Air quality implementation plans; approval and promulgation; various States: Iowa,

[Federal Register: September 5, 2007 (Volume 72, Number 171)]

[Proposed Rules]

[Page 50913-50916]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr05se07-13]

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 62

[EPA-R07-OAR-2007-0655; FRL-8462-8]

Approval and Promulgation of State Plans for Designated Facilities and Pollutants; Iowa; Clean Air Mercury Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

SUMMARY: EPA is proposing to approve the State Plan submitted by Iowa on August 15, 2006, and revisions submitted on April 26, 2007. The plan addresses the requirements of EPA's Clean Air Mercury Rule (CAMR), promulgated on May 18, 2005, and subsequently revised on June 9, 2006. EPA is proposing to determine that the submitted State Plan fully meets the CAMR requirements for Iowa.

CAMR requires States to regulate emissions of mercury (Hg) from large coal-fired electric generating units (EGUs). CAMR establishes State budgets for annual EGU Hg emissions and requires States to submit State Plans to ensure that annual EGU Hg emissions will not exceed the applicable State budget. States have the flexibility to choose which control measures to adopt to achieve the budgets, including participating in the EPA-administered CAMR cap-and-trade program. In the State Plan that EPA is proposing to approve Iowa would meet CAMR requirements by participating in the EPA trading program.

DATES: Comments must be received on or before October 5, 2007.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07- OAR-2007-0655, by one of the following methods:

1. http://www.regulations.gov: Follow the on-line instructions for

   submitting comments.

2. E-mail: jay.michael@epa.gov.

3. Mail: Michael Jay, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101.

4. Hand Delivery or Courier: Deliver your comments to: Michael Jay, Environmental Protection Agency, 901 North 5th Street, Kansas City, Kansas 66101. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8 a.m. to 4:30 p.m., excluding Federal holidays.

   Instructions: Direct your comments to Docket ID No. EPA-R07-OAR- 2007-0655. 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

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   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.

   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 at the Environmental Protection

   Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8 a.m. to 4:30 p.m., excluding Federal holidays.

   FOR FURTHER INFORMATION CONTACT: Michael Jay at (913) 551-7460 or by e- mail at jay.michael@epa.gov.

   SUPPLEMENTARY INFORMATION:

   Table of Contents

   1. What Action Is EPA Proposing to Take? II. What Is the Regulatory History of CAMR? III. What Are the General Requirements of CAMR State Plans? IV. How Can States Comply With CAMR? V. Analysis of Iowa's CAMR State Plan Submittal

      1. State Budgets

      2. CAMR State Plan VI. Statutory and Executive Order Reviews

   1. What Action Is EPA Proposing to Take?

      EPA is proposing to approve Iowa's State Plan, submitted on August 15, 2006, and April 26, 2007. In its State Plan, Iowa would meet CAMR by requiring certain coal-fired EGUs to participate in the EPA- administered cap-and-trade program addressing Hg emissions. EPA is proposing to determine that the State Plan meets the applicable requirements of CAMR.

   2. 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 Hg emissions from coal-fired EGUs (as defined in 40 CFR 60.24(h)(8)) under CAA section 111(d). EPA required all States to submit State Plans with control measures that ensure that total, annual Hg 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.

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

      CAMR establishes Statewide annual EGU Hg emission budgets and is to 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 Hg budget.

      Each State Plan must require coal-fired EGUs to comply with the monitoring, recordkeeping, and reporting provisions of 40 CFR part 75 concerning Hg 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 Hg 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.

   4. How Can States Comply With CAMR?

      Each State Plan must impose control requirements that the State demonstrates will limit Statewide annual Hg emissions from new and existing coal-fired EGUs to the amount of the State's applicable annual EGU Hg 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 chose to control Statewide annual Hg 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 Hg 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 Hg 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 Hg 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 Hg budget for that year.

   5. Analysis of Iowa's CAMR State Plan Submittal

      1. State Budgets

         In this action, EPA is proposing to approve Iowa's State Plan that adopts the annual EGU Hg budgets established for the State in CAMR, i.e., 0.727 tons for EGU Hg emissions in 2010-2017 and 0.287 tons for EGU Hg emissions in 2018 and thereafter. Iowa's State Plan sets these budgets as the total amount of allowances available for allocation for

         [[Page 50915]]

         each year under the EPA-administered CAMR cap-and-trade program.

      2. CAMR State Plan

         The Iowa State Plan requires coal-fired EGUs to participate in the EPA-administered CAMR cap-and-trade program. The State Plan incorporates by reference the EPA model Hg trading rule but has adopted an alternative allowance allocation methodology. Under the Hg allowance allocation methodology in the model rule, Hg allowances are allocated to units that have operated for 5 years, based on heat input data from a 3-year period that are adjusted for coal rank by using coal factors of 3.0 for the lignite combusted by the unit, 1.25 for the subbituminous combusted by the unit, and 1 for other coal ranks combusted by the unit. The model rule also provides a new unit set- aside from which units without 5 years of operation are allocated allowances based on the units' prior year emissions.

         States may establish in their State Plan submissions a different Hg allowance allocation methodology that will be used to allocate allowances to sources in the States if certain requirements are met concerning the timing of submission of units' allocations to the Administrator for recordation and the total amount of allowances allocated for each control period. In adopting alternative Hg allowance allocation methodologies, States have flexibility with regard to:

1. The cost to recipients of the allowances, which may be distributed for free or auctioned;

2. The frequency of allocations;

3. The basis for allocating allowances, which may be distributed, for example, based on historical heat input or electric and thermal output; and

4. The use of allowance set-asides and, if used, their size.

   In Iowa's alternative allowance methodology, Iowa has modified the portion of the model rule relating to the basis for allocating allowances to new units commencing operation on or after January 1, 2001. In Iowa's rule 567-34.304, the State has limited the timeframe within which a unit can meet the requirements to apply for allowances under the new unit set-aside to units that commence operation on or after January 1, 2001, and commence construction before January 1, 2006. As a result, one facility meets this criterion and is provided the full allocation under the new source set-aside for both phases amounting to 5 percent of the State's budget for phase I and 3 percent for phase II. Also in the section relating to new units, in the event a generator is served by two or more units, the nameplate capacity will be attributed to each unit in equal fraction of the total nameplate capacity multiplied by 7900 British Thermal Units per Kilowatt Hour for the determination of heat input for each unit.

   Iowa's State Plan requires coal-fired EGUs to comply with the monitoring, recordkeeping, and reporting provisions of 40 CFR part 75 concerning Hg mass emissions. Iowa's State Plan also 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 Hg 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. Iowa cites Section 455B.133 of the Iowa Code, which contains the broad enabling authority for Iowa's air pollution control regulations, as containing the legal authority for the Iowa Environmental Protection Commission to adopt the State's rule that allows for Iowa's participation in the nationwide cap and trade program for mercury.

   Iowa has committed to revise a definition in its rule to fully ensure allowances can be traded among all sources participating in the EPA-administered cap-and-trade program for mercury as intended. EPA discovered after review of other States' rules, but after Iowa had adopted its Clean Air Interstate Rule (CAIR) and CAMR rules, an issue related to the definition of ``permitting authority'' when it is revised to refer to a specific State's permitting authority.

   In Iowa's rule designed to meet CAMR, the EPA model trading rule was revised to limit all references to ``permitting authority'' to refer to the Iowa Department of Natural Resources. This change is acceptable in most, but not all, instances under the current model rule. In certain definitions in the model rule incorporated by Iowa (i.e., ``allocate'' or ``allocation,'' and ``Hg allowance''), it is important that the term ``permitting authority'' cover permitting authorities in all States that choose to participate in the respective EPA-administered trading program. This is necessary to ensure that all allowances issued in the EPA-administered trading program are fungible and can be traded and used for compliance with the allowance-holding requirement in any State in the program.

   On February 17, 2007, EPA provided a letter to Iowa that requested and outlined necessary definition revisions for all rules intended to meet CAIR and CAMR. EPA received a letter from Iowa on February 28, 2007, that provided a commitment to make the EPA suggested rule revisions as soon as is practicable upon publication of the final rule concerning the proposed Clean Air Mercury Rule (CAMR) Federal plan. The CAMR Federal plan was proposed on December 22, 2006, and the rulemaking also included changes to the CAMR model rule to integrate it with the proposed Federal plan. Any final changes will need to be incorporated in State rules, and Iowa prefers to wait and make one set of amendments to its State rule to address both the above-referenced definition changes and any final changes to the CAMR model rule reflecting the final Federal plan. On April 11, 2007, EPA received an electronic correspondence from Iowa stating that Iowa will, in any event, complete these rule revisions before January 1, 2008. The State will be able to simultaneously revise the ``permitting authority'' definition in all cap-and-trade rules for both CAIR and CAMR, and properly update the State's rule as necessary to meet the requirements of the EPA- administered cap-and-trade-program for mercury.

   The final rule concerning the CAMR Federal plan is expected to be published before the earliest, major deadline for compliance with requirements for source owners and operators under the CAIR trading programs, i.e., the January 1, 2008, deadline for emissions monitoring requirements under the CAIR Annual Trading Program. EPA expects that, by timing adoption of the EPA requested rule revisions to both Iowa's CAIR and CAMR rules to be soon after the publication of the final rule concerning the CAMR Federal plan, the State will ensure the revisions to the definition of ``permitting authority'' will be completed prior to any of the major compliance deadlines for source owners and operators under the CAIR trading programs. Even if the final rule concerning the CAMR Federal plan is not published in the expected timeframe, the State will still need to ensure the necessary State rule revisions are completed and submitted to EPA in advance of January 1, 2008.

   6. Statutory and Executive Order Reviews

   Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 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

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   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 proposes to approve 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 \1\ 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 Executive Order 12898, the Agency has considered whether CAMR may have disproportionate negative impacts on minority or low income populations and determined it would not.

   \1\ U.S. Environmental Protection Agency, 1998. Guidance for Incorporating Environmental Justice Concerns in EPA's NEPA Compliance Analyses. Office of Federal Activities, Washington, DC, April, 1998.

   In reviewing State Plan submissions, EPA's role is to approve State choices, 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 proposed rule 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 Part 62

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

   Dated: August 23, 2007. John B. Askew, Regional Administrator, Region 7.

   [FR Doc. E7-17414 Filed 9-4-07; 8:45 am]

   BILLING CODE 6560-50-P