Document ID: EPA-R03-OAR-2007-0345-0001
Agency: epa
Document Type: Proposed Rule
Title: Approval of Plan of the Commonwealth of Pennsylvania; Clean Air Mercury Rule
Posted Date: 2007-09-13T04:00Z

[Federal Register: September 13, 2007 (Volume 72, Number 177)]
[Proposed Rules]               
[Page 52325-52332]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13se07-20]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 62

[EPA-R03-OAR-2007-0345; FRL-8467-8]

 
Approval of Plan of the Commonwealth of Pennsylvania; Clean Air 
Mercury Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a State Plan submitted by the 
Commonwealth of Pennsylvania (Pennsylvania) which addresses the 
requirements of EPA's Clean Air Mercury Rule (CAMR), which EPA 
promulgated on May 18, 2005 and subsequently revised on June 9, 2006. 
EPA is proposing to determine that the submitted State Plan fully 
implements the CAMR requirements for Pennsylvania.
    CAMR requires States to regulate emissions of mercury (Hg) from 
large coal-fired electric generating units (EGUs). CAMR establishes 
State budgets for annual EGU mercury emissions and requires States to 
submit State Plans that ensure that annual EGU mercury emissions will 
not exceed the applicable State budget. States have the flexibility to 
choose which control measures to adopt to achieve the budgets, 
including

[[Page 52326]]

participating in the EPA-administered CAMR cap-and-trade program.
    Pennsylvania chose to adopt a State-specific plan for the control 
of mercury emissions from EGUs within the State instead of 
participating in the EPA-administered CAMR cap-and-trade program. 
Pennsylvania's plan includes a Pennsylvania-specific mercury control 
regulation for coal-fired EGUs and other elements which the State 
intends to implement to ensure that Pennsylvania meets its mercury 
budget.
    Pennsylvania's state-specific mercury control regulation 
establishes annual mercury emission limitations for EGUs as part of a 
Statewide nontradable mercury allowance program; sets mercury emissions 
standards for EGUs; and includes monitoring, recordkeeping, reporting 
and other provisions.

DATES: Comments must be received on or before October 15, 2007.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R03-OAR-2007-0345, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 

submitting comments.
    2. E-mail: Campbell.Dave@epa.gov.
    3. Mail: EPA-R03-OAR-2007-0345, Dave Campbell, Chief, Permits and 
Technical Assessment Branch, Mailcode 3AP11, U.S. Environmental 
Protection Agency, Region III, 1650 Arch Street, Philadelphia, 
Pennsylvania 19103.
    4. Hand Delivery or Courier: At the previously-listed EPA Region 
III address. Such deliveries are only accepted during the Regional 
Office's normal hours of operation.
    Instructions: Direct your comments to Docket ID No. EPA-R03-OAR-
2007-0345. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information provided, 

unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit through http://www.regulations.gov or e-

mail, information that you consider to be CBI or otherwise protected. 
The http://www.regulations.gov Web site is an ``anonymous access'' system, 

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

your e-mail address will be automatically captured and included as part 
of the comment that is placed in the public docket and made available 
on the Internet. If you submit an electronic comment, EPA recommends 
that you include your name and other contact information in the body of 
your comment and with any disk or CD-ROM you submit. If EPA cannot read 
your comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters and any form of 
encryption and should be free of any defects or viruses. For additional 
information about EPA's public docket visit the EPA Docket Center 
homepage at http://www.epa.gov/epahome/dockets.htm.

    Docket: All documents in the electronic docket are listed in the 
http://www.regulations.gov index. Although listed in the index, some 

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

in hard copy during normal business hours at the Air Protection 
Division, U.S. Environmental Protection Agency, Region III, 1650 Arch 
Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal 
are also available at the Pennsylvania Department of Environmental 
Resources, Bureau of Air Quality Control, P.O. Box 8468, 400 Market 
Street, Harrisburg, Pennsylvania 17105.

FOR FURTHER INFORMATION CONTACT: Mr. Ray Chalmers at 215-814-2061, or 
by e-mail at chalmers.ray@epa.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. What Action Is EPA Proposing To Take?
II. What Is the Regulatory History of CAMR?
III. What Are the General Requirements of CAMR?
IV. How Can States Comply With CAMR?
V. Analysis of Pennsylvania's CAMR State Plan Submittal
    A. EPA Is Proposing To Find That Pennsylvania's State Plan Meets 
All CAMR Budget Related and Other Requirements for Approval
    B. Summary of State Plan
VI. Statutory and Executive Order Reviews

I. What Action Is EPA Proposing To Take?

    EPA is proposing to approve Pennsylvania's State Plan for the 
control of mercury emissions from coal-fired EGUs, as submitted by 
Pennsylvania on November 6, 2006, and as subsequently revised by 
Pennsylvania on March 16, 2007. EPA is proposing to determine that the 
State Plan will meet the applicable requirements of CAMR. In its State 
Plan, Pennsylvania would meet CAMR requirements by implementing a 
Pennsylvania-specific mercury control regulation for coal-fired EGUs, 
rather than through participation in the EPA-administered CAMR cap-and-
trade program. Pennsylvania's state-specific regulation establishes 
annual emission limitations as part of a Statewide mercury nontradable 
allowance program; sets mercury emissions standards; and includes other 
requirements for the purpose of controlling mercury emissions from 
coal-fired EGUs.

II. What Is the Regulatory History of CAMR?

    CAMR was published by EPA on May 18, 2005 (70 FR 28606, ``Standards 
of Performance for New and Existing Stationary Sources: Electric 
Utility Steam Generating Units; Final Rule''). In this rule, acting 
pursuant to its authority under section 111(d) of the Clean Air Act 
(CAA), 42 U.S.C. 7411(d), EPA required that all States and the District 
of Columbia (all of which are referred to herein as States) meet 
Statewide annual budgets limiting mercury emissions from coal-fired 
EGUs (as defined in 40 CFR 60.24(h)(8)) under Clean Air Act (CAA) 
section 111(d). EPA required all States to submit State Plans with 
control measures that ensure that total, annual mercury emissions from 
the coal-fired EGUs located in the respective States do not exceed the 
applicable Statewide annual EGU mercury budget. Under CAMR, States may 
implement and enforce these reduction requirements by participating in 
the EPA-administered cap-and-trade program or by adopting any other 
effective and enforceable control measures.
    CAA section 111(d) requires States, and, along with CAA section 
301(d) and the Tribal Air Rule (40 CFR part 49), allows Tribes granted 
treatment as States (TAS), to submit State Plans to EPA that implement 
and enforce the standards of performance. CAMR explains what must be 
included in State Plans to address the requirements of CAA section 
111(d). The State Plans were due to EPA by November 17, 2006. Under 40 
CFR 60.27(b), the Administrator will approve or disapprove the State 
Plans.

III. What Are the General Requirements of CAMR State Plans?

    CAMR establishes Statewide annual EGU mercury emission budgets and 
is to

[[Page 52327]]

be implemented in two Phases. The first Phase of reductions starts in 
2010 and continues through 2017. The second Phase of reductions starts 
in 2018 and continues thereafter. CAMR requires States to implement the 
budgets by either: (1) Requiring coal-fired EGUs to participate in the 
EPA-administered cap-and-trade program; or (2) adopting other coal-
fired EGU control measures of the respective State's choosing and 
demonstrating that such control measures will result in compliance with 
the applicable State annual EGU mercury budget.
    Each State Plan must require coal-fired EGUs to comply with the 
monitoring, recordkeeping, and reporting provisions of 40 CFR part 75 
concerning mercury mass emissions. Each State Plan must also show that 
the State has the legal authority to adopt emission standards and 
compliance schedules necessary for attainment and maintenance of the 
State's annual EGU mercury budget and to require the owners and 
operators of coal-fired EGUs in the State to meet the monitoring, 
recordkeeping, and reporting requirements of 40 CFR part 75.

IV. How Can States Comply With CAMR?

    Each State Plan must impose control requirements that the State 
demonstrates will limit Statewide annual mercury emissions from new and 
existing coal-fired EGUs to the amount of the State's applicable annual 
EGU mercury budget. States have the flexibility to choose the type of 
EGU control measures they will use to meet the requirements of CAMR. 
EPA anticipates that many States will choose to meet the CAMR 
requirements by selecting an option that requires EGUs to participate 
in the EPA-administered CAMR cap-and-trade program. EPA also 
anticipates that many States may choose to control Statewide annual 
mercury emissions for new and existing coal-fired EGUs through an 
alternative mechanism other than the EPA-administered CAMR cap-and-
trade program. Each State that chooses an alternative mechanism must 
include with its plan a demonstration that the State Plan will ensure 
that the State will meet its assigned State annual EGU mercury emission 
budget.
    A State submitting a State Plan that requires coal-fired EGUs to 
participate in the EPA-administered CAMR cap-and-trade program may 
either adopt regulations that are substantively identical to the EPA 
model mercury trading rule (40 CFR part 60, subpart HHHH) or 
incorporate by reference the model rule. CAMR provides that States may 
only make limited changes to the model rule if the States want to 
participate in the EPA-administered trading program. A State Plan may 
change the model rule only by altering the allowance allocation 
provisions to provide for State-specific allocation of mercury 
allowances using a methodology chosen by the State. A State's 
alternative allowance allocation provisions must meet certain 
allocation timing requirements and must ensure that total allocations 
for each calendar year will not exceed the State's annual EGU mercury 
budget for that year.

V. Analysis of Pennsylvania's CAMR State Plan Submittal

A. EPA Is Proposing To Find That Pennsylvania's State Plan Meets All 
CAMR Budget Related and Other Requirements for Approval

    In today's action, EPA is proposing to approve Pennsylvania's State 
Plan as assuring that mercury emissions from the State's EGUs will not 
exceed the levels specified in the CAMR budget for Pennsylvania found 
at 40 CFR 60.24(h)(3), i.e., 1.779 tons per year for EGU mercury 
emissions in Phase 1 and 0.702 tons per year for EGU mercury emissions 
in Phase 2.
    The State Plan includes a State-specific regulation which requires 
owners or operators of affected new or existing coal-fired EGUs \1\ to 
comply with a Statewide mercury nontradable allowance program among 
other provisions. Pennsylvania assured that the regulation would apply 
to all of the EGUs which have emissions required to be accounted for 
under the CAMR budget for Pennsylvania by using in the regulation a 
definition of EGU consistent with the definition specified in CAMR at 
40 CFR 60.24(h)(8). Pennsylvania's Statewide mercury nontradable 
allowance program, limits total mercury emissions from EGUs in the 
State to the same Phase 1 and Phase 2 amounts as are set forth in the 
CAMR budget for Pennsylvania found at 40 CFR 60.24(h)(3). 
Pennsylvania's mercury nontradeable allowance program requires its 
Phase 1 reductions to be achieved starting January 1, 2010, the same 
date as the Phase 1 reductions are required to be achieved under the 
CAMR, but requires its Phase 2 reductions to be achieved starting 
January 1, 2015, earlier than the required Phase 2 reductions under 
CAMR.
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    \1\ EPA notes that Pennsylvania's definitions of ``existing 
EGU'' and ``new EGU'' overlap in that an EGU that ``commenced 
construction, modification, or reconstruction'' on January 1, 2004 
would be covered by both definitions. EPA believes that this 
technical problem with the rule will likely have no practical 
consequence since it is unlikely that there will be such a unit and 
Pennsylvania can resolve this if and when a problem arises. 
Therefore, EPA's proposed approval includes these definitions.
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    Pennsylvania's State-specific regulation implements the annual 
limits on total mercury emissions of EGUs in the State by setting aside 
for each EGU an amount of nontradable allowances that comprises the 
annual emission limitation (in ounces of mercury emissions) for that 
EGU. The amount set aside may include allowances requested by the owner 
or operator and provided from an annual emission limitation supplement 
pool. Further, the regulation states, in Sec.  123.207(p), that an 
owner or operator must demonstrate compliance with annual emission 
limitation on a unit-by-unit, facility-wide, or system-wide basis and 
explains, in Sec.  123.207(q) and (r), that, under facility-wide or 
system-wide compliance, the total annual emissions from the EGUs 
involved must be less than the total amount of allowable annual 
emissions for such EGUs. However, the regulation also provides, in 
Sec. Sec.  123.207(j)(5) and 123.209, that each ounce of emissions by 
an EGU, facility, or system, as applicable, in excess of the amount of 
allowances set aside for the EGU, facility, or system, including any 
set aside under Sec.  123.209, constitutes a violation. EPA interprets 
Sec.  123.207(j)(5) and (p) through (r) and Sec.  123.209 as requiring 
that the total mercury emissions from an EGU, or from the appropriate 
group of EGUs where compliance is on a facility-wide or system-wide 
basis, determined in accordance with Sec. Sec.  123.210-123.215, must 
not exceed the total amount of allowances set aside for the EGU or the 
appropriate group of EGUs, including any allowances set aside from the 
annual emission limitation supplement pool, for the year.
    It should be noted that Pennsylvania's mercury reduction regulation 
also restricts the emissions of mercury from existing and new coal-
fired EGUs through the imposition of emission standards. These 
standards, established in Sec.  123.205, are to be achieved in addition 
to the Statewide mercury nontradeable allowance program provisions 
described above. The CAMR does not establish or require similar 
emissions standards to be applied to individual emission units. As 
discussed above, CAMR requires a demonstration that the State Plan will 
ensure that the State will meet its assigned State annual EGU mercury 
emission budget. Pennsylvania meets this requirement through the 
establishment of its Statewide nontradeable mercury allowance program 
and not through the

[[Page 52328]]

emission limitations required by Sec.  123.205.
    In addition, EPA is proposing to approve Pennsylvania's Plan, 
interpreted as discussed below, as meeting the CAMR provision that 
State plans must require owners and operators of coal-fired EGUs to 
meet the monitoring, recordkeeping, and reporting requirements of 40 
CFR part 75. The provisions of the regulation included in the State's 
plan concerning monitoring, recordkeeping, and reporting, found at 
Sec. Sec.  123.210-123.215, are intended to be consistent with the 
monitoring, reporting, and recordkeeping requirements for mercury mass 
emissions in 40 CFR part 75, Subpart I and in EPA's CAMR model rule, 
which is based on and references 40 CFR part 75, Subpart I. Section 
123.210(a) and (b) states that, for purposes of compliance with 12-
month rolling average mercury emission requirements in Sec.  123.205 
and annual mercury mass emission requirements in Sec.  123.207, the 
monitoring, reporting, and recordkeeping requirements of Sec. Sec.  
123.210-123.215 and 139.101, 40 CFR part 75, Subpart I, and 
Pennsylvania's Continuous Source Monitoring Manual (DEP 274-0300-001) 
apply. The manual (at 1), in turn, states that part 75 applies to 
``monitoring systems required pursuant to only'' part 75 (e.g., mercury 
mass monitoring systems) and that ``[a]pproval for compliance with 
[part 75] must be obtained from'' EPA. In addition, Sec.  123.210(k) 
states that an owner or operator may not use any alternative to a part 
75 requirement unless the alternative is approved by the Administrator 
in writing. EPA therefore interprets the monitoring, reporting, and 
recordkeeping requirements in Pennsylvania's regulation as requiring 
owners and operators to meet the requirements of 40 CFR part 75, 
Subpart I and providing that, if there is any conflict between those 
requirements and any other requirements set forth in Sec. Sec.  
123.210-123.215, the part 75 provisions will take precedence for the 
purpose of compliance with annual mercury mass emission requirements.
    Specifically, Pennsylvania's regulation includes provisions, in 
Sec.  123.210(n)(1), allowing discontinuation of use of an approved 
monitoring system when the owner or operator is using another certified 
monitoring system for the appropriate parameter that is approved by the 
department in accordance with Sec. Sec.  123.210-123.215 and Chapter 
139, Subchapter C. In light of the other provisions of Pennsylvania's 
regulation discussed above, EPA interprets Sec.  123.210(n)(1) as 
allowing discontinuation of an approved monitoring system used for 
determining compliance with the annual mercury mass emission 
requirements in Sec.  123.207 only if another monitoring system for the 
appropriate parameter is approved in accordance with part 75, subpart 
I.\2\
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    \2\ EPA notes that Sec.  123.210(j) incorrectly references 
``subsections (f)-(h)'' (rather than just subsection (h)) and that 
the provision only makes sense where a certified monitoring system 
already exists and a new stack or flue or new control device is 
added, which is addressed only in subsection (h). In any event, that 
Sec.  123.210(j) is based on a provision in Sec.  60.4170(c)(2) that 
EPA has proposed to remove. See 71 FR 77100, 77117 (2006). EPA 
interprets Sec.  123.210(j) to apply only with regard to subsection 
(h), and, if EPA finalizes removal of Sec.  60.4170(c)(2), Sec.  
123.210(j ) will no longer apply at all for the purpose of 
compliance with the annual mercury mass emission limitation under 
Sec.  123.207.
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    Further, Pennsylvania's regulation includes provisions, in Sec.  
123.211(a)(5)(iii), requiring the substitution of alternative data in 
cases where the State ``issues a notice of disapproval of a 
certification application or a notice of disapproval of certification 
status'' and allowing the substitution of either data values as 
specified in part 75 or ``an alternative emission value that is more 
representative of actual emissions that occurred during the period.'' 
In light of the other provisions of Pennsylvania's regulation discussed 
above, EPA interprets Sec.  123.211(a)(5)(iii) as giving Pennsylvania 
the authority to approve substitute data values other than those 
specified by part 75 only in cases where those data values would be 
used solely for the purpose of showing compliance with the mercury 
emission requirements in Sec.  123.205 and not for any data required 
for the purpose of showing compliance with the annual mercury mass 
emission limitation in Sec.  123.207.
    Similarly, Sec.  123.212(a) of Pennsylvania's regulations requires 
the use of substitute data based on the Continuous Source Monitoring 
Manual if a monitoring system fails to meet certain quality-assurance, 
quality-control, or data validation requirements. As discussed above, 
the manual requires mercury mass emission monitoring systems to meet 
the requirements of part 75. Further, Sec.  123.212(a) also states that 
a mercury mass emission monitoring system failing to meet quality-
assurance or quality-control requirements must use substitute data 
under part 75. EPA therefore interprets Sec.  123.212(a) to require the 
use of substitute data as prescribed in part 75 for the purpose of 
showing compliance with the annual mercury mass emission limitation in 
Sec.  123.207.
    EPA is also proposing to approve the Plan as meeting the 
requirements of CAMR, and also of 40 CFR Subpart B, entitled, 
``Adoption and Submittal of State Plans for Designated Facilities,'' 
for a demonstration of legal authority. The State's Plan includes an 
opinion by the Chief Counsel of the Pennsylvania Department of 
Environmental Protection which demonstrates that the State has the 
required legal authority to adopt emission standards and compliance 
schedules necessary for attainment and maintenance of the State's 
annual EGU mercury budget and to require the owners and operators of 
coal-fired EGUs in the State to meet the monitoring, recordkeeping, and 
reporting requirements of 40 CFR part 75.
    Finally, EPA is proposing to approve the State's Plan as meeting 
the other applicable general requirements for approval under 40 CFR 
part 60, subpart B. The State's Plan requires owners and operators of 
affected coal-fired EGUs in Pennsylvania to comply with emission 
limitations (expressed as nontradable mercury allowances) that ensure 
that total emissions from the affected coal-fired EGUs in Pennsylvania 
will not exceed the CAMR budget for Pennsylvania found at 40 CFR 
60.24(h)(3). The State's Plan also requires owners or operators of 
affected coal-fired EGUs to achieve mercury emission reductions on a 
schedule that is equivalent to, or more rapid than, the schedule under 
CAMR. The State's Plan includes evidence that three public hearings 
were held, and also that public notice of these hearings was provided. 
The State's Plan also includes an emissions inventory of the State's 
EGUs.
    EPA describes the State's Plan in more detail below.

B. Summary of State Plan

    Pennsylvania's State Plan includes a State regulation at 25 Pa. 
Code, Chapter 123, Standards for Contaminants; Mercury, Annex A. 
Pennsylvania's state-specific mercury control regulation establishes 
annual mercury emission limitations for EGUs as part of a Statewide 
mercury nontradable allowance program, sets mercury emissions standards 
for EGUs, and includes monitoring, recordkeeping, reporting and other 
provisions.
    Pennsylvania's State-specific regulation is applicable to all of 
the EGUs which have emissions required to be accounted for under the 
CAMR budget for Pennsylvania found at 40 CFR 60.24(h)(3). Pennsylvania 
assured that the regulation would apply to all of the EGUs which have 
emissions required to be accounted for under the CAMR budget for 
Pennsylvania by using

[[Page 52329]]

in the regulation a definition of EGU consistent with the definition 
specified in CAMR at 40 CFR 60.24(h)(8).
    The Statewide mercury nontradable allowance program ensures that 
the mercury emissions from new and existing EGUs in the State will not 
exceed the CAMR budget for Pennsylvania found at 40 CFR 60.24(h)(3) by 
limiting total mercury emissions from EGUs in the State to the same 
Phase 1 and Phase 2 amounts as specified in the CAMR budget for the 
State. Under the Statewide mercury nontradable mercury allowance 
program the total amount of mercury emissions allowed to be emitted 
from affected coal-fired EGUs is 56,928 ounces (3,558 lbs or 1.779 
tons) per year during Phase 1 extending from January 1, 2010 through 
December 31, 2014, and 22,464 ounces (1,404 pounds or 0.702 tons) per 
year during Phase 2 starting January 1, 2015 (rather than January 1, 
2018, as specified in the CAMR budget for Pennsylvania found at 40 CFR 
60.24(h)(3)) and continuing in subsequent years.
    The Statewide mercury nontradable allowance program provides that 
of the total of 56,928 ounces per year of mercury emissions available 
for emission limitation set-asides during Phase 1, 54,080 ounces will 
be allocated to existing affected EGUs and the remaining five (5) 
percent will be set-aside for use by new affected EGUs. The Statewide 
mercury nontradable allowance program further provides that of the 
22,464 ounces per year of mercury emissions available for emission 
limitation set-asides during Phase 2, 21,790 ounces will be allocated 
to existing affected coal-fired EGUs and the remaining three (3) 
percent will be set aside for new affected coal-fired EGUs.
    The Statewide mercury nontradable allowance program provides that 
the annual nontradeable allowances set aside for owners and operators 
of new affected coal-fired EGUs shall be placed in an annual emission 
limitation supplement pool administered by the State. Upon petition by 
owners or operators of new affected EGUs, Pennsylvania may grant annual 
nontradeable allowances for the new affected coal-fired EGUs from this 
annual emission limitation supplement pool.
    Under the Statewide mercury nontradable allowance program owners or 
operators of new affected coal-fired EGUs that do not yet have a 
baseline heat input will be allocated allowances in accordance with the 
requirements of an approved State permit. The Statewide mercury 
nontradable allowance program specifies that after a new affected coal-
fired EGU has commenced operation and completed three control periods 
of operation, the EGU will become an existing EGU. The Statewide 
mercury nontradable allowance program provides that a new affected EGU 
will continue to receive annual nontradeable mercury allowances from 
the new unit set-aside until the new affected EGU is eligible for 
annual nontradable mercury allowances allocated from the set-aside for 
existing EGUs. Under the allowance program when a new affected EGU is 
eligible to receive annual nontradable mercury allowances from the set-
aside for existing affected EGUs, new maximum allowance levels for all 
existing affected EGUs will be established, and the State will publish 
these new allocation levels in the Pennsylvania Bulletin for comment by 
May 31 of the year that is two years prior to the affected control 
period.
    The Statewide mercury nontradable allowance program provides for 
determining the maximum number of annual nontradeable allowances set 
aside for the owners or operators of all existing affected coal-fired 
EGUs, except for owners or operators of existing circulating fluidized 
bed (CFB) units, by multiplying the EGU's baseline heat input fraction 
of the State's total baseline annual heat input from all affected EGUs 
by the State's annual mercury allowance set-aside for existing affected 
EGUs for each Phase.
    The Statewide mercury nontradable allowance program provides for 
determining the maximum number of annual nontradable mercury allowances 
set aside for owners or operators of existing affected CFB units by 
multiplying the affected CFB's baseline heat input fraction of the 
State's total baseline annual heat input for all EGUs by the State's 
Phase 2 annual mercury allowance for existing EGUs.
    The Statewide mercury nontradable allowance program provides that 
the State will publish for comment in the Pennsylvania Bulletin, by May 
31, 2008, the maximum number of annual nontradeable allowances set 
aside for ``the owner or operator of each existing affected CFB and EGU 
other than CFB for Phase 1 of the Statewide mercury allowance 
program,'' and that it will publish for comment in the Pennsylvania 
Bulletin, by May 31, 2013, the maximum number of annual nontradeable 
allowances set aside for ``the owner or operator of each existing 
affected CFB and EGU other than CFB for Phase 2 of the Statewide 
mercury allowance program.''
    The Statewide mercury nontradable allowance program specifies that 
the actual number of annual nontradable mercury allowances awarded to 
the owner or operator of the EGU, facility, or system shall be based on 
the actual emissions reported to the State. The Statewide mercury 
nontradable allowance program further specifies that the actual number 
of annual nontradable mercury allowances awarded to the owner or 
operator of the EGU, facility, or system may not exceed the maximum 
number of annual nontradeable mercury allowances assigned to the owner 
or operator of the EGU, facility, or system, except in cases where the 
owner or operator has petitioned for and been granted supplemental 
allowances. Under the Statewide mercury nontradable allowance program 
the State could provide such allowances from its annual emission 
limitation supplement pool.
    The Statewide mercury nontradable allowance program provides that 
by March 31 of the year following each reporting year, Pennsylvania 
will notify the owner or operator of each affected EGU, facility, or 
system, in writing, of the actual number of annual nontradable mercury 
allowances awarded to the owner or operator of the affected EGU, 
facility, or system for the control period.
    The Statewide mercury nontradable allowance program provides that 
the owner or operator of one or more affected mercury allowance program 
EGUs shall demonstrate compliance either on: (1) A unit-by-unit basis, 
(2) a facility-wide basis, or (3) a system-wide basis. Under the 
Statewide mercury nontradable allowance program, each ounce of mercury 
emitted in excess of the maximum number of annual nontradable mercury 
allowances set aside for the owner or operator of an EGU, facility, or 
system constitutes a violation of the program and of Pennsylvania's Air 
Pollution Control Act, unless the owner or operator has petitioned for 
and has been granted supplemental allowances.
    Under the Statewide mercury nontradable allowance program if the 
actual emissions of mercury reported to the State for an EGU, facility, 
or system are less than the maximum number of annual nontradeable 
mercury allowances set aside for the owner or operator of the EGU, 
facility, or system, the State will place the unused portion of the 
allowances in its annual emission limitation supplement pool.
    The Statewide mercury nontradable allowance program specifies that 
the unused portion of annual nontradeable mercury emission allowances 
assigned

[[Page 52330]]

to the owner or operator of an affected EGU, facility, or system for 
any year may not be added to the maximum number of annual nontradable 
mercury allowances assigned to the owner or operator of the affected 
EGU, facility, or system for use in future years. Under the Statewide 
mercury nontradable allowance program annual nontradable mercury 
allowances may not be banked for use in future years.
    The Statewide mercury nontradable allowance program does not apply 
to the owner or operator of an EGU that will be permanently shutdown no 
later than December 31, 2009. The allowance program provides that 
annual nontradable mercury allowances will not be set aside for the 
owner or operator of an existing affected EGU that is already shut down 
or scheduled for shutdown unless the owner or operator of the EGU 
obtains a plan approval for the construction of a new EGU, or is on 
``standby'' as of the effective date of each set-aside Phase. When a 
standby unit is ready for normal operation, the owner or operator may 
petition the State for annual nontradeable allowances. Under the 
regulation's allowance program the State could provide such allowances 
from its annual emission limitation supplement pool.
    The Statewide mercury nontradable allowance program specifies that 
an owner or operator of an existing affected EGU who enters into an 
enforceable agreement with the State, by December 31, 2007, to shutdown 
that existing EGU and to replace it, by December 31, 2012, with a new 
Integrated Gasification Combined Cycle (IGCC) unit, is eligible to 
request annual nontradable mercury allowances from the annual emission 
limitation supplement pool.
    The Statewide mercury nontradable allowance program provides that 
the State may revise the percentage of set-aside used to determine the 
number of ounces of mercury set-aside for future annual mercury 
emission limitations to accommodate the emissions from new EGUs, or 
changes in the calculation of baseline heat input, so that the total 
number of ounces of mercury emissions in the Statewide mercury 
nontradable allowance program is not exceeded.
    Pennsylvania's regulation requires owners or operators of EGUs not 
only to keep the emissions of their EGUs at or below levels consistent 
with their allowances for their EGUs, but also to meet emission limits. 
The emission limits for EGUS vary depending upon whether or not the EGU 
qualifies as a new or existing unit and on the type of EGU.
    The regulation defines a new EGU as ``[a]n EGU which commenced 
construction modification, or reconstruction, as defined under 40 CFR 
Part 60 (relating to standards of performance for new stationary 
sources), on or after January 30, 2004, and has less than three 
complete control periods of heat input data as of December 31 of the 
preceding control period.'' The regulation defines an existing EGU as 
``[a]n EGU which commenced construction, modification or reconstruction 
on or before January 30, 2004, or which has three complete control 
periods of heat input data as of December 31 or the preceding control 
period.''
    For new EGUs, Pennsylvania's regulation requires the owner or 
operator to comply at the commencement of operation on a rolling 12 
month basis with one of the following standards:
    (1) Pulverized Coal Fired (PCF) EGU. The owner or operator of a PCF 
EGU shall comply with either or the following:
    (i) A mercury emission standard of 0.011 pound of mercury per 
Gigawatt-hour (GWh).
    (ii) A minimum 90% control of total mercury as measured from the 
mercury content in the coal, either as fired or as approved in writing 
by Pennsylvania.
    (2) Circulating Fluidized Bed (CFB) EGU. The owner or operator of a 
CFB EGU shall comply with the following applicable provisions:
    (i) CFB EGUs burning 100% coal refuse as the only solid fossil fuel 
shall comply with either of the following:
    (A) A mercury emission standard of 0.0096 pound of mercury per GWh.
    (B) A minimum 95% control of total mercury as measured from the 
mercury content in the coal refuse, either as fired or as approved in 
writing by the State.
    (ii) CFB EGU's burning 100% coal as the only solid fossil fuel 
shall comply with either of the following:
    (A) A mercury emission standard of 0.011 pound of mercury per GWh.
    (B) A minimum 90% control of total mercury as measured from the 
mercury content in the coal refuse, either as fired or as approved in 
writing by the State.
    (iii) CFB EGUs burning multiple fuels shall comply with a prorated 
emission standard based on the percentage of heat input from the coal 
and the percentage of heat input from the coal refuse.
    (3) Integrated Gasification Combined Cycle (IGCC) EGU. The owner or 
operator of an IGCC EGU shall comply with one of the following:
    (i) A mercury emission standard of 0.0048 pound of mercury per GWh.
    (ii) A minimum 95% control of total mercury as measured from the 
mercury content in the coal, either as processed or as approved in 
writing by the State.
    Pennsylvania's regulation notifies owners or operators of new EGUs 
that they are also required to comply with the New Source Performance 
Standards (NSPS) found at 40 CFR Part 60, Subpart Da. In addition, the 
regulation indicates that the State's emission standards will serve as 
the baseline the State uses for review and approval of case-by-case 
best available technology determinations in accordance with the State's 
requirements relating to construction, modification, reactivation and 
operation of sources.
    For existing EGUs, the regulation requires the owner or operator to 
comply on a rolling 12-month basis with one of the following standards:
    (1) Phase 1--Effective from January 1, 2010 through December 31, 
2014:
    (i) PCF EGU--The owner or operator of a PCF shall comply with one 
of the following:
    (A) A mercury emission standard of 0.024 pound of mercury per GWh.
    (B) A minimum 80% control of total mercury as measured from the 
mercury content in the coal, either as fired or as approved in writing 
by the State.
    (ii) CFB EGU--The owner or operator of a CFB burning coal refuse 
shall comply with one of the following:
    (A) A mercury emission standard of 0.0096 pound of mercury per GWh.
    (B) A minimum 95% control of total mercury as measured from the 
mercury content in the coal refuse, either as fired or as approved in 
writing by the State.
    (2) Phase 2--Effective beginning January 1, 2015, and each 
subsequent year:
    (i) PCF EGU--The owner or operator of a PCF shall comply with one 
of the following:
    (A) A mercury emission standard of 0.012 pound of mercury per GWh.
    (B) A minimum 90% control of total mercury as measured from the 
mercury content in the coal, either as fired or as approved in writing 
by the State.
    (ii) CFB EGU--The owner or operator of a CFB burning coal refuse 
shall comply with one of the following:
    (A) A mercury emission standard of 0.0096 pound of mercury per GWh.
    (B) A minimum 95% control of total mercury as measured from the 
mercury content in the coal refuse, either as fired or as approved in 
writing by the State.
    The regulation also provides that the owner or operator of an EGU 
may request, in writing, credit for the mercury removal efficiency 
resulting from the pretreatment of coal or coal refuse towards the 
minimum specified percent control efficiency of the total mercury 
requirements.

[[Page 52331]]

    The regulation provides that the owner or operator of one or more 
EGUs subject to the mercury emissions standards shall demonstrate 
compliance on: (1) A unit-by-unit basis, or (2) a facility-wide basis.
    Pennsylvania's regulation requires owners or operators of coal-
fired EGUs to comply with the monitoring, recordkeeping, and reporting 
provisions of 40 CFR part 75 concerning mercury mass emissions. The 
regulation provides that the monitoring, recordkeeping, and reporting 
requirements of 40 CFR part 75 Subpart I (relating to mercury mass 
emission provisions) apply, as well as other monitoring, recordkeeping 
and reporting provisions which are Pennsylvania-specific, as discussed 
in detail above. The regulation further indicates that Pennsylvania has 
adopted by reference the provisions entitled ``Mercury Designated 
Representative for Mercury Budget Sources,'' found in EPA's model rule, 
40 CFR part 60, Subpart HHHH, at sections 60.4110 through 60.4114. In 
addition, the regulation provides that, for purposes of complying with 
its requirements, the definitions in 40 CFR 72.2 shall apply.
    The regulation also includes provisions pertaining to initial 
certification and recertification procedures for emissions reporting, 
provisions for out-of-control periods for emissions monitors, 
provisions pertaining to monitoring of gross electrical output, 
provisions pertaining to coal sampling and analysis for input mercury 
levels, and provisions pertaining to general recordkeeping and 
reporting.
    The regulation provides that owners or operators of new or existing 
affected EGUs will be issued a State plan approval or operating permit 
(including Title V permits) in which the applicable mercury control 
requirements will be specified. The regulation specifies that these 
plan approvals or permits will be issued before the later of January 1, 
2010 or the date on which the affected EGU commences operation.
    The regulation further provides, at Sec.  123.206, that the State's 
Department of Environmental Protection (the Department) ``may approve 
in a plan approval or operating permit, or both, an alternate mercury 
emission standard or compliance schedule, or both, if the owner or 
operator of an EGU subject to the emission standards of Sec.  123.205 
demonstrates in writing to the Department's satisfaction that the 
mercury reduction requirements are economically or technologically 
infeasible. The Department's approval of such an alternative emission 
standard or compliance schedule does not relieve the owner or operator 
of the EGU from complying with the other requirements of Sec. Sec.  
123.201-123.205 and 123.207-123.215.''
    The State Plan also contains required non-regulatory elements. The 
State Plan includes an inventory of the existing designated coal-fired 
EGUs in the State, and provides data regarding the mercury emissions of 
these EGUs. The Plan also provides documentation of the State's public 
participation process, including copies of public notices announcing 
public hearings and the opportunity to comment, a certification that 
three public hearings were held, and a summary of comments received by 
the State and of the State's responses. Further, the Plan includes a 
legal opinion of the Chief Counsel of the Pennsylvania Department of 
Environmental Protection which demonstrates that the State has the 
legal authority to adopt emission standards and compliance schedules 
necessary for attainment and maintenance of the State's annual EGU 
mercury budget and to require the owners and operators of coal-fired 
EGUs in the State to meet the monitoring, recordkeeping, and reporting 
requirements of 40 CFR part 75.

VI. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
proposed action is not a ``significant regulatory action'' and 
therefore is not subject to review by the Office of Management and 
Budget. For this reason, this action is also not subject to Executive 
Order 13211, ``Actions Concerning Regulations That Significantly Affect 
Energy Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This 
action merely proposes to approve State law as meeting Federal 
requirements and would impose no additional requirements beyond those 
imposed by State law. Accordingly, the Administrator certifies that 
this proposed rule would not have a significant economic impact on a 
substantial number of small entities under the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.). Because this action proposes to approve 
pre-existing requirements under State law and would not impose any 
additional enforceable duty beyond that required by State law, it does 
not contain any unfunded mandate or significantly or uniquely affect 
small governments, as described in the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4).
    This proposal also does not have Tribal implications because it 
would not have a substantial direct effect on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes, as specified by Executive 
Order 13175 (65 FR 67249, November 9, 2000).
    This proposed action also does not have Federalism implications 
because it would not have substantial direct effects on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government, as specified in Executive Order 13132 (64 FR 43255, 
August 10, 1999). This action merely proposes to approve a State rule 
implementing a Federal standard. It does not alter the relationship or 
the distribution of power and responsibilities established in the CAA. 
This proposed rule also is not subject to Executive Order 13045 
``Protection of Children from Environmental Health Risks and Safety 
Risks'' (62 FR 19885, April 23, 1997), because it approves a state rule 
implementing a Federal standard.
    Executive Order 12898, ``Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations,'' requires 
Federal agencies to consider the impact of programs, policies, and 
activities on minority populations and low-income populations. EPA 
guidance \3\ states that EPA is to assess whether minority or low-
income populations face risk or a rate of exposure to hazards that is 
significant and that ``appreciably exceed[s] or is likely to 
appreciably exceed the risk or rate to the general population or to the 
appropriate comparison group.'' (EPA, 1998) Because this rule merely 
proposes to approve a state rule implementing the Federal standard 
established by CAMR, EPA lacks the discretionary authority to modify 
today's regulatory decision on the basis of environmental justice 
considerations. However, EPA has already considered the impact of CAMR, 
including this Federal standard, on minority and low-income 
populations. In the context of EPA's CAMR published in the Federal 
Register on May 18, 2005, in accordance with EO 12898, the Agency has 
considered whether CAMR may have disproportionate negative impacts on 
minority or low income populations and determined it would not.
---------------------------------------------------------------------------

    \3\ U.S. Environmental Protection Agency, 1998. Guidance for 
Incorporating Environmental Justice Concerns in EPA's NEPA 
Compliance Analyses. Office of Federal Activities, Washington, DC, 
April, 1998.
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    In reviewing State Plan submissions, EPA's role is to approve State 
choices,

[[Page 52332]]

provided that they meet the criteria of the CAA. In this context, in 
the absence of a prior existing requirement for the State to use 
voluntary consensus standards (VCS), EPA has no authority to disapprove 
a State Plan for failure to use VCS. It would thus be inconsistent with 
applicable law for EPA, when it reviews a State Plan submission, to use 
VCS in place of a State Plan submission that otherwise satisfies the 
provisions of the CAA. Thus, the requirements of section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) do not apply. This rule proposing to approve Pennsylvania's State 
Plan submittal for the CAMR requirements would not impose an 
information collection burden under the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 62

    Environmental protection, Air pollution control, Electric 
utilities, Intergovernmental relations, Mercury, Reporting and 
recordkeeping requirements.

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

    Dated: September 4, 2007.
Donald S. Welsh,
Regional Administrator, Region III.
[FR Doc. E7-18057 Filed 9-12-07; 8:45 am]

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