[Federal Register Volume 66, Number 217 (Thursday, November 8, 2001)]
[Rules and Regulations]
[Pages 56454-56465]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27932]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IL203-3; FRL-7077-8]


Approval and Promulgation of Air Quality Implementation Plans; 
Illinois; Oxides of Nitrogen Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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[[Page 56455]]

SUMMARY: On February 23, 2001, Illinois submitted a rule to control 
emissions of oxides of nitrogen ( NOX) from electric 
generating units (EGU). Illinois' EGU rule represents a key portion of 
the State's response to EPA's October 27, 1998 NOX State 
Implementation Plan (SIP) Call. Illinois adopted other rules to 
regulate NOX emissions from non-EGU and cement kilns and 
these rules are addressed in other rulemakings. In EPA's proposed rule 
on the adequacy of Illinois' EGU rule, we noted that the rule could not 
be approved unless the State changed a compliance delay provision to 
meet the provisions of compliance in the EPA model rule. The State made 
this change, as well as other changes we recommended, and EPA is taking 
this final action to approve the rule. The rule also provides 
NOX emission reductions to support attainment of the 1-hour 
ozone standard in the Chicago-Gary-Lake County ozone nonattainment 
area.

DATES: This final rule is effective December 10, 2001.

ADDRESSES: You may obtain copies of the State Implementation Plan 
revision request at the following address: U.S. Environmental 
Protection Agency, Region 5, Air and Radiation Division, 77 West 
Jackson Boulevard, Chicago, Illinois, 60604. Please telephone John 
Paskevicz at (312) 886-6084 before visiting the Region 5 office.

FOR FURTHER INFORMATION CONTACT: John Paskevicz, Regulation Development 
Section, Air Programs Branch (AR-18J), U.S. Environmental Protection 
Agency, Chicago, Illinois, 60604, Telephone Number: (312) 886-6084, E-
Mail Address: [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document, the terms ``you'' 
and ``me'' refer to the reader of this final rule and to sources 
subject to the State rule, and the terms ``we'', ``us'', or ``our'' 
refers to EPA.

Table Of Contents

I. Background
    A. What Clean Air Act requirements apply to or led to the 
State's submittal of the NOX emission control rule?
    B. What analyses and EPA rulemaking actions support the need for 
the NOX emission control rule?
    C. What have been the Court rulings regarding EPA's 
NOX emission control rule?
II. Summary of the State Submittal
    A. When was the State NOX EGU emission control rule 
submitted to the EPA?
    B. What are the basic components of the State's final rule?
    C. Components of the State's final rule.
    1. What geographic regions and sources are affected by the 
State's final rule?
    2. What are the allowable NOX emission rates or 
levels for affected sources?
    3. What are the monitoring, recordkeeping, and reporting 
requirements for affected sources?
    4. What is the compliance/implementation deadline for the 
affected sources?
    D. Does the Illinois NOX trading program meet the 
Federal NOX budget?
    E. What public review opportunities were provided?
    F. What requirements are contained in the NOX 
emission control rule from the standpoint of the Lake Michigan ozone 
attainment demonstration?
    G. What guidance did EPA use to evaluate Illinois' 
NOX control program?
    H. Does the Illinois Part 217 NOX emissions control 
program meet the needs of the ozone attainment demonstration?
    I. Does the Illinois Part 217 NOX emissions control 
program meet all of the Federal NOX SIP Call 
requirements?
    J. What deficiencies were noted in Illinois' NOX 
emissions control rule, and has Illinois satisfactorily addressed 
them?
III. Response to Public Comment
IV. Final Action
    A. What action is EPA taking today?
V. Administrative Requirements

I. Background

A. What Clean Air Act Requirements Apply to or Led to the State's 
Submittal of the NOX Emission Control Rule?

    The Clean Air Act (Act or CAA) as amended in 1990 requires the EPA 
to establish National Ambient Air Quality Standards (NAAQS) for certain 
air pollutants that cause or contribute to air pollution that is 
reasonably anticipated to endanger public health or welfare. Clean Air 
Act sections 108 and 109. In 1979, EPA promulgated the 1-hour ground-
level ozone standard of 0.12 parts per million (ppm) or 120 parts per 
billion (ppb). 44 FR 8202 (February 8, 1979).
    Ground-level ozone is generally not directly emitted by sources. 
Rather, volatile organic compounds (VOC) and NOX, both 
emitted by a wide variety of sources, react in the presence of sunlight 
to form additional pollutants, including ozone. NOX and VOC 
are referred to as precursors of ozone.
    The Act, as amended in 1990, requires EPA to designate as 
nonattainment any area that was violating the 1-hour ozone standard, 
generally based on air quality monitoring data from the 1987 through 
1989 period. Clean Air Act section 107(d)(4); 56 FR 56694 (November 6, 
1991). The Act further classified these areas, based on the areas' 
ozone design values, as marginal, moderate, serious, severe, or 
extreme. Marginal areas were suffering the least significant ozone 
nonattainment problems, while the areas classified as severe and 
extreme had the most significant ozone nonattainment problems.
    The control requirements and date by which attainment with the 
ozone NAAQS is to be achieved vary with an area's classification. 
Marginal areas were subject to the fewest mandated control requirements 
and had the earliest attainment date, November 15, 1993. Moderate areas 
were subject to more stringent planning and control requirements but 
were provided more time to attain the ozone standard, until November 
15, 1996. Severe and extreme areas are subject to even more stringent 
planning and control requirements but are also provided more time to 
attain the standard. Severe areas are required to attain the ozone 
NAAQS by November 15, 2005 or November 15, 2007, depending on the 
areas' ozone design values for the 1987 through 1989 period.
    The Chicago-Gary-Lake County ozone nonattainment area was 
classified as severe-17 and its attainment date is November 15, 2007. 
The Chicago-Gary-Lake County ozone nonattainment area is defined (40 
CFR 81.314 and 81.315) to contain Cook, DuPage, Grundy (Aux Sable and 
Goose Lake Townships only), Kane, Kendall (Oswego Township only), Lake, 
McHenry, and Will Counties in Illinois, and Lake and Porter Counties in 
Indiana.
    The Act requires moderate and above ozone nonattainment areas 
(including severe ozone nonattainment areas) to be addressed in ozone 
attainment demonstrations, including adopted emission control 
regulations sufficient to achieve attainment of the ozone NAAQS by the 
applicable ozone attainment dates. The requirements of the Act for 
ozone attainment demonstrations for moderate and above ozone attainment 
areas are determined by considering several sections of the Act. 
Section 172(c)(6) of the Act requires SIPs to include enforceable 
emission limitations, and such other control measures, means or 
techniques as well as schedules and timetables for compliance, as may 
be necessary to provide for attainment by the applicable attainment 
dates. Section 172(c)(1) of the Act requires the implementation of all 
reasonably available control measures (including reasonably available 
control technology [RACT]) and requires the SIP to provide for 
sufficient annual reductions in emissions of VOC and NOX as 
necessary to attain the ozone NAAQS by the applicable attainment dates. 
Sections 182(c)(2) and (d) required SIP revision submissions by 
November 15, 1994 for serious and severe ozone nonattainment areas to 
demonstrate how the areas would attain the 1-hour standard and

[[Page 56456]]

how they would achieve rate-of-progress (ROP) reductions in VOC 
emissions of 9 percent for each 3-year period until the date of 
attainment. (In some cases, NOX emission reductions can be 
substituted for the required VOC emission reductions to achieve ROP.) 
Section 182(c)(2)(A) requires the ozone attainment demonstrations for 
serious and above ozone nonattainment areas to be based on the use of 
photochemical grid modeling or on other analytical methods determined 
to be at least as effective. The attainment demonstrations based on 
photochemical grid modeling can address the emission impacts of both 
VOC and NOX. The NOX emission control regulations 
addressed in this rulemaking are, in part, intended to meet the 
requirements for the attainment demonstrations for the Chicago-Gary-
Lake County ozone nonattainment area.
    On October 27, 1998, the EPA promulgated a NOX SIP Call 
for a number of States, including the State of Illinois. The 
NOX SIP Call requires the subject States to develop 
NOX emission control regulations sufficient to provide for a 
prescribed NOX emission budget in 2007, and is further 
discussed below. These NOX emission reductions will address 
ozone transport in the area of the country primarily east of the 
Mississippi River. The rule also provides NOX emission 
reductions to support attainment of the 1-hour ozone standard in the 
Chicago-Gary-Lake County ozone nonattainment area. EPA promulgated the 
NOX SIP Call pursuant to the requirements of CAA section 
110(a)(2)(D) and our authority under CAA section 110(k). Section 
110(a)(2)(D) applies to all SIPs for each pollutant covered by a NAAQS 
and for all areas regardless of their attainment designation. It 
requires a SIP to contain adequate provisions that prohibit any source 
or type of source or other types of emissions within a State from 
emitting any air pollutants in amounts which will contribute 
significantly to nonattainment in, or interfere with maintenance or 
attainment of a standard by any other State with respect to any NAAQS. 
Section 110(k)(5) authorizes the EPA to find that a SIP is 
substantially inadequate to meet any CAA requirement when appropriate, 
and, based on such finding, to then require the State to submit a SIP 
revision within a specified time to correct such inadequacies.

B. What Analyses and EPA Rulemaking Actions Support the Need for the 
NOX Emission Control Rule?

    The State of Illinois has the primary responsibility under the CAA 
for ensuring that Illinois meets the ozone NAAQS and is required to 
submit a SIP that specifies emission limitations, control measures, and 
other measures necessary for attainment, maintenance, and enforcement 
of the NAAQS within the State. The SIP for ozone must meet the CAA 
requirements discussed above, must be adopted pursuant to notice and 
comment rulemaking, and must be submitted to the EPA for approval. A 
number of analyses and EPA rulemaking actions have affected the SIP 
revisions needed for the Chicago-Gary-Lake County ozone nonattainment 
area as discussed below.
    The States of Illinois, Indiana, Wisconsin, and Michigan have 
worked cooperatively to provide the EPA with an ozone attainment 
demonstration for the Lake Michigan area, which includes the Chicago-
Gary-Lake County ozone nonattainment area. Analyses conducted to 
support this ozone attainment demonstration, as submitted in 1994 and 
supplemented in April 1998, indicate that reductions in upwind 
NOX emissions are needed to reduce the transport of ozone 
into these nonattainment areas.
    On March 2, 1995, Mary D. Nichols, Assistant Administrator for 
EPA's Air and Radiation Division, published a memorandum titled ``Ozone 
Attainment Demonstrations.'' In this memorandum, the EPA recognized 
that the development of the necessary technical information, as well as 
the emission control measures necessary to achieve the attainment of 
the ozone NAAQS had been difficult for the States affected by 
significant ozone transport. EPA established a two-phase process for 
States with serious and severe ozone nonattainment areas to develop 
ozone attainment SIPs. Under Phase I, States were required to complete 
1994 SIP requirements (with the exception of final ozone attainment 
demonstrations), submit regulations sufficient to meet ROP requirements 
through 1999, and submit initial ozone modeling analyses, including 
preliminary ozone attainment demonstrations based on assumed reductions 
in upwind ozone precursor emissions. Phase II called for a two-year 
consultative process to assess regional strategies to address ozone 
transport in the eastern United States and required submittal of all 
remaining ROP submittals to cover ROP through the attainment dates, 
final attainment demonstrations to address the emission reduction 
requirements resulting from the two-year consultative process and any 
additional rules and emission controls needed to attain the ozone 
standard, and any regional controls needed for attainment by all areas 
in the eastern half of the United States.
    In response to the problem of ozone transport, the Environmental 
Council of States (ECOS) recommended the formation of a national 
workgroup to assess the problem and to develop a consensus approach to 
addressing the transport problem. As a result of ECOS' recommendation 
and in response to the March 2, 1995 EPA memorandum, the Ozone 
Transport Assessment Group (OTAG), a partnership among EPA, the 36 
eastern States and the District of Columbia, and industrial, academic, 
and environmental groups, was formed to conduct regional ozone 
transport analyses and to develop a recommended ozone transport control 
strategy. OTAG was given the responsibility for conducting the two-
years of analyses envisioned in the March 2, 1995, EPA memorandum.
    OTAG conducted a number of regional ozone data analyses and 
regional ozone modeling analyses using photochemical grid modeling. In 
July 1997, OTAG completed its work and made recommendations to the EPA 
concerning the regional emissions reductions needed to reduce 
transported ozone as an obstacle to attainment in downwind areas. OTAG 
recommended a possible range of regional NOX emission 
reductions to support the control of transported ozone. Based on OTAG's 
recommendations and other information, EPA issued the NOX 
SIP Call rule on October 27, 1998. 63 FR 57356.
    In the NOX SIP Call, EPA determined that sources and 
emitting activities in 23 jurisdictions\1\ emit NOX in 
amounts that ``significantly contribute'' to ozone nonattainment or 
interfere with maintenance of the 1-hour ozone NAAQS in one or more 
downwind areas in violation of CAA section 110(a)(2)(D)(i)(I). EPA 
identified NOX emission reductions by source sector that 
could be achieved using cost-effective measures and set state-wide 
NOX emission budgets for each affected jurisdiction for 2007 
based on the possible cost-effective NOX emission 
reductions. The source sectors include nonroad mobile, highway mobile, 
area, electrical generating units (EGUs) (including stationary boilers 
and turbines, which may generate steam for industrial processes but 
whose primary purpose is to generate electricity for sale to the 
electrical grid), and major non-

[[Page 56457]]

EGU stationary point sources (process stationary boilers or turbines, 
whose primary purpose is to generate steam for industrial processes). 
EPA established recommended NOX emissions caps for large 
EGUs (serving a generator greater than 25 megawatts) and for large non-
EGUs (maximum design heat input of greater than 250 million British 
thermal units [Btu] per hour [mmBtu/hr]). EPA determined that 
significant NOX reductions using cost-effective measures 
could be obtained as follows: application of a 0.15 pounds 
NOX/mmBtu heat input emission rate limit for large EGUs; a 
60 percent reduction of NOX emissions from large non-EGUs; a 
30 percent reduction of NOX emissions from large cement 
kilns; and a 90 percent reduction of NOX emissions from 
large stationary internal combustion engines not serving electricity 
generators. The 2007 state-wide NOX emission budgets were 
established by jurisdiction, in part, by assuming these levels of 
NOX emission controls coupled with NOX emissions 
projected by source sector to 2007.
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    \1\Alabama, Connecticut, Delaware, District of Columbia, 
Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, 
Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, 
Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, 
West Virginia, and Wisconsin.
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    Although the state-wide NOX emission budgets were based 
on the levels of reduction achievable through cost-effective emission 
control measures, the NOX SIP Call allows each State to 
determine what measures it will choose to meet the state-wide 
NOX emission budgets. It does not require the States to 
adopt the specific NOX emission rates assumed by the EPA in 
establishing the NOX emission budgets. The NOX 
SIP Call merely requires States to submit SIPs, which, when 
implemented, will require controls that meet the NOX state-
wide emission budget. The NOX SIP Call encourages the States 
to adopt a NOX cap and trade program for large EGUs and 
large non-EGUs as a cost-effective strategy and provides an interstate 
NOX trading program that the EPA will administer for the 
States. If States choose to participate in the national trading 
program, the States must submit SIPs that conform to the trading 
program requirements in the NOX SIP Call.
    On April 30, 1998, and December 26, 2000, the State of Illinois 
submitted a major revision of the ozone attainment demonstration for 
the Chicago-Gary-Lake County ozone nonattainment area. In that 
attainment demonstration revision, the State demonstrated that 
significant reductions in transported ozone and NOX would be 
necessary to achieve attainment of the 1-hour ozone standard in the 
nonattainment area. Illinois committed to complete the ozone attainment 
demonstration and to adopt sufficient local and regional controls as 
needed to demonstrate attainment of the ozone standard and to submit 
the final attainment demonstration and adopted regulations to the EPA 
by December 2000. The EPA proposed to conditionally approve the 1-hour 
attainment demonstration based, in part, on the State's commitment to 
adopt and submit a final attainment demonstration and a post-1999 ROP 
plan, including the necessary State emission control regulations, by 
December 31, 2000. 64 FR 70496. The NOX regulations reviewed 
in this rule are, in part, intended to meet part of the State's 
commitment to complete the ozone attainment demonstration for the 
Chicago-Gary-Lake County nonattainment area.

C. What Have Been the Court Rulings Regarding EPA's NOX 
Emission Control Rules?

    When the EPA published the NOX SIP Call on October 27, 
1998, a number of States and various industry groups filed petitions 
challenging the SIP Call before the United States Court of Appeals for 
the District of Columbia Circuit. See Michigan v. EPA, 213 F.3d 
663(D.C. Cir. 2000). The Court, on May 25, 1999, stayed the obligation 
of States to submit SIPs in response to the NOX SIP Call 
rule. Subsequently, on March 3, 2000, the Court upheld most of the 
NOX SIP Call. The Court, however, vacated the SIP Call as it 
applied to Missouri and Georgia and remanded for further consideration 
the inclusion of portions of Missouri and Georgia in the rule. The 
Court also vacated the rule as it applied to Wisconsin because EPA had 
not made a showing that sources in Wisconsin significantly contribute 
to nonattainment or interfere with maintenance of the ozone NAAQS in 
any other State. Finally, the Court also remanded two issues concerning 
a limited portion of the NOX emission budgets. On June 22, 
2000, the Court removed the stay of States' obligation to submit SIPs 
in response to the NOX SIP Call and denied petitioners' 
motions for rehearing and rehearing en banc. In removing the stay, the 
Court provided that EPA should allow 128 days for States to submit 
SIPs. Thus, SIPs were to be submitted to us by October 30, 2000.

II. Summary of the State Submittal

A. When Was the State NOX EGU Emission Control Rule 
Submitted to the EPA?

    On June 29, 2000, the Illinois Environmental Protection Agency 
(IEPA) submitted a draft NOX emission control rule to the 
EPA for pre-adoption review.
    On July 18, 2000, EPA received a letter from David J. Kolaz, Chief, 
Bureau of Air, Illinois Environmental Protection Agency, which 
contained a number of documents, including the draft rule submitted on 
June 29, 2000, along with additional documentation for the draft rule. 
The letter included a request from the Bureau Chief to process the 
submittal in parallel (i.e., parallel processing) to the development of 
the rule at the State level and included a schedule for development and 
adoption of the rule by the State.
    Parallel processing allows a State to submit a plan for approval 
prior to actual adoption by the State. 47 FR 27073 (June 23, 1982) A 
submittal for parallel processing must include the following three 
items: a letter from the State requesting parallel processing; a 
schedule for final adoption or issuance of the plan; and a copy of the 
proposed regulation or document. Illinois submitted these three items 
of information in the letter dated July 18, 2000, from the Bureau 
Chief. The Bureau Chief is the authorized representative for the State 
to submit SIP revisions. The letter asks that EPA parallel process the 
submittal, and it includes milestones leading to final adoption of the 
plan. The milestones were acceptable to EPA as a schedule, however the 
end date of final approval (final rule adoption) by the Illinois 
Pollution Control Board (IPCB) could not be precisely established. 
Enclosed with the letter was a copy of the draft NOX rule 
along with a ``Statement of Reasons'' provided to the IPCB by the Legal 
Counsel of the Illinois Environmental Protection Agency to support the 
adoption of the rule.
    On December 27, 2000, EPA received a final rule, Illinois 
Administrative Code 217, Subpart W, NOX Trading Program for 
Electrical Generating Units. This rule was made effective as of 
December 21, 2000, following approval by the IPCB. The rule included 
changes recommended by EPA with the exception of the portion of the 
rule (section 217.756(d)(3)) which contained unapprovable compliance 
delay language. The Administrative Register version of this package, 
containing a technical support document, supplemental information, 
hearing comments and other information such as the ozone attainment 
demonstration was submitted in a letter dated February 23, 2001. This 
package contained compliance delay language as the only nonapprovable 
element of the submittal. The compliance delay language provided for 
the State to delay compliance with the rule to the year following such 
time that all other States

[[Page 56458]]

in EPA Region 5, and States contiguous with the State of Illinois, have 
adopted NOX regulations and EPA has approved these State's 
NOX plans.
    However, in a June 27, 2001, letter from the Chief, Bureau of Air, 
Illinois Environmental Protection Agency, EPA was informed that on June 
22, 2001, the Governor signed into law House Bill 1599. This new 
Illinois law specifies a final compliance date of May 31, 2004, and 
satisfies EPA concerns expressed in our August 31, 2000, proposal.

B. What Are the Basic Components of the State's Final Rule?

    The State based the rule primarily on EPA's part 96 Trading Rule. 
Many sections of part 96 are incorporated by reference (IBR) into the 
rule. In addition to IBR of portions of 40 CFR part 96, Illinois' 
NOX rule also includes IBR of portions of 40 CFR parts 60, 
72, 75, and 76. Section 217.104 of the Illinois rule identifies the CFR 
parts and sections included in the IBR. Table 1 identifies the Volume 
40 CFR parts and sections included by IBR in Illinois' NOX 
rule.

             Table 1.--40 CFR Parts and Sections Incorporated by Reference in Illinois' EGU NOX Rule
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                         40 CFR part and section                                   Section title/subject
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60; Appendix A...........................................................  Method 7 (The phenol disulfonic acid
                                                                            method).
72; All Sections.........................................................  Permits regulation.
75; All Sections.........................................................  Continuous emission monitoring.
76; All Sections.........................................................  Acid rain nitrogen oxides emission
                                                                            reduction program.
96; Subpart A:                                                             .....................................
    96.1.................................................................  Purpose.
    96.2.................................................................  Definitions.
    96.3.................................................................  Measurements, abbreviations, and
                                                                            acronyms.
    96.5.................................................................  Retired unit exemptions.
    96.6.................................................................  Standard requirements.
    96.7.................................................................  Computation of time.
96; Subpart B:                                                             .....................................
    96.10................................................................  Authorization and responsibility of
                                                                            the NOX authorized account
                                                                            representative.
    96.11................................................................  Alternate authorized account
                                                                            representative.
    96.12................................................................  Changing the authorized account
                                                                            representative and alternate
                                                                            authorized account representative.
    96.13................................................................  Account certificate of
                                                                            representation.
    96.14................................................................  Objections concerning authorized
                                                                            account representative.
96; Subpart D:                                                             .....................................
    96.30................................................................  Compliance certification report.
    96.31................................................................  Permitting authority's and
                                                                            Administrator's action on compliance
                                                                            certification.
96; Subpart F:                                                             .....................................
    96.50................................................................  NOX Allowance Tracking System
                                                                            accounts.
    96.51................................................................  Establishment of accounts.
    96.52................................................................  NOX Allowance Tracking System, lists
                                                                            responsibilities of NOX authorized
                                                                            account representative.
    96.53................................................................  Recordation of NOX allowance
                                                                            allocations.
    96.54................................................................  Compliance.
    96.55(a).............................................................  Banking.
    96.55(b).............................................................  Banking.
    96.56................................................................  Account error.
    96.57................................................................  Closing of general accounts.
96; Subpart G:
    96.60................................................................  NOX allowance transfers.
    96.61................................................................  EPA recordation.
    96.62................................................................  Notification.
96; Subpart H:                                                             .....................................
    96.70................................................................  Monitoring and reporting, General
                                                                            requirements.
    96.71................................................................  Initial certification and
                                                                            recertification procedures.
    96.72................................................................  Out of control periods.
    96.73................................................................  Notifications.
    96.74................................................................  Recordkeeping and reporting.
    96.75................................................................  Petitions.
96.76....................................................................  Additional requirements to provide
                                                                            heat input data for allocations
                                                                            purposes.
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    In addition to the IBR portion, the rule contains a number of other 
subparts and sections. Table 2 lists these subparts and sections. Some 
of these were derived from federal regulations. (Illinois attempted to 
either revise the federal regulations to more abbreviated versions or 
to revise the federal regulations to make them more compatible with 
existing State regulations.) Where appropriate, the final column of 
Table 2 notes the federal regulation(s) from which the State regulation 
was derived or notes the effect of the State regulation relative to 
related federal regulations.

[[Page 56459]]



                                Table 2.--Non-IBR Portions of Illinois' NOX Rule
----------------------------------------------------------------------------------------------------------------
           Subpart/Section                         Title                  Comparable Federal Regulation/Note
----------------------------------------------------------------------------------------------------------------
Subpart B/Section 211................  Definitions..................  Replace Some IBR Definitions.
Subpart A............................  General Provisions...........  ..........................................
Section 217.100......................  Scope and organization.......  ..........................................
Section 217.101......................  Measurement Methods..........  ..........................................
Section 217.102......................  Abbreviations and Units......  Replaces some abbreviations included by
                                                                       IBR.
Section 217.104......................  Incorporations by Reference..  ..........................................
Subpart W............................  NOX Trading Program for
                                        Electrical Generating Units.
Section 217.750......................  Purpose......................  ..........................................
Section 217.752......................  Severability.................  ..........................................
Section 217.754......................  Applicability................  See 40 CFR 96.4.
Section 217.756......................  Compliance Requirements......  ..........................................
Section 217.756(b)...................  Permit requirements..........  ..........................................
Section 217.756(c)...................  Monitoring requirements......  ..........................................
Section 217.756(d)...................  NOX requirements.............  ..........................................
Section 217.756(e)...................  Recordkeeping and reporting    ..........................................
                                        requirements.
Section 217.756(f)...................  Liability....................  ..........................................
Section 217.758......................  Permitting Requirements......  ..........................................
Section 217.758(a)...................  Budget permit requirements...  See 40 CFR 96.20 and 96.21.
Section 217.758(b)...................  Budget permit applications...  See 40 CFR 96.22 and 96.23.
Section 217.760......................  NOX Trading Budget...........  See 40 CFR 96.40, 96.41, and 96.42.
Section 217.762......................  Methodology for Calculating    See 40 CFR 96.42.
                                        NOX Allocations for Budget
                                        Electrical Generating Units.
Section 217.764......................  NOX Allocations for Budget     See 40 CFR 96.42.
                                        EGUs.
Section 217.768......................  New Source Set-Asides for      ..........................................
                                        ``New'' Budget EGUs.
Section 217.770......................  Early Reduction Credits for    See 40 CFR 96.55.
                                        Budget EGUs.
Section 217.774......................  Opt-in Units.................  ..........................................
Section 217.776......................  Opt-In Process...............  See 40 CFR 96.84.
Section 217.778......................  Budget Opt-in Units:           ..........................................
                                        Withdrawal from NOX Trading
                                        Program.
Section 217.780......................  Opt-in Units: Change in        ..........................................
                                        Regulatory Status.
Section 217.782......................  Allowance Allocations to       ..........................................
                                        Budget Opt-In Units.
Appendix D...........................  Non-Electrical Generating      ..........................................
                                        Units.
Appendix F...........................  Allowances for Electrical      ..........................................
                                        Generating Units.
----------------------------------------------------------------------------------------------------------------

    Using information provided by the IEPA to the IPCB in support of 
the adoption of this rule, the following summarizes several of the 
various rule sections listed in Table 2 above.

Subpart B, Section 211

    A number of new definitions are added to an existing part 211 of 
Illinois' air pollution rules. Definitions of the following terms are 
added: Allowance; Combined Cycle System; Combustion Turbine; Common 
Commercial Operation; Commence Operation; Common Stack; Control Period; 
Excess Emissions; Fossil Fuel; Fossil Fuel-Fired; Generator; Heat 
Input; Heat Input Rate; Nameplate Capacity; Potential Electrical Output 
Capacity; and Repowering. The specifics of these definitions do affect 
the completeness and enforceability of the rule(s) that uses them. 
Therefore, they have been compared to definitions contained in 40 CFR 
parts 96 and 97 as part of the review conducted for this final 
rulemaking. EPA concurs with these definitions.

Subpart A

Section 217.100  Scope and Organization

    This section specifies the purpose of the State's NOX 
rule.

Section 217.101  Measurement Methods

    This section states that the measurement of NOX 
emissions at sources and facilities covered by the rule shall be 
conducted according to: (a) the phenol disulfonic acid method (40 CFR 
part 60, appendix A, Method 7 (1999)); and continuous emissions 
monitoring pursuant to 40 CFR part 75 (1999).

Section 217.102  Abbreviations and Units

    Like definitions of terms, abbreviation definitions can affect the 
completeness and enforceability of a rule, and the abbreviations added 
to this rule have been reviewed from this standpoint. It should be 
noted that part 211 of Illinois' air pollution rules also contains a 
number of defined abbreviations. The abbreviations added in section 
217.102 are specific to the NOX rule and do not necessarily 
apply to other Illinois air pollution control rules.

Section 217.104

    As noted above, the State amended section 217.104 (to add this 
section to existing Illinois rules) to add portions of 40 CFR part 96 
and 40 CFR parts 72, 75, and 76 (see Table 1 above) to the documents 
that have been incorporated into Illinois' rules by reference. IBR 
documents are an integral part of Illinois' rules and are enforceable 
in the same manner as one would enforce any State rule.

Trading Program for Electrical Generating Units

Section 217.754  Applicability

    This section addresses the applicability of the State's 
NOX trading

[[Page 56460]]

program. Subsection (a) provides that the NOX trading rule 
and emissions cap applies to all fossil fuel-fired stationary boilers, 
combustion turbines or combined cycle systems, serving a generator 
which has a nameplate capacity exceeding 25 megawatts (MWe) if the 
generated electricity is sold. This section also applies to fossil 
fuel-fired units with a maximum design heat input rate of greater than 
250 mmBtu/hour and serving smaller generators under certain specified 
circumstances, including the condition that a served generator is 
larger than 50 percent of a unit's potential electrical output capacity 
(such a unit would also be classified as an electrical generating unit 
subject to the rule and the trading program requirements). Subsection 
(b) of this section provides that units meeting the above criteria are 
subject to the emission limits of the NOX Trading Program.
    Subsection (c) provides an exemption for low-emitters, such as 
units that burn natural gas and/or fuel oil exclusively and have 
potential NOX emission rates of 25 tons or less during the 
control period. The owner or operator of such a unit may choose to get 
an operating permit that limits emissions to this lower level through 
federally enforceable conditions as specified in this subsection. 
Owners and operators seeking low emitter status affect the emission 
allowances covered in the NOX Trading Program.
    Further interpretation of this section is contained in a June 18, 
2001, letter from IEPA addressing low-emitter status. The intent of 
Illinois' low emitter status provisions in Subpart U (Sec. 217.472) and 
Subpart W (Sec. 217.754 (c)) is to provide a unit two alternatives to 
qualify for low emitter status. The first alternative requires a unit 
to take permit limits on its operating hours and potential 
NOX mass emissions in order to ensure that the unit's 
potential NOX mass emissions do not exceed 25 tons of 
NOX in an ozone season. The operating hours restriction 
follows the procedures in EPA's model rule, 40 CFR 96.4(b), and is 
calculated using a default NOX emissions rate and the unit's 
maximum potential hourly heat input.
    The second alternative allows a unit with monitored ozone season 
NOX emissions of 25 tons or less, as monitored according to 
part 75, to qualify for low emitter status. Under this alternative, a 
unit must again take permit limits restricting ozone season operating 
hours and potential NOX mass emissions during the ozone 
season to 25 tons or less.
    Also, the State made clearer, in its letter, the meaning of the 
term ``potential'' in these provisions. In Subpart W, section 
217.754(c), this term is first used in paragraph (c)(1)(B), stating 
that the source's permit must ``Limit the EGU's potential 
NOX mass emissions * * * to 25 tons or less.'' Under 
paragraph (c)(1)(D), the permit must in addition ``Require that the 
EGU's potential NOX mass emissions be calculated [either by 
monitoring according to 40 CFR Part 75 or by multiplying maximum 
potential hourly emissions times hours of operation].'' Consequently, 
``potential emissions'' must be interpreted to mean the emissions 
determined according to whichever method is used under section 
217.754(c)(1)(D). Since the measurements under 40 CFR Part 75 measure 
actual emissions, a low emitting source using such monitoring would 
rely largely on actual emissions data to evaluate compliance with the 
permit limit on potential NOX mass emissions.
    The contents of this letter and an analysis was published in the 
proposed rule dated June 28, 2001 (66 FR 34382), because similar 
provisions are found in Subpart U, Section 217.472(a). The public 
comment period closed for the June 28, 2001 proposed rule on July 30, 
2001. No adverse comments were received on Illinois' low-emitter status 
provisions. EPA believes the explanation provided by the State 
regarding low-emitter status adequately addresses EPA's concerns.

Section 217.756  Compliance Requirements

    This section specifies the compliance requirements for EGUs subject 
to the NOX Trading Program (budget EGUs). Owners or 
operators of each source that has one or more budget EGUs must submit 
an application meeting the requirements of section 217.758 for an 
emissions budget permit from the IEPA. The budget permit must specify 
federally enforceable conditions covering the NOX Trading 
Program and must satisfy all other permitting requirements in Illinois' 
air quality rules. The application for a budget permit is subject to 
specified timing requirements.
    Subject budget EGUs must meet specified monitoring requirements, 
including continuous emissions monitoring. An account representative 
for a subject budget EGU must comply with specified monitoring 
compliance certification and reporting requirements of 40 CFR part 96, 
subpart H. The monitoring results will be used to certify compliance 
with the budget emissions limitations.
    Subsection (d) requires the account representative for a budget EGU 
to hold sufficient emission allowances available for compliance 
deduction in the budget EGU's compliance account or the source's 
overdraft account by November 30 of each year, starting in the 
compliance year, to account for NOX emissions. Only a 
certain number of allowances will be given to a budget EGU each control 
period (May 1 through September 30) based on an established State-wide 
NOX emissions cap and an allowance distribution system 
devised cooperatively by the State and the affected sources. Budget 
EGUs can not use an allowance prior to the control period in which it 
is allocated by the State.
    Subsection (e) provides the recordkeeping requirements for the 
budget EGUs. All emission monitoring information must be recorded and 
maintained in accordance with 40 CFR part 96, subpart H. Documents and 
records must be kept and must be made available for inspection upon 
request for 5 years unless a different period is specified elsewhere 
(under other parts of these SIP rules).
    Subsection (f) contains the provisions governing liability of 
budget EGUs, their owner and operators, and account representatives. 
The owner and account representative of one budget EGU are not liable 
for any violation of any other budget EGU with which they are not 
affiliated, except with respect to requirements for EGUs with a common 
stack.

Section 217.758  Permitting Requirements

    The budget permit of a budget EGU must contain federally 
enforceable conditions that apply to the unit and provide that the 
budget permit is a complete and separable portion of the source's 
entire permit.
    Subsection (a) prohibits the issuance of a budget permit and the 
establishment of a NOX emissions allowance until the IEPA 
and the EPA have received a complete ``account certificate of 
representation'' from the budget EGU's account representative, and sets 
forth the timing for submitting a budget permit application where one 
or more of the budget EGUs are subject to the requirements of section 
39.5 of the Illinois Clean Air Act Permit Program. Budget EGUs not 
subject to these requirements are also required to obtain a permit with 
federally enforceable conditions.

[[Page 56461]]

Section 217.760  The NOX Trading Budget

    Subsection (a) provides that the total base NOX trading 
budget available statewide for allowance allocations for each control 
period (May 1 through September 30) is 30,701 tons (30,701 allowances). 
This budget may be increased or decreased under various circumstances, 
such as the opt-in of non-subject sources or the opt-out of exempted 
low-emitter sources. This subsection also provides that for the years 
of 2004 through 2006, 5 percent of the 30,701 allowances will be 
allocated to a new source set-aside. For the years 2007 and thereafter, 
the new source set-aside will be reduced to 2 percent of the 30,701 
allowances.
    Subsection (b) authorizes the IEPA to adjust the total EGU trading 
budget available for allocation. This is done to remove allowances for 
low-emitters opting to become exempt from some provisions of the 
NOX Trading Program.
    Subsection (c) authorizes the IEPA to adjust the total base EGU 
trading budget pro-rata if the EPA subsequently makes adjustments in 
the EGU budget.

Section 217.762  Methodology for Calculating NOX Allocations 
for Budget Electrical Generating Units (EGUs)

    The methodology used to calculate allocations (not the total state-
wide emission cap) is based on the emission rate limit and a unit's 
control period heat input. Appendix F of the rule lists the budget EGUs 
and their associated allowances. For budget EGUs, including opt-ins, 
not listed in Appendix F, the limiting emission rate used in the 
calculation of allowances is the more stringent of 0.15 pounds 
NOX/million Btu heat input or the permitted NOX 
emission rate, but never less than 0.055 pounds NOX per 
million Btu heat input.
    Subsection (b) sets forth how the heat input is to be determined 
for the control period. This heat input for each budget EGU is used 
along with the emission limit to determine the NOX allowance 
for the EGU.

Section 217.764  NOX Allocations for Budget EGUs

    This section sets forth, for each control period, the allowance 
allocations for budget EGUs. The allocations involve a ``fixed/flex'' 
approach from 2007 through 2010 and a ``100 percent flex'' approach in 
2011 and thereafter (consult this section of the rule for the details 
of these approaches). The allocations for 2004 through 2006 are 
specified in subsection (a). Other subsections provide for allocations 
of allowances to budget EGUs for follow-on years out to 2011.

Section 217.768  New Source Set-Aside for ``New'' Budget EGUs

    This section sets aside allowances for new sources as noted above. 
During the period of 2004 through 2006, any allowances that are not 
allocated to new sources will be allocated to certain EGUs. After 
January 1, 2004, new budget EGUs that commence commercial operation may 
purchase allowances from the new source set-aside based on a pricing 
structure defined in this section.

Section 217.770  Early Reduction Credits for Budget EGUs

    This section allows budget EGUs to request early reduction credits 
(ERCs) if they reduce NOX emissions in the 2001, 2002 or 
2003 control periods for use in 2004 and 2005 control periods. This 
section sets forth the various requirements associated with the 
generation and recording of these ERCs along with the requirement for 
monitoring system availability. It is understood that early reduction 
credits for the year 2001 would require emissions monitoring according 
to part 75 during the 2000 ozone period in order to establish a 
baseline and for each control period for which early reduction credits 
are requested. This and other issues were addressed to the State in a 
letter dated May 16, 2001.

C. Components of the State's Final Rules

1. What Geographic Regions and Sources Are Affected by the State's 
Final Rule?
    The final rules affect all fossil fuel-fired boilers, combustion 
turbines or combined cycle systems in the State of Illinois serving a 
generator with a nameplate capacity greater than 25 MWe and selling 
electricity (and boilers, turbines, and all combined cycle systems in 
the State of Illinois serving smaller generators provided that these 
units have heat input rates exceeding 250 mmBtu/hour and have a 
potential to provide more than 50 percent of their power output to the 
generators), and any opt-in sources in the State of Illinois as 
described in the rule.
2. What Are the Allowable NOX Emission Rates or Levels for 
Affected Sources?
    The NOX reductions called for in the State rule are 
based on an NOX emissions cap required for EGUs in the 
State. The target budget established in the State rule is 30,701 tons 
for the control period. The cap is based on an emission rate of 0.15 
pounds/mmBtu heat input for EGUs operating in 1995/1996 applied to 
operating levels expected in 2007. With regard to the attainment 
demonstration for the Chicago-Gary-Lake County nonattainment area, the 
State submitted an attainment demonstration on December 26, 2000. This 
rule is intended to provide the level of control from EGUs that, in 
conjunction with rules establishing similar requirements for other 
source types, will meet Illinois' NOX emission budget under 
the NOX SIP Call.
3. What Are the Monitoring, Recordkeeping, and Reporting Requirements 
for Affected Sources?
    The IEPA incorporated by reference the EPA Part 96 monitoring, 
recordkeeping, and reporting requirements for affected sources. 
However, in section 217.770(a) of the rule, which addresses early 
reduction credits for budget EGUs, the rule provided that ``* * * 
monitoring system availability shall be not less than 80 percent during 
the control period prior to the control period in which the 
NOX emissions reduction is made * * *''. Also, in the opt-in 
process, the State, in section 217.776(b) addressed monitoring system 
availability of ``* * * not less than 80 percent * * *''. This differed 
with the EPA requirement for monitoring in section 96.84(b) of 40 CFR 
part 96, which requires 90 percent availability. In the course of 
finalizing the rule, the State revised the availability requirement to 
90 percent and, therefore, this portion of the rule is approvable.
4. What Is the Compliance/Implementation Deadline for Affected Sources?
    The Illinois rule had a compliance date that was contingent upon 
implementation of NOX rules in other States. Section 217.756 
stated that sources ``* * * shall be subject to the monitoring and 
[emission control] requirements * * * starting on the later of May 1, 
2003, * * * or [May 1 of the year after] all of the other States 
subject to the provisions of the NOX SIP Call [in Region 5 
or contiguous to Illinois] have adopted regulations to implement 
NOX trading programs and other required reductions of 
NOX emissions pursuant to the NOX SIP Call, and 
such regulations have received final approval by USEPA * * *, or a 
final FIP for ozone promulgated by USEPA is effective.'' The relevant 
other States are Indiana, Michigan, Ohio, Missouri, and Kentucky. This 
language provided for compliance with relevant requirements by May 1, 
2003, except that a later compliance date would apply if any of

[[Page 56462]]

these five other States did not have adequate NOX 
regulations either as approved State regulations or as effective 
promulgated Federal regulations by the end of 2002.
    This language raised significant concerns which we communicated to 
the State. For EPA to approve this rule and the expected other related 
rules as satisfying the NOX SIP Call, EPA must conclude that 
the controls needed to achieve the budget will be required by May 31, 
2004. As noted above, in a June 27, 2001, letter, IEPA informed EPA 
that on June 22, 2001, the Governor signed into law House Bill 1599 
which specifies a May 31, 2004, compliance date applicable to this rule 
and other rules which are part of the NOX SIP.

D. Does the Illinois NOX Trading Program Meet the Federal 
NOX Budget?

    EPA believes the Illinois NOX EGU rule submittal 
addresses all of the elements of the NOX model rule for EGUs 
and therefore, when fully implemented, will meet the existing 
requirements of the Federal NOX budget. The State's SIP 
included rules controlling emissions from electric generating units, 
non-electric generating units, cement kilns, and associated budget 
trading rules. The SIP also includes a rule which incorporates by 
reference portions of the Federal part 96 rule, and includes a budget 
demonstration which was submitted by the Chief, Bureau of Air, in a 
letter dated June 18, 2001.
    The most significant portion of the plan was a revision of the 
State's rules, requested by EPA, which responded to our concerns 
regarding the delayed compliance date affecting the three source 
categories and the budget trading program. This revision to the rules 
was brought about by a change in legislation, signed by the Governor 
and submitted by the State to EPA in a letter dated June 27, 2001.
    All of these items have been reviewed by EPA and found to meet the 
requirements set forth in the EPA model rule and in part 51.121. The 
State has not yet submitted a rule to control internal combustion 
engines because EPA has not promulgated its final rule for this source 
category.
    The budget data are derived
from EPA's inventory, obtained from 
the EPA Internet site at
ftp.epa.gov/EmisInventory/NOxSIPCall_Mar2_2000/. The following table 
summarizes the 2007 budget for the five categories of sources 
identified in EPA's rulemaking, namely electrical generating point 
sources (EGUs), non-electrical generating point sources (non-EGUs), 
stationary area sources, non-road mobile sources, and on-road mobile 
sources.

----------------------------------------------------------------------------------------------------------------
                                                    2007
                                     2007 CAA      Budget                                           Contribution
                                    base ozone     ozone       Emission     Category    Percent of     to NOX
              Sector                  season       season     reduction    reduction      total        trading
                                      total        total        (tons)        (%)       reduction      budget
                                      (tons)       (tons)                                              (tons)
----------------------------------------------------------------------------------------------------------------
Electrical Generating Units            119,311       32,372       86,939          73%          89%        30,701
 (EGUs)..........................
Non-Electrical Generation Units         71,011       59,765       11,246          16%          11%         4,856
 (Non-EGUs)......................
Area.............................        9,369        9,369            0            0            0             0
On-Road Mobile...................      112,518      112,518            0            0            0             0
Non-Road.........................       56,724       56,724            0            0            0             0
    Total........................      368,933      270,748       98,185    27% Total                     35,557
                                                                            Reduction
----------------------------------------------------------------------------------------------------------------

    The reductions of 11,246 tons from non-EGUs are based on reductions 
at large cement kilns, large industrial boilers and turbines, and 
assuming a 90% reduction from large internal combustion (I.C.) engines. 
Illinois has not yet submitted a rule to control I.C. engines because 
EPA has not promulgated its final rule covering I.C. engines. Also, in 
the Subpart U (non-EGU) SIP submittal, Illinois EPA has requested that 
EPA incorporate a slightly revised budget for non-EGUs that reflects 
inventory corrections. When these revisions are incorporated, the non-
EGU point source's 2007 base and 2007 budget emissions will be 71,011 
and 59,765 tons of NOX per ozone season, respectively, as 
compared to the 70,948 and 59,577 tons per season reported in EPA's 
inventory.
    As with the approach EPA assumed in formulating its budget, 
Illinois' approach reflects controls on EGUs and on non-EGUs. Illinois' 
rules provide for large EGUs and large point non-EGUs to participate in 
the Federal NOX Trading Program, and their NOX 
emissions are capped at the same level as contained in EPA's inventory 
of March 2, 2000, with the exception of revisions requested in 
Illinois' non-EGU (Subpart U) SIP revision. The revised trading budget 
for non-EGUs as proposed by Illinois is 4,856 tons, as compared to 
4,882 reported in the EPA's inventory. The Subpart T cement kiln rule 
does not cap NOX emissions from large kilns. Illinois 
followed EPA's model rule in developing the Subpart T regulation. It is 
a technology/rate-based rule. Though Illinois has used the emissions 
reductions specified in the March 2, 2000, inventory, the 
NOX emissions can decrease or increase slightly depending on 
the options the sources choose to comply with the Subpart T rule. EPA 
is satisfied with the State's submittal.

E. What Public Review Opportunities Were Provided?

    The State reports that early in 1999, the IEPA commenced regular 
meetings with the NOX Technical Committee and with 
representatives of the existing EGUs. The State met with these existing 
sources on numerous occasions. Most of the time was spent developing 
concepts in the flexible portions of the Federal NOX Trading 
Program, i.e., initial allocations, allocation methodology, and the use 
of the Compliance Supplement Pool. The State also met with new EGUs and 
again with existing EGUs for a second time to discuss how allowances 
would be allocated.
    Following the May 25, 1999 stay by the Court of Appeals, the IEPA 
shifted its effort to meet the requirements of the 1-hour ozone 
standard attainment demonstration. When this stay was lifted on June 
22, 2000, IEPA again began to formulate a program to comply with the 
NOX SIP Call rule. IEPA again met with the affected sources 
and also with the American Lung Association of Chicago, the Illinois 
Environmental Council, the Environmental Law and Policy Center, and the 
Illinois Environmental Regulatory Group.

F. What Requirements are Contained in the NOX Emission 
Control Rule From the Standpoint of the Lake Michigan Ozone Attainment 
Demonstration?

    As noted in the December 16, 1999 proposed rulemaking on the 
State's

[[Page 56463]]

attainment demonstration for the Chicago-Gary-Lake County ozone 
nonattainment area (64 FR 70496), the attainment demonstration noted 
that significant reductions in regional NOX emissions would 
be needed to attain the standard in the nonattainment area. The State 
did assume significant future reductions in background (transported) 
ozone levels and upwind NOX emissions to reflect possible 
impacts from EPA's NOX SIP Call based on information 
available prior to April 1998.

G. What Guidance did EPA Use to Evaluate Illinois' NOX 
Control Program?

    The State of Illinois asked that the Part 217 NOX 
emissions control rule be parallel processed by EPA in order to 
expedite eventual approval of the State's NOX SIP. Guidance 
for parallel processing is found at 47 FR 27073 (June 23, 1982). In 
addition, we used 40 CFR part 96 for review of portions of the 
submittal which apply. The State incorporated by reference a 
significant portion of 40 CFR part 96. The portions incorporated by 
reference are listed elsewhere in this action.

H. Does the Illinois Part 217 NOX Emissions Control Program 
Meet the Needs of the Ozone Attainment Demonstration?

    Illinois and other Lake Michigan States completed the attainment 
demonstration for the Lake Michigan area. EPA proposed on July 11, 2001 
(66 FR 36370) to approve IEPA's Chicago area attainment demonstration 
because we believe it adequately demonstrates attainment for the 
Chicago-Gary-Lake County ozone nonattainment area. A complete 
discussion of the budget demonstration can be found at 66 FR 34382.

I. Does the Illinois Part 217 NOX Emissions Control Program 
Meet All of the Federal NOX SIP Call Requirements?

    No. The Part 217 rule only addresses the NOX controls 
for EGUs. Although these reductions are significant, they are not 
sufficient to guarantee that the State will achieve the NOX 
emission budget established in the NOX SIP Call. To achieve 
the acceptable NOX emission level of the NOX SIP 
Call, the State adopted additional emission control regulations for 
non-EGUs and Cement Kilns. The adequacy of the full set of reductions 
to satisfy the NOX SIP Call requirements is addressed in 
separate rulemaking on these sources and on the budget demonstration 
(See 66 FR 34382). Other previously identified deficiencies and how 
Illinois addressed them are discussed below.

J. What Deficiencies Were Noted in Illinois' NOX Emissions 
Control Rules and Has Illinois Satisfactorily Addressed Them?

    We reviewed the State's draft Part 217 NOX trading 
program rule for EGUs and gave the State comments on deficiencies. EPA 
again reviewed the rule when it was submitted in February 23, 2001, and 
found the State made many of the corrections suggested by us. These 
deficiencies were corrected by Illinois and the State included these 
changes in an errata sheet filed with the Illinois Pollution Control 
Board during its hearing process. We again reviewed the rule and the 
legislation following the action by the Legislature which addressed the 
compliance delay language and found this portion addressing compliance 
delay to be acceptable.

Section 217.101(a)

    The reference to Method 7 is questionable. Method 7 is a one time 
stack test. The rule should require Continuous Emissions Monitoring 
Systems (CEMS). Additionally, there is a more recent method than method 
7. It is method 7e. The State made this correction in its final rule. 
The State's rule incorporates by reference EPA's measurement methods, 
it also refers to 40 CFR part 75. Table 1 lists the elements of EPA's 
model rule which the State incorporated by reference. Included in that 
list is part 75 Continuous Emissions Monitoring which the State 
requires for all sources subject to this rule. It is clear that the 
State's intent in this section is to see that all sources use CEMs as 
the exclusive requirement for measuring emissions.

Section 217.754(c)  Low-Emitter Status

    If a unit receives low emitter status, it will not be required to 
monitor emissions. The unit will need only to report operating hours. 
In Subpart W at 217.754(c) of the State's rule, which requires 
potential NOX emissions to be calculated by either part 75 
or by the default emissions rate, the rule should require only the use 
of default emissions rates. However, in the State's final rule this 
recommendation was not followed. The intent of this portion of the rule 
is to provide a unit two alternatives to qualify for low emitter 
status. The first alternative requires a unit to take permit limits on 
its operating hours and potential NOX mass emission in order 
to ensure that the units potential NOX mass emission do not 
exceed 25 tons during the ozone season.
    The second alternative allows a unit with monitored ozone season 
NOX emissions of 25 tons or less, as monitored according to 
part 75, to qualify for low emitter status. Under this alternative, a 
unit must again take a permit limit restricting ozone season operating 
hours and potential NOX mass emissions during the season to 
25 tons or less.
    The State goes on to define the use of the term ``potential 
NOX mass emissions'' as it is used in this section. In 
Subpart W, section 217.754(c), this term is first used in paragraph 
(c)(1)(B), stating that the source's permit must ``Limit the EGU's 
potential NOX mass emissions * * * to 25 tons or less.'' 
Under paragraph (c)(1)(D), the permit must in addition ``Require that 
the EGU's potential NOX mass emissions be calculated [either 
by monitoring according to 40 CFR 75 or by multiplying maximum 
potential hourly emissions times hours of operation].'' Consequently, 
``potential emissions'' must be interpreted to mean the emissions 
determined according to whichever method is used under section 
217.754(c)(1)(D). Since the measurements under 40 CFR 75 measure actual 
emissions, a low emitting source using such monitoring would rely 
largely on actual emissions data to evaluate compliance with the permit 
limit on potential NOX mass emissions.

Section 217.756

    This section repeats section 96.6 of 40 CFR part 96, which is 
already incorporated by reference in the State rule. EPA recommended 
section 217.756 be deleted. The State chose to leave this section in 
its rule as a means of providing fuller notice to sources in Illinois 
subject to the rule applicable to them.
    (d)(3). This subsection is discussed in detail in previous pages of 
this action and was the main reason for EPA's August 31, 2000, proposed 
disapproval in the alternative (See 65 FR 52967). In a June 27, 2001, 
letter to EPA, IEPA informed EPA that on June 22, 2001, the Governor 
signed into law House Bill 1599 which specifies a May 31, 2004, 
compliance date.
    (g). Effect on other authorities--We recommended that rather than 
referencing 40 CFR 96.4(b), the rule should reference 217.754(c). The 
State agreed and made the change.

Section 217.762

    Throughout this section, when the State addressed allocation of 
allowances from the new source set-aside, it uses the phrase ``to 
budget EGUs that have

[[Page 56464]]

not fully operated for the full 2000 control period (italics 
supplied).'' Read literally, it could authorize an existing source that 
was shut down for part of a control period to receive allowances from 
the new source set-aside. We recommended the State clarify this, 
perhaps by replacing the italicized phrase with the phrase ``commenced 
commercial operation.'' This latter term is used in section 217.768. In 
order to use consistent terminology, the State made the recommended 
change.

Section 217.768

    (i) In this section the State should clarify the phrase ``* * * 
less than one-half of the control period in 2002 * * *''. EPA 
recommended this language be more specific. The State changed this to 
``* * * but have operated for 76 or fewer days of the control period in 
2003 * * *'' This changed not only the language to clarify the meaning 
but also changed the year to reflect the court change in the date of 
compliance.

Section 217.770

    (a) The unit's monitoring data availability was listed at 80 
percent. In the State's final rule data availability was changed to 90 
percent, as in the model Federal rule. The phrase, the ``* * * control 
period prior to the control period * * *'' is ambiguous due to the 
double reference to ``control period.'' This was made clear in the 
final rule. The State also revised the years in which early reduction 
credits can be earned as reflected in the change in the date by which 
sources must be in compliance.

Section 217.774  Opt-in Units

    (a)(2) By its terms, the provisions authorize units to opt-in only 
if all of their emissions are vented to a stack and monitor in 
accordance with part 75.

Section 217.776

    (b) Monitoring data availability was 80 percent in the State's 
proposed rule. The State changed this to 90 percent in it's final rule.

Section 217.778

    (b)(3) In the State's final rule this section was changed to 
(b)(2). The rule referred to ``any allowances allocated to that unit 
under section 217.782 of this subpart for the control period * * * 
(emphasis added).'' We recommended the emphasized term be revised to 
read ``* * * the same or earlier control period * * *'' The State's 
final rule includes this recommended change.

Section 217.780

    Throughout this section, the State refers to a unit which changes 
its regulatory status and becomes a budget opt-in unit. In fact, this 
provision is meant to address units which change their regulatory 
status and become budget units. EPA recommended in this section the 
phrase ``* * * budget opt-in unit * * *'' be replaced with the phrase 
``* * * budget EGU * * *''. The State did not make this recommended 
change as it believed the change was not necessary. The State retained 
the terminology in order to keep it straight for purposes of Illinois 
sources that are opt-in units, not ones that are required to be in the 
trading program. As they are opt-in units, they can opt out again. The 
State believes the meaning of the phrase from any point of view is not 
ambiguous. We agree, and this is not an approvability issue.

Section 217.782

    (b)(2)(B) This section was unclear and referred to the year of the 
control period not to the year prior to the year of the control period. 
The State agreed and made the change in the final rule.

III. Response to Public Comments

    EPA proposed to approve the Illinois EGU rule on August 31, 2000 
(65 FR 52967). We received 2 comments on the proposal. One comment was 
from the State of Missouri Department of Natural Resources, Division of 
Air Quality (DAQ). This comment dated October 2, 2000, was a letter 
requesting that EPA extend the comment period by 30 days so that DAQ 
would have sufficient time to review the Federal proposal and its 
potential impacts on Missouri and submit substantive comments to EPA. 
No follow-up comments on the proposal were received from the DAQ, and 
its request to extend the comment period was subsequently withdrawn.
    The second comment is from the State of Illinois and was received 
in a letter dated September 29, 2000. These comments responded to 
specific issues EPA noted in the August 31, 2000, proposal including a 
comment on proposed State rule concerning the compliance delay 
language.

IV. Final Action

What Action is EPA Taking Today?

    EPA is taking final action today to approve Illinois' 
Administrative Code 217, Subpart W, NOX Trading Program for 
Electrical Generating Units. These rules require reductions in 
emissions of nitrogen oxides from large EGUs and require a statewide 
cap on NOX emissions, consistent with the requirements of 
the NOX SIP Call. 63 FR 57355 (October 27, 1998)

V. Administrative Requirements

    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 22, 2001). This action 
merely approves state law as meeting federal requirements and imposes 
no additional requirements beyond those imposed by state law. 
Accordingly, the Administrator certifies that this rule will 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 rule approves pre-existing requirements under state law and does 
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 (Public Law 104-4). This rule also does 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), nor will it 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), because it 
merely approves a state rule implementing a federal standard, and does 
not alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. This rule also is 
not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), 
because it is not economically significant.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. 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 SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission,

[[Page 56465]]

to use VCS in place of a SIP submission that otherwise satisfies the 
provisions of the Clean Air Act. 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. As required by section 3 of 
Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this 
rule, EPA has taken the necessary steps to eliminate drafting errors 
and ambiguity, minimize potential litigation, and provide a clear legal 
standard for affected conduct. EPA has complied with Executive Order 
12630 (53 FR 8859, March 15, 1988) by examining the takings 
implications of the rule in accordance with the ``Attorney General's 
Supplemental Guidelines for the Evaluation of Risk and Avoidance of 
Unanticipated Takings'' issued under the executive order. This rule 
does not impose an information collection burden under the provisions 
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
    The Congressional Review Act, 5 U.S.C. section 801 et seq., as 
added by the Small Business Regulatory Enforcement Fairness Act of 
1996, generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. EPA will submit a report containing this 
rule and other required information to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States 
prior to publication of the rule in the Federal Register. A major rule 
cannot take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
section 804(2). This rule will be effective December 10, 2001.
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by January 7, 2002. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen oxides, Ozone, 
Reporting and recordkeeping requirements.

    Dated: September 25, 2001.
Jo Lynn Traub,
Acting Deputy Regional Administrator, Region 5.


    For the reasons stated in the preamble, part 52, chapter I, title 
40 of the Code of Federal Regulations is amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

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

Subpart O--Illinois

    2. Section 52.720 is amended by adding paragraph (c)(157) to read 
as follows:


Sec. 52.720  Identification of plan.

* * * * *
    (c) * * *
    (157) On May 8, 2001, the Illinois Environmental Protection Agency 
submitted revisions to 35 Ill. Adm. Code 217, Subpart W: NO[x] Trading 
Program for Electrical Generating Units with a request that these rules 
be incorporated into the Illinois State Implementation Plan. On June 
11, 2001, the Illinois EPA submitted Section 9.9(f) of the Illinois 
Environmental Protection Act as revised by Public Act 92-012 (formerly 
House Bill 1599) which was approved by both Houses of the Illinois 
General Assembly on June 7, 2001, approved by the Governor on June 22, 
2001, and became effective on July 1, 2001. Section 9.9(f) requires a 
May 31, 2004 final compliance date for 35 Ill. Adm. Code 215, Subparts 
T, U and W. This compliance date replaces the compliance date contained 
in Section 217.756(d)(3).
    (i) Incorporation by reference.
    (A) Title 35: Environmental Protection, Subtitle B: Air Pollution, 
Chapter 1: Pollution Control Board, Subchapter c: Emission Standards 
and Limitations for Stationary Sources, Part 217 Nitrogen Oxides 
Emissions, Subpart W: NO[x] Trading Program for Electrical Generating 
Units except for 217.756(d)(3) which has been superseded by Section 
9.9(f) of the Illinois Environmental Protection Act. Added at 25 Ill. 
Reg. 128, January 25, 2001, effective December 26, 2000.
    (B) Section 9.9(f) of the Illinois Environmental Protection Act. 
Adopted by both Houses of the Illinois General Assembly as part of 
Public Act 92-0012 (previously House Bill 1599) on May 31, 2001, 
approved by the Governor of Illinois on June 22, 2001, effective July 
1, 2001.

[FR Doc. 01-27932 Filed 11-7-01; 8:45 am]
BILLING CODE 6560-50-P