[Federal Register Volume 64, Number 21 (Tuesday, February 2, 1999)]
[Proposed Rules]
[Pages 5015-5017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2445]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[PA112-4084; FRL-6229-2]


Approval and Promulgation of Air Quality Implementation Plans; 
Pennsylvania; Nitrogen Oxides Allowance Requirements

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a State Implementation Plan (SIP) 
revision submitted by the Commonwealth of Pennsylvania. This revision 
implements Pennsylvania's portion of the Ozone Transport Commission's 
(OTC) September 27, 1994 Memorandum of Understanding (MOU) including a 
regional nitrogen oxides (NOX) cap and trade program that 
will significantly reduce NOX emissions generated within the 
Ozone Transport Region (OTR). The intended effect of this action is to 
propose approval of Pennsylvania's regulations implementing Phase II of 
the OTC's MOU to reduce nitrogen oxides.

DATES: Written comments must be received on or before March 4, 1999.

ADDRESSES: Written comments may be mailed to David L. Arnold, Chief, 
Ozone & Mobile Sources Branch, Mailcode 3AP21, U.S. EPA, Region III, 
1650 Arch Street, Philadelphia, PA 19103. Copies of the documents 
relevant to this action are available for public inspection during 
normal business hours at the Air

[[Page 5016]]

Protection Division, EPA, Region III, 1650 Arch Street, Philadelphia, 
PA 19103 and Pennsylvania Department of Environmental Protection, 
Bureau of Air Quality, P.O. Box 8468, 400 Market Street, Harrisburg, PA 
17105.

FOR FURTHER INFORMATION CONTACT: Cristina Fernandez, (215) 814-2178, or 
by e-mail at [email protected]. While information may be 
requested via e-mail, comments must be submitted in writing to the 
above Region III address.

SUPPLEMENTARY INFORMATION: On December 19, 1997, the Pennsylvania 
Department of Environmental Protection (PADEP) submitted a revision to 
its State Implementation Plan (SIP). The revision consists of 
amendments to Title 25 of the Pennsylvania Code including Chapter 
121.01--Definitions and Chapter 123--NOX Allowance 
Requirements.

I. Background

    The Ozone Transport Commission (OTC) adopted a Memorandum of 
Understanding (MOU) on September 27, 1994, committing the signatory 
states to the development and proposal of a two phase region-wide 
reduction in nitrogen oxides (NOX) emissions by 1999 and 
2003, respectively. As reasonably available control technology (RACT) 
to reduce NOX emissions was required to be implemented by 
May of 1995, the MOU refers to the reduction in NOX 
emissions to be achieved by 1999 as Phase II; and the reduction in 
NOX emissions to be achieved by 2003 as Phase III. The OTC 
states include Maine, New Hampshire, Vermont, Massachusetts, 
Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, 
Maryland, Delaware, the northern counties of Virginia and the District 
of Columbia. All of the OTC states, with the exception of the 
Commonwealth of Virginia, signed the September 27, 1994 MOU. The OTC 
MOU requires a reduction in ozone season NOX emissions from 
utility and large industrial combustion facilities 2 within the Ozone 
Transport Region (OTR) in order to further the effort to achieve the 
health-based National Ambient Air Quality Standard (NAAQS) for ozone. 
In the MOU, the OTC states agreed to propose regulations for the 
control of NOX emissions in accordance with the following 
guidelines:
    1. The level of NOX required would be established from a 
1990 baseline emissions level.
    2. The reduction would vary by location, or zone, and would be 
implemented in two phases utilizing a region wide trading program.
    3. The reduction would be determined based on the less stringent of 
each of the following:
    a. By May 1, 1999, the affected facilities in the inner zone shall 
reduce their rate of NOX emissions by 65% from baseline, or 
emit NOX at a rate no greater than 0.20 pounds per million 
Btu. (This is a Phase II requirement.)
    b. By May 1, 1999, the affected facilities in the outer zone shall 
reduce their rate of NOX emissions by 55% from baseline, or 
shall emit NOX at a rate no greater than 0.20 pounds per 
million Btu. (This is a Phase II requirement.)
    c. By May 1, 2003, the affected facilities in the inner and outer 
zones shall reduce their rate of NOX emissions by 75% from 
baseline, or shall emit NOX at a rate no greater than 0.15 
pounds per million Btu. (This is a Phase III requirement.)
    d. By May 1, 2003, the affected facilities in the Northern zone 
shall reduce their rate of NOX emissions by 55% from 
baseline, or shall emit NOX at a rate no greater than 0.20 
pounds per million Btu. (This is a Phase III requirement.)
    A Task Force of representatives from the OTC states, organized 
through the Northeast States for Coordinated Air Use Management 
(NESCAUM) and the Mid-Atlantic Regional Air Management Association 
(MARAMA), was charged with the task of developing a Model Rule that 
would implement the program defined by the OTC MOU. During 1995 and 
1996, the NESCAUM/MARAMA NOX Budget Task Force worked with 
EPA and developed a model rule as a template for OTC states to adopt 
their own rules to implement the OTC MOU. The model was issued May 1, 
1996. The model rule was developed for the OTC states to implement the 
Phase II reductions called for in the MOU to be achieved by May 1, 
1999. The model rule does not include the implementation of Phase III.

II. Summary of SIP Revision

    Pennsylvania's Chapters 121.01 Definitions and 123--Nitrogen Oxides 
Allowance Requirements are based upon and are consistent with the 
``NESCAUM/MARAMA NOX Budget Rule'' issued in May 1, 1996. 
The model rule was developed by the states in the OTR using the EPA's 
economic incentive rules (59 FR 16690) which were published on April 7, 
1994, as the general regulatory framework.
    Pennsylvania Chapter 121.01 has been amended to include definitions 
for the terms used in Chapter 123--NOX Allowances 
Requirements. Chapter 123--NOX Allowances Requirements and 
its Appendix A include reduction requirements to implement Phase II of 
the OTC's MOU. The regulations include provisions for a regional cap 
and trade program, and establish NOX emission allowances for 
each NOX control period beginning May 1, 1999 through the 
NOX control period ending September 30, 2002. The budgeted 
sources and their NOX allowances allocations are identified. 
Pennsylvania Chapter 123--NOX Allowances Requirements is 
divided into twenty sections: (1) Purpose; (2) Source NOX 
allowance requirements and NOX allowance control period; (3) 
General NOX allowance provisions; (4) Source authorized 
account representative requirements; (5) Allowance Tracking System 
(NATS) provisions; (6) NOX allowance transfer protocol; (7) 
NOX allowance transfer procedures; (8) Source emissions 
monitoring requirements; (9) Source emissions reporting requirements; 
(10) Source compliance requirements; (11) Failure to meet source 
compliance requirements; (12) Source operating permit provision 
requirements; (13) source recordkeeping requirements; (14) General 
NOX allocation provisions; (15) Initial NOX 
allowance NOX allocations; (16) Source opt-in provisions; 
(17) New NOX affected source provisions; (18) Emission 
reduction credit provisions; (19) Bonus NOX allowance 
awards; (20) Audit. Appendix A to Chapter 123 is where the budgeted 
sources and their NOX allowance allocations are identified.

III. Proposed Action

    EPA is proposing to approve the Pennsylvania SIP revision for 
Chapter 121.01--Definitions and Chapter 123--NOX Allowance 
Requirements, submitted on December 19, 1997 implementing Phase II of 
the OTC's MOU to reduce nitrogen oxides. EPA is soliciting public 
comments on the issues discussed in this document or on other relevant 
matters. These comments will be considered before taking final action. 
Interested parties may participate in the Federal rulemaking procedure 
by submitting written comments to the EPA Regional office listed in the 
ADDRESSES section of this document. A more detailed description of the 
state submittal and EPA's evaluation are included in a Technical 
Support Document (TSD) prepared in support of this rulemaking action. A 
copy of the TSD is available upon request from the EPA Regional Office 
listed in the ADDRESSES section of this document.

[[Page 5017]]

IV. Administrative Requirements

A. Executive Orders 12866

    The Office of Management and Budget (OMB) has exempted this 
regulatory action from review under E.O. 12866, entitled ``Regulatory 
Planning and Review.''

B. Executive Order 12875

    Under E.O. 12875, EPA may not issue a regulation that is not 
required by statute and that creates a mandate upon a state, local, or 
tribal government, unless the Federal government provides the funds 
necessary to pay the direct compliance costs incurred by those 
governments. If EPA complies by consulting, E.O. 12875 requires EPA to 
provide to the Office of Management and Budget a description of the 
extent of EPA's prior consultation with representatives of affected 
state, local, and tribal governments, the nature of their concerns, 
copies of written communications from the governments, and a statement 
supporting the need to issue the regulation. In addition, E.O. 12875 
requires EPA to develop an effective process permitting elected 
officials and other representatives of state, local, and tribal 
governments ``to provide meaningful and timely input in the development 
of regulatory proposals containing significant unfunded mandates.'' 
Today's rule does not create a mandate on state, local or tribal 
governments. The rule does not impose any enforceable duties on these 
entities. Accordingly, the requirements of section 1(a) of E.O. 12875 
do not apply to this rule.

C. Executive Order 13045

    Executive Order 13045, entitled ``Protection of Children from 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997), applies to any rule that the EPA determines (1) is 
``economically significant,'' as defined under Executive Order 12866, 
and (2) the environmental health or safety risk addressed by the rule 
has a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency. This 
proposed rule is not subject to Executive Order 13045 because it is not 
an economically significant regulatory action as defined by Executive 
Order 12866, and it does not address an environmental health or safety 
risk that would have a disproportionate effect on children.

D. Executive Order 13084

    Under E.O. 13084, EPA may not issue a regulation that is not 
required by statute, that significantly affects or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments. If EPA complies by 
consulting, E.O. 13084 requires EPA to provide to the Office of 
Management and Budget, in a separately identified section of the 
preamble to the rule, a description of the extent of EPA's prior 
consultation with representatives of affected tribal governments, a 
summary of the nature of their concerns, and a statement supporting the 
need to issue the regulation. In addition, Executive Order 13084 
requires EPA to develop an effective process permitting elected and 
other representatives of Indian tribal governments ``to provide 
meaningful and timely input in the development of regulatory policies 
on matters that significantly or uniquely affect their communities.'' 
Today's rule does not significantly or uniquely affect the communities 
of Indian tribal governments. This action does not involve or impose 
any requirements that affect Indian Tribes. Accordingly, the 
requirements of section 3(b) of E.O. 13084 do not apply to this rule.

E. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions. This proposed rule will not have a significant impact on 
a substantial number of small entities because SIP approvals under 
section 110 and subchapter I, part D of the Clean Air Act do not create 
any new requirements but simply approve requirements that the State is 
already imposing. Therefore, because the Federal SIP approval does not 
create any new requirements, I certify that this action will not have a 
significant economic impact on a substantial number of small entities. 
Moreover, due to the nature of the Federal-State relationship under the 
Clean Air Act, preparation of a flexibility analysis would constitute 
Federal inquiry into the economic reasonableness of state action. The 
Clean Air Act forbids EPA to base its actions concerning SIPs on such 
grounds. Union Electric Co. v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 
42 U.S.C. 7410(a)(2).

F. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
annual costs to State, local, or tribal governments in the aggregate; 
or to private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule. EPA has determined that 
the proposed approval action does not include a Federal mandate that 
may result in estimated annual costs of $100 million or more to either 
State, local, or tribal governments in the aggregate, or to the private 
sector. This Federal action approves pre-existing requirements under 
State or local law, and imposes no new requirements. Accordingly, no 
additional costs to State, local, or tribal governments, or to the 
private sector, result from this action to approve Pennsylvania's 
NOX Allowance Requirements regulations to implement Phase II 
of the OTC MOU.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Nitrogen dioxide, 
Ozone, Reporting and recordkeeping requirements.

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

    Dated: January 22, 1999.
W. Michael McCabe,
Regional Administrator, Region III.
[FR Doc. 99-2445 Filed 2-1-99; 8:45 am]
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