separate administrative record, as indicated by the 
comment. Any challenges raised with regard to the present rulemaking 
and outside that litigation may be time-barred or directed to the wrong 
forum. As such, we do not believe that the incorporation of arguments 
from a brief filed with the D.C. Circuit concerning a separate 
regulatory determination warrants responses here, in this rulemaking, 
and that to offer responses here would suggest some basis for 
collateral, time-barred arguments that are out of the scope of this 
action.
    Comment: In addition to the legal uncertainty surrounding the 
national CSAPR-Better-than-BART rule, it is too late for Texas to rely 
on a BART alternative like CSAPR or any other program. Under EPA's 
Regional Haze Rule, any BART alternative must include a ``requirement 
that all necessary emission reductions take place during the period of 
the first long-term strategy for regional haze''--i.e., no later than 
2018. There are no plans in place, or even in development, for any 
federal or state program that would ensure the necessary reductions 
take place by the end of the first planning period in 2018.
    With the exception of a BART alternative approved for the Navajo 
Generating Station, which relied on the Tribal Authority Rule to 
provide additional flexibility, EPA has never proposed or approved a 
BART alternative that would allow the necessary emission reductions to 
be delayed past 2018. In Texas v. EPA, 829 F.3d 405 (5th Cir. 2016), 
Texas and industry persuaded the Fifth Circuit of a likelihood that EPA 
could not require controls beyond the first planning period for 
reasonable progress. While neither the statute nor regulation precludes 
emission reductions relative to reasonable progress requirements to 
occur beyond the planning period deadline, the BART alternative 
requirements contain a provision directly on point. Accordingly, 
emission reductions under a BART alternative must be implemented by the 
end of the first planning period.
    Response: The Regional Haze Rule at 40 CFR 51.308(e)(2)(iii) 
requires that the emission reductions from BART alternatives occur 
``during the period of the first long-term strategy for regional 
haze.'' The SO2 BART alternative that EPA is finalizing here 
will be implemented beginning in January 2019, and thus emission 
reductions needed to meet the allowance allocations must take place by 
the end of 2019. For the purpose of evaluating Texas's BART 
alternative, the end of the first planning period of the first long-
term strategy for Texas is 2021. This is a result of recent changes to 
the regional haze regulation, revising the requirement for states to 
submit revisions to their long-term strategy from 2018 to 2021.\64\ 
Therefore, the emission reductions from the Texas SO2 
trading program will be realized prior to that date and within the 
period of Texas' first long-term strategy for regional haze. Moreover, 
we expect that source owners in 2018 will already be taking steps, 
including appropriate source-level compliance planning (e.g., purchase 
contracts for coal), to be ready for the compliance year beginning on 
January 1, 2019. Adding to this, the State has already experienced 
reductions in SO2 emissions in response to market conditions 
and, to some extent, periods of compliance with CSAPR, including its 
allocations for SO2, when those measures were in effect or 
otherwise part of source owner planning considerations.
---------------------------------------------------------------------------

    \64\ 82 FR 3078 (Jan. 10, 2017).
---------------------------------------------------------------------------

    We note that the BART alternative is projected to be implemented 
before any of the earlier-proposed compliance dates for source-specific 
SO2 BART for coal-fired units.
    The last year for which Texas EGUs must meet CSAPR requirements for 
SO2 is 2016. We considered and decided not to make the Texas 
SO2 trading program effective for 2017 because that would be 
unreasonably short notice to the affected EGUs in light of the late 
date in 2017 on which this action will become effective. We considered 
and decided not to make the program effective for 2018 because that 
also would be unreasonably short notice given that affected EGU owners 
should be allowed more than a few months to determine their strategy 
for compliance with the program in light of it having some features 
that are different from the CSAPR trading program they have been 
operating under until recently, for example the fact that they will no 
longer be able to purchase and use allowances from out-of-state EGUs.
    Comment: Adopting an emissions trading program for Texas that 
allows anywhere close to the tonnage of SO2 permitted by the 
emissions caps in CSAPR would also fail to meet the substantive 
requirements for a BART alternative. While the D.C. Circuit is 
considering whether CSAPR meets these substantive requirements in the 
CSAPR-Better-than-BART litigation, Texas's situation is unique in that 
EPA has

[[Page 48336]]

actually completed a source-specific BART proposal that can be directly 
compared with the CSAPR program. Thus, even if the CSAPR-Better-than-
BART rule is upheld as a national rule that EPA has the option of 
relying upon in certain states, and even if Texas were to join CSAPR or 
voluntarily adopt its budgets, it would be arbitrary for EPA to rely on 
CSAPR as a BART alternative without actually comparing the CSAPR or 
CSAPR-like program with its BART proposal. When comparing the two head-
to-head, it is obvious as a practical matter that allowing Texas's 
coal-fired power fleet to essentially continue emitting the same levels 
of SO2 as the status quo is not going to achieve equivalent 
visibility gains as the BART proposal would. As detailed in ``EPA's 
Fact Sheet for the Open House on EPA's Clean Air Plan Proposal for 
Texas Regional Haze'', the proposed BART limits are expected to reduce 
emissions of SO2 from 16 EGUs and would cut emissions from 
approximately 89 to 98 percent--a reduction of over 194,000 tons of 
SO2 every year.
    To satisfy the requirements for a BART ``alternative,'' an 
emissions trading program must make a technical demonstration that the 
trading program ``will achieve greater reasonable progress [towards 
natural visibility] than would have resulted from the installation and 
operation of BART at all sources subject to BART.'' Id. Sec.  
51.308(e)(2)(i). Under EPA's regulations, if the distribution of 
emissions is different under an alternative program, a state ``must 
conduct dispersion modeling'' to determine differences in visibility 
between BART and the trading program for each impacted Class I area, 
for the worst and best 20 percent of days. The modeling only 
demonstrates ``greater reasonable progress'' if both of the following 
two criteria are met: (i) Visibility does not decline in any Class I 
area, and (ii) There is an overall improvement in visibility, 
determined by comparing the average differences between BART and the 
alternative over all affected Class I areas. Id. Sec.  51.308(e)(3).
    Response: The comment addresses the approvability of a hypothetical 
SIP offered to meet the requirements of 40 CFR 51.308(e)(2). First, we 
do not agree with the premise of the comment that merely proposed 
determinations of BART in the context of a possible FIP set a 
stringency threshold for a demonstration set forth in a hypothetical 
SIP. Proposed determinations are only proposals and the facts put forth 
to support those proposals are themselves subject to correction via 
public comment and new information. Second, we also do not agree with 
any extension of the commenter's assertion to a FIP. While the comment 
does not address all the pertinent requirements for a BART alternative, 
we have done so elsewhere in this preamble. For example, as allowed by 
the requirements for a BART alternative in Sec.  51.308(e)(2)(i)(C), we 
are declining to conduct the analysis that would include making 
determinations of BART for each source subject to BART and we are 
instead exercising the exception allowed when the alternative measure 
``has been designed to meet a requirement other than BART (such as the 
core requirement to have a long-term strategy to achieve the reasonable 
progress goals established by States).'' \65\ Third, we disagree that 
51.308(e)(3) applies to this action. Rather, we find justification for 
the BART alternative under the ``clear weight of the evidence'' that 
the trading program will provide greater reasonable progress than would 
be achieved through the installation and operation of BART at the 
covered sources. This means of validating a BART alternative, described 
by one Court as the ``catch-all,'' is permitted by 40 CFR 
51.308(e)(2)(i)(E). We are allowed but not required to validate the 
BART alternative under the test set out in 40 CFR 51.308(e)(3). 
Although we are not applying that test here, we believe this intrastate 
trading program meets the intent of (e)(3). When promulgating the 2012 
CSAPR-Better-than-BART rule, the EPA relied on an analysis showing that 
CSAPR would result in greater reasonable progress than BART under the 
test in 40 CFR 51.308(e)(3). In this action we are relying, in part, on 
that demonstration to show that the clear weight of evidence 
demonstrates that the SO2 Trading Program will provide for 
greater reasonable progress than BART in Texas. This is based on a 
showing that the emissions in Texas under the BART alternative will be 
on average no greater than the emission levels from Texas EGUs that was 
forecast in the demonstration for Texas EGU emissions assuming CSAPR 
participation.
---------------------------------------------------------------------------

    \65\ See 40 CFR 51.308(e)(2)(i)(C).
---------------------------------------------------------------------------

2. Statutory or Regulatory Text
    Comment: A state should be able to independently rely on EPA's 
CSAPR-is-better-than-BART determination if the state can demonstrate 
that a state-only program for EGUs is more stringent than CSAPR. While 
the TCEQ has not proposed any action to implement a Texas-only program 
for EGUs based in some way on CSAPR as a means of satisfying BART, and 
these comments in no way represent a commitment to propose such an 
action, the TCEQ should be able to rely on the EPA's CSAPR-is-better-
than-BART determination to satisfy certain aspects of the BART 
alternative provisions in 40 CFR part 51, Sec.  51.308(e)(2) if such a 
program can be demonstrated to be more stringent than CSAPR. 
Specifically, the state should be able to rely on the EPA's 
determination that CSAPR resulted in greater reasonable progress than 
source-specific BART to satisfy the requirements of Sec.  
51.308(e)(2)(i)(E) and (e)(3).
    We acknowledge that other requirements of Sec.  51.308(e)(2) would 
still need to be satisfied, such as monitoring, recordkeeping, 
reporting, and provisions for emission trading programs. While the 
CSAPR option is specifically listed at Sec.  51.308(e)(4), the EPA's 
Regional Haze rules do not prohibit a state from relying on EPA's 
modeling demonstration that CSAPR resulted in greater reasonable 
progress when using an alternative under Sec.  51.308(e)(2). If a 
state-only program is more stringent than CSAPR, for example a program 
based on CSAPR allocations but without interstate trading, requiring a 
state to conduct extensive modeling to demonstrate what the EPA has 
already demonstrated for a less stringent program is illogical and 
places an unnecessary and wasteful burden on states.
    Response: We agree with this comment. In response to this comment, 
our final FIP establishes an intrastate trading program that operates 
much like the CSAPR program did in Texas. This program is discussed in 
more detail elsewhere.
3. EPA's Reliance on CSAPR for NOX BART
    Comment: Agree with EPA's proposal regarding CSAPR as a BART 
alternative for NOX which is proposed for separate 
finalization. EPA could have followed the D.C. Circuit's directive and 
updated NOX (and SO2) budgets for Texas. EPA 
could have but declined to do so. EPA notes that finalization of CSAPR 
as better-than-BART for NOX is contingent on a separate 
finalization that the D.C. Circuit remands would not adversely impact 
2012 demonstrations. Uncertainty in this proposal does not seem to be 
an issue for NOX and EPA is again basing a proposal on an 
action yet to be finalized.
    Response: Whether we were in a position to provide updated annual 
NOX and SO2 budgets for Texas is not relevant to 
this rulemaking. Because Texas EGUs are required to continue

[[Page 48337]]

participation in CSAPR for ozone transport, which involves 
NOX trading, we are determining that the NOX BART 
requirement for EGUs continues to be met through our determination that 
CSAPR is better than BART.
    We interpret the comment as supporting this action, even as it 
appears to criticize our reference to another proposed action, which 
has since been finalized, as part of the proposal for the 
NOX aspect of this action. Our proposed and finalized action 
for the NOX BART requirement addresses the Act's 
requirements for Texas. This action and our recent action to remove 
Texas EGUs from CSAPR's SO2 trading program are distinct 
actions, but we have provided appropriate transparency and notice 
regarding how the proposed actions relate and have given careful 
consideration to comments received that have bearing on each of the 
actions.
    Comment: EPA's proposal is unlawful because it exempts sources from 
installing BART controls without going through the exemption process 
Congress prescribed. The visibility protection provisions of the Clean 
Air Act include a ``requirement'' that certain sources ``install, and 
operate'' BART controls. 42 U.S.C. 7491(b)(2)(A). Congress specified 
the standard by which sources could be exempted from the BART 
requirements, which is that the source is not reasonably anticipated to 
cause or contribute to a significant impairment of visibility in any 
Class I area. Appropriate federal land managers must concur with any 
proposed exemption. EPA has not demonstrated that any of the Texas EGUs 
subject to BART meet the standards for an exemption, nor has EPA 
obtained the concurrence of federal land managers. Therefore, EPA must 
require source-specific BART for each power plant subject to BART.
    Response: To the extent the comment is directed to the prior rules 
that determined and redetermined that CSAPR is better than BART and may 
be relied upon as an alternative to BART, we disagree that relying on 
CSAPR is in conflict with the CAA provision regarding exemptions from 
BART. In addition, the commenter's objection does not properly pertain 
to this action, but instead to our past action that established 40 CFR 
51.308(e)(4). We believe this comment to fall outside of the scope of 
our action here. To the extent the comment objects to BART alternatives 
generally, we also disagree. In addition, that objection does not 
properly pertain to this action, but instead to our past regulatory 
action that provided for BART alternatives.
    Comment: Even if EPA could use a BART alternative without going 
through the statutory exemption process, the CSAPR-Better-than-BART 
Rule was fatally flawed, and even if it were valid in 2012, is now 
woefully outdated. EPA's regulations purport to allow the use of an 
alternative program in lieu of source-specific BART only if the 
alternative makes ``greater reasonable progress'' than would BART. 40 
CFR 51.308(e)(2). To demonstrate greater reasonable progress, a state 
or EPA must show that the alternative program does not cause visibility 
to decline in any Class I area and results in an overall improvement in 
visibility relative to BART at all affected Class I areas. Id. Sec.  
51.308(e)(3)(i)-(ii).
    EPA compared CSAPR to BART in the Better-than-BART Rule by using 
CSAPR allocations that are more stringent than now required as well as 
by using presumptive BART limits that are less stringent than are 
actually required under the statute. Even under EPA's skewed 2012 
comparison, CSAPR achieves barely more visibility improvement than BART 
at Big Bend and Guadalupe Mountains. The NOX emissions 
allowed under CSAPR from Texas EGUs are higher than would be allowed 
under BART. This was true even before EPA revised CSAPR to increase the 
emissions allocations for all Texas EGUs.
    If it were assumed that the CSAPR-Better-than-BART Rule were valid 
in 2012, it is based on assumptions for both CSAPR and BART emissions 
which are now woefully outdated. The CSAPR-Better-than-BART Rule's 
reliance on presumptive BART emission limits is now outdated, given 
that EPA has issued or approved source-specific BART determinations for 
dozens of sources since 2012. In particular, for Texas sources, EPA has 
proposed SO2 BART limits which are far below the presumptive 
BART limits EPA used in the Better-than-BART Rule. For units other than 
Martin Lake, EPA proposes SO2 BART limits of 0.04 to 0.06 
lbs/MMBtu, which are well below the presumptive SO2 BART 
limit of 0.15 lbs/MMBtu; even at Martin Lake, EPA proposes limits of 
0.11 to 0.12, which are still below presumptive BART for 
SO2.
    Similarly, the CSAPR-Better-than-BART Rule is based on a version of 
CSAPR that no longer exists. Accordingly, any conclusion that EPA made 
in the 2012 Better than BART rule regarding whether CSAPR achieves 
greater reasonable progress than BART is no longer valid. Since 2012, 
EPA has significantly changed the allocations and the compliance 
deadlines for CSAPR. Of particular relevance here, after 2012, EPA 
dramatically increased the CSAPR allocations for every covered EGU in 
Texas. EPA later withdrew the February 21, 2012 rule revision, but 
issued a new rule that included both the changes in the February 21, 
2012 rule as well as additional changes to state budgets.
    By the time EPA finalized the Better-than-BART-Rule in June 2012, 
EPA had changed the state emissions budgets by tens of thousands of 
tons, yet EPA proceeded to finalize the Better-than-BART Rule based 
solely on the emissions budgets in the original, 2011 CSAPR rule. EPA 
also extended the compliance deadlines by three years, such that the 
phase 1 emissions budgets take effect in 2015-2016 and the phase 2 
emissions budgets take effect in 2017 and beyond. Even more changes to 
CSAPR have occurred as a result of the D.C. Circuit's decision in EME 
Homer City II Generation, including the proposed withdrawal of Texas 
from the annual NOX and SO2 trading programs. 
Given the large number of final BART determinations made since 2012, 
and the significant changes to CSAPR budgets since 2012, it is 
arbitrary and capricious to rely on the outdated assumptions about 
emissions which were made in the CSAPR-Better-than-BART Rule.
    Response: As we had proposed, our finalized determination that 
CSAPR participation will resolve NOX BART requirements for 
Texas EGUs is based on a separately proposed and finalized action. This 
comment falls outside of the scope of our action here.
    Comment: EPA's November 2016 ``Sensitivity Analysis'' purports to 
update its CSAPR-Better-than-BART analysis to show that CSAPR still 
makes greater reasonable progress than BART. We agree with EPA that the 
2016 Sensitivity Analysis is not a proper legal basis for demonstrating 
that CSAPR makes greater reasonable progress than BART, because the 
2016 analysis is merely a proposed rule. It would be unlawful to issue 
a final BART rule relying on CSAPR to satisfy the NOX BART 
requirements in the absence of a final rule demonstrating that the 
CSAPR Update makes greater reasonable progress than BART.
    To demonstrate that CSAPR makes greater reasonable progress than 
BART, EPA must show that (1) visibility does not decline in any Class I 
area under CSAPR, and (2) there is an overall improvement in 
visibility, based on comparing the average differences between CSAPR 
and BART across all affected Class I areas. EPA's analysis falls well 
short of making such a

[[Page 48338]]

demonstration, as we noted in our prior comments on EPA's 2016 
Sensitivity Analysis.
    EPA's 2016 analysis is markedly different from the CSAPR-Better-
than-BART Rule, which relied on quantitative modeling of electric power 
section emissions, using the Integrated Planning Model, and 
quantitative modeling of visibility at all affected Class I areas, 
using CAMx. Instead of updating that modeling, EPA's 2016 analysis 
consists of a back-of-the-envelope, qualitative discussion. This is 
wholly insufficient. There have been enormous changes in the electric 
power sector since EPA issued the Better-than-BART Rule in 2012, 
including changes in regulatory requirements (e.g., CSAPR revisions, 
NAAQS updates, etc.) and changes in unit operations caused by changes 
in fuel prices, demand, etc. Given that EPA believed in 2012 that it 
was necessary to conduct quantitative modeling of power sector 
emissions and the visibility impacts of such emissions, EPA must update 
that modeling in order to prove that CSAPR still makes greater 
reasonable progress than BART.
    EPA's failure to update the modeling upon which it relied in the 
2012 Better than BART Rule is even more arbitrary given EPA's 
assumption, in the 2016 Sensitivity Analysis, that no trading of CSAPR 
allowances would occur across state lines. The Sensitivity Analysis 
uses ``emissions that would occur if the state budgets are increased as 
proposed assuming that all of the additional allowances are used by 
sources in the respective state (i.e., we did not re-model trading).'' 
This assumption bears no relationship to reality, in which CSAPR--both 
the original rule, and the updated rule--expressly allows trading 
across state lines. EPA's failure to create a realistic depiction of 
the geographic distribution of emissions under the updated CSAPR 
budgets dooms its Sensitivity Analysis, as EPA must demonstrate that 
visibility does not decline in any Class I area. Trading across state 
lines can increase emissions from particular sources, which in turn can 
degrade visibility at particular Class I areas. Having failed to 
consider how inter-state trading will affect the distribution of 
emissions under CSAPR, EPA cannot possibly show that visibility will 
not decline in any Class I area under CSAPR.
    Similarly, EPA failed to account for intra-state trading under 
CSAPR. Even assuming all changes in budgets would apply only within the 
affected state--that is, assuming interstate emissions trading did not 
change at all--EPA has not accounted for trading within the states. A 
20% reduction in statewide emissions does not imply that each unit will 
reduce its emissions by 20%; indeed, some units could increase 
emissions while statewide emissions went down. EPA does not seem to 
have accounted for this in its analysis. Thus, even within EPA's 
scenario whereby no changes to reflect current conditions need to be 
made, EPA's ad hoc analysis fails to demonstrates that the ``Better-
than-BART'' test above would be met because EPA has failed to account 
for changes in emissions distribution based on the altered budgets.
    In addition, EPA cannot simply assume that the visibility 
improvement averaged across all Class I areas, 40 CFR 51.308(e)(3)(ii), 
will still be better under the updated CSAPR than under BART. Without 
updated visibility modeling, EPA has no data to demonstrate that the 
second prong of the BART alternative test will be met in spite of the 
substantial changes in coverage and budgets under CSAPR.
    Response: In part, the comment makes the point that this final 
action cannot rely on another action that has only been proposed. We 
agree with this aspect of the comment, but this part of the comment is 
no longer relevant because the other action has now been finalized. As 
we had proposed, our finalized determination that CSAPR participation 
will resolve NOX BART requirements for Texas EGUs is based 
on a separately proposed and now finalized action. This comment in its 
discussion of the 2016 sensitivity analysis and other particulars 
raises issues that are addressed in the record for that separately 
finalized action. This comment falls outside of the scope of our action 
here.
    Comment: Under the updated version of CSAPR, Texas will not have 
allowances for annual NOX emissions. Instead, Texas will 
have a CSAPR budget for NOX for only the ozone season, which 
runs a few months each year. But BART is not a seasonal requirement; 
BART requires continuous operation of pollution controls. ``The 
determination of BART must be based on an analysis of the best system 
of continuous emission control technology available and associated 
emission reductions achievable for each BART-eligible source that is 
subject to BART within the State.'' It violates EPA's regulations to 
use seasonal emissions reductions under CSAPR to satisfy the BART 
requirement to install and operate ``continuous emission control 
technology.''
    Response: We disagree with this comment, but also note that it 
should not be directed to this action but rather to the past rulemaking 
determination that provided BART coverage for pollutant trading under 
CSAPR as specified at 40 CFR 51.308(e)(4). In any event, the argument 
that BART must be based on ``continuous'' control does not transfer to 
the application and operation of a BART alternative. Sources that would 
operate under an annual trading program that provides tons per year 
allocations for a unit are not necessarily applying ``continuous'' 
controls either. In fact, they are also free to operate seasonally or 
with intermittent use of controls so long as they operate within the 
allocation or purchase allowances whenever emissions may exceed that 
allocation. We necessarily disagree that EPA regulations would bar 
seasonal emissions reductions to satisfy requirements for a BART 
alternative.
4. Other CSAPR Comments
    Comment: The EPA should proceed to finalize CSAPR as a better-than-
BART alternative not only as to NOX but also as to 
SO2. In the Texas Regional Haze SIP, Texas relied on EPA's 
Regional Haze Rule that allows states to implement an alternative to 
BART as long as the alternative has been demonstrated to achieve 
greater reasonable progress toward the national visibility goal than 
BART. EPA made such a demonstration for CAIR and many states, including 
Texas, relied on CAIR's cap and trade programs as a BART alternative 
for EGU emissions of SO2 and NOX in their SIP 
submittals. Following EPA's demonstration in 2005 that CAIR is better-
than-BART and after Texas submitted the Regional Haze SIP, the D.C. 
Circuit Court remanded CAIR to EPA but ultimately did not vacate the 
CAIR rule. EPA approved certain States' SIPs that implemented CAIR as a 
BART alternative, yet, EPA did not do so for Texas.
    CSAPR was issued to replace CAIR and because of EPA's action on 
CAIR, EPA subsequently withdrew reliance on CAIR as a BART alternative 
and finalized the demonstration that compliance with CSAPR is better 
than application of BART. This action occurred after Texas had 
submitted its SIP.
    On December 16, 2014, EPA published a proposed FIP program to 
``replace reliance on CAIR with reliance on the trading programs of 
CSAPR as an alternative to BART for SO2 and NOX 
emissions for EGUs.'' The CSAPR rule had been challenged in the D.C. 
Circuit and the court held that EPA had over-controlled certain States' 
budgets and remanded the CSAPR rule without vacatur for further 
revision by EPA. In January 2016, EPA did not finalize BART controls 
for EGUs, citing

[[Page 48339]]

uncertainty. EPA issued the CSAPR Update on October 24, 2016 but did 
not revise SO2 or NOX annual budgets for Texas.
    EPA's Proposed FIP and the imposition of source-specific BART 
relies on the EPA's proposed rulemaking for the withdrawal of Texas 
from the CSAPR Phase 2 trading budgets for SO2. In November 
2016, EPA published a proposal to withdraw the FIP provisions that 
required affected EGUs to participate in Phase 2 of the CSAPR trading 
programs for annual emissions of SO2 and NOX 
purportedly to address a decision of the U.S. Court of Appeals for the 
District of Columbia Circuit that had remanded for further 
consideration the CSAPR Phase 2 SO2 budgets for Texas and 
other states.
    EPA's proposed withdrawal of Texas from the Phase 2 CSAPR program 
for SO2 included a ``sensitivity analysis'' indicating that 
removal of Texas from the Phase 2 SO2 budget trading program 
(and including the removal of the Florida trading program) would not 
adversely impact the demonstration that CSAPR participation continued 
to qualify as an alternative to compliance with BART, in other states 
that were relying on CSAPR for BART compliance.
    EPA also noted that ``[n]o changes to the Regional Haze Rule are 
proposed as part of the rulemaking.'' Id. However, in support of this 
FIP proposal addressing Regional Haze, EPA notes that it, ``had earlier 
proposed to rely on CSAPR participation to address these BART-related 
deficiencies in Texas' SIP submittals referencing its December, 2014 
proposed FIP.'' EPA did not address the D.C. Circuit Court's remand as 
directed.
    The D.C. Circuit had remanded without vacatur the Phase 2 budgets 
in EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Circuit 
2015) and directed the EPA to reconsider the emission budgets and 
propose revised budgets. AEP said they did not support EPA's proposal 
to withdraw Texas from CSAPR, stating that the EPA had provided 
insufficient justification and explanation for the proposal and had not 
considered the impact on the trading market. AEP noted that the court 
had specifically not vacated the Phase 2 budgets due to concerns that 
such a decision would disrupt the trading markets. AEP also expressed 
concern that withdrawing Texas from CSAPR would impact the compliance 
strategies facilities have developed for compliance with BART, as BART 
eligible facilities had developed compliance strategies assuming BART 
compliance would be achieved through compliance with CSAPR. AEP said 
they supported the CSAPR trading programs because of their flexibility 
and administrative convenience, cost-effectiveness and the ``remarkable 
reductions that have occurred across the electric utility industry.'' 
AEP also considered EPA's analysis of the impact of sources in Texas on 
nonattainment areas in other states was inadequate and the explanation 
provided by EPA for its decision to change the initial determination 
was insufficient and potentially exposed Texas EGUs to future liability 
for the impact of PM2.5 emissions on Madison County and 
other upwind locations. AEP concluded their comments on 81 FR 78954 by 
recommending the EPA finalize CSAPR as a compliance alternative to BART 
for SO2 and revise the Phase 2 budgets, instead of 
withdrawing Texas from CSAPR.
    The D.C. Circuit requires EPA to propose acceptable budgets 
consistent and confirm that those budgets are a BART alternative and 
allow Texas to remain in the CSAPR trading program. Source specific 
controls, then, would no longer be necessary since CSAPR as a BART 
alternative would provide a more cost-effective, less burdensome and 
flexible program for compliance with Texas' visibility obligations.
    By EPA's reliance on the proposed withdrawal of Texas from the 
CSAPR trading program for SO2 as the basis for the proposed 
Texas BART FIP, EPA is illegally proposing BART controls on facilities 
premised on a proposed rule. Buttressing the proposed FIP on a 
proposed-not-yet-finalized rule is inconsistent with the APA. EPA seems 
concerned with uncertainty created by the remand yet, this action by 
EPA creates its own uncertainty with regard to whether the proposed 
withdrawal will be finalized as proposed. The APA requires that an 
agency provide notice and an opportunity to comment on proposed rules. 
5 U.S.C. 553(c). An agency must be open to taking comments and 
responding to them. This necessarily requires that EPA must consider 
comments from the public before finalizing a proposed rule. In fact, 
the comment period for the proposed withdrawal of Texas from the 
SO2 CSAPR budgets ended after the date of the proposed BART 
FIP. Clearly, EPA gave itself no opportunity to consider public comment 
on the proposed withdrawal prior to relying on it as if it were final 
as proposed to justify the need for proposing source-specific BART. 
EPA's actions demonstrate that it had no intention of accepting public 
comment and had already made up its mind that the proposal would be 
finalized as proposed, a direct contravention of the APA.
    Response: Several contentions provided by this commenter are 
relevant to the action withdrawing Texas from Phase 2 CSAPR program 
budget, but given the finalization of that action they are not relevant 
to this action. We are required to address the BART requirements for 
both pollutants under our CAA FIP authority, in the absence of an 
approvable SIP. We are finalizing our proposal that NOX BART 
is met by continued participation in CSAPR and we are finalizing a BART 
alternative to address the SO2 BART requirement. The BART 
alternative applies the CSAPR allowance allocations for SO2 
to all BART-eligible coal-fired EGUs, several additional coal-fired 
EGUs, and several BART-eligible gas-fired and gas/fuel oil-fired EGUs. 
In addition to being a sufficient alternative to BART, it secures 
reductions consistent with visibility transport requirements and is 
part of the long-term strategy to meet the reasonable progress 
requirements of the Regional Haze Rule.
    We do not agree with the commenter's suggestion that we were not 
open to the consideration of comments in our proposed action or in any 
related actions in violation of the APA. Moreover, the assertion that 
EPA had made up its mind that any proposal would be finalized as 
proposed regardless of comments that might be offered is not correct. 
For efficiency and because of time constraints, our proposal for the 
NOX aspect of this action was based on a scenario of later 
finalization of the CSAPR remand response rule, but that does not mean 
that we did not fairly consider all comments on the CSAPR remand 
response rule or pre-decided the outcome of that rule. Our final 
decisions in this action reflect the final CSAPR remand rule, and 
consideration of comments on our proposal for this action.
    Comment: Recommend the CSAPR budgets be revised. Revising the CSAPR 
budgets is supported by actual SO2 emissions. The Texas EGU 
SO2 and NOX emissions have steadily decreased and 
have fallen well below 2017 CSAPR budgets. These emissions are well 
below the original better-than-BART budgets for SO2. EPA's 
determinations that CSAPR is better-than-BART is still valid and 
supported even if emissions were increased.
    We anticipate that EPA may respond that a September 9, 2017 Consent 
Decree deadline (derived from a case in which the EGUs were not party) 
did not permit time to consider comments before proposing the Texas 
BART FIP.

[[Page 48340]]

Clearly, the most expeditious approach would be for EPA to revise the 
invalid Phase 2 CSAPR budgets for Texas and propose that reliance on 
the revised budgets satisfies BART compliance. Any delays in addressing 
Texas' BART obligations are the result of EPA not establishing an 
acceptable CAIR or CSAPR program, and EPA's refusal to revise CSAPR 
Phase 2 budgets and not Texas' failure to agree to accept invalid CSAPR 
budgets. In fact, the D.C. Circuit instructed EPA to act ``promptly'' 
in revising the budgets.
    Additionally, EPA's attempt to comply with a court deadline does 
not justify noncompliance with the APA. With its current proposal 
(Texas BART FIP), EPA has done nothing but create further uncertainty 
and violate the APA. EPA could have requested an extension of the 
deadline to revise the budgets, but did not. Consistent with the 
Administration's Executive Order on Reducing Regulation and Controlling 
Regulatory Costs, EPA could revise the CSAPR budgets adhere to CSAPR is 
better-than-BART, as they have in many other states, and remove two 
proposed regulations in doing so without the promulgation of another 
rule (proposed withdrawal of Texas from the CSAPR Phase 2 program and 
proposed source-specific BART for Texas source.) EPA should update the 
Phase 2 SO2 budgets as directed and post-haste proceed to 
finalize CSAPR as a better an alternative to the application of source-
specific BART.
    Response: Texas declined to submit a SIP to voluntarily participate 
in CSAPR and we have addressed our remand obligations for Phase 2 
SO2 budgets by ending Texas EGU participation in CSAPR for 
PM2.5 transport. We agree, however, that Texas sources can 
continue NOX BART coverage under CSAPR and we are finalizing 
a BART alternative for SO2 instead of establishing source-
specific SO2 BART determinations for units at those sources. 
The BART alternative applies the CSAPR allowance allocations for 
SO2 to all BART-eligible coal-fired EGUs, several additional 
coal-fired EGUs, and several BART-eligible gas-fired and gas/fuel oil-
fired EGUs. In addition to being a sufficient alternative to BART, it 
secures reductions consistent with visibility transport requirements 
and is part of the long-term strategy to meet the reasonable progress 
requirements of the Regional Haze Rule.
    Comment: EPA is now proposing to require stringent emission control 
technology on units that have already met the BART obligations by 
participation in the regional trading programs, CAIR, and its 
replacement, CSAPR. In this proposal, EPA has effectively removed a 
cost-effective compliance mechanism which has been in place for the 
duration of the first planning period, with costs and reductions that 
far exceed the regulatory obligation, with limited or no benefit to 
visibility. Because it was only late last week that EPA made available 
the technical documents that it claims would support its action and EPA 
has yet to provide us with the specific modeling supporting the 
proposal that we requested several weeks ago, We have not yet had an 
opportunity to thoroughly evaluate EPA's technical justification for 
the proposal.
    Response: Our proposal did not effectively remove CSAPR, and we 
disagree with the comment's characterization of how and when CSAPR has 
been ``in place.'' Regardless, we agree with the premise of the comment 
that SO2 BART and NOX BART for Texas EGUs can be 
addressed by the BART alternatives we rely on in our final action. We 
also disagree that our proposal would have provided limited or no 
benefit to visibility to the extent it suggests our final action is not 
providing visibility benefits. Visibility benefits are being secured 
and preserved into the future by the final FIP measures.
    Comment: Texas' SO2 emissions are below the levels that 
EPA has found to be better-than-BART, and any reasonable assessment 
would conclude that trends of anticipated emissions in Texas will 
remain below those levels. EPA conducted two sensitivity analyses that 
both demonstrate that revised CSAPR emission levels for Texas are 
better-than-BART. We compared actual Texas EGU SO2 emissions 
in 2015 and 2016 to the SO2 emission levels that EPA found 
are better-than-BART. In both cases, Texas' actual emissions are well 
below the budgets that EPA has determined are better-than-BART.
    Response: We are finalizing a BART alternative that applies the 
CSAPR allowance allocations for SO2 to all BART-eligible 
coal-fired EGUs, several additional coal-fired EGUs, and several BART-
eligible gas-fired and gas/fuel oil-fired EGUs. In addition to being a 
sufficient alternative to BART, it secures reductions consistent with 
visibility transport requirements and is part of the long-term strategy 
to meet the reasonable progress requirements of the Regional Haze Rule. 
To the extent, the comment suggests that current and anticipated 
emissions alone are enough to satisfy requirements for BART or a BART 
alternative, we disagree. As a fundamental matter, emissions reductions 
must be enforceable to prevent undesired and unexpected increases in 
future years. Pointing to ``trends''--i.e., unenforceable emissions 
levels without legal requirements against future increases--does not 
meet CAA requirements.
    Comment: EPA must promulgate or approve a BART alternative for 
Texas, and must not finalize the unlawful and cost-prohibitive proposed 
Texas BART FIP. EPA should not, and lawfully may not, finalize its 
Proposed Texas BART FIP. The Proposed Texas BART FIP--like the 
predecessor Reasonable Progress Rule that is stayed and was remanded by 
the Fifth Circuit for reconsideration--is fundamentally flawed, cost-
prohibitive to implement, and contrary to reasoned decision-making. EPA 
should address BART for Texas--not through federally-mandated specific 
controls on individual units--but through one of several available BART 
alternatives that will achieve equivalent or greater benefits at far 
less costs, as demonstrated by EPA's own prior modeling and sensitivity 
analyses.
    Among those available alternatives is EPA's original proposed BART 
action for EGUs in Texas--reliance on Texas EGUs' participation in 
CSAPR's annual SO2 and NOX trading Programs as 
BART compliance. That alternative remains the most expeditious and 
defensible path for finalizing a BART solution for Texas EGUs, and it 
is fully supported by EPA's previous CSAPR better-than BART modeling 
and sensitivity analyses. Indeed, EPA's only lawful path forward to 
finalize a BART FIP for Texas by the current September 9, 2017 deadline 
in EPA's consent decree with Sierra Club is to finalize a CSAPR-for-
BART FIP for Texas EGUs, as EPA signed in December 2014. For the many 
reasons discussed in Section II of these comments, EPA would be acting 
unlawfully were it to finalize the Proposed Texas BART FIP as issued in 
December 2016.
    As an alternative to finalizing a CSAPR-for-BART FIP in September 
2017, EPA could seek an extension of the consent decree deadline and 
proceed to work cooperatively with the State of Texas and Texas EGU 
operators to develop and propose for comment a different BART 
alternative for Texas, as it has done in other states. Such an 
alternative could, for example, establish SO2 emission caps 
for Texas EGUs that are comparable to CSAPR budgets and would thus fall 
squarely within EPA's previous CSAPR=BART demonstration and sensitivity 
analyses for Texas. EPA has frequently worked with states and 
stakeholders to develop workable BART alternatives for EGUs, and it 
should do

[[Page 48341]]

the same here with Texas and Texas stakeholders, including Luminant.
    Promulgation of a CSAPR-for-BART FIP is EPA's only lawful option 
for meeting the September 9, 2017 consent decree deadline. If EPA 
believes that it must finalize a BART rule for Texas EGUs by September 
2017, EPA's only valid legal option is to finalize its 2014 proposed 
CSAPR-for-BART FIP. In that proposal, EPA specifically stated that it 
was proposing ``a FIP to replace reliance on CAIR with reliance on the 
trading programs of CSAPR as an alternative to BART for SO2 
and NOX emissions from EGUs in the regional haze plan for 
Texas.'' In support, EPA explained that it ``determined that [1] CSAPR 
provides for greater reasonable progress towards the national goal than 
would BART and [2] Texas is included in CSAPR for NOX and 
SO2.'' The same is true today, and, indeed, recent emission 
trends and EPA's sensitivity analyses for Texas confirm that CSAPR is 
and remains better-then-BART for Texas EGUs. Texas remains in the CSAPR 
annual programs for NOX and SO2, and EPA's 
determination that CSAPR provides for greater reasonable progress than 
the installation of BART remains scientifically sound. EPA has 
determined that ``[CSAPR] achieves greater reasonable progress towards 
the national goal of achieving natural visibility conditions than 
source-specific BART.'' That conclusion remains valid today, and EPA 
has not undertaken any action to revise or rescind that rulemaking. In 
fact, the Eighth Circuit recently upheld EPA's conclusion that CSAPR is 
better than BART, stating that ``EPA's explanation that the Transport 
Rule is better than source-specific BART is rational.'' There is no 
legal or technical barrier to EPA finalizing its original proposal of 
CSAPR-for-BART for Texas EGUs, and, indeed, that is EPA's only lawful 
current option if it were to meet the September 2017 deadline.
    EPA's consent decree with Sierra Club does not prevent EPA from 
finalizing its original CSAPR-for-BART proposal in Texas. The consent 
decree that EPA entered into with Sierra Club was revised in December 
2015 to provide two alternative deadlines for issuing a final rule that 
implements BART for Texas. First, the revised consent decree provides 
that by ``[n]o later than December 9, 2016,'' EPA was to promulgate a 
final BART FIP for Texas, unless EPA had approved Texas's SIP or 
promulgated ``a partial SIP'' meeting the BART requirements under the 
regional haze program. Alternatively, the December 2016 deadline would 
be ``extended to September 9, 2017,'' if EPA signed a new proposed rule 
for BART by December 9, 2016. EPA signed the Proposed Texas BART FIP on 
December 9, 2016, thereby triggering the extension in the consent 
decree.
    The consent decree, however, does not (and cannot) dictate the 
substance of EPA's final BART rulemaking under the extended deadline of 
September 9, 2017; the only prerequisite to invoking this extension is 
the signing of a proposal by December 9, 2016. EPA is not bound by the 
consent decree to finalize the terms of the current proposal or any 
similar source-specific BART rule; in fact, established principles of 
administrative law require EPA to remain open-minded during the 
rulemaking process. The consent decree merely established deadlines for 
EPA's pending course of action. Accordingly, for purposes of meeting 
the upcoming deadline of September 9, 2017, EPA is not prohibited by 
the consent decree from reverting to its 2014 proposal to finalize 
CSAPR as a BART alternative for Texas EGUs.
    Response: We agree that the existence of the consent decree 
deadline does not dictate the substance of our action to address Clean 
Air Act requirements to meet the deadline. We disagree that our only 
possible lawful action for meeting the deadline is to impose a FIP 
based on CSAPR. 40 CFR 51.308(e) requires that states submit a SIP 
containing emission limitations that represent BART for BART eligible 
sources that may reasonably be anticipated to cause or contribute to 
any impairment of visibility in any mandatory Class I Federal area. 
Alternatively, 40 CFR 51.308(e) allows states to establish an emissions 
trading program or other alternative as long as the trading program or 
other alternative will achieve greater reasonable progress toward 
natural visibility conditions than BART. Where a state has failed to 
submit a SIP by the applicable deadline or has submitted a SIP that has 
been disapproved by the EPA, the CAA authorizes and requires EPA to 
promulgate a FIP that meets the requirements of the applicable federal 
statutes and regulations. Thus, EPA has the authority to promulgate a 
FIP containing emission limits that represent BART for BART eligible 
sources that may reasonably be anticipated to cause or contribute to 
any impairment of visibility in any mandatory Class I Federal area. 
Alternatively, EPA may establish an emissions trading program or other 
alternative which will achieve greater reasonable progress than BART. 
We are meeting requirements with valid use of discretion where 
appropriate to finalize NOX BART as proposed, and to 
finalize a BART alternative with emission levels similar to CSAPR to 
address SO2 BART. We are not able to revive the 2014 
proposal to satisfy SO2 BART for Texas EGUs because remand 
obligations have led to the removal of SO2 trading 
requirements for Texas. We agree that this might have been a viable 
solution, but Texas declined to submit a SIP to voluntarily participate 
in CSAPR to fully preserve and accommodate this option.
    Comment: The Proposed Texas BART FIP is not only cost-prohibitive, 
it is not necessary to achieve the goals of the Regional Haze Program 
and satisfy the requirements of the CAA. EPA's own prior modeling and 
analysis show that BART for these units is more than met by current 
SO2 emission levels from Texas EGUs, and the stringent 
additional limits in the Proposed Texas BART FIP are not necessary.
    EPA's sensitivity analyses for Texas's SO2 CSAPR budgets 
and recent emission trends in Texas demonstrate that CSAPR remains 
better-than-BART. EPA's sensitivity analyses definitively confirm that 
EPA's determination that CSAPR is better-than-BART in Texas remains 
scientifically sound. When EPA issued the final rule promulgating the 
CSAPR-for-BART provision in June 2012, EPA confirmed that the upward 
adjustments to Texas's budgets under CSAPR did not adversely impact 
visibility conditions in nearby Class I areas. EPA initially calculated 
visibility improvements for nearby Class I areas based on a 
SO2 budget for Texas of 243,954 tons/year. Following EPA's 
upward adjustments to the CSAPR budget due to errors in EPA's initial 
calculation, EPA revised its visibility improvement estimates based on 
a SO2 budget of 294,471 tons/year. EPA's methodology 
demonstrates the expected visibility improvement as a result of 
implementing the CSAPR is better-than-BART provision under the original 
budget and the revised budget. Even with an SO2 budget of 
nearly 300,000 tons for Texas, visibility at these Class I areas was 
projected to improve (not degrade).
    Recent emissions data confirm EPA's prior determination--i.e., that 
Texas's emissions are well below the threshold that was previously 
determined to be better-than-BART. Implementation of CSAPR Phase 1 
began in 2015, and implementation of Phase 2 began in 2017. For 2015 
and 2016--during CSAPR Phase 1--Texas maintained its annual emissions 
of SO2 and NOX well under the budgets established 
by EPA. The state-wide budget for annual SO2 in Texas is 
294,471 tons, and the state-

[[Page 48342]]

wide budget for annual NOX in Texas is 137,701 tons. These 
same budgets will apply during Phase 2, and there is no expectation 
that Texas EGUS will exceed these thresholds. In fact, EPA's own data 
demonstrate that Texas has not exceeded, or even approached, its annual 
allowance allocations for either SO2 or NOX 
during Phase I of CSAPR. Emissions of SO2 from Texas EGUs 
were 260,122 tons in 2015 and 244,233 tons in 2016. As for 
NOX, emissions from Texas EGUs were 107,921 tons in 2015 and 
106,625 tons in 2016. Once CSAPR became effective in Texas in 2015, 
SO2 emissions from Luminant's coal-fired EGUs dropped 
dramatically and have trended downward. There is no reason to believe, 
and EPA presented no reason, that this trend will reverse--and 
certainly not to a degree that Texas EGU SO2 emissions would 
exceed CSAPR budgets or call into question EPA's CSAPR better-than-BART 
demonstration.
    Texas has maintained its emissions well below the budgets 
established by CSAPR. The record establishes that BART for these units 
can be no more stringent than current emission levels, which are well 
below CSAPR budgets. In 2012, EPA concluded that ``[CSAPR] achieves 
greater reasonable progress towards the national goal of achieving 
natural visibility conditions than source-specific BART.'' EPA 
confirmed this determination in subsequent sensitivity analyses. So 
long as Texas's emissions remain below the CSAPR budgets, the operation 
of Texas EGUs in such a manner will continue to be better-than-BART.
    Thus, the Proposed Texas BART FIP is based on a fundamental flaw by 
EPA--that BART for Texas EGUs must be ``more emission reductions than 
projected under CAIR or CSAPR.'' To the contrary, because Texas validly 
remains in the annual CSAPR programs for SO2 and 
NOX combined with the fact that Texas EGU SO2 
emissions are well below the annual allocations, EPA has no valid basis 
to change course from its 2014 proposal to finalize CSAPR for BART in 
Texas in order to impose more stringent source-specific BART controls. 
EPA should proceed to finalize a FIP for Texas that approves CSAPR as a 
BART alternative for Texas EGUs.
    Response: We agree that emissions similar to the CSAPR budgets 
would be better than BART and can be justified as a BART alternative. 
To the extent the comment suggests that merely pointing to current 
emissions level can satisfy the requirements of a BART alternative, we 
disagree. Those emissions levels must be made enforceable, and our 
final action accomplishes that. NOX BART for EGUs is 
addressed by continued participation in CSAPR program for ozone 
transport. With regard to SO2, the BART alternative is 
designed to achieve SO2 emission levels from Texas EGUs 
similar to the SO2 emission levels that would have been 
realized from the SO2 trading program under CSAPR. These 
measures will assure Texas' recent reductions of SO2 and 
NOX will be maintained and improved upon in the future.
    Comment: The D.C. Circuit's remand of CSAPR budgets does not create 
``uncertainty'' that prevents EPA from finalizing CSAPR-for-BART for 
Texas EGUs. EPA says that it did not finalize its initial CSAPR-for-
BART proposal for Texas EGUs because it noted some ``uncertainty 
arising from the remand of Texas' CSAPR budgets'' by the D.C. Circuit. 
EPA made that claim in the now-stayed January 2016 Reasonable Progress 
Rule. That claim was wrong when it was made then, and it is clearly 
wrong now. There is no ``uncertainty.'' The D.C. Circuit's remand does 
not prevent EPA from finalizing CSAPR as an SO2 BART 
alternative for Texas EGUs.
    First, EPA's claim that there is an ``absence of CSAPR coverage for 
SO2'' in Texas following the D.C. Circuit's remand is simply 
wrong. Texas EGUs are and have been regulated by a BART equivalent 
trading program for the entirety of the first planning period to date--
first through CAIR and, after CAIR's replacement and up to the present 
day, through CSAPR. Texas EGUs are presently subject to CSAPR's annual 
SO2 and NOX programs under the budgets remanded 
by the D.C. Circuit, which are budgets that EPA has confirmed as 
better-than-BART. EPA's prior determination that CSAPR is better-than-
BART for all states, including Texas, is scientifically sound and 
remains a binding part of EPA's regulations. EPA may properly respond 
to the D.C. Circuit's remand by revising Texas's annual SO2 
budget (as instructed by the D.C. Circuit) after it finalizes the 
proposed CSAPR-for-BART FIP for Texas.
    Second, regardless of when EPA responds to the D.C. Circuit's 
remand, EPA's own sensitivity analyses confirm that were EPA to 
properly respond to the remand by increasing Texas's annual 
SO2 budgets so they do not over-control as instructed by the 
D.C. Circuit, those revised budgets would remain better-than-BART. EPA 
established a multi-step methodology to analyze whether increases in 
Texas's SO2 annual budgets would change EPA's CSAPR better-
than-BART determination (which remains part of EPA's binding 
regulations). First, EPA's methodology for conducting a revised 
sensitivity analysis requires the identification of the Class I areas 
in and near Texas that that are most likely affected by Texas 
emissions. Second, EPA's analysis then ``employ[s] [the] very 
conservative'' assumption that ``all of the visibility improvement'' 
that EPA's CSAPR better-than-BART modeling predicted for these nine 
areas as a result of all CSAPR reductions from all covered states is 
``solely due to [reductions] from Texas.'' Third, with this 
conservative assumption, EPA then ``proportionally reduce[s]'' the 
modeled visibility improvements at these nine Class I areas based on 
the corrected higher SO2 budget for Texas. For example, if, 
in response to the D.C. Circuit's remand, EPA were to adjust Texas's 
budget to 350,000 tons, CSAPR would still be better-than-BART for Texas 
and other states. Such an adjustment would be equivalent to a 57% 
reduction in the number of SO2 tons reduced compared to the 
original Texas CSAPR reductions that were modeled for EPA's original 
CSAPR better-than-BART modeling. EPA's methodology would thus reduce 
the visibility benefit accordingly by multiplying the visibility 
improvement at the Class I areas affected by Texas by a factor of 0.43. 
Thus, for example, the visibility improvement at Wichita Mountains from 
CSAPR, even after increasing Texas's budget to 350,000 tons, would be 
0.688 deciview [1.6 deciview x 0.43 = 0.688]. This methodology could be 
applied to other budgets as well. Visibility improvements at nine Class 
I areas in or around Texas result from the application of EPA's 
sensitivity analysis of a hypothetical adjustment of Texas's CSAPR 
SO2 budget to 350,000 tons per year. Thus, EPA's own 
modeling shows that visibility at these Class I areas is projected to 
improve (not degrade) and that the BART requirements are met even if 
the CSAPR budgets are increased.
    Response: We have completed our response to the CSAPR remand by 
withdrawing Texas EGUs from CSAPR requirements for PM2.5 
transport. We did not act to upward adjust Texas' SO2 
budget. Whether that was a proper response to the remand or whether 
upward adjustments would have preserved the analytic demonstration that 
CSAPR is better than BART are not issues of concern with the present 
finalized action. To the extent the comment asserts that CSAPR budgets 
can be used to support a better than BART alternative, we agree with 
the comment and this concept is part of the

[[Page 48343]]

BART alternative and weight of the evidence that we deem to justify it.
    Comment: The proposed rule is legally dependent on other pending 
proposed rulemakings. EPA may not proceed with this action without 
first finalizing other proposed rules under the CAA on which this 
action is based.
    Since 2009, Texas EGUs have been subject to federal regulatory 
programs that have resulted in substantial reductions in the 
NOX and SO2 emissions that have been targeted by 
EPA as contributing to interstate transport and haze. In compliance 
with EPA rules and precedent, Texas relied on CAIR, and then its 
replacement CSAPR as achieving reductions in haze precursors from EGUs 
that are ``better than BART'' in its Texas Regional Haze SIP submittal. 
In the unlawful proposed rule, EPA rejects its prior position that 
Texas EGUs are exempt from BART due to participation in CSAPR. Yet, 
Texas EGUs continue to this day to be subject to CSAPR requirements for 
NOX and SO2. While EPA has proposed to withdraw 
CSAPR SO2 requirements for Texas EGUs, it has not yet done 
so and those EGUs remain subject to CSAPR allocations for both 
NOX and SO2 under federal and state laws and 
permits. Additionally, EPA's proposal to withdraw the CSAPR FIP with 
respect to SO2 has been challenged in that rulemaking docket 
as unlawful and not in accordance with the court decision remanding 
that action to EPA.
    As a result, EPA may not proceed with the disapproval of Texas' 
reliance on CSAPR as ``better than BART'' until such time that the 
proposal is legally finalized in compliance with the Court decision 
that remanded that rule to EPA. Once that rule is legally finalized, 
then Texas should be given an opportunity to address whether and how 
that affects the state's regional haze program before a FIP is 
considered.
    Response: As was made clear by our proposal, we agree our rule is 
dependent on other proposed and now finalized rulemakings. Nothing in 
our proposal or final action prevents Texas from addressing the State's 
regional haze program under its SIP planning authorities. Texas did not 
request that we withhold our action to withdraw CSAPR SO2 
requirements for Texas EGUs, and it did not submit comments to oppose 
that action. We disagree that anything in the sequencing of actions 
would allow us to suspend our FIP obligations when there is no SIP to 
address the requirements.
    Comment: The effort to impose BART controls is the result of the 
proposed withdrawal of Texas from the CSAPR Phase 2 or annual trading 
program for SO2. Compliance with regional haze obligations 
for BART-eligible facilities in Texas has depended on CAIR-equal BART 
and CSAPR-equal BART and removing Texas from CSAPR results in 
significant disruption and costs to planned future compliance for these 
facilities. EPA seeks these excessive controls which will achieve 
limited visibility benefits. EPA should take the proper approach and 
follow the remand without vacatur of the D.C. Circuit, revise the 
trading budgets and then finalize CSAPR as compliance strategy for BART 
in lieu of this proposal.
    Response: We completed our response to the CSAPR remand in a 
separate action and refer Commenter there. We are finalizing a BART 
alternative for SO2 BART.

E. Comments on the Identification of BART-Eligible Sources

    Comment: We received comment from the owners of Coleto Creek 
stating that in the Texas Regional Haze SIP, TCEQ determined that 
Coleto Creek Unit 1 was not a BART-eligible source, based on its 
interpretation and application of its SIP-approved regional haze rules 
at 30 TAC Chapter 116, Subchapter M. In implementing its rules, TCEQ 
prepared questionnaires that sought the information needed to render 
its BART-eligibility determinations.\66\ As a result of this TCEQ-led 
process, TCEQ determined that Coleto Creek Unit 1 was not BART-eligible 
because it was not built, and did not commence operation, until 1980, 
which is well after the August 7, 1977 applicability date. Coleto Creek 
Unit 1 has reasonably relied on the state's eligibility determination 
in evaluating its obligations under the Regional Haze Rule program. 
EPA's decision to reject TCEQ's BART-eligibility determination for 
Coleto Creek Unit 1 under 30 TAC 116.1500 is unsupported.
---------------------------------------------------------------------------

    \66\ See October 24, 2005 letter from Al Espinosa, Coleto Creek 
Power Station, #TX187-0023-0001, Docket Item No. EPA-R06-OAR-2016-
0611-0023 at p. 6.
---------------------------------------------------------------------------

    Response: The commenter states that because Coleto Creek Unit 1 did 
not commence operations until 1980, it should be determined to be not 
BART-eligible, as was determined by the TCEQ. However, we believe the 
TCEQ erred in not listing Coleto Creek Unit 1 as being BART-eligible. 
The date test for BART-eligibility is whether the units was ``in 
existence on August 7, 1977,'' and began operation after August 7, 
1962. The BART rule defines as ``in existence on August 7, 1977'' as 
follows (70 FR 39159):
    What does ``in existence on August 7, 1977'' mean?
    2. The regional haze rule defines ``in existence'' to mean that: 
``the owner or operator has obtained all necessary preconstruction 
approvals or permits required by Federal, State, or local air pollution 
emissions and air quality laws or regulations and either has (1) begun, 
or caused to begin, a continuous program of physical on-site 
construction of the facility or (2) entered into binding agreements or 
contractual obligations, which cannot be canceled or modified without 
substantial loss to the owner or operator, to undertake a program of 
construction of the facility to be completed in a reasonable time.'' 40 
CFR 51.301.
    The owner of Coleto Creek Unit 1 provided information that onsite 
construction began prior to August 7, 1977. Thus, Coleto Creek Unit 1 
satisfies the above criteria as being ``in existence on August 7, 
1977.'' Therefore, we disagree with the commenter and continue to find 
that Coleto Creek Unit 1 is BART-eligible. The NOX BART 
requirement for Coleto Creek is met by relying on CSAPR as an 
alternative to EGU BART for NOX. The SO2 BART 
requirement is met by the intrastate trading program FIP that we are 
finalizing in this action and to which Coleto Creek will be subject. 
The PM BART requirement is met by our determination that the visibility 
impacts of PM emissions from Coleto Creek are too small to be 
considered to cause or contribute to visibility impairment at any Class 
I area and we determined the facility screens out and is not subject to 
PM BART.

F. Comments on PM BART

    We previously proposed to disapprove the SIP's subject-to-BART 
determinations for PM, on the grounds that the SIP had based these 
determinations on reliance on a BART alternative for SO2 and 
NOX and, as a result, considered only the contribution of PM 
emissions to visibility impairment, and to adopt source-specific PM 
emission limits to fill the SIP gap. In that context, we received 
several comments related to PM BART issues. Now, however, we have 
determined it is appropriate to adopt a BART alternative to address 
SO2 and NOX and therefore find Texas' original 
SIP was correct in considering only the contribution of PM emissions. 
Considering only PM emissions, all sources considered in the Texas SIP 
were demonstrated to screen out of the need for source specific PM BART 
emission limits.
    Also, as explained above, we have identified additional sources as 
BART-eligible that were not considered in the

[[Page 48344]]

2009 Texas Regional Haze SIP. As discussed elsewhere, we have 
determined that the impact due to PM emissions from these additional 
sources are also below the BART screen level. Thus, the SIP's 
determination that none of the BART-eligible EGUs are subject-to-BART 
for PM is correct and approvable. As a consequence, there is no SIP gap 
needing to be filled by a FIP. Because we are approving EGU PM BART 
screening determinations that result in no EGUs being subject to PM 
BART analysis, comments supporting or alleging errors in the details of 
our PM BART five-factor analysis and our proposed PM BART technology 
selections and emission limits are not relevant. We address in this 
section comments that are relevant to whether it is appropriate to 
approve the portion of this 2009 SIP submission and EPA's analysis in 
our proposal that determined that no PM emission limits for Texas EGUs 
are needed to satisfy the BART requirement because the visibility 
impacts of PM emissions from BART-eligible EGUs do not cause or 
contribute to visibility impairment. The information in section III.A. 
on the history of our proposals regarding the EGU PM BART element of 
the 2009 Texas SIP submission and EPA's proposals is useful background 
for understanding the comments and our responses on this topic.
    Although we are not finalizing the MATS-based PM limits proposed as 
PM BART for the coal-fired EGUs, this regional haze action does not 
affect the existing MATS requirements for these units. We are also not 
finalizing the fuel oil sulfur percentage limits that we proposed for 
gas/fuel oil-fired EGUs; the same limits in existing permits for these 
sources are not affected by our action.
    Comments: AEP states that we provide no basis for not approving the 
TCEQ's PM BART determination in 2016 or logical support for our 
decision to proceed with modeling PM in the proposed Texas BART FIP. 
AEP believes that when a state is provided statutory deference in 
implementing the Regional Haze program, EPA must support its decision 
for not approving the state's determination. While AEP also agrees that 
current PM requirements for sources complying with MATS are sufficient 
for meeting PM BART for Welsh Unit 1, it disagrees that PM BART is even 
warranted at all or that EPA has provided adequate basis for declaring 
that TCEQ's screening analysis is no longer reliable. AEP says that 
buried in a footnote, EPA grasps at some claim of error that Texas' PM 
BART determinations only looked at the impact of PM emissions on 
visibility, that Texas can only take this approach when the BART 
requirements of NOX and SO2 are satisfied, and 
that Texas' error of not identifying several PM BART eligible sources 
is grounds for disapproval. AEP believes this logic is unfounded and 
the situation is created by EPA's piecemeal approach to rulemaking. AEP 
agrees with EPA's conclusion that gas-fired units that occasionally 
burn fuel oil should have no further control. AEP will limit burning 
fuel oil with a sulfur content of 0.7% as currently required by its 
permit. However, EPA has not provided sufficient reasons to be 
addressing PM BART. EPA should finalize its earlier proposal to approve 
Texas' determination that sources in Texas are not subject to PM BART.
    The Lower Colorado River Authority disagrees with the disapproval 
of the Texas PM BART demonstration.
    The TCEQ and the Public Utilities Commission of Texas stated that 
our reliance on language in a guidance memo \67\ to bar TCEQ from 
conducting pollutant-specific modeling to determining BART eligibility 
was incorrect. The TCEQ believes this memo did not state that the 
TCEQ's pollutant-specific modeling is only appropriate when BART for 
other pollutants is satisfied with a BART alternative such as the CAIR 
or CSAPR. The TCEQ believes the memo states that such modeling may be 
appropriate where an alternative program is used for other pollutants. 
The TCEQ also believes we incorrectly claimed that its SIP acknowledges 
PM-only modeling is inappropriate where an alternative to BART is not 
employed.\68\
---------------------------------------------------------------------------

    \67\ Regional Haze Regulations and Guidelines for Best Available 
Retrofit Technology (BART) Determinations, Joseph Paisie, EPA 
Geographic Strategies Group, July 19, 2006.
    \68\ Technical Support Document for the Texas Regional Haze BART 
Federal Implementation Plan, BART FIP TSD, Docket ID No. EPA-R06-
OAR-2016-0611-004, page 26, footnote 39.
---------------------------------------------------------------------------

    The TCEQ states that our CAMx modeling supports the conclusions 
from the screening modeling conducted by it that shows these same units 
did not meet the 0.5 deciview (dv) threshold.\69\ Furthermore, the TCEQ 
states that we found that for gas-fired units, PM emissions are 
``inherently low,'' and that existing controls plus compliance with the 
MATS filterable PM limit of 0.03 lb/MMBtu is already BART, further 
supporting its conclusion that there are no significant visibility 
impacts from PM emissions from these sources and BART controls for PM 
are unnecessary. Thus, the TCEQ reasons, a FIP for PM BART is 
unnecessary and the EPA should approve the screening modeling the TCEQ 
conducted, as we proposed to do in January 2015.
---------------------------------------------------------------------------

    \69\ Id, at 82.
---------------------------------------------------------------------------

    Luminant provided comments similar to those above. Luminant added 
that it believes that Texas remains in CSAPR so there is no basis for 
us to deviate from our prior proposal to approve Texas's PM BART 
determination. Luminant also stated that our reliance on a Ninth 
Circuit Court decision to support our rejection of pollutant-specific 
BART screening is incorrect because the case in point relied upon the 
BART de minimis exemption, which does not apply in this instance.
    Response: We are approving the EGU PM BART element of Texas's 2009 
SIP submittal. Under the combination of reliance on the CSAPR ozone-
season NOX trading program to satisfy NOX BART 
and reliance on the FIP's intrastate trading program for SO2 
emissions to satisfy SO2 BART, it is appropriate for 
determinations of whether a BART-eligible EGU is subject to BART for PM 
to be based only on the visibility impact of the source's PM emissions. 
It is not necessary for us to respond to the comments stating that a 
PM-only analysis would be appropriate even if both SO2 and 
NOX were not addressed by trading programs.
    In particular, TCEQ's comments are correct that the BART Guidelines 
do not prohibit pollutant-specific screening. The July 19, 2006 
guidance memo states that EPA does not generally recommend a pollutant-
specific screening approach, however, such a screening approach may be 
appropriate for PM in certain situations. The memo provides the 
situation of a state relying on CAIR for NOX and 
SO2 BART as an example where pollutant-specific screening 
for PM may be appropriate. We agree with TCEQ that the memo's intention 
is not to limit PM-only analysis to SIPs that rely on CAIR. While we 
disagree with TCEQ's position that a PM-only analysis is appropriate in 
a situation involving source-specific SO2 BART emission 
limits, the approaches promulgated here for SO2 and 
NOX BART are BART alternatives and are similar to the CAIR 
situation described in the memo. Therefore, we find that the pollutant 
specific PM screening approach in TCEQ's original 2009 SIP submittal is 
appropriate and demonstrates that the sources covered by the BART 
alternative program for SO2 screen out of PM BART. For BART-
eligible EGU sources not participating in the BART alternative program 
for SO2, all these sources screened out of BART for all 
visibility impairing pollutants utilizing model plants and CALPUFF 
modeling as described in our proposed rule and

[[Page 48345]]

BART Screening TSD. Therefore, we are approving the determination that 
no Texas EGUs are required to have source-specific PM emission limits 
in order for the BART requirement to be met. This approval is 
consistent with our December 2014 proposal for PM BART, in which EPA 
proposed to rely on Texas' CSAPR participation for SO2 and 
NOX BART and to approve the SIP's determinations regarding 
the need for PM emission limits. See 79 FR 74817, 74848 (January 13, 
2015). We are also determining that other sources that EPA identified 
in our December 2016 proposal as BART-eligible that were not identified 
as BART eligible in TCEQ's 2009 Regional Haze SIP are also screened out 
from PM BART.
    Comment: The Sierra Club states that we should finalize our 
proposed disapproval of Texas's PM BART determinations, which assumed 
that SO2 and NOX emissions contributing to PM 
formation would be regulated under CSAPR, see 82 FR at 935. Following 
the D.C. Circuit Court's remand of CSAPR, SO2 emissions from 
Texas sources are no longer limited by CSAPR. The assumption underlying 
Texas's PM BART determinations--that CSAPR would limit emissions of PM 
precursors from Texas sources--is now inaccurate; therefore, reasons 
the Sierra Club, we must disapprove the State's PM BART determinations.
    Response: We note that the D.C. Circuit Court remanded the budget 
for Texas EGUs in the CSAPR trading program for SO2 without 
vacatur, so the commenter's statement that Texas EGUs are no longer 
limited by CSAPR was not true at the time the comment was offered. It 
is true now as a result of our recent action to remove Texas EGUs from 
the annual SO2 and NOX trading programs. However, 
a large set of Texas EGUs will, under the final FIP, be subject to 
CSAPR for ozone-season NOX and the intrastate trading 
program FIP for SO2. For these EGUs, the BART guidelines and 
our guidance allow for the subject-to-BART for PM determination to be 
based on only the impacts of PM emissions on visibility. For the BART-
eligible EGUs that will not be required to participate in the FIP's 
intrastate trading program, our analysis indicates that even when all 
three pollutants are included in the modeling, all of these sources 
affect visibility at surrounding Class I Areas by less than 0.5 dv, 
thus screening out of being subject to PM BART.
    Comment: EPA in its previous rulemaking on the reasonable progress 
measures for the Texas and Oklahoma regional haze plans initially 
proposed to accept Texas' finding that no PM BART controls were 
necessary for EGUs ``based on a screening analysis of the visibility 
impacts from just PM emissions . . . .'' In its current Texas BART 
rulemaking, EPA states that ``[i]n connection with changed 
circumstances on how Texas EGUs are able to satisfy NOX and 
SO2 BART, we are now proposing to disapprove the portion of 
the Texas Regional Haze SIP that evaluated the PM BART requirements for 
EGUs.'' The changed circumstances EPA refers to is the removal of Texas 
sources from the SO2 caps of the CSAPR rule. Unless a source 
is subject to a BART alternative or is otherwise determined to be 
exempt from BART for a particular pollutant, EPA's regulations and BART 
guidelines do not generally provide for exemptions from a five-factor 
BART analysis for a specific pollutant. Under EPA's BART Guidelines and 
the definition of BART, once a source has been determined to be subject 
to BART, a five-factor BART analysis must be done for each pollutant 
pursuant to 40 CFR part 51, 51.301 and Appendix Y, section IV.A. So, 
EPA is correct that it must address BART for PM for the BART-subject 
sources in Texas.
    Response: The premise in the comment that EGUs in Texas will not be 
subject to a BART alternative for both NOX and 
SO2 is incorrect, given the content of this final action.
    Comment: Coleto Creek Unit 1 should not be subject to any FIP 
emission limits, because it should not be determined to be BART-
eligible.
    Response: Texas' 2009 SIP submission did not include Coleto Creek 
Unit 1 as a BART-eligible source and consequently the SIP did not 
present any analysis of whether it is subject-to-BART, while we are 
determining in this action that Coleto Creek Unit 1 is BART-eligible. 
However, we evaluated the available modeling and other analyses and we 
have concluded that this information shows minimal impacts from PM from 
this particular BART-eligible source. Modeled PM impacts from Coleto 
Creek Unit 1 are expected to be much less than 0.32 delta deciviews 
(see Section III.4).
    Comment: Requiring the Stryker and Graham units to switch to ultra-
low-sulfur diesel would significantly improve visibility. Requiring 
this switching at Stryker would improve visibility by more than 0.5 dv 
at Caney Creek, and switching to ultra-low-sulfur diesel at Graham 
would improve visibility by 0.85 dv at Wichita Mountains.
    Response: Insofar as this is a comment on our proposed source-
specific FIP emission limits to address BART for PM, it is not 
necessary for us to respond because we are approving the SIP and not 
promulgating any such limits in this action. We note that the cited 
visibility benefits of switching to low-sulfur fuel reflect assumed 
reductions in both direct PM emissions and SO2 emissions 
from these two sources. The Stryker and Graham units are both covered 
by the intrastate trading program for SO2 and CSAPR for 
NOX, so it is appropriate that the subject-to-BART 
determination be made on the basis of the impacts of direct PM 
emissions alone. Those impacts are less than 0.5 dv.
    Comment: Texas identified 126 sources as BART-eligible or 
potentially BART eligible.
    Yet Texas ultimately concluded that no BART-eligible source is 
subject to BART. Texas's determination is based in part on the 
unsupported selection of 0.5 dv as the threshold for contribution to 
visibility impairment. EPA must disapprove Texas's determination as to 
the sources subject to BART. Texas adopted 0.5 dv as the threshold for 
``contribution'' to visibility impairment. Texas provided no 
justification for using a 0.5 dv threshold. There is no documentation 
in the record as to how or why Texas selected this threshold, and there 
is no legal support for such threshold. EPA's BART Guidelines do not 
authorize states automatically to use a 0.5 dv contribution threshold. 
Instead, the BART Guidelines state only that ``any threshold that you 
use for determining whether a source `contributes' to visibility 
impairment should not be higher than 0.5 deciviews. In the next 
sentence, the Guidelines instruct each state that it ``should consider 
the number of emissions sources affecting the Class I areas at issue 
and the magnitude of the individual sources' impacts.'' There is no 
evidence in the record that Texas ever conducted this analysis. 
Furthermore, the Guidelines conclude that ``a larger number of sources 
causing impacts in a Class I area may warrant a lower contribution 
threshold.'' As Texas's list of 126 BART eligible sources indicates, a 
large number of sources impact the Class I areas in Texas and in 
neighboring states. Indeed, the subset of sources that screened out of 
BART based on individual modeling have a combined, baseline impact of 
nearly 10 deciviews. Thus, the situation in Texas is exactly what EPA 
had in mind when it noted that a contribution threshold lower than 0.5 
dv may be appropriate. Had Texas followed the BART Guidelines, it may 
well have selected a threshold lower than 0.5 dv. Using a lower 
contribution threshold would change Texas's conclusion as to which

[[Page 48346]]

sources are subject to BART because there are sources with a baseline 
impact just below 0.5 deciviews. EPA has a statutory responsibility to 
ensure that a SIP meets all applicable Clean Air Act requirements and 
is supported by the record. Here, Texas's use of a 0.5 dv threshold has 
two fatal flaws: It is not based on the analysis prescribed by the BART 
Guidelines, and it is not supported by any analysis whatsoever in the 
record. Therefore, EPA must disapprove Texas's conclusions that sources 
are not subject to BART, where Texas screened out sources because of a 
visibility impact below 0.5 deciviews.\70\
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    \70\ This comment was submitted to a public docket (separate 
from the docket established for this action), in response to our 
December 2014 proposal (79 FR 74817, 74853-54 (Dec. 16, 2014)) to 
approve the subject-to-BART determinations in Texas' 2009 SIP 
submission and to disapprove the reasonable progress and some other 
elements of that SIP submission. See Docket Item No. EPA-R06-OAR-
2014-0754-0067. We never took final action on PM BART, and did not 
respond to the comment. We are responding to it today because of its 
relevance to this final action.
---------------------------------------------------------------------------

    Response: EPA's BART Guidelines allow states conducting source-by-
source BART determinations to exempt sources with visibility impacts as 
high as 0.5 dv. While we agree that a state may choose to use a lower 
threshold, this should be based on consideration of not only the number 
of sources, but the proximity to the Class I area and the potential 
combined visibility impacts from a group of sources. States have the 
discretion within the CAA, Regional Haze Rule, and BART Guidelines to 
set an appropriate contribution threshold considering the number of 
emissions sources affecting the Class I areas at issue and the 
magnitude of the sources' impacts.

G. Comments on EPA's Source-Specific SO2 BART Cost Analyses

    Comment: We received a large number of comments from the EGU owners 
covered under our proposal and environmental groups concerning various 
aspects of the SO2 BART cost analyses we performed for the 
coal-fired EGUs. These comments included both criticisms of and support 
for our basic approach, the tools we used, and various individual 
aspects of our cost analyses. We also received Confidential Business 
Information (CBI) comments from the owner of one of the EGUs covering 
the same areas.
    We also received comments from environmental groups stating that we 
should have required the gas-fired units that occasionally burn fuel 
oil to minimally switch to Ultra-Low-Sulfur Diesel (ULSD) in lieu of 
our proposed BART determination that these units be limited to 0.7% 
fuel oil by weight. These commenters argued that our estimate of the 
price per gallon for ULSD was too high and that in any case, the total 
annual cost to make the switch is very low. They also argue that 
requiring the Stryker and Graham units to switch to ultra-low-sulfur 
diesel would significantly improve visibility.
    Response: Due to the comments we received requesting a BART 
alternative in lieu of source-specific EGU BART determinations, we are 
finalizing a SO2 trading program as an alternative to 
source-by-source BART. As a consequence, we believe that comments 
concerning the SO2 BART cost analyses we performed on the 
coal-fired EGUs and these gas-fired units that occasionally burn fuel 
oil are no longer relevant. The trading program, by its nature, 
provides sources with flexibility in meeting the requirements. As a 
result, we expect compliance for sources to be extremely cost-
effective. The program addresses both BART eligible and non-BART 
eligible EGUs. The combination addresses 89% of the emissions (based on 
2016 annual emissions) that would have been addressed by CSAPR and, as 
a result, EGU emissions in Texas will be similar to emission levels 
anticipated in the CSAPR better than BART demonstration and will 
achieve greater reasonable progress than BART.

H. Comments on EPA's Modeling

1. Modeling Related to Screening out BART-eligible sources based on 
CALPUFF Modeling and Model Plant analysis
    Comment: We received comments stating that we used an outdated 
version of CALPUFF and CALMET in our CALPUFF analyses and there are 
more recent EPA approved versions of CALPUFF and CALMET. The commenter 
indicated that there are more recent non-regulatory versions of CALPUFF 
(such as version 6.4) that include a number of technological 
improvements that could have been used. The commenter also indicated we 
did not follow USDA Forest Service Guidance that recommend using 
Mesocscale Model Interface Program (MMIF) for generating met fields for 
CALPUFF.\71\ The commenter concluded that EPA's CALPUFF analysis was 
less reliable because of these issues.
---------------------------------------------------------------------------

    \71\ USDA Forest Service, Guidance on the Use of the Mesoscale 
Model Interface Program (MMIF) for Air Quality Related Values Long 
Range Transport Modeling Assessments (Aug. 2016).
---------------------------------------------------------------------------

    Response: For those BART-eligible EGUs that are not covered by the 
BART alternative for SO2, we are finalizing determinations 
that those EGUs are not subject-to-BART for NOX, 
SO2 and PM as proposed, based on the methodologies utilizing 
model plants and CALPUFF modeling as described in our proposed rule and 
BART Screening TSD. As mentioned in the BART screening TSD, we used 
versions (CALPUFF v5.8.4 and an existing CALMET data set that utilized 
CALMET v5.53a) that do not significantly differ from the current 
regulatory versions of CALPUFF (v5.8.5) and CALMET (v5.8.5). The 
current regulatory versions do include some additional bug fixes but 
the bugs that were fixed are not expected to significantly change the 
results for the modeling assessments we have done. The 2016 USDA Forest 
Service Guidance was not released until August of 2016 and no BART 
modeling was conducted by states and RPOs using MMIF. The USDA Forest 
Service Guidance is more germane for future SIP developments and any 
visibility analyses for other regulatory assessments in the future.
    In considering the comment that we should use a more recent version 
of CALPUFF (6.4) or an earlier version 6.112, we considered the 
regulatory status of CALPUFF for visibility analyses and what analyses 
are needed to utilize an updated CALPUFF modeling system. The 
requirements of 40 CFR 51.112 and 40 CFR part 51, Appendix W, Guideline 
on Air Quality Models (GAQM) and the BART Guidelines which refers to 
GAQM as the authority for using CALPUFF, provide the framework for 
determining the appropriate model platforms and versions and inputs to 
be used. Because of concern with CALPUFF's treatment of chemical 
transformations, which affect AQRVs, EPA has not approved the chemistry 
of CALPUFF's model as a ``preferred'' model. The use of the regulatory 
version is approved for increment and NAAQS analysis of primary 
pollutants only. Currently, CALPUFF Version 5.8, is subject to the 
requirements of GAQM 3.0(b) and as a screening model, GAQM 4. CALPUFF 
Versions 6.112 and 6.4 have not been approved by EPA for even this 
limited purpose. The versions of CALPUFF, version 6.112 or 6.4, that 
the commenter recommended could be used to provide modeling analyses of 
BART eligible sources that have not gone through a full regulatory 
review in accordance with 40 CFR part 51 Appendix W Section 3.2.2. 
Furthermore, the currently available information does not support the 
approval of these versions of the CALPUFF model for use in making BART 
determinations. In addition, if these versions of the model

[[Page 48347]]

were acceptable for use, EPA would have to reconsider whether using the 
98th percentile impact for determining impairment was appropriate. 
Therefore, EPA does not believe the use of CALPUFF version 6.112 or 6.4 
is appropriate for this rulemaking. We believe we have made the 
appropriate choice in using CALPUFF version 5.8. For further 
discussion, see our Modeling RTC and the response to comments in our 
previous New Mexico Final FIP in 2011.\72\
---------------------------------------------------------------------------

    \72\ 76 FR 52388, 52431-52434 (Aug. 22, 2011).
---------------------------------------------------------------------------

    Comment: We received a number of comments concerning the acceptable 
distances/range for which CALPUFF modeling results should be used for 
BART screening. A number of commenters indicated that EPA has 
repeatedly stated that 300 km should be the maximum distance for 
CALPUFF modeling results and even cited to some past actions (several 
FIPs--Arkansas, Oklahoma, Montana, and New Mexico) where EPA has 
indicated that 300 km was the general outer distance for CALPUFF. 
Commenters also raised past promulgation of CALPUFF in 2003 and IWAQM 
guidance/reports to support the claim that 300 km is the acceptable 
outer range of CALPUFF. TCEQ commented we should not use CALPUFF for 
distances beyond 400 km. Two commenters indicated that EPA had 
inappropriately reported CALPUFF results for distances of 412 km and 
436.1 km, well outside of 300 km. Another commenter indicated we 
included some model plants at distances greater than 400 km in our 
model plant screening analysis.
    Other commenters indicated that we should use the modeling results 
from CALPUFF for BART screening at ranges much greater than 400 km. 
They stated that CALPUFF over-predicts visibility impacts at distances 
greater than 300 km; therefore, CALPUFF is an acceptable and 
conservative tool for screening BART sources at large distances from 
Class I areas. We received comments from several different companies 
(NRG, LCRA, Coleto Creek, and Luminant) that provided contractor 
(AECOM) analysis with opinions on the acceptable range of CALPUFF. 
AECOM's report for LCRA included CALPUFF modeling results for 14 Class 
I areas with distances out to more than 1000 km and asserted that TCEQ 
and EPA had utilized CALPUFF previously in screening out sources from 
being subject to a full BART analysis in the 2009 Texas regional haze 
SIP submission, our 2014 proposal, and our 2015 final action. Some 
comments were supportive of using CALPUFF results at distances of 400-
1000 + km,\73\ while others opposed using CALPUFF beyond 300 km if the 
results did not screen a facility out of a full BART analysis.
---------------------------------------------------------------------------

    \73\ For example, see comment from Andrew Gray, Footnote 11, 
``For example, Texas used CALPUFF to perform BART modeling for Alcoa 
Inc, RN100221472 (nearest Class I area 490 km); Equistar Chemicals 
LP, RN 100542281 (nearest Class I area 517 km); ExxonMobil, 
RN102579307 and RN102450756 (nearest Class I areas 526 and 482 km, 
respectively); and Invista, RN104392626 and RN102663671 (nearest 
Class I areas 472 and 614 km, respectively). See February 25, 2009 
Texas Regional Haze Plan, Chapter 9 at pages 9-9 through 9-14, 
available at https://www.tceq.texas.gov/airquality/sip/bart/haze_sip.html. South Dakota used CALPUFF for Big Stone's BART 
determination, including its impact on multiple Class I areas 
further than 400 km away, including Isle Royale, which is more than 
600 km away. See 76 FR 76656. Nebraska relied on CALPUFF modeling to 
evaluate whether numerous power plants were subject to BART where 
the ``Class I areas [were] located at distances of 300 to 600 
kilometers or more from'' the sources. See Best Available Retrofit 
Technology Dispersion Modeling Protocol for Selected Nebraska 
Utilities, p. 3. EPA Docket ID No. EPA-R07-OAR-2012-0158-0008. EPA 
has approved reliance on these models.''
---------------------------------------------------------------------------

    A number of commenters also raised concerns with the accuracy of 
the CALPUFF model and several uncertainty issues related to the CALPUFF 
model and results from the model. We also received the comment that 
CALPUFF's regulatory status as a preferred model recently changed and 
that this change raises a question of whether CALPUFF should have been 
used for the Proposed Texas BART FIP.
    Response: As previously discussed and included in our record for 
our proposal we did use direct CALPUFF modeling results of facilities 
out to 432 km for some very large EGU facilities (very large emissions 
from tall stacks). We also used CALPUFF for model plants for screening 
of sources beyond 360 km to a Class I Area, but the actual distance to 
a Class I Area was 360 km or less for each of the model plants used for 
screening of sources. In our 2014 proposed action \74\ and the 2015 
final action \75\ on Texas regional haze we approved the use of CALPUFF 
to screen BART-eligible non-EGU sources at distances of 400 to 614 km 
for some sources. In those actions, we weighed the modeling results 
that were mostly well below 0.5 delta-dv with the potential uncertainty 
of CALPUFF results at these greater distances outside the typical range 
of CALPUFF in deciding how to use the results in screening of 
facilities. We disagree with the comment that it was inappropriate to 
rely on CALPUFF to screen BART-eligible EGU sources at ranges beyond 
400 km and that it would not be consistent with our past approval of 
the BART screening modeling included in the 2009 Texas Regional Haze 
SIP of non-EGU BART sources.\76\
---------------------------------------------------------------------------

    \74\ 79 FR 74818 (Dec. 16, 2014).
    \75\ 81 FR 296 (Jan. 5, 2016).
    \76\ We note that the Fifth Circuit Court of Appeals remanded 
the rule in its entirety. See Texas v. EPA, 829 F.3d 405 (5th Cir. 
2016).
---------------------------------------------------------------------------

    It has been asserted by the commenters that CALPUFF overestimates 
visibility impacts at greater distances (greater than 300/400 km) and 
therefore some commenters claimed that use of CALPUFF is conservative 
and acceptable for screening BART sources. We disagree with this 
comment. EPA has seen situations of both under-prediction and over-
prediction at these greater distances. EPA has indicated historically 
that use of CALPUFF was generally acceptable at 300 km and for larger 
emissions sources with elevated stacks. We and FLM representatives have 
also allowed or supported the use of CALPUFF results beyond 400 km in 
some cases other than the Texas actions as pointed out by 
commenters.\77\ EPA has a higher confidence level with results within 
300 km and when analysis of impacts at Class I areas within 300 km is 
sufficient to inform decisions on BART screening and BART 
determinations, we have often limited the use of CALPUFF results to 
within 300 km as there are fewer questions about the suitability of the 
results. However, that does not preclude the use of model results for 
sources beyond the 300 km range with some additional consideration of 
relevant issues such as stack height, size of emissions, etc. As one 
commenter pointed out, EPA and FLM representatives have utilized 
CALPUFF results in a number of different situations when the range was 
between 300-450 km. The model plants utilized in our model plant 
screening analysis were modeled at distances of 300-360 km from the 
Class I area. In our model plant analysis, we found that in some 
situations there was a difference in whether or not a source screened 
out based on the distance between the model plant and the Class I area. 
Some initial model plant runs were done at distances of 201-300 km from 
a Class I Area and yielded higher Q/D ratios than the same model plant 
evaluation with the same modeled visibility impact at 350-360 km (only 
20% more than 300 km).\78\ This difference and the lower Q/

[[Page 48348]]

D modeling for the model plant located at a greater distance from the 
Class I area indicated that using the model plant modeling at 300 km or 
less was overly conservative when we are evaluating facilities at 
distances of 360-600 km. Therefore, we chose the range that we thought 
was appropriate in the context of the distances of the sources being 
evaluated with that model plant. A distance of 300-360 km also fell 
within a range for which we have evaluated CALPUFF results a number of 
times and felt comfortable with using for large elevated point sources, 
and in most cases the comparison of Q/D ratios of the facility to model 
plant were not similar and the facility screened out with a significant 
safety margin.\79\
---------------------------------------------------------------------------

    \77\ See comments from Andrew Gray, n 11 (which is listed in its 
entirety earlier in this document) citing examples of modeled 
impacts from sources at distances greater than 300 km in Texas, 
Nebraska, and South Dakota.
    \78\ We did iterative modeling with the model plants to model 
emissions at a level that would yield a value just under the 
screening level of 0.5 del-dv, typically a value around 0.49 del-dv. 
In these model distance sensitivity runs when we used the same 
number of sources and stack parameters but varied the emissions to 
yield 98th percentile max impacts of approximately 0.49 del-dv. We 
found that model plants at 350-360 km range had lower resulting Q/Ds 
than the same model plants at 300 km, thus sources more easily 
screened out using model plants at 350-360 km.
    \79\ See our Screening of BART TSD.pdf (EPA-R06-OAR-2016-0611-
0005.pdf); most sources had Q/D values on the order 30-50% of the 
critical Q/D from the model plant.
---------------------------------------------------------------------------

    We note that we also had direct CALPUFF screening of some coal-
fired plants out to 412 km with NOX, SO2, and PM 
in our proposal. The impacts of these facilities in the proposal 
screening modeling were typically very large and well above the 0.5 
del-dv, so even considering that there are more uncertainties at 
distances greater than 300 km the impacts were large enough that it was 
clear that these facilities would have impacts above the threshold 
based on impacts from the 3 pollutants.\80\ The BART Guidelines 
indicate other models may be used on a case-by-case basis. CAMx is a 
photochemical modeling platform with a full chemistry mechanism that is 
also suited for assessing visibility impacts from single facilities/
sources at longer distances where CALPUFF is more uncertain (such as 
distances much greater than 300 km). Texas and EPA have previously 
approved the use of CAMx for determining source impacts for BART 
screening purposes, and we also decided to supplement our CALPUFF 
analysis for some large coal-fired sources with CAMx modeling. Our CAMx 
modeling of these coal-fired sources in the proposal further supported 
the magnitude of the assessed impacts were well above 0.5 del-dv 
(NOX, SO2, and PM) for these facilities that fell 
into the greater than 300 km range. We note that this screening 
modeling for these coal-fired facilities directly modeled with CALPUFF 
beyond 300 km and also modeled with CAMx is not pertinent to this final 
action since these coal-fired sources are participating in the 
SO2 trading program and we are not finalizing subject to 
BART determinations for these sources.
---------------------------------------------------------------------------

    \80\ Id. For example, Big Brown was 404 km from WIMO and the 
maximum impacts with NOX, SO2, and PM was 
4.265 del-dv (over 8 times the 0.5 del-dv threshold).
---------------------------------------------------------------------------

    Due to the comments we received requesting a BART alternative in 
lieu of source-specific EGU BART determinations, we are finalizing a 
SO2 trading program as an alternative to source-by-source 
BART. With the NOX BART coverage from CSAPR, all the BART-
eligible sources participating in the SO2 trading program 
only have PM emissions that have to be assessed for screening and 
potential subject to PM BART determinations. As discussed elsewhere, we 
are approving the determination in the 2009 Texas Regional Haze SIP 
that PM BART emission limits are not required for any Texas EGUs.
    We disagree with the commenter's characterization of uncertainties 
raised that invalidate the CALPUFF modeling results. We respond to 
comments raised briefly here and in our Modeling RTC. We have also 
responded to a number of these issues in our past FIP actions.\81\
---------------------------------------------------------------------------

    \81\ For example, see Arkansas FIP, 81 FR 66332, 66355- 66413 
(Sept. 27, 2016) and the Response to Comments, Docket No. EPA-R06-
OAR-2015-0189.
---------------------------------------------------------------------------

    In response to the court's 2002 finding in American Corn Growers 
Ass'n. v. EPA \82\ that we failed to provide an option for BART 
evaluations on an individual source-by-source basis, we had to identify 
the appropriate analytical tools to estimate single-source visibility 
impacts. The 2005 BART Guidelines recommended the use of CALPUFF for 
assessing visibility (secondary chemical impacts) but noted that 
CALPUFF's chemistry was fairly simple and the model has not been fully 
tested for secondary formation and thus is not fully approved for 
secondary-formed particulate. In the preamble of the final 2005 BART 
guidelines, we identify CALPUFF as the best available tool for 
analyzing the visibility effects of individual sources, but we also 
recognized that it is a model that includes certain assumptions and 
uncertainties.\83\ Evaluation of CALPUFF model performance for 
dispersion (no chemistry) to case studies using inert tracers has been 
performed.\84\ It was concluded from these case studies the CALPUFF 
dispersion model had performed in a reasonable manner, and had no 
apparent bias toward over or under prediction, so long as the transport 
distance was limited to less than 300km.85 86 As discussed 
above EPA has indicated historically that use of CALPUFF was generally 
acceptable at 300 km and for larger emissions sources with elevated 
stacks we and FLM representatives have also allowed or supported the 
use of CALPUFF results beyond 400 km in some cases.
---------------------------------------------------------------------------

    \82\ Am. Corn Growers Ass'n v. EPA, 291 F.3d 1 (D.C. Cir. 2002).
    \83\ 70 FR 39104, 39121 (July 6, 2005).
    \84\ ``[M]ore recent series of comparisons has been completed 
for a new model, CALPUFF (Section A.3). Several of these field 
studies involved three-to-four hour releases of tracer gas sampled 
along arcs of receptors at distances greater than 50km downwind. In 
some cases, short-term concentration sampling was available, such 
that the transport of the tracer puff as it passed the arc could be 
monitored. Differences on the order of 10 to 20 degrees were found 
between the location of the simulated and observed center of mass of 
the tracer puff. Most of the simulated centerline concentration 
maxima along each arc were within a factor of two of those 
observed.'' 68 FR 18440, 18458 (April 15, 2003), 2003 Revisions to 
Appendix W, Guideline on Air Quality Models.
    \85\ Interagency Workgroup on Air Quality Modeling (IWAQM) Phase 
2 Summary Report and Recommendations for Modeling Long-Range 
Transport Impacts. Publication No. EPA-454/R-98-019. Office of Air 
Quality Planning & Standards, Research Triangle Park, NC. 1998.
    \86\ 68 FR 18440, 18458 (Apr. 15, 2003). (2003 Revisions to 
Appendix W, Guideline on Air Quality Models).
---------------------------------------------------------------------------

    In promulgating the 2005 BART guidelines, we responded to comments 
concerning the limitations and appropriateness of using CALPUFF.\87\ In 
the 2005 BART Guidelines the selection of the 98th percentile value 
rather than the maximum value was made to address concerns that the 
maximum may be overly conservative and address concerns with CALPUFF's 
limitations.\88\
---------------------------------------------------------------------------

    \87\ 70 FR 39104, 39121 (July 6, 2005).
    \88\ Id., at 39121. ``Most important, the simplified chemistry 
in the model tends to magnify the actual visibility effects of that 
source. Because of these features and the uncertainties associated 
with the model, we believe it is appropriate to use the 98th 
percentile--a more robust approach that does not give undue weight 
to the extreme tail of the distribution.''
---------------------------------------------------------------------------

    In the 2003 revisions to the Guideline on Air Quality Models, 
CALPUFF was added as an approved model for long range transport of 
primary pollutants. At that time, we considered approving CALPUFF for 
assessing the impact from secondary pollutants but determined that it 
was not appropriate in the context of a PSD review because the impact 
results could be used as the sole determinant in denying a permit.\89\ 
However, the use of CALPUFF in the context of the Regional Haze rule 
provides results that can be used in a relative manner and are only one 
factor in the overall BART determination. We determined the visibility 
results from CALPUFF could be used as one of the

[[Page 48349]]

five factors in a BART evaluation and the impacts should be utilized 
somewhat in a relative sense because CALPUFF was not explicitly 
approved for full chemistry calculations.\90\ We note that since the 
BART Guidelines were finalized in 2005 there has been more modeling 
with CALPUFF for BART and PSD primary impact purposes and the general 
community has utilized CALPUFF in the 300-450 km range many times (a 
number of examples were pointed out by a commenter) and EPA and FLM 
representatives have weighed the additional potential uncertainties 
with the magnitude of the modeled impacts in comparison to screening/
impact thresholds on a case-by-case basis in approving the use of 
CALPUFF results at these extended ranges.
---------------------------------------------------------------------------

    \89\ 68 FR 18440 (Apr. 15, 2003).
    \90\ 70 FR 39104, 39123-24 (July 6, 2005). ``We understand the 
concerns of commenters that the chemistry modules of the CALPUFF 
model are less advanced than some of the more recent atmospheric 
chemistry simulations. To date, no other modeling applications with 
updated chemistry have been approved by EPA to estimate single 
source pollutant concentrations from long range transport,'' and in 
discussion of using other models with more advanced chemistry, ``A 
discussion of the use of alternative models is given in the 
Guideline on Air Quality in appendix W, section 3.2.''
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    We disagree with the commenter's general statement that there is an 
acknowledged over-prediction of the CALPUFF model or an acknowledged 
inaccuracy at low impact levels, and that the actual visibility impacts 
from the BART sources are lower. The CALPUFF model can both under-
predict and over-predict visibility impacts when compared to predicted 
visibility impacts from photochemical grid models. See our Modeling RTC 
for more detailed response.\91\
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    \91\ For example, see Comparison of Single-Source Air Quality 
Assessment Techniques for Ozone, PM2.5, other Criteria 
Pollutants and AQRVs, ENVIRON, September 2012; and Anderson, B., K. 
Baker, R. Morris, C. Emery, A. Hawkins, E. Snyder ``Proof-of-Concept 
Evaluation of Use of Photochemical Grid Model Source Apportionment 
Techniques for Prevention of Significant Deterioration of Air 
Quality Analysis Requirements'' Presentation for Community Modeling 
and Analysis System (CMAS) 2010. Annual Conference, (October 11-15, 
2010) can be found at http://www.cmascenter.org/conference/2010/agenda.cfm.
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    CALPUFF visibility modeling, performed using the regulatory CALPUFF 
model version and following all applicable guidance and EPA/FLM 
recommendations, provides a consistent tool for comparison with the 0.5 
dv subject-to-BART threshold. The CALPUFF model, as recommended in the 
BART guidelines, has been used for almost every single-source BART 
analysis in the country and has provided a consistent basis for 
assessing the degree of visibility benefit anticipated from controls as 
one of the factors under consideration in a five factor BART analysis. 
Since almost all states have completed their BART analyses and have 
either approved SIPs or FIPs in place, there is a large set of 
available data on modeled visibility impacts and benefits for 
comparison with, and this data illuminates how those model results were 
utilized to screen out sources and as part of the five-factor analysis 
in making BART control determinations.
    The regulatory status of CALPUFF was changed in the recent 
revisions to the Guideline on Air Quality Models (GAQM) as far as the 
classification of CALPUFF as a preferred model for transport of 
pollutants for primary impacts, not impacts based on chemistry. The 
recent GAQM changes do not alter the original status of CALPUFF as 
discussed and approved for use in the 2005 BART guidelines. The GAQM 
changes indicated that the change in model preferred status had no 
impact on the use of CALPUFF for BART.\92\
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    \92\ 82 FR 5182, 5196 (Jan. 17, 2017). ``As detailed in the 
preamble of the proposed rule, it is important to note that the 
EPA's final action to remove CALPUFF as a preferred appendix A model 
in this Guideline does not affect its use under the FLM's guidance 
regarding AQRV assessments (FLAG 2010) nor any previous use of this 
model as part of regulatory modeling applications required under the 
CAA. Similarly, this final action does not affect the EPA's 
recommendation [See 70 FR 39104, 39122-23 (July 6, 2005)] that 
states use CALPUFF to determine the applicability and level of best 
available retrofit technology in regional haze implementation 
plans.''
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    Comment: We received comments stating that we used out-of-date and 
unrealistic emissions for some units, which artificially inflate the 
actual visibility impacts. The commenters state that the data used is 
unrealistic due to the 2000-2004 time period selected and also due to 
reporting errors to CAMD. Had more recent emissions been utilized in 
the screening analysis, these units would have been determined to not 
be subject to BART by the various screening methods applied by EPA. 
Commenters also state that a common sense reading of the Clean Air Act, 
BART regulations, and BART Guidelines indicate that the ``subject to 
BART'' analysis should be based on the most recently available emission 
data, which EPA's subject-to-BART analysis does not use. Furthermore, 
the BART Guidelines do not specifically mandate the use of the 2000-
2004 emission rates. Although the BART Guidelines recommend that for 
the purpose of screening BART-eligible sources, ``States use the 24-
hour average actual emission rate from the highest emitting day of the 
metrological period modeled,'' the BART Guidelines do not state that 
the time period analyzed must be restricted to 2000-2004. In fact, in 
the context of analyzing cost effective control options, the BART 
Guidelines recommend the use of emissions that are a ``realistic 
depiction of anticipated annual emissions for the source.'' \4\ And 
``[i]n the absence of enforceable limitations, you calculate baseline 
emissions based upon continuation of past practice.'' \5\ EPA must also 
use realistic emissions when determining whether a unit causes or 
contributes to visibility impairment for BART. The use of 15-year old 
NOX and SO2 data for purposes of evaluating this 
threshold question is illogical and arbitrary and capricious.
    We also received comments that doubling the annual emissions of PM 
was conservative and we should have potentially used maximum heat input 
to estimate PM emission rates for subject to BART modeling. We also 
received comments that the values we modeled based on CEM data may have 
included emission rates during upset conditions, thus the emission 
rates used may be larger than normal operations.
    Response: We note that, as discussed elsewhere, we are not making a 
subject-to-BART determination for those sources covered by the 
SO2 trading program. In our final rule, the relevant BART 
requirement for these participating units will be encompassed by BART 
alternatives for NOX and SO2 such that we do not 
deem it necessary to finalize subject-to-BART findings for these EGUs. 
In addition, we are approving the determination in the 2009 TX RH SIP 
that none of these sources are subject to BART for PM. Therefore, 
comments concerning the emissions utilized in our subject to BART 
modeling for the sources participating in the SO2 trading 
program are no longer relevant. For those BART-eligible EGUs that are 
not covered by the BART alternative for SO2, we are 
finalizing determinations that those EGUs are not subject-to-BART for 
NOX, SO2 and PM as proposed, based on the 
methodologies utilizing model plants and CALPUFF modeling as described 
in our proposed rule and BART Screening TSD.
    We disagree with the commenter and believe using emissions from the 
2000-2004 period is appropriate for determining if a source is subject 
to BART. Our analysis for facilities followed the BART Guidelines and 
was consistent with the BART analyses done for all BART-eligible 
sources. The BART Guidelines recommend that for the

[[Page 48350]]

purpose of screening BART-eligible sources, ``States use the 24-hour 
average actual emission rate from the highest emitting day of the 
metrological period modeled'' unless this rate reflects periods start-
up, shutdown, or malfunction. The emissions estimates used in the 
models are intended to reflect steady-state operating conditions during 
periods of high capacity utilization. Consistent with this guidance, we 
utilized the 24-hr maximum emission rate from the 2000-2004 baseline 
period and modeled using 2001-2003 meteorological data. We based our 
analysis on the CEM data from the baseline period 2000-2004 and removed 
what looked like questionably high values that did not occur often as 
they were potentially upset values. As discussed elsewhere we did 
review sources to determine if they installed controls during the 
baseline period and when that occurred we only looked at baseline 
emission data post controls. We received general comments that the 
values we used from CEM data might include upset values, but did not 
receive comments that indicated the values used were specifically upset 
values during the baseline period and should not be used. Facilities 
did not give us specific information to justify that the emission rates 
we used were not representative maximum 24-hour emission rates during 
the 2000-2004 period, so EPA considers the emission rates used were 
acceptable for the BART screening process.
    We are not aware of any newly installed controls or limitations on 
emissions that have been put in place between the 2000-2004 baseline 
period and now for any of the BART-eligible sources not participating 
in the SO2 trading program that would affect the potential 
visibility impact from the source. Furthermore, because all these 
sources were shown to have visibility impacts less than the 0.5 dv 
threshold using the maximum 24-hr actual emissions during the 2000-
2004, modeling of lower emissions due to any new controls or emissions 
limits would also result in the same determination. We were also not 
provided any specific information where additional emission reductions/
controls had been installed and resulted in a short-term (24-hour) 
maximum emission rate significantly less than modeled at any of these 
units.
    The overall concern of the commenters was that the emissions used 
in the modeling resulted in some facilities being subject to a full 
BART analysis, but, as discussed elsewhere, we are not finalizing 
subject to BART determinations for the sources participating in the 
SO2 trading program. For the sources not participating in 
the trading program, they have been screened out with our baseline 
emissions modeling, so underlying concerns about emissions being high/
non-representative would not result in any differences to the sources 
being screened out from a full BART analysis.
    Comment: We received comments that stated that the proposed PM BART 
demonstration by Texas only considered PM emissions because 
SO2 and NOX emissions were to be controlled 
through an alternative BART program, CAIR. Following the same type of 
approach, EPA in this Proposed Rule finds that CSAPR for ozone season 
NOX is better than BART. However, for the screen modeling 
used in the development of this Proposed Rule, instead of setting the 
NOX emission rate consistent with CSAPR, EPA uses the 
maximum 24-hour NOX emission rates from the 2000-2004 time 
period. EPA ignores the continued application of CSAPR ozone season 
budgets that apply to EGUs in Texas. This methodology is inconsistent 
with past practices and overestimates cumulative conditions and 
facility impacts. Commenters also state that because NOX is 
to be controlled by CSAPR, NOX related haze impacts should 
not be considered in the screening analysis.
    Response: As discussed in our response to another comment, the 
emission rates used in the modeling should reflect maximum 24-hour 
emission rates from the baseline period. CSAPR for ozone season 
NOX is a seasonal NOX budget but does not 
effectively limit short-term emission rates such that a newer maximum 
24-hour emission rate can be determined. Therefore, even if it were 
appropriate to consider any potential reductions due to CSAPR, it is 
not possible to accurately model any reductions/limits due to CSAPR on 
a short term basis. Furthermore, emissions from a unit can vary greatly 
over time as the CSAPR program allows sources to meet emission budgets 
in a given year by using banked allowances from previous years or by 
purchasing allowances from other sources within or outside of the State 
allowing emissions from the source to exceed their annual allocation 
level. We also note that we were not provided specific short-term 
emission rate limits from commenters that were based on the 
installation of new controls or other reductions that were permanent 
reductions to short-term emission rates. Our proposal did assess if 
emission controls were installed during the base period and we utilized 
the maximum short-term emission rate from the base period after the 
controls were installed where applicable. Regardless of this issue, the 
underlying concern of the commenters was whether their facility 
screened out of being subject to a full BART analysis. With CSAPR 
coverage for NOX and the SO2 intrastate trading 
program coverage for BART for all BART-eligible coal-fired EGUs, and 
several BART-eligible gas-fired and gas/fuel oil-fired EGUs, all the 
BART eligible units screen out of a full BART analysis for the 
pollutants not covered by trading programs, thus the chief concern that 
the modeling based on 2000-2004 maximum emissions and the inclusion of 
NOX contributed to a determination that the source was 
subject-to-BART, is no longer relevant.
    Concerning the inclusion of NOX emissions in the 
screening analysis, EPA's position is that the modeling must include 
both pollutants (NOX and SO2) since they both 
compete for ammonia. If we modeled only SO2, all of it would 
convert to ammonia sulfate (based on ammonia availability) and both 
baseline screening impacts for SO2 and visibility benefits 
from any control assessments would also be overestimated. The chemical 
interaction between pollutants and background species can lead to 
situations where the reduction of emissions of a pollutant can actually 
lead to an increase or inaccurate assessment of the visibility 
impairment, if both NOX and SO2 are not included 
in CALPUFF modeling. Therefore, to fully assess the visibility benefit 
anticipated from the use of controls, all pollutants should be modeled 
together.
    BART screening modeling would also include the PM emissions. BART 
screening is meant to be a conservative and inclusive test. We have 
always considered combined NOX, SO2, and PM 
impacts even if the facility had NOX coverage or stringent 
NOX controls already installed. The BART guidelines state 
``You must look at SO2, NOX, and direct 
particulate matter (PM) emissions in determining whether sources cause 
or contribute to visibility impairment'' unless emissions of these 
pollutants from the source are less than de minimis.\93\ The BART 
Guidelines then provide three modeling options to determine which 
sources and pollutants need to be subject to BART: \94\ (1) Dispersion 
modeling to ``determine an individual source's impact on visibility as 
a result of its emissions of SO2, NOX and direct 
PM emissions''; (2) model plants to exempt individual sources with 
common characteristics as

[[Page 48351]]

described in our BART Screening TSD; and (3) cumulative modeling on a 
pollutant by pollutant basis or for all visibility-impairing pollutants 
to show that no source in the State is subject to BART. The BART 
guidelines are clear that individual source modeling should evaluate 
impacts from NOX, SO2 and PM in determining if a 
source is subject to BART and the pollutant-specific analyses are 
directed as an option to screen out the impacts of all BART sources in 
the State for a specific pollutant such as VOC or PM (in the case of 
EGUs covered by trading programs for NOX and 
SO2). The BART Guidelines also state that in assessing the 
visibility benefits of controls ``modeling should be conducted for 
SO2, NOX, and direct PM emissions 
(PM2.5 and/or PM10).'' \95\ In many cases a state 
may have only a handful of sources and impacts from more linear species 
(VOC or PM) may be so small that they make up a very small contribution 
(on the order of a 0-2% of the NOX and SO2 
impacts) to the visibility impacts at a Class I Area, therefore it may 
be acceptable to screen out pollutants that have a minimal impact. This 
is not the situation with NOX, SO2 and PM 
emissions from EGUs in Texas where some EGUs' PM modeled impacts were 
greater than 0.25 del-dv. EPA's 2006 memorandum on this is clear that 
you have to model both (NOX and SO2) because of 
technical and policy concerns, and also reiterated that pollutant 
specific analysis was for the limited situation of addressing PM when a 
large group of sources had BART coverage for the non-linear reacting 
pollutants (NOX and SO2) through a BART 
alternative.\96\ The BART Guidelines specifically indicate that 
NOX, SO2 and PM should be modeled together when 
modeling BART eligible units at one facility.\97\ This is similar to 
the BART eligibility test contemplated in the BART guidelines where if 
the emissions from the identified units at source exceed a potential to 
emit of 250 tons per year for any single visibility-impairing 
pollutant, the source is considered BART-eligible and may be subject to 
a BART review for all visibility impairing pollutants.\98\
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    \93\ 40 CFR part 51 Appendix Y, Section III.A.2.
    \94\ 40 CFR part 51 Appendix Y, Section III.A.3.
    \95\ 40 CFR part 51 Appendix Y, Section IV.D.5 (emphasis added).
    \96\ EPA Memorandum from Joseph W. Paisie OAQPS to Kay Prince 
EPA Region 4, ``Regional Haze Regulations and Guidelines for Best 
Available Retrofit Technology (BART) Determinations'', July 19, 
2006.
    \97\ 40 CFR part 51 Appendix Y, Section III.A.3.
    \98\ See first example in 40 CFR part 51 Appendix Y, Section 
II.A.4.
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    As previously discussed the commenter's primary concern with regard 
to the inclusion of NOX was that this may have contributed 
to facilities not screening out from a full BART analysis. Because, in 
the final rule, trading programs constitute BART alternatives for 
NOX and SO2, the facilities that were proposed as 
subject to BART now screen out for the pollutants not covered by a 
trading program.
    Comment: We received a comment from TCEQ that EPA should screen out 
the Newman facility based on CALPUFF modeling or use CAMx to 
appropriately screen Newman and determine its visibility impacts. We 
also received comments from the owner of Newman, EPEC, stating that the 
PM and SO2 BART limits for those gas-fired units that 
occasionally burn fuel oil, applicable to Newman 2 and 3, of a fuel oil 
sulfur content of 0.7% is acceptable, and that Newman 4 is restricted 
to burn only natural gas. EPEC has maintained on-site diesel fuel oil 
with a lesser sulfur content as emergency backup fuel for testing for 
preparedness purposes, and in the unlikely scenario of a natural gas 
curtailment event or other situation that may compromise the steady 
flow of the primary pipeline quality natural gas fuel supply. EPEC also 
notes that these units are only permitted to operate 876 hours per 
year.
    Response: Based upon the comments we received requesting a BART 
alternative in lieu of source-specific EGU BART determinations, we are 
finalizing a SO2 trading program as an alternative to 
source-by-source BART. We are not finalizing subject-to-BART 
determinations for BART eligible sources covered by the BART 
alternative for SO2 and NOX. In our final rule, 
the relevant BART requirement for these participating units, including 
the BART-eligible Newman units, will be satisfied by BART alternatives 
for NOX and SO2 such that we do not deem it 
necessary to finalize subject-to-BART findings for these EGUs. In 
addition, we are approving a determination that none of these sources 
are subject to BART for PM. Therefore, we do not find it necessary to 
respond to the merits of comments concerning screening modeling for 
this source, because the outcome of that modeling is not dispositive to 
the source's inclusion in the BART alternative or its allowance 
thereunder. See discussion above for assessment of previous CAMx PM 
screening (Texas 2009 RH SIP) where the Newman source was included in 
Group 2 with a number of other sources and screened out from being 
subject to BART for PM.
    Comment: We received comments that some of the stack parameters 
were incorrect at facilities in our CALPUFF and CAMx modeling. New 
stack height, diameter, velocity values were given for some units.
    Response: We reviewed the information provided and note that some 
facilities gave contradicting data within their comments. For those 
facilities for which we are relying on modeling to determine they are 
not subject to BART, we have evaluated potential changes where we may 
have had an inaccurate number in our proposal modeling. We have 
determined that the impacts from changes to stack parameters would be 
minimal and not change our current assessment and decisions.
2. Modeling Related to Whether Coal-Fired Sources Are Subject to BART
    Comment: We received comments on the CALPUFF and CAMx modeling 
utilized to determine which coal-fired EGUs are subject to BART. These 
included comments concerning emissions inputs, the metrics used, the 
post-processing methodology, and the model performance.
    Response: Due to the comments we received requesting a BART 
alternative in lieu of source-specific EGU BART determinations, we are 
finalizing a SO2 trading program as an alternative to 
source-by-source BART. This trading program includes participation of 
all BART-eligible coal-fired EGUs such that we do not deem it necessary 
to finalize subject-to-BART findings for these EGUs except for PM 
emissions. As a consequence, we believe that it is not necessary to 
respond to the merits of comments concerning modeled baseline 
visibility impacts using CALPUFF or CAMx and determination of which 
coal-fired sources are subject to BART. In this final action we are 
approving the determination in the Texas RH SIP that all EGU sources 
screen out of BART for PM. We are also finalizing the determination 
that all BART-eligible EGUs not participating in the trading program 
screen out of BART for NOX, SO2 and PM based on 
upon CALPUFF modeling (direct source and Model Plant). We address all 
comments pertinent to the use of CALPUFF (direct source and Model 
Plant) for BART screening for these sources in other responses to 
comments. We note that the comments expressing concerns about CALPUFF 
modeling were associated with facilities that did not screen out from a 
full subject to BART analysis. Since we have determined that no EGU 
sources are now subject to BART and a source-specific BART control 
analysis for pollutants not covered by a BART alternative, the

[[Page 48352]]

specific concerns raised by commenters about being determined to be 
subject to a BART control analysis because of emissions inputs used, 
metrics used, etc. are not relevant to this final action. See the 
Modeling RTC document for the entirety of the modeling comments and our 
responses.
    Comment: The 0.5 dv threshold used by EPA in its proposed 
determinations based on CAMx modeling of what sources are subject to 
BART is too low, given the uncertainties in the CAMx modeling methods 
used to quantify the visibility impacts of sources.
    Response: In our proposed action, we utilized CAMx modeling to 
evaluate visibility impacts from BART-eligible sources that include 
BART eligible coal-fired EGUs. Due to the comments we received 
requesting a BART alternative in lieu of source-specific EGU BART 
determinations, we are finalizing a SO2 trading program as 
an alternative to source-by-source BART. This trading program includes 
participation of all BART-eligible coal-fired EGUs such that we do not 
deem it necessary to finalize subject-to-BART findings for these 
sources except for PM emissions.
    In this final action the only CAMx modeling we are relying upon is 
CAMx modeling performed for TCEQ in screening of EGU emissions of PM 
that was included in TCEQ's 2009 SIP. Our approval of the CAMx PM 
screening of EGUs is based on the original CENRAP modeling datasets, 
agreed modeling protocols and Texas' use of the 0.5 del-dv to screen 
sources as agreed upon by TCEQ in 2007. Any potential concerns with 
CAMx bias were considered in 2007 and TCEQ, EPA and FLM representatives 
agreed to the approach of using 0.5 del-dv to screen groups of sources 
using CAMx modeling. We note that the BART guidelines specifically 
state that ``as a general matter, any threshold that you use for 
determining whether a source ``contributes'' to visibility impairment 
should not be higher than 0.5 deciviews.'' \99\ Furthermore, our action 
on the PM BART determinations in the 2009 Texas SIP submittal would not 
be any different had we used a higher threshold since all sources 
screened out based on the use of the 0.5 dv threshold. Since we are not 
relying on the CAMx modeling we had performed for our proposal, any 
comments concerning the use of this modeling are not pertinent to this 
final action and it is not necessary to respond to the merits of those 
comments.
---------------------------------------------------------------------------

    \99\ 40 CFR part 51 Appendix Y, Section III.A.1.
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3. Modeling Related to Visibility Benefit of Sources Subject-to-BART
    Comment: We received comments on the CALPUFF and CAMx modeling 
utilized to estimate the visibility benefits of controls. These 
included comments concerning the emissions inputs, the metrics used, 
the post-processing methodology, and the model performance.
    Response: Based on the comments we received requesting a BART 
alternative in lieu of source-specific EGU BART determinations, we are 
finalizing a SO2 trading program as an alternative to 
source-by-source BART. This trading program includes participation of 
all BART-eligible coal-fired EGUs and a number of BART-eligible gas or 
gas/fuel oil-fired EGUs. It also includes a number of non-BART eligible 
EGUs. The combination of the source coverage for this program, the 
total allocations for EGUs covered by the program, and recent and 
foreseeable emissions from EGUs not covered by the program will result 
in future EGU emissions in Texas that are similar to the SO2 
emission levels forecast in the 2012 better-than-BART demonstration for 
Texas EGU emissions assuming CSAPR participation. We are not finalizing 
our evaluation of whether individual sources are subject to BART. As a 
consequence, we believe that it is not necessary to respond to the 
merits of comments concerning source-specific visibility benefits of 
controls on these units, because we are not finalizing requirements 
based on those controls.

I. Comments on Affordability and Grid Reliability

    Comment: We received comments from the State, EGU owners covered 
under our proposal and environmental groups concerning whether our 
proposal would cause EGUs to retire and thus cause grid reliability 
issues. These comments included both criticisms of and support for our 
proposed position. Texas, in particular, stated that recent ERCOT 
studies have raised concerns that several units in Texas will no longer 
be economically viable if required to install capital intensive 
controls. They also indicated that EPA's IPM modeling supports this 
conclusion. Texas believed that if units shutdown with little notice it 
could cause reliability concerns.
    Response: EPA takes very seriously concerns about grid reliability. 
We are finalizing a SO2 trading program as an alternative to 
source-by-source BART. We believe the program we have designed will 
help address reliability concerns because it does not require 
installation of capital intensive controls and will provide much more 
flexibility to sources than the source by source compliance we 
proposed. In fact, aggregate emissions of the covered sources in 2016 
were below the level called for by the trading program. In addition, 
the supplemental allowance pool is expected to provide additional 
flexibility to allow sources to run, if necessary, in an emergency. We 
believe that it is not necessary to respond on the merits to specific 
comments concerning the impacts to grid reliability related to the 
requirements of the proposed source-specific controls, because we are 
not finalizing those requirements.

V. SO[bdi2] Trading Program and Its Implications for Interstate 
Visibility Transport, EGU BART, and Reasonable Progress

    The Regional Haze Rule provides each state with the flexibility to 
adopt an allowance trading program or other alternative measure instead 
of requiring source-specific BART controls, so long as the alternative 
measure is demonstrated to achieve greater reasonable progress than 
BART. As discussed in Section III.A.3 above, based principally on 
comments submitted by the State of Texas during the comment period 
urging us to consider as a BART alternative the concept of system-wide 
emission caps using CSAPR allocations as part of an intrastate trading 
program,\100\ we are acknowledging the State's preference and 
exercising our authority to promulgate a BART alternative for 
SO2 for certain Texas EGUs. The combination of the source 
coverage for this program, the total allocations for EGUs covered by 
the program, and recent and foreseeable emissions from EGUs not covered 
by the program will result in future EGU emissions in Texas that are 
similar to what was forecast in the 2012 better than BART demonstration 
for Texas EGU emissions assuming CSAPR participation.
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    \100\ See Docket Item No. EPA-R06-OAR-2016-0611-0070, p. 3.
---------------------------------------------------------------------------

A. Background on the CSAPR as an Alternative to BART Concept

    In 2012, the EPA amended the Regional Haze Rule to provide that 
participation by a state's EGUs in a CSAPR trading program for a given 
pollutant--qualifies as a BART alternative for those EGUs for that 
pollutant.\101\ In promulgating this

[[Page 48353]]

CSAPR-better-than-BART rule (also referred to as ``Transport Rule as a 
BART Alternative''), the EPA relied on an analytic demonstration based 
on an air quality modeling study \102\ showing that CSAPR 
implementation meets the Regional Haze Rule's criteria for a 
demonstration of greater reasonable progress than BART. In the air 
quality modeling study conducted for the 2012 analytic demonstration, 
the EPA projected visibility conditions in affected Class I areas \103\ 
based on 2014 emissions projections for two control scenarios and on 
the 2014 base case emissions projections.\104\ One control scenario 
represents ``Nationwide BART'' and the other represents ``CSAPR + BART-
elsewhere.'' In the base case, neither BART controls nor the EGU 
SO2 and NOX emissions reductions attributable to 
CSAPR were reflected. To project emissions under CSAPR, the EPA assumed 
that the geographic scope and state emissions budgets for CSAPR would 
be implemented as finalized and amended in 2011 and 2012.\105\ The 
results of that analytic demonstration based on this air quality 
modeling passed the two-pronged test set forth at 40 CFR 51.308(e)(3). 
The first prong ensures that the alternative program will not cause a 
decline in visibility at any affected Class I area. The second prong 
ensures that the alternative program results in improvements in average 
visibility across all affected Class I areas as compared to adopting 
source-specific BART. Together, these tests ensure that the alternative 
program provides for greater visibility improvement than would source-
specific BART.
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    \101\ 40 CFR 51.308(e)(4); see also generally 77 FR 33641 (June 
7, 2012). Legal challenges to the CSAPR-better-than-BART rule from 
conservation groups and other petitioners are pending. Utility Air 
Regulatory Group v. EPA, No. 12-1342 (D.C. Cir. filed August 6, 
2012).
    \102\ See Technical Support Document for Demonstration of the 
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011-
0729-0014 (December 2011) (2011 CSAPR/BART Technical Support 
Document), and memo entitled ``Sensitivity Analysis Accounting for 
Increases in Texas and Georgia Transport Rule State Emissions 
Budgets,'' Docket ID No. EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), 
both available in the docket for this action.
    \103\ The EPA identified two possible sets of ``affected Class I 
areas'' to consider for purposes of the study and found that 
implementation of CSAPR met the criteria for a BART alternative 
whichever set was considered. See 77 FR 33641, 33650 (June 7, 2012).
    \104\ For additional detail on the 2014 base case, see the CSAPR 
Final Rule Technical Support Document, available in the docket for 
this action.
    \105\ CSAPR was amended three times in 2011 and 2012 to add five 
states to the seasonal NOX program and to increase 
certain state budgets. 76 FR 80760 (Dec. 27, 2011); 77 FR 10324 
(Feb. 21, 2012); 77 FR 34830 (June 12, 2012). The CSAPR-better-than-
BART final rule reflected consideration of these changes to CSAPR.
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    For purposes of the 2012 analytic demonstration that CSAPR as 
finalized and amended in 2011 and 2012 provides for greater reasonable 
progress than BART, the analysis included Texas EGUs as subject to 
CSAPR for SO2 and annual NOX (as well as ozone-
season NOX). CSAPR's emissions limitations are defined in 
terms of emissions ``budgets'' for the collective emissions from 
affected EGUs in each covered state. Sources have the ability to 
purchase allowances from sources outside of the state, so total 
projected emissions for a state may, in some cases, exceed the state's 
emission budget, but aggregate emissions from all sources in a state 
should remain lower than or equal to the state's ``assurance level.'' 
The final emission budget under CSAPR for Texas was 294,471 tons per 
year for SO2, including 14,430 tons of allowances available 
in the new unit set aside.\106\ The State's ``assurance level'' under 
CSAPR was 347,476 tons.\107\ Under CSAPR, the projected SO2 
emissions from the affected Texas EGUs in the CSAPR + BART-elsewhere 
scenario were 266,600 tons per year. In a 2012 sensitivity analysis 
memo, EPA conducted a sensitivity analysis that confirmed that CSAPR 
would remain better-than-BART if Texas EGU emissions increased to 
approximately 317,100 tons.\108\
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    \106\ Units that are subject to CSAPR but that do not receive 
allowance allocations as existing units are eligible for a new unit 
set aside (NUSA) allowance allocation. NUSA allowance allocations 
are a batch of emissions allowances that are reserved for new units 
that are regulated by the CSAPR, but weren't included in the final 
rule allocations. The NUSA allowance allocations are removed from 
the original pool of regional allowances, and divided up amongst the 
new units, so as not to exceed the emissions cap set in the CSAPR. 
Each calendar year, EPA issues three pairs of preliminary and final 
notices of data availability (NODAs), which are determined and 
recorded in two ``rounds'' and are published in the Federal 
Register. In any year, if the NUSA for a given CSAPR state and 
program does not have enough new units after completion of the 2nd 
round, the remaining allowances are allocated to existing CSAPR-
affected units.
    \107\ See 40 CFR 97.710 for state SO2 Group 2 trading 
budgets, new unit set-asides, Indian country new unit set-asides, 
and variability limits.
    \108\ For the projected annual SO2 emissions from 
Texas EGUs See Technical Support Document for Demonstration of the 
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011- 
0729-0014 (December 2011) (2011 CSAPR/BART Technical Support 
Document), available in the docket for this action. at table 2-4. 
Certain CSAPR budgets were increased after promulgation of the CSAPR 
final rule (and the increases were addressed in the 2012 CSAPR/BART 
sensitivity analysis memo. See memo entitled ``Sensitivity Analysis 
Accounting for Increases in Texas and Georgia Transport Rule State 
Emissions Budgets,'' Docket ID No. EPA-HQ-OAR-2011-0729-0323 (May 
29, 2012), available in the docket for this action. The increase in 
the Texas SO2 budget was 50,517 tons which, when added to 
the Texas SO2 emissions projected in the CSAPR + BART-
elsewhere scenario of 266,600 tons, yields total potential 
SO2 emissions from Texas EGUs of approximately 317,100 
tons.
---------------------------------------------------------------------------

    As introduced in Section I.C, in the EPA's final response to the 
D.C. Circuit's remand of certain CSAPR budgets, we finalized the 
withdrawal of the requirements for Texas' EGUs to participate in the 
annual SO2 and NOX trading programs and also 
finalized our determination that the changes to the geographic scope of 
the CSAPR trading programs resulting from the remand response do not 
affect the continued validity of participation in CSAPR as a BART 
alternative. This determination that CSAPR remains a viable BART 
alternative despite changes in geographic scope resulting from EPA's 
response to the CSAPR remand was based on a sensitivity analysis of the 
2012 analytic demonstration used to support the original CSAPR as 
better-than-BART rulemaking. A full explanation of the sensitivity 
analysis is included in the remand response proposal and final 
rule.\109\
---------------------------------------------------------------------------

    \109\ 81 FR 78954 (Nov. 10, 2016) and final action signed 
September 21, 2017 available at regulations.gov in Docket No. EPA-
HQ-OAR-2016-0598.
---------------------------------------------------------------------------

B. Texas SO2 Trading Program

    Texas is no longer in the CSAPR program for annual SO2 
emissions and accordingly cannot rely on CSAPR as a BART alternative 
for SO2 under 51.308(e)(4).\110\ Therefore, informed by the 
TCEQ comments, we are proceeding to address the SO2 BART 
requirement for coal-fired, some gas-fired, and some gas/fuel oil-fired 
units under a BART alternative, which we are justifying according to 
the demonstration requirements under 51.308(e)(2).
---------------------------------------------------------------------------

    \110\ See final action signed September 21, 2017 available at 
regulations.gov in Docket No. EPA-HQ-OAR-2016-0598.
---------------------------------------------------------------------------

1. Identification of Sources Participating in the Trading Program
    Under 51.308(e)(2), a State may opt to implement or require 
participation in an emissions trading program or other alternative 
measure rather than to require sources subject to BART to install, 
operate, and maintain BART. Such an emissions trading program or other 
alternative measure must achieve greater reasonable progress than would 
be achieved through the installation and operation of BART. At the same 
time, the Texas trading program should be designed so as not to 
interfere with the validity of existing SIPs in other states that have 
relied on reductions from sources in Texas. As discussed elsewhere, the 
Texas trading program is designed to provide the measures that are 
needed to address interstate visibility transport requirements for 
several NAAQS and to be part of the long-term strategy needed to meet 
the reasonable progress requirements of the

[[Page 48354]]

Regional Haze Rule.\111\ To meet all of these goals, the trading 
program must not only be inclusive of all BART-eligible sources that 
are treated as satisfying the BART requirements through participation 
in a BART alternative, but must also include additional emission 
sources such that the trading program as a whole can be shown to both 
achieve greater reasonable progress than would be achieved through the 
installation and operation of BART, and achieve the emission reductions 
relied upon by other states during consultation and assumed by other 
states in their own regional haze SIPs, including their reasonable 
progress goals for their Class I areas.
---------------------------------------------------------------------------

    \111\ EPA is not determining at this time that this final action 
fully resolves the EPA's outstanding obligations with respect to 
reasonable progress that resulted from the Fifth Circuit's remand of 
our reasonable progress FIP. We intend to take future action to 
address the Fifth Circuit's remand.
---------------------------------------------------------------------------

    The identification of EGUs in the trading program necessarily 
begins with the list of BART-eligible EGUs for which we intend to 
address the BART requirements through a BART alternative. As discussed 
elsewhere, we determined that several BART-eligible gas-fired and gas/
oil-fired EGUs are not subject-to-BART for NOX, 
SO2, and PM, therefore those BART-eligible sources are not 
included in the trading program. The table below lists those BART-
eligible EGUs identified for participation in the trading program.
---------------------------------------------------------------------------

    \112\ Dynegy purchased the Coleto Creek power plant from Engie 
in February, 2017. Note that Coleto Creek may still be listed as 
being owned by Engie in some of our supporting documentation which 
was prepared before that sale.

    Table 4--BART-Eligible EGUs Participating in the Trading Program
------------------------------------------------------------------------
                  Facility                               Unit
------------------------------------------------------------------------
Big Brown (Luminant)........................  1.
Big Brown (Luminant)........................  2.
Coleto Creek (Dynegy \112\).................  1.
Fayette (LCRA)..............................  1.
Fayette (LCRA)..............................  2.
Graham (Luminant)...........................  2.
Harrington Station (Xcel)...................  061B.
Harrington Station (Xcel)...................  062B.
J T Deely (CPS Energy)......................  1.
J T Deely (CPS Energy)......................  2.
Martin Lake (Luminant)......................  1.
Martin Lake (Luminant)......................  2.
Martin Lake (Luminant)......................  3.
Monticello (Luminant).......................  1.
Monticello (Luminant).......................  2.
Monticello (Luminant).......................  3.
Newman (El Paso Electric)...................  2.
Newman (El Paso Electric)...................  3.
Newman (El Paso Electric)...................  4.
O W Sommers (CPS Energy)....................  1.
O W Sommers (CPS Energy)....................  2.
Stryker Creek (Luminant)....................  ST2.
WA Parish (NRG).............................  WAP4.
WA Parish (NRG).............................  WAP5.
WA Parish (NRG).............................  WAP6.
Welsh Power Plant (AEP).....................  1.
Welsh Power Plant (AEP).....................  2.
Wilkes Power Plant (AEP)....................  1.
Wilkes Power Plant (AEP)....................  2.
Wilkes Power Plant (AEP)....................  3.
------------------------------------------------------------------------

    For a BART alternative that includes an emissions trading program, 
the applicability provisions must be designed to prevent any 
significant potential shifting within the state of production and 
emissions from sources in the program to sources outside the program. 
Shifting would be logistically simplest among units in the same 
facility, because they are under common management and have access to 
the same transmission lines. In addition, since a coal-fired EGU to 
which electricity production could shift would have a relatively high 
SO2 emission rate (compared to a gas-fired EGU), such 
shifting could also shift substantive amounts of SO2 
emissions. To prevent any significant shifting of generation and 
SO2 emissions from participating sources to non-
participating sources within the same facility, coal-fired EGUs that 
are not BART-eligible but are co-located with BART-eligible EGUs have 
been included in the program. While Fayette Unit 3, WA Parish Unit 8 
(WAP8), and J K Spruce Units 1 and 2 were identified as coal-fired 
units that are not BART-eligible but are co-located with BART-eligible 
EGUs, these units have scrubbers installed to control SO2 
emissions such that a shift in generation from the participating units 
to these units would not result in a significant increase in emissions. 
Fayette Unit 3 has a high performing scrubber similar to the scrubbers 
on Fayette Units 1 and 2,\113\ and has a demonstrated ability to 
maintain SO2 emissions at or below 0.04 lbs/MMBtu.\114\ We 
find that any shifting of generation from the participating units at 
the facility to Fayette Unit 3 would result in an insignificant shift 
of emissions. The scrubber at Parish Unit 8 maintains an emission rate 
four to five times lower than the emission rate of the other coal-fired 
units at the facility (Parish Units 5, 6, and 7) that are 
uncontrolled.\115\ Shifting of generation from the participating units 
at the Parish facility to Parish Unit 8 would result in a decrease in 
overall emissions from the source. Similarly, J K Spruce Units 1 and 2 
have high performing scrubbers and emit at emission rates much lower 
than the co-located BART-eligible coal-fired units (J T Deely Units 1 
and 2).\116\ In addition, because these units not covered by the 
program are on average better controlled for SO2 than the 
covered sources and emit far less SO2 per unit of energy 
produced, we conclude that in general, based on the current emission 
rates of the EGUs, should a portion of electricity generation shift to 
those units not covered by the program, the net result would be a 
decrease in overall SO2 emissions, as these non-
participating units are on average much better controlled. Relative to 
current emission levels, should participating units increase their 
emissions rates and decrease generation to comply with their 
allocation, emissions from non-participating units may see a small 
increase. Therefore, we have not included Fayette Unit 3, WA Parish 
Unit 8 (WAP8), and J K Spruce Units 1 and 2 in the trading program. The 
table below lists those coal-fired units that are co-located with BART-
eligible units that have been identified for inclusion in the trading 
program.
---------------------------------------------------------------------------

    \113\ See the BART FIP TSD, available in the docket for this 
action (Document Id: EPA-R06-OAR-2016-0611-0004), for evaluation of 
the performance of scrubbers on Fayette Units 1 and 2.
    \114\ The annual average emission rate for 2016 for this unit 
was 0.01 lb/MMBtu.
    \115\ Parish Units 5 and 6 are coal-fired BART-eligible units. 
Parish Unit 7 is not BART-eligible, but is a co-located coal-fired 
EGU. Unlike Parish Unit 8, these three units do not have an 
SO2 scrubber installed.
    \116\ The annual average emission rate for 2016 for J K Spruce 
Units 1 and 2 was 0.03 lb/MMBtu and 0.01 lb/MMBtu, respectively. The 
annual average emission rate for 2016 for J T Deely Units 1 and 2 
was 0.52 lb/MMBtu and 0.51 lb/MMBtu, respectively.

     Table 5--Coal-Fired EGUs Co-Located With BART-Eligible EGUs and
                  Participating in the Trading Program
------------------------------------------------------------------------
                  Facility                               Unit
------------------------------------------------------------------------
Harrington Station (Xcel)...................  063B.
WA Parish (NRG).............................  WAP7.
Welsh Power Plant (AEP).....................  3.
------------------------------------------------------------------------

    In addition to these sources, we also evaluated other EGUs for 
inclusion in the trading program based on their potential to impact 
visibility at Class I areas. Addressing emissions from sources with the 
largest potential to impact visibility is required to make progress 
towards the goal of natural visibility conditions and to address 
emissions that may otherwise interfere

[[Page 48355]]

with measures required to protect visibility in other states. EPA, 
States, and RPOs have historically used a Q/D analysis to identify 
those facilities that have the potential to impact visibility at a 
Class I area based on their emissions and distance to the Class I area. 
Where,
    1. Q is the annual emissions in tons per year (tpy), and
    2. D is the nearest distance to a Class I Area in kilometers (km).
    We used a Q/D value of 10 as a threshold for identification of 
facilities that may impact air visibility at Class I areas and could be 
included in the trading program in order to meet the goals of achieving 
greater reasonable progress than BART and limiting visibility 
transport. We selected this value of 10 based on guidance contained in 
the BART Guidelines, which states:
    Based on our analyses, we believe that a State that has established 
0.5 deciviews as a contribution threshold could reasonably exempt from 
the BART review process sources that emit less than 500 tpy of 
NOX or SO2 (or combined NOX and 
SO2), as long as these sources are located more than 50 
kilometers from any Class I area; and sources that emit less than 1000 
tpy of NOX or SO2 (or combined NOX and 
SO2) that are located more than 100 kilometers from any 
Class I area.\117\
---------------------------------------------------------------------------

    \117\ See 40 CFR part 51, App. Y, Sec.  III (How to Identify 
Sources ``Subject to BART'').
---------------------------------------------------------------------------

    The approach described above corresponds to a Q/D threshold of 10. 
This approach has also been recommended by the Federal Land Managers' 
Air Quality Related Values Work Group (FLAG) \118\ as an initial 
screening test to determine if an analysis is required to evaluate the 
potential impact of a new or modified source on air quality related 
value (AQRV) at a Class I area. For this purpose, a Q/D value is 
calculated using the combined annual emissions in tons per year of 
(SO2, NOX, PM10, and sulfuric acid 
mist (H2SO4) divided by the distance to the Class 
I area in km. A Q/D value greater than 10 requires a Class I area AQRV 
analysis.\119\
---------------------------------------------------------------------------

    \118\ Federal Land Managers' Air Quality Related Values Work 
Group (FLAG), Phase I Report--Revised (2010) Natural Resource Report 
NPS/NRPC/NRR--2010/232, October 2010. Available at http://www.nature.nps.gov/air/Pubs/pdf/flag/FLAG_2010.pdf.
    \119\ We also note that TCEQ utilized a Q/D threshold of 5 in 
its analysis of reasonable progress sources in the 2009 Texas 
Regional Haze SIP. See Appendix 10-1.
---------------------------------------------------------------------------

    We considered the results of an available Q/D analysis based on 
2009 emissions to identify facilities that may impact air visibility at 
Class I areas.\120\ The table below summarizes the results of that Q/D 
analysis for EGU sources in Texas with a Q/D value greater than 10 with 
respect to the nearest Class I area to the source.
---------------------------------------------------------------------------

    \120\ See the TX RH FIP TSD that accompanied our December 2014 
Proposed action 79 FR 74818 (Dec 16, 2014) and 2009statesum_Q_D.xlsx 
available in the docket for that action.

                  Table 6--Q/D Analysis for Texas EGUs
              [Q/D greater than 10, 2009 annual emissions]
------------------------------------------------------------------------
                        Facility                            Maximum Q/D
------------------------------------------------------------------------
H.W. Pirkey (AEP).......................................            35.8
Big Brown (Luminant)....................................           182.9
Sommers-Deely (CPS).....................................            56.9
Coleto Creek (Dynegy)...................................            46.0
Fayette (LCRA)..........................................            61.0
Gibbons Creek (TMPA)....................................            30.8
Harrington Station (XCEL)...............................           107.8
San Miguel..............................................            32.9
Limestone (NRG).........................................            85.1
Martin Lake (Luminant)..................................           367.4
Monticello (Luminant)...................................           425.4
Oklaunion (AEP).........................................            85.0
Sandow (Luminant).......................................            63.0
Tolk Station (XCEL).....................................           148.5
Twin Oaks...............................................            14.2
WA Parish (NRG).........................................            84.3
Welsh (AEP).............................................           230.1
------------------------------------------------------------------------

    Based on the above Q/D analysis, we identified additional coal-
fired EGUs for participation in the SO2 trading program due 
to their emissions, proximity to Class I areas, and potential to impact 
visibility at Class I areas. While Gibbons Creek is identified by the 
Q/D analysis, the facility does not include any BART-eligible EGUs and 
has installed very stringent controls such that current emissions are 
approximately 1% of what they were in 2009.\121\ Therefore, we do not 
consider Gibbons Creek to have significant potential to impact 
visibility at any Class I area and do not include it in the trading 
program. The Twin Oaks facility, consisting of two units, is also 
identified as having a Q/D greater than 10. However, the Q/D for this 
facility is significantly lower than that of the other facilities, the 
facility does not include any BART-eligible EGUs, and the estimated Q/D 
for an individual unit would be less than 10. We do not consider the 
potential visibility impacts from these units to be significant 
relative to the other coal-fired EGUs in Texas with Q/Ds much greater 
than 10 and do not include it in the trading program. The Oklaunion 
facility consists of one coal-fired unit that is not BART-eligible. 
Annual emissions of SO2 in 2016 from this source were 1,530 
tons, less than 1% of the total annual emissions for EGUs in the state. 
We have determined that the most recent emissions from this facility 
are small relative to other non-BART units included in the program and 
we have not included Oklaunion in the trading program. Finally, San 
Miguel is identified as having a Q/D greater than 10. The San Miguel 
facility consists of one coal-fired unit that is not BART-eligible. In 
our review of existing controls at the facility performed as part of 
our action to address the remaining regional haze obligations for 
Texas, we found that the San Miguel facility has upgraded its 
SO2 scrubber system to perform at the highest level (94% 
control efficiency) that can reasonably be expected based on the 
extremely high sulfur content of the coal being burned, and the 
technology currently available.\122\ Since completion of all scrubber 
upgrades,\123\ emissions from the facility on a 30-day boiler operating 
day \124\ rolling average basis have remained below 0.6 lb/MMBtu and 
the 2016 annual average emission rate was 0.44 lb/MMBtu. Therefore, we 
have determined that the facility is well controlled and have not 
included San Miguel in the trading program. Other coal-fired EGUs in 
Texas that are not included in the trading program either had Q/D 
values less than 10 based on 2009 emissions or were not yet operating 
in 2009. New units beginning operation after 2009 would be permitted 
and constructed using emission control technology determined under 
either BACT or LAER review, as applicable and we do not consider the 
potential visibility impacts from these units to be significant 
relative to those coal-fired EGUs participating in the program. See 
Table 10 and accompanying discussion in the section below for 
additional information on coal-fired EGUs not included in the trading 
program. The table below lists the additional units identified by the 
Q/D analysis described above as potentially significantly impacting 
visibility and are included in the trading program. We note that all of 
the other coal-fired units identified for inclusion in the trading 
program due to their BART-eligibility or by the fact that they are co-
located with BART-eligible coal units would also be identified for

[[Page 48356]]

inclusion in the trading program if the Q/D analysis were applied to 
them.
---------------------------------------------------------------------------

    \121\ 2016 annual SO2 emissions were only 138 tons 
compared to 11,931 tons in 2009.
    \122\ 79 FR 74818 (Dec. 16, 2014).
    \123\ San Miguel Electric Cooperative FGD Upgrade Program 
Update, URS Corporation, June 30, 2014. Available in the docket for 
our December 2014 Proposed action, 79 FR 74818 (Dec 16, 2014) as 
``TX166-008-066 San Miguel FGD Upgrade Program.''
    \124\ A boiler operating day (BOD) is any 24-hour period between 
12:00 midnight and the following midnight during which any fuel is 
combusted at any time at the steam generating unit. See 70 FR 39172 
(July 6, 2005).

    Table 7--Additional Units Identified for Inclusion in the Trading
                                 Program
------------------------------------------------------------------------
                  Facility                               Unit
------------------------------------------------------------------------
H.W. Pirkey (AEP)...........................  1.
Limestone (NRG).............................  1.
Limestone (NRG).............................  2.
Sandow (Luminant)...........................  4.
Tolk (Xcel).................................  171B.
Tolk (Xcel).................................  172B.
------------------------------------------------------------------------

    As discussed in more detail below, the inclusion of all of these 
identified sources (Tables 4, 5, and 7 above) in an intrastate 
SO2 trading program will achieve emission levels that are 
similar to original projected participation by all Texas EGUs in the 
CSAPR program for trading of SO2 and achieve greater 
reasonable progress than BART. In addition to being a sufficient 
alternative to BART, the trading program secures reductions consistent 
with visibility transport requirements and is part of the long-term 
strategy to meet the reasonable progress requirements of the Regional 
Haze Rule.\125\ The combination of the source coverage for this 
program, the total allocations for EGUs covered by the program, and 
recent and foreseeable emissions from EGUs not covered by the program 
will result in future EGU emissions in Texas that on average will be no 
greater than what was forecast in the 2012 better-than-BART 
demonstration for Texas EGU emissions assuming CSAPR participation.
---------------------------------------------------------------------------

    \125\ EPA is not determining at this time that this final action 
fully resolves the EPA's outstanding obligations with respect to 
reasonable progress that resulted from the Fifth Circuit's remand of 
our reasonable progress FIP. We intend to take future action to 
address the Fifth Circuit's remand.
---------------------------------------------------------------------------

2. Texas SO2 Trading Program as a BART Alternative
    40 CFR 51.308(e)(2) contains the required plan elements and 
analyses for an emissions trading program or alternative measure 
designed as a BART alternative.
    As discussed above, consistent with our proposal, we are finalizing 
our list of all BART-eligible sources, in Texas, which serves to 
satisfy Sec.  51.308(e)(2)(i)(A).
    This action includes a list of all EGUs covered by the trading 
program, satisfying the first requirement of Sec.  51.308(e)(2)(i)(B). 
All BART-eligible coal-fired units, some additional coal-fired EGUs, 
and some BART-eligible gas-fired and oil-and-gas-fired units are 
covered by the alternative program.\126\ This coverage and our 
determinations that the BART-eligible gas-fired and oil-and-gas-fired 
EGUs not covered by the program are not subject-to-BART for 
NOX, SO2 and PM satisfy the second requirement of 
Sec.  51.308(e)(2)(i)(B).
---------------------------------------------------------------------------

    \126\ See Table 3 above for list of participating units and 
identification of BART-eligible participating units.
---------------------------------------------------------------------------

    Regarding the requirements of 40 CFR 51.308(e)(2)(i)(C), we are not 
making determinations of BART for each source subject to BART and 
covered by the program. The demonstration for a BART alternative does 
not need to include determinations of BART for each source subject to 
BART and covered by the program when the ``alternative measure has been 
designed to meet a requirement other than BART.'' The Texas trading 
program meets this condition, as discussed elsewhere, because it has 
been designed to meet multiple requirements other than BART. This BART 
alternative extends beyond all BART-eligible coal-fired units to 
include a number of additional coal-fired EGUs, and some BART-eligible 
gas-fired and oil-and-gas-fired units, capturing the majority of 
emissions from EGUs in the State and is designed to provide the 
measures that are needed to address interstate visibility transport 
requirements for several NAAQS. This is because for all sources covered 
by the Texas SO2 trading program, those sources' CSAPR 
allocations for SO2 are incorporated into this finalized 
BART alternative, and the BART FIP obtains more emission reductions of 
SO2 and NOX than the level of emissions 
reductions relied upon by other states during consultation and assumed 
by other states in their own regional haze SIPs including their 
reasonable progress goals for their Class I areas. This BART 
alternative, addressing emissions from both BART eligible and non-BART 
eligible sources, that in combination provides for greater reasonable 
progress than BART, is also designed to be part of the long-term 
strategy needed to meet the reasonable progress requirements of the 
Regional Haze Rule, which remain outstanding after the remand of our 
reasonable progress FIP by the Fifth Circuit Court of Appeals. Since 
the time of our January 4, 2017 proposal on BART, we note that the 
Fifth Circuit Court of Appeals has remanded without vacatur our prior 
action on the 2009 Texas Regional Haze SIP and part of the Oklahoma 
Regional Haze SIP.\127\ We contemplate that future action on this 
remand, including action that may merge with new development of SIP 
revisions by the State of Texas as contemplated in its request for the 
SO2 BART alternative, will bring closure to the reasonable 
progress requirement. For these reasons, we find that it is not 
necessary for us to make determinations of BART for each source subject 
to BART and covered by the program. In this context, 51.308(e)(2)(i)(C) 
provides that we may ``determine the best system of continuous emission 
control technology and associated emission reductions for similar types 
of sources within a source category based on both source-specific and 
category-wide information, as appropriate.'' In this action, we are 
relying on the determinations of the best system of continuous emission 
control technology and associated emission reductions for EGUs as was 
used in our 2012 determination that showed that CSAPR as finalized and 
amended in 2011 and 2012 achieves more reasonable progress than BART. 
These determinations were based on category-wide information.
---------------------------------------------------------------------------

    \127\ Texas v. EPA, 829 F.3d 405 (5th Cir. 2016).
---------------------------------------------------------------------------

    Regarding the requirement of 40 CFR 51.308(e)(2)(i)(D), our 
analysis is that the Texas trading program will effectively limit the 
aggregate annual SO2 emissions of the covered EGUs to be no 
higher than the sum of their allowances. As discussed elsewhere, the 
average total annual allowance allocation for covered sources is 
238,393 tons and an additional 10,000 tons for the Supplemental 
Allowance pool. In addition, while the Supplemental Allowance pool may 
grow over time as unused supplemental allowances remain available and 
allocations from retired units are placed in the supplemental pool, the 
total number of allowances that can be allocated in a control period 
from the supplemental pool is limited to a maximum 54,711 tons plus the 
amount of any allowances placed in the pool that year from retired 
units and corrections. Therefore, annual average emissions for the 
covered sources will be less than or equal to 248,393 tons with some 
year to year variability constrained by the number of banked allowances 
and number of allowances that can be allocated in a control period from 
the supplemental pool. The projected SO2 emission reduction 
that will be achieved by the program, relative to any selected 
historical baseline year, is therefore the difference between the 
aggregate historical baseline emissions of the covered units and the 
average total annual allocation. For example, the aggregate 2014 
SO2 emissions of the covered EGUs were 309,296 tons per 
year, while the average total annual allocation for the covered EGUs is

[[Page 48357]]

248,393 tons/year.\128\ Therefore, compared to 2014 emissions, the 
Texas trading program is projected to achieve an average reduction of 
approximately 60,903 tons per year.\129\ We note that the trading 
program allows additional sources to opt-in to the program. Should 
sources choose to opt-in in the future, the average total annual 
allocation could increase up to a maximum of 289,740. For comparison, 
the aggregate 2014 SO2 emissions of the covered EGUs 
including all potential opt-ins were 343,425 tons per year. Therefore, 
compared to 2014 emissions, the Texas trading program including all 
potential opt-ins is projected to achieve an average reduction of 
approximately 53,685 tons per year.
---------------------------------------------------------------------------

    \128\ Texas sources were subject to CSAPR in 2015 and 2016 but 
are no longer subject to CSAPR. We therefore select 2014 as the 
appropriate most recent year for this comparison.
    \129\ We note that for other types of alternative programs that 
might be adopted under 40 CFR 51.308(e)(2), the analysis of 
achievable emission reductions could be more complicated. For 
example, a program that involved economic incentives instead of 
allowances or that involved interstate allowance trading would 
present a more complex situation in which achievable emission 
reductions could not be calculated simply be comparing aggregate 
baseline emissions to aggregate allowances.
---------------------------------------------------------------------------

    Regarding the requirement of 40 CFR 51.308(e)(2)(i)(E), the BART 
alternative being finalized today is supported by our determination 
that the clear weight of the evidence is that the trading program 
achieves greater reasonable progress than would be achieved through the 
installation and operation of BART at the covered sources. The 2012 
demonstration showed that CSAPR as finalized and amended in 2011 and 
2012 meets the Regional Haze Rule's criteria for a demonstration of 
greater reasonable progress than BART. This 2012 demonstration is the 
primary evidence that the Texas trading program achieves greater 
reasonable progress than BART. However, the states participating in 
CSAPR are now slightly different than the geographic scope of CSAPR 
assumed in the 2012 analytic demonstration. The changes to states 
participating in both CSAPR NOX trading programs resulting 
from EPA's response to the D.C. Circuit's remand were found by us to 
have no adverse impact on the 2012 determination that CSAPR 
participation remains better-than-BART.\130\ Regarding SO2 
emissions from Texas, as detailed below, the BART alternative is 
projected to accomplish emission levels from Texas EGUs that are 
similar to the emission levels from Texas EGUs that would have been 
realized from the SO2 trading program under CSAPR. The 
changes to the geographic scope of the NOX CSAPR programs 
combined with the expectation that the Texas trading program will 
reduce the SO2 emissions of EGUs in Texas to levels similar 
to CSAPR-participation levels, despite slight differences in EGU 
participation between the two SO2 programs, lead to the 
finding here that post-remand CSAPR and the Texas BART alternative 
program are better-than-BART for Texas.
---------------------------------------------------------------------------

    \130\ 81 FR 78954, 78962 (November 10, 2016) and final action 
signed September 21, 2017 available at regulations.gov in Docket No. 
EPA-HQ-OAR-2016-0598.
---------------------------------------------------------------------------

    The differences in Texas EGU participation in CSAPR and this BART 
alternative are either not significant or, in some cases, work to 
demonstrate the relative stringency of the BART alternative as compared 
to CSAPR. If Texas EGUs were still required to participate in CSAPR's 
SO2 trading program, it would be plainly consistent with 
previous findings and approvals that CSAPR is an acceptable BART 
alternative. The Texas trading program will result in emissions from 
the covered EGUs and other EGUs in Texas that are no higher than if 
Texas EGUs were still required to participate in CSAPR's SO2 
trading program, and thus the clear weight of evidence is that the 
Texas trading program will provide more reasonable progress than BART. 
Still regarding 40 CFR 51.308(e)(2)(i)(E), we have considered the 
question of whether in applying this portion of the Regional Haze Rule 
we should take as the baseline the application of source-specific BART 
at the covered sources. We interpret the rule to not require that 
approach in this situation, given that 51.308(e)(2)(i)(C) provides for 
an exception (which we are exercising) to the requirement for source-
specific BART determinations for the covered sources. We are not making 
any source-specific BART determinations in this action, nor did Texas 
do so in its 2009 SIP submission.
    Table 8 below identifies the participating units and their unit-
level allocations under the Texas SO2 trading program. These 
allocations are the same as under CSAPR.

   Table 8--Allocations for Texas EGUs Subject to the FIP SO2 Trading
                                 Program
------------------------------------------------------------------------
                                                            Allocations
         Owner/operator                   Units                (tpy)
------------------------------------------------------------------------
AEP............................  Welsh Power Plant Unit            6,496
                                  1.
                                 Welsh Power Plant Unit            7,050
                                  2.
                                 Welsh Power Plant Unit            7,208
                                  3.
                                 H W Pirkey Power Plant            8,882
                                  Unit 1.
                                 Wilkes Unit 1..........              14
                                 Wilkes Unit 2..........               2
                                 Wilkes Unit 3..........               3
CPS Energy.....................  JT Deely Unit 1........           6,170
                                 JT Deely Unit 2........           6,082
                                 Sommers Unit 1.........              55
                                 Sommers Unit 2.........               7
Dynegy.........................  Coleto Creek Unit 1....           9,057
El Paso Electric...............  Newman Unit 2..........               1
                                 Newman Unit 3..........               1
                                 Newman Unit 4..........               2
LCRA...........................  Fayette/Sam Seymour               7,979
                                  Unit 1.                          8,019
                                 Fayette/Sam Seymour
                                  Unit 2.
Luminant.......................  Big Brown Unit 1.......           8,473
                                 Big Brown Unit 2.......           8,559
                                 Martin Lake Unit 1.....          12,024
                                 Martin Lake Unit 2.....          11,580
                                 Martin Lake Unit 3.....          12,236
                                 Monticello Unit 1......           8,598

[[Page 48358]]

 
                                 Monticello Unit 2......           8,795
                                 Monticello Unit 3......          12,216
                                 Sandow Unit 4..........           8,370
                                 Stryker ST2............             145
                                 Graham Unit 2..........             226
NRG............................  Limestone Unit 1.......          12,081
                                 Limestone Unit 2.......          12,293
                                 WA Parish Unit WAP4....               3
                                 WA Parish Unit WAP5....           9,580
                                 WA Parish Unit WAP6....           8,900
                                 WA Parish Unit WAP7....           7,653
Xcel...........................  Tolk Station Unit 171B.           6,900
                                 Tolk Station Unit 172B.           7,062
                                 Harrington Unit 061B...           5,361
                                 Harrington Unit 062B...           5,255
                                 Harrington Unit 063B...           5,055
                                                         ---------------
    Total......................  .......................         238,393
------------------------------------------------------------------------

    The total annual allocation for all sources in the Texas 
SO2 trading program is 238,393 tons. In addition, a 
Supplemental Allowance pool initially holds an additional 10,000 tons 
for a maximum total annual allocation of 248,393 tons. The 
Administrator may allocate a limited number of additional allowances 
from this pool to sources whose emissions exceed their annual 
allocation, pursuant to 40 CFR 97.912. Under CSAPR, the total 
allocations for all existing EGUs in Texas is 279,740 tons, with a 
total of 294,471 tons including the new unit set aside of 14,430 tons 
and the Indian country new unit set aside.\131\ As shown in Table 9 
below, the coverage of the Texas SO2 trading program 
represents 81% of the total CSAPR allocation for Texas and 85% of the 
CSAPR allocations for existing units. The Supplemental Allowance pool 
contains an additional 10,000 tons, compared to the new unit set aside 
(NUSA) allowance allocation under CSAPR of 14,430 tons. Examining 2016 
emissions, the EGUs covered by the program represent 89% of total Texas 
EGU emissions.
---------------------------------------------------------------------------

    \131\ An Indian Country new unit set-aside is established for 
each state under the CSAPR that provides allowances for future new 
units locating in Indian Country. The Indian Country new unit set-
aside for Texas is 294 tons. See 40 CFR 97.710.

 Table 9--Comparison of Texas SO2 Trading Program Allocations to Previously Applicable CSAPR Allocations and to
                                                 2016 Emissions
----------------------------------------------------------------------------------------------------------------
                                                                 % of total previously
                                        Annual allocations in       applicable CSAPR      2016 emissions  (tons
                                          the Texas Trading       allocations (294,471          per year)
                                       Program (tons per year)       tons per year)
----------------------------------------------------------------------------------------------------------------
Texas SO2 Trading program sources....                  238,393                       81                  218,291
Total EGU emissions..................  .......................  .......................                  245,737
Supplemental Allowance pool..........                   10,000                      3.4  .......................
Existing Sources not covered by                              *                       16                   27,446
 trading program.....................
----------------------------------------------------------------------------------------------------------------
* No allocation.

    The remaining 11% of the total 2016 emissions due to sources not 
covered by the program come from coal-fired units that on average are 
better controlled for SO2 than the covered sources (26,795 
tons in 2016) and gas units that rarely burn fuel oil (651 tons in 
2016). The table below lists these coal-fired units. The average annual 
emission rate for 2016 is 0.50 lb/MMBTU for the coal-fired units 
participating in the trading program compared to 0.12 lb/MMBTU for the 
coal-fired units not covered by the program. Therefore, we conclude 
that in general, based on the current emission rates of the EGUs, 
should a portion of electricity generation shift to units not covered 
by the program, the net result would be a decrease in overall 
SO2 emissions, as these non-participating units are on 
average much better controlled and emit far less SO2 per 
unit of energy produced. Relative to current emission levels, should 
participating units increase their emissions rates and decrease 
generation to comply with their allocation, emissions from non-
participating units may see a small increase.

[[Page 48359]]

                     Table 10--Coal-Fired EGUs Not Covered by the Texas SO2 Trading Program
----------------------------------------------------------------------------------------------------------------
                                                                                           2016 annual average
                                        Previously applicable    2016 emissions (tons)      emission rate (lb/
                                       CSAPR allocation (tons)                                    MMBtu)
----------------------------------------------------------------------------------------------------------------
Fayette/Sam Seymour Unit 3...........                    2,955                      231                     0.01
Gibbons Creek Unit 1.................                    6,314                      138                     0.02
JK Spruce Unit 1.....................                    4,133                      467                     0.03
JK Spruce Unit 2.....................                      158                      151                     0.01
Oak Grove Unit 1.....................                    1,665                    3,334                     0.11
Oak Grove Unit 2 *...................  .......................                    3,727                     0.12
Oklaunion Unit 1.....................                    4,386                    1,530                     0.11
San Miguel Unit 1....................                    6,271                    6,815                     0.44
Sandow Station Unit 5A...............                      773                    1,117                     0.11
Sandow Station Unit 5B...............                      725                    1,146                     0.10
Sandy Creek Unit 1 *.................  .......................                    1,842                     0.09
Twin Oaks Unit 1.....................                    2,326                    1,712                     0.21
Twin Oaks Unit 2.....................                    2,270                    1,475                     0.23
WA Parish Unit WAP8..................                    4,071                    3,112                     0.16
                                      --------------------------------------------------------------------------
    Total............................                   36,047                   26,795  .......................
----------------------------------------------------------------------------------------------------------------
* Oak Grove Unit 2 and Sandy Creek Unit 1 received allocations from the new unit set aside under the CSAPR
  program.

    The exclusion of a large number of gas-fired units that 
occasionally burn fuel oil further limits allowances in the program as 
compared to CSAPR because CSAPR allocated these units allowances that 
are higher than their recent and current emissions. In 2016, these 
units emitted 651 tons of SO2, but received allowances for 
over 5,000 tons. By excluding these sources from the program, those 
unused allowances are not available for purchase by other EGUs. We note 
the trading program does allow non-participating sources that 
previously had CSAPR allocations to opt-in to the trading program and 
receive an allocation equivalent to the CSAPR level allocation. Should 
some sources choose to opt-in to the program, the total number of 
allowances will increase by that amount. This will serve to increase 
the percentage of CSAPR allowances represented by the Texas 
SO2 trading program and increase the portion of emissions 
covered by the program, more closely resembling the CSAPR program.
    Finally, the Texas SO2 trading program does not allow 
EGUs to purchase allowances from sources in other states. Under CSAPR, 
Texas EGUs were allowed to purchase allowances from other Group 2 
states, a fact which could, and was projected to, result in an increase 
in annual allowances used in the State above the state budget. CSAPR 
also included a variability limit that was set at 18% of the State 
budget and an assurance level equal to the State's budget plus 
variability limit. The assurance level for Texas was set at 347,476 
tons. The CSAPR assurance provisions are triggered if the State's 
emissions for a year exceed the assurance level. These assurance 
provisions require some sources to surrender two additional allowances 
per ton beyond the amount equal to their actual emissions, depending on 
their emissions and annual allocation level. In effect, under CSAPR, 
EGUs in Texas could emit above the allocation if willing to pay the 
market price of allowances and the cost associated with each 
incremental ton of emissions could triple if in the aggregate they 
exceeded the assurance level. The Texas trading program will have 
248,393 tons of allowances allocated every year, with no ability to 
purchase additional allowances from sources outside of the State, 
preventing an increase beyond that annual allocation.\132\ This 
includes an annual allocation of 10,000 allowances to the Supplemental 
Allowance pool. The Supplemental Allowance pool may grow over time as 
unused supplemental allowances remain available and allocations from 
retired units are placed in the supplemental pool but the total number 
of allowances that can be allocated in a control period from in this 
supplemental pool is limited to a maximum 54,711 tons plus the amount 
of any allowances placed in the pool that year from retired units and 
corrections. The 54,711-ton value is equal to 10,000 tons annually 
allocated to the pool plus 18% of the total annual allocation for 
participating units, mirroring the variability limit from CSAPR. The 
total number of allowances that can be allocated in a single year is 
therefore 293,104, which is the sum of the 238,393 budget for existing 
units plus 54,711. Annual average emissions for the covered sources 
will be less than or equal to 248,393 tons with some year to year 
variability constrained by the number of banked allowances and 
allowances available to be allocated during a control period from the 
Supplemental Allowance pool. If additional units opt into the program, 
additional allowances will be available corresponding to the amounts 
that those units would have been allocated under CSAPR. The projected 
SO2 emissions from the affected Texas EGUs in the CSAPR + 
BART-elsewhere scenario were 266,600 tons per year. In a 2012 
sensitivity analysis memo, EPA conducted a sensitivity analysis that 
confirmed that CSAPR would remain better-than-BART if Texas EGU 
emissions increased to approximately 317,100 tons.\133\ Under the Texas 
SO2 trading program, annual average EGU emissions are 
anticipated to remain well below 317,100 tons per year as annual 
allocations for participating units are

[[Page 48360]]

held at 248,393 tons per year. Sources not covered by the program 
emitted less than 27,500 tons of SO2 in 2016 and are not 
projected to significantly increase from this level. Any new units 
would be required to be well controlled and similar to the existing 
units not covered by the program, they would not significantly increase 
total emissions of SO2. Furthermore, as discussed above, any 
load shifting to these new non-participating units would be projected 
to result in a net decrease in emissions per unit of electricity 
generated and at most a small increase in total SO2 
emissions compared to them not having been brought into operation. We 
note that total emissions of SO2 from all EGU sources in 
Texas in 2016 were 245,737 tons.
---------------------------------------------------------------------------

    \132\ We note the trading program does allow non-participating 
sources that previously had CSAPR allocations to opt-in to the 
trading program and receive an allocation equivalent to the CSAPR 
level allocation. Should some sources choose to opt-in to the 
program, the total number of allowances will increase by that 
amount.
    \133\ For the projected annual SO2 emissions from 
Texas EGUs see Technical Support Document for Demonstration of the 
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011- 
0729-0014 (December 2011) (2011 CSAPR/BART Technical Support 
Document), available in the docket for this action, at table 2-4. 
Certain CSAPR budgets were increased after promulgation of the CSAPR 
final rule (and the increases were addressed in the 2012 CSAPR/BART 
sensitivity analysis memo), See memo titled ``Sensitivity Analysis 
Accounting for Increases in Texas and Georgia Transport Rule State 
Emissions Budgets,'' Docket ID No. EPA-HQ-OAR-2011-0729-0323 (May 
29, 2012), available in the docket for this action. The increase in 
the Texas SO2 budget was 50,517 tons which, when added to 
the Texas SO2 emissions projected in the CSAPR + BART-
elsewhere scenario of 266,600 tons, yields total potential 
SO2 emissions from Texas EGUs of approximately 317,100 
tons.
---------------------------------------------------------------------------

    We also note that state-wide EGU emissions in Texas have decreased 
considerably since the 2002 baseline period, reflecting market changes 
and reductions due to requirements such as CAIR/CSAPR. In 2002, Texas 
EGU emissions were 560,860 tons of SO2 compared to emissions 
of 245,737 tons in 2016, a reduction of over 56%. The Texas 
SO2 trading program locks in the large majority of these 
reductions by limiting allocation of allowances to 248,393 tons per 
year for participating sources. While the Texas program does not 
include all EGU sources in the State, as discussed above, the EGUs 
outside of the program contribute relatively little to the total state 
emissions and these units on average are better controlled for 
SO2 than the units subject to the Texas program.

C. Specific Texas SO2 Trading Program Features

    The Texas SO2 Trading Program is an intrastate cap-and-
trade program for listed covered sources in the State of Texas. The EPA 
is promulgating the Texas SO2 Trading Program under 40 CFR 
52.2312 and subpart FFFFF of part 97. The State of Texas may choose to 
remain under the Texas SO2 Trading Program or replace it 
with an appropriate SIP. If the State of Texas is interested in 
pursuing delegation of the Texas SO2 Trading Program, the 
request would need to provide a demonstration of the State's statutory 
authority to implement any delegated elements.
    The Texas SO2 Trading Program is modeled after the EPA's 
CSAPR SO2 Group 2 Trading Program and satisfies the 
requirements of Sec.  51.308(e)(2)(vi). Similar to the CSAPR 
SO2 Group 2 Trading Program, the Texas SO2 
Trading Program sets an SO2 emission budget for the State of 
Texas. Authorizations to emit SO2, known as allowances, are 
allocated to affected units. The Texas SO2 Trading Program 
provides flexibility to affected units and sources by allowing units 
and sources to determine their own compliance path; this includes 
adding or operating control technologies, upgrading or improving 
controls, switching fuels, and using allowances. Sources can buy and 
sell allowances and bank (save) allowances for future use as long as 
each source holds enough allowances to account for its emissions of 
SO2 by the end of the compliance period.
    Pursuant to the requirements of Sec.  51.308(e)(2)(vi)(A), the 
applicability of the Texas SO2 Trading Program is defined in 
40 CFR 97.904. Section 97.904(a) identifies the subject units, which 
include all BART-eligible coal-fired EGUs, additional coal-fired EGUs, 
and several BART-eligible gas-fired and gas/fuel oil-fired EGUs, all of 
which were previously covered by the CSAPR SO2 Group 2 
Trading Program. Additionally, under 40 CFR 97.904(b), the EPA is 
providing an opportunity for any other unit in the State of Texas that 
was subject to the CSAPR SO2 Group 2 Trading Program to opt-
in to the Texas SO2 Trading Program. We discuss in Section 
V.B above, how the applicability results in coverage of the Texas 
SO2 trading program representing 81% of the total CSAPR 
allocation for Texas and 85% of the CSAPR allocations for existing 
units, and how potential shifts in generation would result in an 
insignificant change in emissions. The Texas SO2 Trading 
Program establishes the statewide SO2 budget for the subject 
units at 40 CFR 97.910(a). This budget is equal to the allowances for 
each subject unit identified under Sec. Sec.  97.904(a) and 97.911(a). 
As units opt-in to the Texas SO2 Trading under Sec.  
97.904(b), the allowances for each of these units will equal their 
CSAPR SO2 Group 2 allowances under Sec.  97.911(b). 
Additionally, the EPA has established a Supplemental Allowance Pool 
with a budget of 10,000 tons of SO2 to provide compliance 
assistance to subject units and sources. Section 40 CFR 97.912 
establishes how allowances are allocated from the Supplemental 
Allowance Pool to sources (collections of participating units at a 
facility) that have reported total emissions for that control period 
exceeding the total amounts of allowances allocated to the 
participating units at the source for that control period (before any 
allocation from the Supplemental Allowance Pool). For any control 
period, the maximum supplemental allocation from the Supplemental 
Allowance Pool that a source may receive is the amount by which the 
total emissions reported for its participating units exceed the total 
allocations to its participating units (before any allocation from the 
Supplemental Allowance Pool). If the total amount of allowances 
available for allocation from the Supplemental Allowance Pool for a 
control period is less than the sum of these maximum allocations, 
sources will receive less than the maximum supplemental allocation from 
the Supplemental Allowance Pool, where the amount of supplemental 
allocations for each source is determined in proportion to the sources' 
respective maximum allocations, with one exception. While all other 
sources required to participate in the trading program have flexibility 
to transfer allowances among multiple participating units under the 
same owner/operator when planning operations, Coleto Creek consists of 
only one coal-fired unit and is the only coal-fired unit in Texas owned 
and operated by Dynegy. To provide this source additional flexibility, 
Coleto Creek will be allocated its maximum supplemental allocation from 
the Supplemental Allowance Pool as long as there are sufficient 
allowances in the Supplemental Allowance Pool available for allocation, 
and its actual allocation will not be reduced in proportion with any 
reductions made to the supplemental allocations to other sources. 
Section 97.921 establishes how the Administrator will record the 
allowances for the Texas SO2 Trading Program and ensures 
that the Administrator will not record more allowances than are 
available under the program consistent with 40 CFR 51.308(e)(2)(vi)(B). 
The monitoring, recordkeeping, and reporting provisions for the Texas 
SO2 Trading Program at 40 CFR 97.930-97.935 are consistent 
with those requirements in the CSAPR SO2 Group 2 Trading 
Program. The provisions in 40 CFR 97.930-97.935 require the subject 
units to comply with the monitoring, recordkeeping, and reporting 
requirements for SO2 emissions in 40 CFR part 75; thereby 
satisfying the requirements of Sec.  51.308(e)(2)(vi)(C)-(E). The Texas 
SO2 Trading Program will be implemented by the EPA using the 
Allowance Management System. The use of the Allowance Management System 
will provide a consistent approach to implementation and tracking of 
allowances and emissions for the EPA, subject sources, and the public 
consistent with the requirements of 40 CFR 51.308(e)(2)(vi)(F). 
Additionally, the EPA is promulgating requirements at 40 CFR 97.913-
97.918 for designated

[[Page 48361]]

and alternate designated representatives that satisfy the requirements 
of 40 CFR 51.308(e)(2)(vi)(G) and are consistent with the EPA's other 
trading programs under 40 CFR part 97. Allowance transfer provisions 
for the Texas SO2 Trading Program at 40 CFR 97.922 and 
97.923 provide procedures that allow timely transfer and recording of 
allowances; these provisions will minimize administrative barriers to 
the operation of the allowance market and ensure that such procedures 
apply uniformly to all sources and other potential participants in the 
allowance market, consistent with 40 CFR 51.308(e)(2)(vi)(H). 
Compliance provisions for the Texas SO2 Trading Program at 
40 CFR 97.924 prohibit a source from emitting a total tonnage of 
SO2 that exceeds the tonnage value of its SO2 
allowance holdings as required by 40 CFR 51.308(e)(2)(vi)(I). The Texas 
SO2 Trading Program includes automatic allowance surrender 
provisions at 40 CFR 97.924(d) that apply consistently from source to 
source and the tonnage value of the allowances deducted shall equal at 
least three times the tonnage of the excess emissions, consistent with 
the penalty provisions at 40 CFR 51.308(e)(2)(vi)(J). The Texas 
SO2 Trading Program provides for banking of allowances under 
40 CFR 97.926; Texas SO2 Trading Program allowances are 
valid for compliance in the control period of issuance or may be banked 
for future use, consistent with 40 CFR 51.308(e)(2)(vi)(K). The EPA is 
promulgating the Texas SO2 Trading Program as a BART-
alternative for Texas' Regional Haze obligations. The CAA and EPA's 
implementing regulations require periodic review of the state's 
regional haze approach under 40 CFR 51.308(g) to evaluate progress 
towards the reasonable progress goals for Class I areas located within 
the State and Class I areas located outside the State affected by 
emissions from within the State. Because the Texas SO2 
Trading Program is a BART-alternative for Texas' Regional Haze 
obligations, this program is required to be reviewed in each progress 
report. We anticipate this progress report will provide the information 
needed to assess program performance, as required by 40 CFR 
51.308(e)(2)(vi)(L).
    As previously discussed, the EPA modeled the Texas SO2 
Trading Program after the EPA's CSAPR SO2 Group 2 Trading 
Program. Relying on a trading program structure that is already in 
effect enables the EPA, the subject sources, and the public to benefit 
from the use of the Allowance Management System, forms, and monitoring, 
recordkeeping, and reporting requirements. However, there are a few 
features of the Texas SO2 Trading Program that are separate 
and unique from the EPA's CSAPR. First, the program does not address 
new units that are built after the inception of the program; these 
units would be permitted and constructed using emission control 
technology determined under either BACT or LAER review, as applicable. 
Second, the Texas SO2 Trading Program provides that sources 
that were previously covered under the CSAPR SO2 Group 2 
Trading Program, but are not subject to the requirements of subpart 
FFFFF of part 97 can opt-in to the Texas SO2 Trading Program 
at the allocation level established under CSAPR. Finally, the Texas 
SO2 Trading Program includes a Supplemental Allowance Pool 
to provide some compliance assistance to units whose emissions exceed 
their allocations. The amount of allocations to the Supplemental 
Allowance Pool each year is less than the portion of the Texas budget 
under the CSAPR SO2 Group 2 Trading Program that would have 
been set aside each year for new units (and which would have been 
allocated to existing units to the extent not needed by new units).

VI. Final Action

A. Regional Haze

    We are finalizing our identification of BART-eligible EGUs. We are 
approving the portion of the Texas Regional Haze SIP that addresses the 
BART requirement for EGUs for PM. As discussed elsewhere in this 
preamble, we are replacing Texas' reliance on CAIR with reliance on 
CSAPR to address the NOX BART requirements for EGUs. To 
address the SO2 BART requirements for EGUs, we are 
promulgating a FIP to replace Texas' reliance on CAIR with reliance on 
an intrastate SO2 trading program for certain EGUs 
identified in Table 11 below. This FIP is codified under 40 CFR 52.2312 
and subpart FFFFF of part 97. We are finalizing our determination that 
BART-eligible EGUs not covered by the intrastate SO2 trading 
program are not subject-to-BART. This final action is also part of the 
long-term strategy to address the reasonable progress requirements for 
Texas EGUs, which remain outstanding after the remand of our reasonable 
progress FIP by the Fifth Circuit Court of Appeals. However, further 
assessment and analysis of the CAA's reasonable progress factors will 
be needed before the Regional Haze Rule's reasonable progress 
requirements will be fully addressed for Texas.

                                               Table 11--Texas EGUs Subject to the FIP SO2 Trading Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
                Owner/operator                                                                    Units
--------------------------------------------------------------------------------------------------------------------------------------------------------
AEP...........................................  Welsh Power Plant Units 1, 2, and 3.
                                                H W Pirkey Power Plant Unit 1.
                                                Wilkes Units 1 *, 2 *, and 3 *.
CPS Energy....................................  JT Deely Units 1 and 2, Sommers Units 1 * and 2 *.
Dynegy........................................  Coleto Creek Unit 1.
LCRA..........................................  Fayette/Sam Seymour Units 1 and 2.
Luminant......................................  Big Brown Units 1 and 2.
                                                Martin Lake Units 1, 2, and 3.
                                                Monticello Units 1, 2, and 3.
                                                Sandow Unit 4.
                                                Stryker ST2 *.
                                                Graham Unit 2 *.
NRG...........................................  Limestone Units 1 and 2.
                                                WA Parish Units WAP4 *, WAP5, WAP6, WAP7.
Xcel..........................................  Tolk Station Units 171B and 172B.
                                                Harrington Units 061B, 062B, and 063B.
El Paso Electric..............................  Newman Units 2 *, 3 *, and 4 *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Gas-fired or gas/fuel oil-fired units.

[[Page 48362]]

B. Interstate Visibility Transport

    In our January 5, 2016 final action \134\ we disapproved the 
portion of Texas' SIP revisions intended to address interstate 
visibility transport for six NAAQS, including the 1997 8-hour ozone and 
1997 PM2.5.\135\ That rulemaking was challenged, however, 
and in December 2016, following the submittal of a request by the EPA 
for a voluntary remand of the parts of the rule under challenge, the 
Fifth Circuit Court of Appeals remanded the rule in its entirety 
without vacatur.\136\ In our January 4, 2017 proposed action we 
proposed to reconsider the basis of our prior disapproval of Texas' SIP 
revisions addressing interstate visibility transport under CAA section 
110(a)(2)(D)(i)(II) for six NAAQS. We have reconsidered the basis of 
our prior disapproval and are disapproving Texas' SIP revisions 
addressing interstate visibility transport under CAA section 
110(a)(2)(D)(i)(II) for six NAAQS. We are finalizing a FIP to fully 
address Texas' interstate visibility transport obligations for the 
following six NAAQS: (1) 1997 8-hour ozone, (2) 1997 PM2.5 
(annual and 24 hour), (3) 2006 PM2.5 (24-hour), (4) 2008 8-
hour ozone, (5) 2010 1-hour NO2 and (6) 2010 1-hour 
SO2. The BART FIP emission reductions are consistent with 
the level of emission reductions relied upon by other states during 
Regional Haze consultation, and it is therefore adequate to ensure that 
emissions from Texas do not interfere with measures to protect 
visibility in nearby states in accordance with CAA section 
110(a)(2)(D)(i)(II).
---------------------------------------------------------------------------

    \134\ 81 FR 296 (Jan. 5, 2016).
    \135\ Specifically, we previously disapproved the relevant 
portion of these Texas' SIP submittals: April 4, 2008: 1997 8-hour 
Ozone, 1997 PM2.5 (24-hour and annual); May 1, 2008: 1997 
8-hour Ozone, 1997 PM2.5 (24-hour and annual); November 
23, 2009: 2006 24-hour PM2.5; December 7, 2012: 2010 
NO2; December 13, 2012: 2008 8-hour Ozone; May 6, 2013: 
2010 1-hour SO2 (Primary NAAQS). 79 FR 74818, 74821; 81 
FR 296, 302.
    \136\ Texas v. EPA, 829 F.3d 405 (5th Cir. 2016).
---------------------------------------------------------------------------

VII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Overview, Executive 
Order 13563: Improving Regulation and Regulatory 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 Executive Orders 12866 and 13563 
(76 FR 3821, January 21, 2011).

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This action is not an Executive Order 13771 regulatory action 
because this action is not significant under Executive Order 12866.

C. Paperwork Reduction Act

    The Office of Management and Budget (OMB) has determined that this 
action imposes a collection burden that is subject to the Paperwork 
Reduction Act (PRA). 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. Therefore, the EPA will 
obtain a valid OMB control number unless OMB determines that these 
collection activities are covered under an existing information 
collection request (ICR) and associated OMB control number. If the EPA 
obtains a new OMB control number or amends an existing ICR with a valid 
OMB control number, the EPA will provide notice in the Federal Register 
as required by the PRA and the implementing regulations, with burden 
estimates, and, if necessary, publish a technical amendment to 40 CFR 
part 9 to display the new OMB control number for the information 
collection activities contained in this final rule.

D. Regulatory Flexibility Act

    I certify that this action will not have a significant impact on a 
substantial number of small entities. In making this determination, the 
impact of concern is any significant adverse economic impact on small 
entities. An agency may certify that a rule will not have a significant 
economic impact on a substantial number of small entities if the rule 
relieves regulatory burden, has no net burden or otherwise has a 
positive economic effect on the small entities subject to the rule. 
This rule does not impose any requirements or create impacts on small 
entities. This FIP action under Section 110 of the CAA will not create 
any new requirement with which small entities must comply. Accordingly, 
it affords no opportunity for the 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 CAA 
prescribes that various consequences (e.g., emission limitations) may 
or will flow from this action does not mean that the EPA either can or 
must conduct a regulatory flexibility analysis for this action. We have 
therefore concluded that, this action will have no net regulatory 
burden for all directly regulated small entities.

E. 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.

F. 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.

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

    This rule does not have tribal implications, as specified in 
Executive Order 13175. It will not have substantial direct effects on 
tribal governments. Thus, Executive Order 13175 does not apply to this 
rule.

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

    Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks \137\ applies to any rule that: (1) Is 
determined to be economically significant as defined under Executive 
Order 12866; and (2) concerns an environmental health or safety risk 
that we have reason to believe may have a disproportionate effect on 
children. EPA interprets EO 13045 as applying only to those regulatory 
actions that concern health or safety risks, such that the analysis 
required under Section 5-501 of the EO has the potential to influence 
the regulation. This action is not subject to Executive Order 13045 
because it is not economically significant as defined in Executive 
Order 12866, and because the EPA does not believe the environmental 
health or safety risks addressed by this action present a 
disproportionate risk to children. This action is not subject to EO 
13045 because it implements specific standards established by Congress 
in statutes. However, to the extent this rule will limit emissions of 
SO2, the rule will have a beneficial effect on children's 
health by reducing air pollution.
---------------------------------------------------------------------------

    \137\ 62 FR 19885 (Apr. 23, 1997).

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

[[Page 48363]]

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

    This action 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.

J. National Technology Transfer and Advancement Act (NTTAA)

    This action involves technical standards. The EPA has decided to 
use the applicable monitoring requirements of 40 CFR part 75. Part 75 
already incorporates a number of voluntary consensus standards. 
Consistent with the Agency's Performance Based Measurement System 
(PBMS), part 75 sets forth performance criteria that allow the use of 
alternative methods to the ones set forth in part 75. The PBMS approach 
is intended to be more flexible and cost-effective for the regulated 
community; it is also intended to encourage innovation in analytical 
technology and improved data quality. At this time, EPA is not 
recommending any revisions to part 75; however, EPA periodically 
revises the test procedures set forth in part 75. When EPA revises the 
test procedures set forth in part 75 in the future, EPA will address 
the use of any new voluntary consensus standards that are equivalent. 
Currently, even if a test procedure is not set forth in part 75, EPA is 
not precluding the use of any method, whether it constitutes a 
voluntary consensus standard or not, as long as it meets the 
performance criteria specified; however, any alternative methods must 
be approved through the petition process under 40 CFR 75.66 before they 
are used.

K. 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). We 
have determined that this rule will not have disproportionately high 
and adverse human health or environmental effects on minority or low-
income populations because it increases the level of environmental 
protection for all affected populations without having any 
disproportionately high and adverse human health or environmental 
effects on any population, including any minority or low-income 
population. The rule limits emissions of SO2 from certain 
facilities in Texas.

L. Congressional Review Act (CRA)

    This rule is exempt from the CRA because it is a rule of particular 
applicability.

List of Subjects

40 CFR Part 52

    Environmental protection, Air pollution control, Best available 
retrofit technology, Incorporation by reference, Intergovernmental 
relations, Interstate transport of pollution, Nitrogen dioxide, Ozone, 
Particulate matter, Regional haze, Reporting and recordkeeping 
requirements, Sulfur dioxides, Visibility.

40 CFR Part 97

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Intergovernmental relations, Nitrogen dioxide, 
Reporting and recordkeeping requirements, Sulfur dioxides.

    Dated: September 29, 2017.
E. Scott Pruitt,
Administrator.

    40 CFR parts 52 and 97 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.

Subpart SS--Texas

0
2. In Sec.  52.2270, the second table in paragraph (e) is amended by 
adding the entry ``Texas Regional Haze BART Requirement for EGUs for 
PM'' at the end of the table to read as follows:

Sec.  52.2270  Identification of plan.

* * * * *
    (e) * * *

                                  EPA Approved Nonregulatory Provisions and Quasi-Regulatory Measures in the Texas SIP
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        State
         Name of SIP provision           Applicable geographic or  submittal date/       EPA approval date                       Comments
                                            nonattainment area     effective date
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                      * * * * * * *
Texas Regional Haze BART Requirement     Statewide...............       3/31/2009  10/17/2017, [insert Federal    ......................................
 for EGUs for PM.                                                                   Register citation].
--------------------------------------------------------------------------------------------------------------------------------------------------------

0
3. Section 52.2304 is amended by adding paragraph (f) to read as 
follows:

Sec.  52.2304  Visibility protection.

* * * * *
    (f) Measures addressing disapproval associated with NOX 
and SO2. (1) The deficiencies associated with NOX 
identified in EPA's limited disapproval of the regional haze plan 
submitted by Texas on March 31, 2009, and EPA's disapprovals in 
paragraph (d) of this section, are satisfied by Sec.  52.2283(d).
    (2) The deficiencies associated with SO2 identified in 
EPA's limited disapproval of the regional haze plan submitted by Texas 
on March 31, 2009, and EPA's disapprovals in paragraph (d of this 
section), are satisfied by Sec.  52.2312.

0
4. Add Sec.  52.2312 to subpart SS to read as follows:

Sec.  52.2312  Requirements for the control of SO2 emissions to address 
in full or in part requirements related to BART, reasonable progress, 
and interstate visibility transport.

    (a) The Texas SO2 Trading Program provisions set forth 
in subpart FFFFF of part 97 of this chapter constitute the Federal 
Implementation Plan provisions fully addressing Texas' obligations with 
respect to best available retrofit technology under section 169A of the 
Act and the deficiencies associated with EPA's disapprovals in Sec.  
52.2304(d) and partially addressing Texas' obligations with respect to 
reasonable progress under section 169A of the Act, as those obligations 
relate to emissions of sulfur dioxide (SO2) from electric 
generating units (EGUs).
    (b) The provisions of subpart FFFFF of part 97 of this chapter 
apply to sources in Texas but not sources in Indian country located 
within the

[[Page 48364]]

borders of Texas, with regard to emissions in 2019 and each subsequent 
year.

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

0
5. 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
6. Revise the part heading for part 97 to read as set forth above.

0
7. Add subpart FFFFF consisting of Sec. Sec.  97.901 through 97.935 to 
read as follows:
Subpart FFFFF--Texas SO2 Trading Program
Sec.
97.901 Purpose.
97.902 Definitions.
97.903 Measurements, abbreviations, and acronyms.
97.904 Applicability.
97.905 Retired unit exemptions.
97.906 General provisions.
97.907 Computation of time.
97.908 Administrative appeal procedures.
97.909 [Reserved]
97.910 Texas SO2 Trading Program and Supplemental 
Allowance Pool Budgets.
97.911 Texas SO2 Trading Program allowance allocations.
97.912 Texas SO2 Trading Program Supplemental Allowance 
Pool.
97.913 Authorization of designated representative and alternate 
designated representative.
97.914 Responsibilities of designated representative and alternate 
designated representative.
97.915 Changing designated representative and alternate designated 
representative; changes in owners and operators; changes in units at 
the source.
97.916 Certificate of representation.
97.917 Objections concerning designated representative and alternate 
designated representative.
97.918 Delegation by designated representative and alternate 
designated representative.
97.919 [Reserved]
97.920 Establishment of compliance accounts and general accounts.
97.921 Recordation of Texas SO2 Trading Program allowance 
allocations.
97.922 Submission of Texas SO2 Trading Program allowance 
transfers.
97.923 Recordation of Texas SO2 Trading Program allowance 
transfers.
97.924 Compliance with Texas SO2 Trading Program 
emissions limitations.
97.925 [Reserved]
97.926 Banking.
97.927 Account error.
97.928 Administrator's action on submissions.
97.929 [Reserved]
97.930 General monitoring, recordkeeping, and reporting 
requirements.
97.931 Initial monitoring system certification and recertification 
procedures.
97.932 Monitoring system out-of-control periods.
97.933 Notifications concerning monitoring.
97.934 Recordkeeping and reporting.
97.935 Petitions for alternatives to monitoring, recordkeeping, or 
reporting requirements.

Subpart FFFFF--Texas SO2 Trading Program

Sec.  97.901  Purpose.

    This subpart sets forth the general, designated representative, 
allowance, and monitoring provisions for the Texas SO2 
Trading Program under sections 110 and 169A of the Clean Air Act and 40 
CFR 52.2312, as a means of addressing Texas' obligations with respect 
to BART, reasonable progress, and interstate visibility transport as 
those obligations relate to sulfur dioxide emissions from electricity 
generating units.

Sec.  97.902  Definitions.

    The terms used in this subpart shall have the meanings set forth in 
this section as follows:
    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 Texas SO2 
Trading Program allowances, the determination by the Administrator, 
State, or permitting authority, in accordance with this subpart or any 
SIP revision submitted by the State approved by the Administrator, of 
the amount of such Texas SO2 Trading Program allowances to 
be initially credited, at no cost to the recipient, to a Texas 
SO2 Trading Program unit.
    Allowance management system means the system by which the 
Administrator records allocations, transfers, and deductions of Texas 
SO2 Trading Program allowances under the Texas 
SO2 Trading Program. Such allowances are allocated, 
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, holding, transfer, or deduction 
of Texas SO2 Trading Program 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 
Texas SO2 Trading Program allowance transfer must be 
submitted for recordation in a Texas SO2 Trading Program 
source's compliance account in order to be available for use in 
complying with the source's Texas SO2 Trading Program 
emissions limitation for such control period in accordance with 
Sec. Sec.  97.906 and 97.924.
    Alternate designated representative means, for a Texas 
SO2 Trading Program source and each Texas SO2 
Trading Program 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 Texas 
SO2 Trading Program. If the Texas SO2 Trading 
Program source is also subject to the Acid Rain 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.
    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 Texas SO2 trading Program 
allowances held in the general account and, for a Texas SO2 
Trading Program 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 parameters in the measurement units 
required by this subpart.
    Business day means a day that does not fall on a weekend or a 
federal holiday.
    Clean Air Act means the Clean Air Act, 42 U.S.C. 7401, et seq.

[[Page 48365]]

    Coal means ``coal'' as defined in Sec.  72.2 of this chapter.
    Commence commercial operation means, with regard to a Texas 
SO2 Trading Program unit, to have begun to produce steam, 
gas, or other heated medium used to generate electricity for sale or 
use, including test generation.
    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 Texas SO2 Trading 
Program source under this subpart, in which any Texas SO2 
Trading Program allowance allocations to the Texas SO2 
Trading Program units at the source are recorded and in which are held 
any Texas SO2 Trading Program allowances available for use 
for a control period in a given year in complying with the source's 
Texas SO2 Trading Program emissions limitation in accordance 
with Sec. Sec.  97.906 and 97.924.
    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 SO2 emissions, stack gas volumetric flow rate, 
stack gas moisture content, and O2 or CO2 
concentration (as applicable), in a manner consistent with part 75 of 
this chapter and Sec. Sec.  97.930 through 97.935. 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 SO2 monitoring system, consisting of a 
SO2 pollutant concentration monitor and an automated data 
acquisition and handling system and providing a permanent, continuous 
record of SO2 emissions, in parts per million (ppm);
    (3) A moisture monitoring system, as defined in Sec.  75.11(b)(2) 
of this chapter and providing a permanent, continuous record of the 
stack gas moisture content, in percent H2O;
    (4) A 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
    (5) 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 January 1 of a calendar 
year, except as provided in Sec.  97.906(c)(3), and ending on December 
31 of the same year, inclusive.
    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.
    Designated representative means, for a Texas SO2 Trading 
Program source and each Texas SO2 Trading Program 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 Texas SO2 Trading 
Program. If the Texas SO2 Trading Program source is also 
subject to the Acid Rain 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.
    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 Texas 
SO2 Trading Program units at a Texas SO2 Trading 
Program source during a control period in a given year that exceeds the 
Texas SO2 Trading Program emissions limitation for the 
source for such control period.
    Fossil fuel means natural gas, petroleum, coal, or any form of 
solid, liquid, or gaseous fuel derived from such material.
    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, which is not a compliance 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.
    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.
    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.

[[Page 48366]]

    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.
    Natural person means a human being, as opposed to a legal person, 
which may be a private (i.e., business entity or non-governmental 
organization) or public (i.e., government) organization.
    Operate or operation means, with regard to a unit, to combust fuel.
    Operator means, for a Texas SO2 Trading Program source 
or a Texas SO2 Trading Program unit at a source 
respectively, any person who operates, controls, or supervises a Texas 
SO2 Trading Program unit at the source or the Texas 
SO2 Trading Program 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 Texas SO2 Trading Program source or a 
Texas SO2 Trading Program unit at a source, any of the 
following persons:
    (1) Any holder of any portion of the legal or equitable title in a 
Texas SO2 Trading Program unit at the source or the Texas 
SO2 Trading Program unit;
    (2) Any holder of a leasehold interest in a Texas SO2 
Trading Program unit at the source or the Texas SO2 Trading 
Program 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) on the revenues 
or income from such Texas SO2 Trading Program unit; and
    (3) Any purchaser of power from a Texas SO2 Trading 
Program unit at the source or the Texas SO2 Trading Program 
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.
    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 Texas 
SO2 Trading Program allowances, the moving of Texas 
SO2 Trading Program allowances by the Administrator into, 
out of, or between Allowance Management System accounts, for purposes 
of allocation, transfer, or deduction.
    Reference method means any direct test method of sampling and 
analyzing for an air pollutant as specified in Sec.  75.22 of this 
chapter.
    Replacement, replace, or replaced means, with regard to a unit, the 
demolishing of a unit, or the permanent 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).
    Serial number means, for a Texas SO2 Trading Program 
allowance, the unique identification number assigned to each Texas 
SO2 Trading Program allowance by the Administrator.
    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 Texas.
    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.
    Texas SO2 Trading Program means an SO2 air pollution 
control and emission reduction program established in accordance with 
this subpart and 40 CFR 52.2312 (including such a program that is 
revised in a SIP revision approved by the Administrator), or 
established in a SIP revision approved by the Administrator, as a means 
of addressing the State's obligations with respect to BART, reasonable 
progress, and interstate visibility transport as those obligations 
relate to emissions of SO2 from electricity generating 
units.
    Texas SO2 Trading Program allowance means a limited authorization 
issued and allocated by the Administrator under this subpart, or by a 
State or permitting authority under a SIP revision approved by the 
Administrator, to emit one ton of SO2 during a control 
period of the specified calendar year for which the authorization is 
allocated or of any calendar year thereafter under the Texas 
SO2 Trading Program.
    Texas SO2 Trading Program allowance deduction or deduct Texas SO2 
Trading Program allowances means the permanent withdrawal of Texas 
SO2 Trading Program allowances by the Administrator from a 
compliance account (e.g., in order to account for compliance with the 
Texas SO2 Trading Program emissions limitation).
    Texas SO2 Trading Program allowances held or hold Texas SO2 Trading 
Program allowances means the Texas SO2 Trading Program 
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, Texas SO2 Trading Program 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, Texas SO2 Trading Program 
allowance transfer in accordance with this subpart.
    Texas SO2 Trading Program emissions limitation means, for a Texas 
SO2 Trading Program source, the tonnage of SO2 
emissions authorized in a control period by the Texas SO2 
Trading Program allowances available for deduction for the source under 
Sec.  97.924(a) for such control period.
    Texas SO2 Trading Program source means a source that includes one 
or more Texas SO2 Trading Program units.
    Texas SO2 Trading Program unit means a unit that is subject to the 
Texas SO2 Trading Program under Sec.  97.904.

[[Page 48367]]

    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.

Sec.  97.903  Measurements, abbreviations, and acronyms.

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

BART--best available retrofit technology
Btu--British thermal unit
CO2--carbon dioxide
CSAPR--Cross-State Air Pollution Rule
H2O--water
hr--hour
lb--pound
mmBtu--million Btu
MWe--megawatt electrical
NOX--nitrogen oxides
O2--oxygen
ppm--parts per million
scfh--standard cubic feet per hour
SIP--State implementation plan
SO2--sulfur dioxide

Sec.  97.904  Applicability.

    (a) Each of the units in Texas listed in the table in Sec.  
97.911(a)(1) shall be a Texas SO2 Trading Program unit, and 
each source that includes one or more such units shall be a Texas 
SO2 Trading Program source, subject to the requirements of 
this subpart.
    (b) Opt-in provisions. (1) The provisions of paragraph (b) of this 
section apply to each unit in Texas that:
    (i) Is listed in the table entitled ``Unit Level Allocations under 
the CSAPR FIPs after Tolling,'' EPA-HQ-OAR-2009-0491-5028, available at 
www.regulations.gov;
    (ii) Is not a Texas SO2 Trading Program unit under 
paragraph (a) of this section; and
    (iii) Has not received a determination of non-applicability under 
40 CFR 97.404(c), 97.504(c), 97.704(c), or 97.804(c).
    (2) The designated representative of a unit described in paragraph 
(b)(1) of this section may submit an opt-in application seeking 
authorization for the unit to participate in the Texas SO2 
Trading Program, provided that the unit has operated in the calendar 
year preceding submission of the opt-in application. Opt-in 
applications must be submitted in a format specified by the 
Administrator no later than October 1 of the year preceding the first 
control period for which authorization to participate in the Texas 
SO2 Trading Program is sought.
    (3) The Administrator shall review applications for opt-in units 
and respond in writing to the designated representative within 30 
business days. The Administrator will authorize the unit to participate 
in the Texas SO2 Trading Program if the provisions of 
paragraphs (b)(1) and (2) of this section are satisfied.
    (4) Following submission of an opt-in application and authorization 
in accordance with paragraphs (b)(2) and (3) of this section, the unit 
shall be a Texas SO2 Trading Program unit, and the source 
that includes the unit shall be a Texas SO2 Trading Program 
source, subject to the requirements of this subpart starting on the 
next January 1. The unit shall remain subject to the requirements of 
this subpart for the life of the source, with the exception for retired 
units under Sec.  97.905.
    (5) Opt-in units shall receive allowance allocations as provided in 
Sec.  97.911(b). These allocations shall be recorded into a source's 
compliance account per the recordation schedule in Sec.  97.921.
    (6) The Administrator will maintain a publicly accessible record of 
all units that become Texas SO2 Trading Program units under 
paragraph (b) of this section and of all allocations of allowances to 
such units. Such public access may be provided through posting of 
information on a Web site.

Sec.  97.905  Retired unit exemptions.

    (a)(1) Any Texas SO2 Trading Program unit that is 
permanently retired shall be exempt from Sec.  97.906(b) and (c)(1), 
Sec.  97.924, and Sec. Sec.  97.930 through 97.935.
    (2) The exemption under paragraph (a)(1) of this section shall 
become effective the day on which the Texas SO2 Trading 
Program 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 SO2, 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 comply with the requirements of the Texas SO2 
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. A 
retired unit that resumes operation will not receive an allowance 
allocation under Sec.  97.911. The unit may receive allowances from the 
Supplemental Allowance Pool pursuant to Sec.  97.912. All other 
provisions of Subpart FFFFF regarding monitoring, reporting, 
recordkeeping and compliance will apply on the first date on which the 
unit resumes operation.

Sec.  97.906  General provisions.

    (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.  97.913 through 97.918.
    (b) Emissions monitoring, reporting, and recordkeeping 
requirements. (1) The owners and operators, and the designated 
representative, of each Texas SO2 Trading Program source and 
each Texas SO2 Trading Program unit at the source shall 
comply with the monitoring, reporting, and recordkeeping requirements 
of Sec. Sec.  97.930 through 97.935.
    (2) The emissions data determined in accordance with Sec. Sec.  
97.930 through 97.935 shall be used to calculate allocations of Texas 
SO2 Trading Program allowances under Sec.  97.912 and to 
determine compliance with the Texas SO2 Trading Program 
emissions limitation under paragraph (c) of this

[[Page 48368]]

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.  97.930 through 97.935 and rounded to the nearest ton, 
with any fraction of a ton less than 0.50 being deemed to be zero and 
any fraction of a ton greater than or equal to 0.50 being deemed to be 
a whole ton.
    (c) SO2 emissions requirements--(1) Texas SO2 Trading Program 
emissions limitation. (i) As of the allowance transfer deadline for a 
control period in a given year, the owners and operators of each Texas 
SO2 Trading Program source and each Texas SO2 
Trading Program unit at the source shall hold, in the source's 
compliance account, Texas SO2 Trading Program allowances 
available for deduction for such control period under Sec.  97.924(a) 
in an amount not less than the tons of total SO2 emissions 
for such control period from all Texas SO2 Trading Program 
units at the source.
    (ii) If total SO2 emissions during a control period in a 
given year from the Texas SO2 Trading Program units at a 
Texas SO2 Trading Program source are in excess of the Texas 
SO2 Trading Program emissions limitation set forth in 
paragraph (c)(1)(i) of this section, then:
    (A) The owners and operators of the source and each Texas 
SO2 Trading Program unit at the source shall hold the Texas 
SO2 Trading Program allowances required for deduction under 
Sec.  97.924(d); and
    (B) The owners and operators of the source and each Texas 
SO2 Trading Program 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) Compliance periods. A Texas SO2 Trading Program unit 
shall be subject to the requirements under paragraph (c)(1) of this 
section for the control period starting on the later of January 1, 2019 
or the deadline for meeting the unit's monitor certification 
requirements under Sec.  97.930(b) and for each control period 
thereafter.
    (3) Vintage of Texas SO2 Trading Program allowances held for 
compliance. (i) A Texas SO2 Trading Program 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 Texas 
SO2 Trading Program allowance that was allocated for such 
control period or a control period in a prior year.
    (ii) A Texas SO2 Trading Program allowance held for 
compliance with the requirements under paragraph (c)(1)(ii)(A) of this 
section for a control period in a given year must be a Texas 
SO2 Trading Program allowance that was allocated for a 
control period in a prior year or the control period in the given year 
or in the immediately following year.
    (4) Allowance Management System requirements. Each Texas 
SO2 Trading Program allowance shall be held in, deducted 
from, or transferred into, out of, or between Allowance Management 
System accounts in accordance with this subpart.
    (5) Limited authorization. A Texas SO2 Trading Program 
allowance is a limited authorization to emit one ton of SO2 
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 
Texas SO2 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.
    (6) Property right. A Texas SO2 Trading Program 
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 Texas SO2 Trading Program allowances in accordance with 
this subpart.
    (2) A description of whether a unit is required to monitor and 
report SO2 emissions using a continuous emission monitoring 
system (under subpart B 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.  97.930 through 97.935 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 Texas 
SO2 Trading Program source and each Texas SO2 
Trading Program 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.  97.916 for the 
designated representative for the source and each Texas SO2 
Trading Program 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.  97.916 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 Texas SO2 Trading 
Program.
    (2) The designated representative of a Texas SO2 Trading 
Program source and each Texas SO2 Trading Program unit at 
the source shall make all submissions required under the Texas 
SO2 Trading Program, except as provided in Sec.  97.918. 
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 Texas SO2 
Trading Program that applies to a Texas SO2 Trading Program 
source or the designated representative of a Texas SO2 
Trading Program source shall also apply to the owners and operators of 
such source and of the Texas SO2 Trading Program units at 
the source.
    (2) Any provision of the Texas SO2 Trading Program that 
applies to a Texas SO2 Trading Program unit or the 
designated representative of a Texas SO2

[[Page 48369]]

Trading Program unit shall also apply to the owners and operators of 
such unit.
    (g) Effect on other authorities. No provision of the Texas 
SO2 Trading Program or exemption under Sec.  97.905 shall be 
construed as exempting or excluding the owners and operators, and the 
designated representative, of a Texas SO2 Trading Program 
source or Texas SO2 Trading Program unit from compliance 
with any other provision of the applicable, approved State 
implementation plan, a federally enforceable permit, or the Clean Air 
Act.

Sec.  97.907  Computation of time.

    (a) Unless otherwise stated, any time period scheduled, under the 
Texas SO2 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 
Texas SO2 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 Texas SO2 Trading Program, is not a business day, 
the time period shall be extended to the next business day.

Sec.  97.908  Administrative appeal procedures.

    The administrative appeal procedures for decisions of the 
Administrator under the Texas SO2 Trading Program are set 
forth in part 78 of this chapter.

Sec.  97.909  [Reserved]

Sec.  97.910  Texas SO2 Trading Program and Supplemental Allowance Pool 
Budgets.

    (a) The budgets for the Texas SO2 Trading Program and 
Supplemental Allowance Pool for the control periods in 2019 and 
thereafter are as follows:
    (1) The Texas SO2 Trading Program budget for the control 
period in 2019 and each future control period is 238,393 tons.
    (2) The Texas SO2 Trading Program Supplemental Allowance 
Pool budget for the control period in 2019 and each future control 
period is 10,000 tons.
    (b) [reserved]

Sec.  97.911  Texas SO2 Trading Program allowance allocations.

    (a)(1) Except as provided in paragraph (a)(2) of this section, 
Texas SO2 Trading Program allowances from the Texas 
SO2 Trading Program budget will be allocated, for the 
control periods in 2019 and each year thereafter, as provided in the 
following table:

------------------------------------------------------------------------
                                                             Texas SO2
                                                              trading
     Texas SO2 trading program units         ORIS code        program
                                                            allocation
------------------------------------------------------------------------
Big Brown Unit 1........................            3497           8,473
Big Brown Unit 2........................            3497           8,559
Coleto Creek Unit 1.....................            6178           9,057
Fayette/Sam Seymour Unit 1..............            6179           7,979
Fayette/Sam Seymour Unit 2..............            6179           8,019
Graham Unit 2...........................            3490             226
H W Pirkey Power Plant Unit 1...........            7902           8,882
Harrington Unit 061B....................            6193           5,361
Harrington Unit 062B....................            6193           5,255
Harrington Unit 063B....................            6193           5,055
JT Deely Unit 1.........................            6181           6,170
JT Deely Unit 2.........................            6181           6,082
Limestone Unit 1........................             298          12,081
Limestone Unit 2........................             298          12,293
Martin Lake Unit 1......................            6146          12,024
Martin Lake Unit 2......................            6146          11,580
Martin Lake Unit 3......................            6146          12,236
Monticello Unit 1.......................            6147           8,598
Monticello Unit 2.......................            6147           8,795
Monticello Unit 3.......................            6147          12,216
Newman Unit 2...........................            3456               1
Newman Unit 3...........................            3456               1
Newman Unit 4...........................            3456               2
Sandow Unit 4...........................            6648           8,370
Sommers Unit 1..........................            3611              55
Sommers Unit 2..........................            3611               7
Stryker Unit ST2........................            3504             145
Tolk Station Unit 171B..................            6194           6,900
Tolk Station Unit 172B..................            6194           7,062
WA Parish Unit WAP4.....................            3470               3
WA Parish Unit WAP5.....................            3470           9,580
WA Parish Unit WAP6.....................            3470           8,900
WA Parish Unit WAP7.....................            3470           7,653
Welsh Power Plant Unit 1................            6139           6,496
Welsh Power Plant Unit 2................            6139           7,050
Welsh Power Plant Unit 3................            6139           7,208
Wilkes Unit 1...........................            3478              14
Wilkes Unit 2...........................            3478               2
Wilkes Unit 3...........................            3478               3
------------------------------------------------------------------------

    (2) Notwithstanding paragraph (a)(1) of this section, if a unit 
provided an allocation pursuant to the table in paragraph (a)(1) of 
this section does not operate, starting after 2018, during the control 
period in two consecutive years, such unit will not be allocated the 
Texas SO2 Trading Program allowances provided in paragraph 
(a)(1) of this

[[Page 48370]]

section 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 Texas 
SO2 Trading Program allowances that would otherwise have 
been allocated to such unit will be allocated under the Texas 
Supplemental Allowance Pool under 40 CFR 97.912.
    (b)(1) A unit that becomes a Texas SO2 Trading Program 
unit pursuant to Sec.  97.904(b) will receive an allocation of Texas 
SO2 Trading Program allowances equal to the SO2 
allocation shown for the unit in the table referenced in Sec.  
97.404(b)(1) (ignoring the years shown in the column headings in the 
table) for the control period in each year while the unit is a Texas 
SO2 Trading Program unit, provided that the unit has 
operated during the calendar year immediately preceding the year of 
each such control period.
    (2) If a unit that becomes a Texas SO2 Trading Program 
unit pursuant to Sec.  97.904(b) does not operate during a given 
calendar year, no Texas SO2 Trading Program allowances will 
be allocated to that unit for the control period in the following year 
or any subsequent year, nor will any allowances that would otherwise 
have been allocated to such unit under paragraph (b)(1) of this section 
be made available for use by any other unit under the Texas 
Supplemental Allowance Pool or otherwise.
    (c) Units incorrectly allocated Texas SO2 Trading Program 
allowances. (1) For each control period in 2019 and thereafter, if the 
Administrator determines that Texas SO2 Trading Program 
allowances were incorrectly allocated under paragraph (a) or (b) of 
this section, or under a provision of a SIP revision approved by the 
Administrator, 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:
    (2) Except as provided in paragraph (c)(3) or (4) of this section, 
the Administrator will not record such Texas SO2 Trading 
Program allowances under Sec.  97.921.
    (3) If the Administrator already recorded such Texas SO2 
Trading Program allowances under Sec.  97.921 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.  97.924(b) for such control period, then the Administrator will 
deduct from the account in which such Texas SO2 Trading 
Program allowances were recorded an amount of Texas SO2 
Trading Program allowances allocated for the same or a prior control 
period equal to the amount of such already recorded Texas 
SO2 Trading Program allowances. The authorized account 
representative shall ensure that there are sufficient Texas 
SO2 Trading Program allowances in such account for 
completion of the deduction.
    (4) If the Administrator already recorded such Texas SO2 
Trading Program allowances under Sec.  97.921 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.  97.924(b) for such control period, then the Administrator will 
not make any deduction to take account of such already recorded Texas 
SO2 Trading Program allowances.
    (5) With regard to the Texas SO2 Trading Program 
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 (a) of this section, the 
Administrator will transfer such Texas SO2 Trading Program 
allowances to the Texas Supplemental Allowance Pool under 40 CFR 
97.912. With regard to the Texas SO2 Trading Program 
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 (b) of this section, the 
Administrator will retire such Texas SO2 Trading Program 
allowances.

Sec.  97.912  Texas SO2 Trading Program Supplemental Allowance Pool.

    (a) For each control period in 2019 and thereafter, the 
Administrator will allocate Texas SO2 Trading Program 
allowances from the Texas SO2 Trading Program Supplemental 
Allowance Pool as follows:
    (1) No later than February 15, 2020 and each subsequent February 
15, the Administrator will review all the quarterly SO2 
emissions reports provided under Sec.  97.934(d) for each Texas 
SO2 Trading Program unit for the previous control period. 
The Administrator will identify each Texas SO2 Trading 
Program source for which the total amount of emissions reported for the 
units at the source for that control period exceeds the total amount of 
allowances allocated to the units at the source for that control period 
under Sec.  97.911.
    (2) For each Texas SO2 Trading Program source identified 
under paragraph (a)(1) of this section, the Administrator will 
calculate the amount by which the total amount of reported emissions 
for that control period exceeds the total amount of allowances 
allocated for that control period under Sec.  97.911.
    (3)(i) For Coleto Creek (ORIS 6178), if the source is identified 
under paragraph (a)(1) of this section, the Administrator will allocate 
and record in the source's compliance account an amount of allowances 
from the Supplemental Allowance Pool equal to the lesser of the amount 
calculated for the source under paragraph (a)(2) of this section or the 
total number of allowances in the Supplemental Allowance Pool available 
for allocation under paragraph (b) of this section.
    (ii) For any Texas SO2 Trading Program sources 
identified under paragraph (a)(1) of this section other than Coleto 
Creek (ORIS 6178), the Administrator will allocate and record 
allowances from the Supplemental Allowance Pool as follows:
    (A) If the total for all such sources of the amounts calculated 
under paragraph (a)(2) of this section is less than or equal to the 
total number of allowances in the Supplemental Allowance Pool available 
for allocation under paragraph (b) of this section that remain after 
any allocation under paragraph (a)(3)(i) of this section, then the 
Administrator will allocate and record in the compliance account for 
each such source an amount of allowances from the Supplemental 
Allowance Pool equal to the amount calculated for the source under 
paragraph (a)(2) of this section.
    (B) If the total for all such sources of the amounts calculated 
under paragraph (a)(2) of this section is greater than the total number 
of allowances in the Supplemental Allowance Pool available for 
allocation under paragraph (b) of this section that remain after any 
allocation under paragraph (a)(3)(i) of this section, then the 
Administrator will calculate each such source's allocation of 
allowances from the Supplemental Allowance Pool by dividing the amount 
calculated under paragraph (a)(2) of this section for the source by the 
sum of the amounts calculated under paragraph (a)(2) of this section 
for all such sources, then multiplying by the number of allowances in 
the Supplemental Allowance Pool available for allocation under 
paragraph (b) of this section that remain after any allocation under 
paragraph (a)(3)(i) of this section and rounding to the nearest 
allowance. The Administrator will then record the calculated 
allocations of allowances in the applicable compliance accounts.
    (iii) Any unallocated allowances remaining in the Supplemental 
Allowance Pool after the allocations determined under paragraphs 
(a)(3)(i)

[[Page 48371]]

and (ii) of this section will be maintained in the Supplemental 
Allowance Pool. These allowances will be available for allocation by 
the Administrator in subsequent control periods to the extent 
consistent with paragraph (b) of this section.
    (4) The Administrator will notify the designated representative of 
each Texas SO2 Trading Program source when the allowances 
from the Supplemental Allowance Pool have been recorded.
    (b) The total amount of allowances in the Texas SO2 
Trading Program Supplemental Allowance Pool available for allocation 
for a control period is equal to the sum of the Texas SO2 
Trading Program Supplemental Allowance Pool budget under Sec.  
97.910(a)(2), any allowances from retired units pursuant to Sec.  
97.911(a)(2) and from corrections pursuant to Sec.  97.911(c)(5), and 
any allowances maintained in the Supplemental Allowance Pool pursuant 
to paragraph (a)(3)(iii) of this section, but cannot exceed by more 
than 44,711 tons the sum of the budget provided under Sec.  
97.910(a)(2) and any portion of the budget provided under Sec.  
97.910(a)(1) not otherwise allocated for that control period under 
Sec.  97.911(a)(1). If the number of allowances in the Supplemental 
Allowance Pool exceeds this level then the Administrator may only 
allocate allowances up to this level for the control period.

Sec.  97.913  Authorization of designated representative and alternate 
designated representative.

    (a) Except as provided under Sec.  97.915, each Texas 
SO2 Trading Program source, including all Texas 
SO2 Trading Program units at the source, shall have one and 
only one designated representative, with regard to all matters under 
the Texas SO2 Trading Program.
    (1) The designated representative shall be selected by an agreement 
binding on the owners and operators of the source and all Texas 
SO2 Trading Program units at the source and shall act in 
accordance with the certification statement in Sec.  97.916(a)(4)(iii).
    (2) Upon and after receipt by the Administrator of a complete 
certificate of representation under Sec.  97.916:
    (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 Texas SO2 Trading Program unit at the source in all 
matters pertaining to the Texas SO2 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 Texas 
SO2 Trading Program 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.  97.915, each Texas 
SO2 Trading Program 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 
Texas SO2 Trading Program units at the source and shall act 
in accordance with the certification statement in Sec.  
97.916(a)(4)(iii).
    (2) Upon and after receipt by the Administrator of a complete 
certificate of representation under Sec.  97.916,
    (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 Texas 
SO2 Trading Program 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.  97.902, and Sec. Sec.  97.914 
through 97.918, whenever the term ``designated representative'' is used 
in this subpart, the term shall be construed to include the designated 
representative or any alternate designated representative.

Sec.  97.914  Responsibilities of designated representative and 
alternate designated representative.

    (a) Except as provided under Sec.  97.918 concerning delegation of 
authority to make submissions, each submission under the Texas 
SO2 Trading Program shall be made, signed, and certified by 
the designated representative or alternate designated representative 
for each Texas SO2 Trading Program source and Texas 
SO2 Trading Program 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 
Texas SO2 Trading Program source or a Texas SO2 
Trading Program unit only if the submission has been made, signed, and 
certified in accordance with paragraph (a) of this section and Sec.  
97.918.

Sec.  97.915  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.  97.916. 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 Texas SO2 Trading Program source and 
the Texas SO2 Trading Program 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.  97.916. 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 Texas 
SO2 Trading Program source and the Texas

[[Page 48372]]

SO2 Trading Program units at the source.
    (c) Changes in owners and operators. (1) In the event an owner or 
operator of a Texas SO2 Trading Program source or a Texas 
SO2 Trading Program unit at the source is not included in 
the list of owners and operators in the certificate of representation 
under Sec.  97.916, 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 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 Texas SO2 Trading Program source or a Texas SO2 
Trading Program 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.  97.916 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 Texas SO2 Trading Program 
source (including the addition (see Sec.  97.904(b)) or removal of a 
unit), the designated representative or any alternate designated 
representative shall submit a certificate of representation under Sec.  
97.916 amending the list of units to reflect the change.
    (1) If the change is the addition of a unit (see Sec.  97.904(b)) 
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.  97.916  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 Texas SO2 Trading Program 
source, and each Texas SO2 Trading Program 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, and actual 
date of commencement of commercial operation, and a statement of 
whether such source is located in Indian country.
    (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 Texas SO2 
Trading Program source and of each Texas SO2 Trading Program 
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 Texas SO2 Trading Program unit at the source.''
    (ii) ``I certify that I have all the necessary authority to carry 
out my duties and responsibilities under the Texas SO2 
Trading Program on behalf of the owners and operators of the source and 
of each Texas SO2 Trading Program 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 Texas SO2 Trading 
Program unit, or where a utility or industrial customer purchases power 
from a Texas SO2 Trading Program 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 Texas SO2 Trading Program unit at the 
source; and Texas SO2 Trading Program allowances and 
proceeds of transactions involving Texas SO2 Trading Program 
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 Texas SO2 Trading 
Program allowances by contract, Texas SO2 Trading Program 
allowances and proceeds of transactions involving Texas SO2 
Trading Program 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.

Sec.  97.917  Objections concerning designated representative and 
alternate designated representative.

    (a) Once a complete certificate of representation under Sec.  
97.916 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.  97.916 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 Texas SO2 Trading Program.
    (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 Texas SO2 Trading Program allowance transfers.

[[Page 48373]]

Sec.  97.918  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 97.918(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 97.918(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 97.918 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.

Sec.  97.919   [Reserved]

Sec.  97.920  Establishment of compliance accounts and general 
accounts.

    (a) Compliance accounts. Upon receipt of a complete certificate of 
representation under Sec.  97.916, the Administrator will establish a 
compliance account for the Texas SO2 Trading Program 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) General accounts--(1) Application for general account. (i) Any 
person may apply to open a general account, for the purpose of holding 
and transferring Texas SO2 Trading Program 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 Texas 
SO2 Trading Program 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 Texas SO2 Trading Program 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 representative, as applicable, by an 
agreement that is binding on all persons who have an ownership interest 
with respect to Texas SO2 Trading Program allowances held in 
the general account. I certify that I have all the necessary authority 
to carry out my duties and responsibilities under the Texas 
SO2 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.
    (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 (b)(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:

[[Page 48374]]

    (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 Texas 
SO2 Trading Program allowances held in the general account 
in all matters pertaining to the Texas SO2 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 Texas 
SO2 Trading Program 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 (b)(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 Texas SO2 Trading Program 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 Texas SO2 Trading Program 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.
    (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 (b)(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 Texas 
SO2 Trading Program 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 (b)(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 Texas 
SO2 Trading Program allowances in the general account.
    (iii)(A) In the event a person having an ownership interest with 
respect to Texas SO2 Trading Program 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 Texas SO2 Trading Program 
allowances in the general account, including the addition or removal of 
a person, the authorized account representative or any alternate 
authorized account representative shall submit a revision to the 
application for a general account amending the list of persons having 
an ownership interest with respect to the Texas SO2 Trading 
Program 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 (b)(1) of this 
section has been submitted and received, the Administrator will rely on 
the application unless and until a superseding complete application for 
a general account under paragraph (b)(1) of this section is received by 
the Administrator.
    (ii) Except as provided in paragraph (b)(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 Texas SO2 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 Texas 
SO2 Trading Program 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 
(b)(5)(i) or (ii) of this section, the authorized

[[Page 48375]]

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 (b)(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 
97.920(b)(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 97.920(b)(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 
97.920(b)(5) is terminated.''
    (iv) A notice of delegation submitted under paragraph (b)(5)(iii) 
of this section shall be effective, with regard to the 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 (b)(5)(iii)(D) of this section and made in accordance with a 
notice of delegation effective under paragraph (b)(5)(iv) of this 
section shall be deemed to be an electronic submission by the 
authorized account representative or alternate authorized account 
representative submitting such notice of delegation.
    (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 Texas 
SO2 Trading Program allowance transfer under Sec.  97.922 
for any Texas SO2 Trading Program allowances in the account 
to one or more other Allowance Management System accounts.
    (ii) If a general account has no Texas SO2 Trading 
Program allowance transfers to or from the account for a 12-month 
period or longer and does not contain any Texas SO2 Trading 
Program 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 Texas SO2 
Trading Program allowance transfer under Sec.  97.922 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.
    (c) Account identification. The Administrator will assign a unique 
identifying number to each account established under paragraph (a) or 
(b) of this section.
    (d) 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 Texas 
SO2 Trading Program allowances in the account, only if the 
submission has been made, signed, and certified in accordance with 
Sec. Sec.  97.914(a) and 97.918 or paragraphs (b)(2)(ii) and (b)(5) of 
this section.

Sec.  97.921  Recordation of Texas SO2 Trading Program allowance 
allocations.

    (a) By November 1, 2018, the Administrator will record in each 
Texas SO2 Trading Program source's compliance account the 
Texas SO2 Trading Program allowances allocated to the Texas 
SO2 Trading Program units at the source in accordance with 
Sec.  97.911(a) for the control periods in 2019, 2020, 2021, and 2022. 
The Administrator may delay recordation of Texas SO2 Trading 
Program allowances for the specified control periods if the State of 
Texas submits a SIP revision before the recordation deadline.
    (b) By July 1, 2019 and July 1 of each year thereafter, the 
Administrator will record in each Texas SO2 Trading Program 
source's compliance account the Texas SO2 Trading Program 
allowances allocated to the Texas SO2 Trading Program units 
at the source in accordance with Sec.  97.911(a) for the control period 
in the fourth year after the year of the applicable recordation 
deadline under this paragraph. The Administrator may delay recordation 
of the Texas SO2 Trading Program allowances for the 
applicable control periods if the State of Texas submits a SIP revision 
by May 1 of the year of the applicable recordation deadline under this 
paragraph.
    (c) By February 15, 2020, and February 15 of each year thereafter, 
the Administrator will record in each Texas SO2 Trading 
Program source's compliance account the allowances allocated from the 
Texas SO2 Trading Program Supplemental Allowance Pool in 
accordance with Sec.  97.912 for the control period in the year of the 
applicable recordation deadline under this paragraph, .
    (d) By July 1, 2019 and July 1 of each year thereafter, the 
Administrator will record in each Texas SO2 Trading Program 
source's compliance account the Texas SO2 Trading Program 
allowances allocated to the Texas SO2 Trading Program units 
at the source in accordance with Sec.  97.911(b).
    (e) When recording the allocation of Texas SO2 Trading 
Program allowances to a Texas SO2 Trading Program unit in an 
Allowance Management System account, the Administrator will assign each 
Texas SO2 Trading Program allowance a unique identification 
number that will include digits identifying the year of the control 
period for which the Texas SO2 Trading Program allowance is 
allocated.

Sec.  97.922  Submission of Texas SO2 Trading Program allowance 
transfers.

    (a) An authorized account representative seeking recordation of a 
Texas SO2 Trading Program allowance transfer shall submit 
the transfer to the Administrator.

[[Page 48376]]

    (b) A Texas SO2 Trading Program 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 Texas SO2 Trading Program 
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 Texas SO2 Trading Program 
allowance identified by serial number in the transfer.

Sec.  97.923  Recordation of Texas SO2 Trading Program allowance 
transfers.

    (a) Within 5 business days (except as provided in paragraph (b) of 
this section) of receiving a Texas SO2 Trading Program 
allowance transfer that is correctly submitted under Sec.  97.922, the 
Administrator will record a Texas SO2 Trading Program 
allowance transfer by moving each Texas SO2 Trading Program 
allowance from the transferor account to the transferee account as 
specified in the transfer.
    (b) A Texas SO2 Trading Program 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 
Texas SO2 Trading Program allowances allocated 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.  97.924 for the control period 
immediately before such allowance transfer deadline.
    (c) Where a Texas SO2 Trading Program allowance transfer 
is not correctly submitted under Sec.  97.922, the Administrator will 
not record such transfer.
    (d) Within 5 business days of recordation of a Texas SO2 
Trading Program 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 Texas SO2 
Trading Program allowance transfer that is not correctly submitted 
under Sec.  97.922, 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.  97.924  Compliance with Texas SO2 Trading Program emissions 
limitations.

    (a) Availability for deduction for compliance. Texas SO2 
Trading Program allowances are available to be deducted for compliance 
with a source's Texas SO2 Trading Program emissions 
limitation for a control period in a given year only if the Texas 
SO2 Trading Program allowances:
    (1) Were allocated 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.  97.923, of Texas SO2 Trading Program 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 Texas SO2 Trading Program 
allowances available under paragraph (a) of this section in order to 
determine whether the source meets the Texas SO2 Trading 
Program emissions limitation for such control period, as follows:
    (1) Until the amount of Texas SO2 Trading Program 
allowances deducted equals the number of tons of total SO2 
emissions from all Texas SO2 Trading Program units at the 
source for such control period; or
    (2) If there are insufficient Texas SO2 Trading Program 
allowances to complete the deductions in paragraph (b)(1) of this 
section, until no more Texas SO2 Trading Program allowances 
available under paragraph (a) of this section remain in the compliance 
account.
    (c)(1) Identification of Texas SO2 Trading Program 
allowances by serial number. The authorized account representative for 
a source's compliance account may request that specific Texas 
SO2 Trading Program 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 Texas SO2 Trading 
Program source and the appropriate serial numbers.
    (2) First-in, first-out. The Administrator will deduct Texas 
SO2 Trading Program 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 Texas SO2 Trading Program allowances 
in such request, on a first-in, first-out accounting basis in the 
following order:
    (i) Any Texas SO2 Trading Program allowances that were 
recorded in the compliance account pursuant to Sec.  97.921 and not 
transferred out of the compliance account, in the order of recordation; 
and then
    (ii) Any other Texas SO2 Trading Program allowances that 
were transferred to and recorded in the compliance account pursuant to 
this subpart, 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 Texas SO2 Trading Program source has 
excess emissions, the Administrator will deduct from the source's 
compliance account an amount of Texas SO2 Trading Program 
allowances, allocated 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 three 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.  97.925  [Reserved]

Sec.  97.926  Banking.

    (a) A Texas SO2 Trading Program allowance may be banked 
for future use or transfer in a compliance account or general account 
in accordance with paragraph (b) of this section.
    (b) Any Texas SO2 Trading Program allowance that is held 
in a compliance account or a general account will remain in such 
account unless and until the Texas SO2 Trading Program 
allowance is deducted or transferred under Sec.  97.911(c), Sec.  
97.923, Sec.  97.924, Sec.  97.927, or Sec.  97.928.

Sec.  97.927  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

[[Page 48377]]

making such correction, the Administrator will notify the authorized 
account representative for the account.

Sec.  97.928  Administrator's action on submissions.

    (a) The Administrator may review and conduct independent audits 
concerning any submission under the Texas SO2 Trading 
Program and make appropriate adjustments of the information in the 
submission.
    (b) The Administrator may deduct Texas SO2 Trading 
Program allowances from or transfer Texas SO2 Trading 
Program allowances to a compliance account, based on the information in 
a submission, as adjusted under paragraph (a) of this section, and 
record such deductions and transfers.

Sec.  97.929  [Reserved]

Sec.  97.930  General monitoring, recordkeeping, and reporting 
requirements.

    The owners and operators, and to the extent applicable, the 
designated representative, of a Texas SO2 Trading Program 
unit, shall comply with the monitoring, recordkeeping, and reporting 
requirements as provided in this subpart and subparts F and G of part 
75 of this chapter. For purposes of applying such requirements, the 
definitions in Sec.  97.902 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 ``Texas 
SO2 Trading Program unit,'' ``designated representative,'' 
and ``continuous emission monitoring system'' (or ``CEMS'') 
respectively as defined in Sec.  97.902. The owner or operator of a 
unit that is not a Texas SO2 Trading Program unit but that 
is monitored under Sec.  75.16(b)(2) of this chapter shall comply with 
the same monitoring, recordkeeping, and reporting requirements as a 
Texas SO2 Trading Program unit.
    (a) Requirements for installation, certification, and data 
accounting. The owner or operator of each Texas SO2 Trading 
Program unit shall:
    (1) Install all monitoring systems required under this subpart for 
monitoring SO2 mass emissions and individual unit heat input 
(including all systems required to monitor SO2 
concentration, stack gas moisture content, stack gas flow rate, 
CO2 or O2 concentration, and fuel flow rate, as 
applicable, in accordance with Sec. Sec.  75.11 and 75.16 of this 
chapter);
    (2) Successfully complete all certification tests required under 
Sec.  97.931 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 Texas SO2 Trading 
Program 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:
    (1) For a Texas SO2 Trading Program unit under Sec.  
97.904(a), January 1, 2019; or
    (2) For a Texas SO2 Trading Program unit under Sec.  
97.904(b), January 1 of the first control period for which the unit is 
a Texas SO2 Trading Program unit.
    (3) The owner or operator of a Texas SO2 Trading Program 
unit for which construction of a new stack or flue or installation of 
add-on SO2 emission controls is completed after the 
applicable deadline under paragraph (b)(1) or (2) 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.  97.930 through Sec.  97.935, rather than the 
monitoring systems required under part 75 of this chapter;
    (ii) SO2 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.  97.935, rather than Sec.  
75.66 of this chapter.
    (c) Reporting data. The owner or operator of a Texas SO2 
Trading Program 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 SO2 
concentration, stack gas flow rate, stack gas moisture content, fuel 
flow rate, and any other parameters required to determine 
SO2 mass emissions and heat input in accordance with Sec.  
75.31(b)(2) or (c)(3) of this chapter or section 2.4 of appendix D to 
part 75 of this chapter, as applicable.
    (d) Prohibitions. (1) No owner or operator of a Texas 
SO2 Trading Program 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.  97.935.
    (2) No owner or operator of a Texas SO2 Trading Program 
unit shall operate the unit so as to discharge, or allow to be 
discharged, SO2 to the atmosphere without accounting for all 
such SO2 in accordance with the applicable provisions of 
this subpart and part 75 of this chapter.
    (3) No owner or operator of a Texas SO2 Trading Program 
unit shall disrupt the continuous emission monitoring system, any 
portion thereof, or any other approved emission monitoring method, and 
thereby avoid monitoring and recording SO2 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 Texas SO2 Trading Program 
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.  97.905 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.  
97.931(d)(3)(i).
    (e) Long-term cold storage. The owner or operator of a Texas 
SO2 Trading Program unit is subject to the applicable 
provisions of Sec.  75.4(d) of this chapter concerning units in long-
term cold storage.

Sec.  97.931  Initial monitoring system certification and 
recertification procedures.

    (a) The owner or operator of a Texas SO2 Trading Program 
unit shall be exempt from the initial certification

[[Page 48378]]

requirements of this section for a monitoring system under Sec.  
97.930(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 and D 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.  97.930(a)(1) that is exempt from initial 
certification requirements under paragraph (a) of this section.
    (c) [Reserved]
    (d) Except as provided in paragraph (a) of this section, the owner 
or operator of a Texas SO2 Trading Program 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 
appendix D to part 75 of this chapter) under Sec.  97.930(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.  
97.930(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.  97.930(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.  97.930(a)(1) that may 
significantly affect the ability of the system to accurately measure or 
record SO2 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 under Sec.  97.930(a)(1) is 
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.  
97.930(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.  97.933.
    (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 Texas SO2 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 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 Texas SO2 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

[[Page 48379]]

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.  97.932(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 SO2 pollutant concentration 
monitor and disapproved flow monitor, respectively, the maximum 
potential concentration of SO2 and the maximum potential 
flow rate, as defined in sections 2.1.1.1 and 2.1.4.1 of appendix A to 
part 75 of this chapter.
    (2) For a disapproved moisture monitoring system and disapproved 
diluent gas monitoring system, respectively, the minimum potential 
moisture percentage and either the maximum potential CO2 
concentration or the minimum potential O2 concentration (as 
applicable), as defined in sections 2.1.5, 2.1.3.1, and 2.1.3.2 of 
appendix A to part 75 of this chapter.
    (3) For a disapproved 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.
    (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.  97.932  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 appendix D 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.  97.931 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 procedures in Sec.  
97.931 for each disapproved monitoring system.

Sec.  97.933  Notifications concerning monitoring.

    The designated representative of a Texas SO2 Trading 
Program unit shall submit written notice to the Administrator in 
accordance with Sec.  75.61 of this chapter.

Sec.  97.934  Recordkeeping and reporting.

    (a) General provisions. The designated representative of a Texas 
SO2 Trading Program unit shall comply with all recordkeeping 
and reporting requirements in paragraphs (b) through (e) of this 
section, the applicable recordkeeping and reporting requirements in 
subparts F and G of part 75 of this chapter, and the requirements of 
Sec.  97.914(a).
    (b) Monitoring plans. The owner or operator of a Texas 
SO2 Trading Program unit shall comply with the requirements 
of Sec.  75.62 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.  97.931, including the information required under Sec.  
75.63 of this chapter.
    (d) Quarterly reports. The designated representative shall submit 
quarterly reports, as follows:
    (1) The designated representative shall report the SO2 
mass emissions data and heat input data for a Texas SO2 
Trading Program 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, 2019 through March 31, 
2019; or
    (ii) The calendar quarter corresponding to the earlier of the date 
of provisional certification or the applicable deadline for initial 
certification under Sec.  97.930(b).
    (2) 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.  75.64 of this chapter.
    (3) For Texas SO2 Trading Program units that are also 
subject to the Acid Rain 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.
    (4) 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

[[Page 48380]]

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)(2) 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; 
and
    (2) For a unit with add-on SO2 emission controls and for 
all hours where SO2 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 SO2 emissions.

Sec.  97.935  Petitions for alternatives to monitoring, recordkeeping, 
or reporting requirements.

    (a) The designated representative of a Texas SO2 Trading 
Program unit may submit a petition under Sec.  75.66 of this chapter to 
the Administrator, requesting approval to apply an alternative to any 
requirement of Sec. Sec.  97.930 through 97.934.
    (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.

[FR Doc. 2017-21947 Filed 10-16-17; 8:45 am]
BILLING CODE 6560-50-P