[Federal Register Volume 68, Number 11 (Thursday, January 16, 2003)]
[Rules and Regulations]
[Pages 2211-2217]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-962]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[OH155-1a; FRL-7425-8]


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

AGENCY: United States Environmental Protection Agency (USEPA).

ACTION: Direct final rule.

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SUMMARY: On July 11, 2002, Ohio submitted a plan which contained rules 
to control emissions of oxides of nitrogen (NOX) from 
electric generating units (EGU), non-EGUs and Portland Cement Kilns. 
The plan and associated rules represent a strategy submitted by the 
Ohio Environmental Protection Agency (Ohio EPA) in response to USEPA's 
October 27, 1998, NOX State Implementation Plan (SIP) Call 
and subsequent technical amendments. This direct final rule addresses 
the adequacy and acceptability of the Ohio plan, which we believe will 
have a major impact in reducing NOX and ozone in Ohio and in 
areas downwind from major sources of NOX emissions. USEPA 
believes the State's plan, which includes a NOX trading 
program, an energy efficiency/renewable energy feature and accommodates 
innovative technology projects, adequately addresses the requirements 
of the NOX SIP Call and meets the budget prescribed for 
Ohio. USEPA is taking final action today to approve the Ohio EPA plan.

DATES: This rule is effective on March 17, 2003, unless USEPA receives 
relevant adverse written comments by February 18, 2003. If USEPA 
receives adverse comment, we will publish a timely withdrawal of the 
rule in the Federal Register and inform the public that the rule will 
not take effect.

ADDRESSES: Send written comments to: J. Elmer Bortzer, Chief, 
Regulation Development Section, Air and Radiation Division (AR-18J) 
Region 5, U.S. Environmental Protection Agency, 77 West Jackson 
Boulevard, Chicago, Illinois, 60604. You may obtain a copy of the State 
Implementation Plan revision request at the above address. Please 
telephone John Paskevicz at (312) 886-6084 if you intend to visit the 
Region 5 office.
    You may inspect copies of Ohio's submittal at: Regulation 
Development Section, Air Programs Branch (AR-18J), U.S. Environmental 
Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, 
Illinois 60604.

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

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

Table of Contents

I. Background
    A. What Requirements Led to the State's Submittal of the 
NOX Emission Control Plan?
    B. What Requirements Must Ohio Meet?
    C. What Have Been the Court Rulings Regarding USEPA's 
NOX Emission Control Rule?
II. Summary of the State Submittal
    A. When Was the Ohio EPA NOX Plan Submitted to the 
USEPA?
    B. What Are the Basic Components of the Ohio EPA NOX 
Plan?
    C. Does the Ohio EPA NOX Plan Meet the Federal 
NOX Statewide Emissions Budget?
    D. What Public Review Opportunities Were Provided?
    E. What Guidance Did USEPA Use to Evaluate Ohio's NOX 
Control Program?
    F. Does the Ohio Plan Meet Federal NOX SIP Call 
Requirements?
    G. What Deficiencies Were Noted in the Ohio EPA NOX 
Plan?
III. USEPA Action
IV. Administrative Requirements

I. Background

A. What Requirements Led to the State's Submittal of the NOX 
Emission Control Plan?

    On October 27, 1998, the USEPA promulgated a regulation known as 
the NOX SIP Call for numerous States, including the State of 
Ohio. 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.
    Preceding the promulgation of USEPA's NOX SIP Call, 
there had been extensive discussions by Federal, State, and local 
environmental agencies, industry, and environmental groups regarding 
the transport of ozone in the eastern United States. 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 a March 2, 1995, USEPA memorandum, the Ozone 
Transport Assessment Group (OTAG) was formed to conduct regional ozone 
transport analyses and to develop a recommended ozone transport control 
strategy. OTAG was a partnership among USEPA, the 37 eastern States and 
the District of Columbia, and industrial, academic, and environmental 
groups. OTAG was given the responsibility of conducting the two years 
of analyses envisioned in the March 2, 1995, USEPA 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 
USEPA 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, USEPA issued the NOX 
SIP Call rule on October 27, 1998. 63 FR 57356.
    In the NOX SIP Call, USEPA 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 national ambient air 
quality standards (NAAQS) in one or more downwind areas in violation of 
Clean Air Act (CAA) section 110(a)(2)(D)(I)(I). USEPA 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

[[Page 2212]]

possible cost-effective NOX emission reductions.
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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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    The source sectors include nonroad mobile, highway mobile, 
electricity generating units (EGUs), and major non-EGU stationary point 
sources. EGUs include stationary boilers and turbines that generate at 
least some electricity, even if they also generate steam for industrial 
processes. Non-EGUs include other large stationary boilers and 
turbines, typically for the purpose of generating steam for industrial 
processes.
    USEPA established recommended NOX emissions caps for 
large EGUs (potentially generating more than 25 megawatts) and for 
large non-EGUs (minimum design heat input of 250 mmBTU per hour). USEPA 
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. The 2007 state-wide 
NOX emission budgets established by jurisdiction were based, 
in part, by assuming these levels of NOX emission controls 
coupled with NOX emissions projected by source sector to 
2007.
    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 USEPA 
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 USEPA 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.

B. What Requirements Must Ohio Meet?

    The State of Ohio has the primary responsibility under the Clean 
Air Act for ensuring that Ohio meets the ozone air quality standards 
and is required to submit a SIP that specifies emission limitations, 
control measures, and other measures necessary for meeting the 
NOX emissions budget. The SIP for ozone must meet the ozone 
transport SIP Call requirements, must be adopted pursuant to notice and 
comment rulemaking, and must be submitted to the USEPA for approval.
    These NOX emission reductions will address ozone 
transport in the area of the country primarily east of the Mississippi 
River. USEPA 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 of attainment of a standard by any other State with 
respect to any NAAQS.
    Pursuant to its authority under section 110(k)(5), USEPA concluded 
that the SIPs for Ohio and other states were substantially inadequate 
to prohibit NOX emissions that significantly contribute to 
ozone nonattainment. As a result, Ohio was required to submit SIP 
revisions that addressed this inadequacy.
    USEPA has published a model rule for control of NOX 
emissions from boilers and turbines. This model rule, codified at title 
40 of the Code of Federal Regulations part 96 (40 CFR part 96), 
reflects USEPA's recommendations for the general design of the 
necessary NOX emission control programs as well as detailed 
recommendations for specific program features. Similarly, at 63 FR 
56393 (October 21, 1998), USEPA has published a proposed Federal 
implementation plan including rules regulating cement kilns, which 
serve as sample rules for this source type. USEPA recommends the cost-
effective levels of control noted above. The budget that USEPA 
established for states reflects these control levels. USEPA further 
recommends that states take the necessary steps to allow their sources 
to participate in a multi-state NOX emissions trading 
program that USEPA will run. While USEPA offers flexibility to states 
on various elements of program design, particularly in the distribution 
of projected emission reductions, USEPA can offer more streamlined 
approval of programs that more closely follow USEPA's model rule. (See 
63 FR 57365)

C. What Have Been the Court Rulings Regarding USEPA's NOX 
Emission Control Rule?

    When the USEPA published the NOX SIP Call on October 27, 
1998, a number of States and industry groups filed petitions 
challenging the rulemaking before the United States Court of Appeals 
for the District of Columbia. The court, on May 25, 1999, stayed the 
States' obligation to submit SIPs in response to the NOX SIP 
Call rule. Subsequently, on March 3, 2000, the court upheld most of 
USEPA's NOX SIP Call rule. The court, however, vacated the 
rule 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 the court believed that USEPA had not made a showing that 
sources in Wisconsin significantly contributed to nonattainment or 
interfered with maintenance of the ozone NAAQS in any other State. 
Finally, the court remanded to USEPA two issues concerning a limited 
portion of the NOX emission budgets. See Michigan et al. v. 
EPA, 213 F.3d 663 (D.C. Cir. 2000). On April 11, 2000, based on the 
remanded issues, USEPA initiated a two phase approach to implement the 
NOX SIP Call. Phase I of this approach addressed the portion 
of the NOX SIP Call upheld by the court. Phase I will 
achieve the majority of the reductions in the NOX SIP Call. 
The Phase I plan was due from Ohio on October 30, 2000.
    Phase II will address the few narrow issues that the DC Circuit 
court remanded to USEPA, including: Whether, and if so, how, a small 
subclass of facilities that generate electricity should be included in 
the rule; and what control levels should be assumed for large, 
stationary internal combustion engines. Phase II of the NOX 
SIP Call will not require a submittal from the States until USEPA has 
proposed and finalized rules in response to the court's remand.
    On June 22, 2000, the court removed the stay of the state's 
obligation to submit SIPs in response to the NOX SIP Call 
and denied petitioner's motions for rehearing and rehearing en banc. In 
removing the stay, the court provided that USEPA should allow 128 days 
for States to submit SIPs to the USEPA, i.e., by October 30, 2000. 
Shortly after removing the stay, petitioners requested that the court 
adjust the NOX SIP Call compliance date. In an action 
related to Michigan v. EPA, 213 F.3d 663 (D.C. Cir

[[Page 2213]]

2000) the court then determined that the compliance date for the SIP 
Call would be May 31, 2004. Although the court's action affected only 
the compliance deadline, other dates in the rule for related 
requirements (such as flow control) were also extended because they 
were established relative to the original compliance deadline.

II. Summary of the State Submittal

A. When Was the Ohio EPA NOX Plan Submitted to the USEPA?

    Ohio EPA submitted the NOX plan on July 11, 2002. USEPA 
had an opportunity to review and comment on earlier draft versions of 
the rules during the stakeholder review process. USEPA made both formal 
and informal comments, and these comments are available in the Docket. 
The plan was submitted in sufficient time for the USEPA to make a 
finding of completeness, which terminated the imposition of sanctions 
which were scheduled to go into effect on July 25, 2002, due to Ohio's 
failure to submit a plan. The Region 5 Regional Administrator signed 
the completeness finding on July 24, 2002. (See 67 FR 50600)

B. What Are the Basic Components of the Ohio EPA NOX Plan?

    The Ohio EPA plan includes the following documents: (1) A letter 
from the Director of Ohio EPA requesting a revision to the Ohio EPA 
plan; (2) a copy of the rules containing the provisions and 
requirements to implement a NOX budget trading program to 
control and reduce emissions of NOX in Ohio; (3) a copy of 
the Ohio code indicating the authority of the Ohio EPA Director to 
develop and submit the revision; (4) a notice of the proposed 
rulemaking and public hearing; (5) a transcript of the public hearing 
on the rules containing comments and testimony; (6) the Ohio Director's 
Findings and Orders announcing the adoption of rules controlling 
NOX from sources in Ohio; (7) a list of Ohio's ``interested 
parties'' or stakeholders to whom draft rules were distributed for 
comment; (8) summary of comments submitted into Ohio's formal hearing 
record regarding the proposed rules which establish a NOX 
budget trading program in Ohio; and, (9) Ohio's budget demonstration 
including a list of units (operating or under construction) subject to 
the State's NOX rules.
    Ohio's NOX plan and rules apply to, and establish, a 
trading program for EGUs, non-EGUs, and portland cement kilns. The 
rules contained in chapter 3745-14, establish the provisions and 
requirements to implement a NOX budget trading program in 
Ohio. The net effect of the rules is to cap emissions from major 
emitters and provide allowances to units to operate within the State's 
budget during the control period. Allowance allocations are made for 
five year periods with the exception of the first period, which is for 
a four-year period.
    The State's market-based program which follows the model 
NOX budget trading rule is the method selected by Ohio to 
meet its NOX emissions reduction obligations under the 
NOX SIP Call. The trading program caps total emissions in 
order to ensure that emissions reductions are achieved and maintained. 
Also, the flexibility in the State's program allows sources to reduce 
emissions and where possible, and if desired, generate allowances for 
trading.
    The Ohio EPA plan includes Ohio rule 3745-14. This trading rule 
contains eleven separate rule elements, listed in Table 1, which 
correspond with part 96 model rule of the NOX SIP Call.

                                Table 1.--Comparison of State Rule to Model Rule
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                   Ohio Rule 3745-14                                Corresponds with USEPA rule . . .
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01, General Provisions.................................  Subpart A, sections 96.1, 96.2, and 96.3 Purpose,
                                                          Definitions and Abbreviations. 96.4, Applicability.
                                                          96.5, Retired unit exemptions. 96.6, Standard
                                                          requirements. 96.7, Computation of time.
02, NOX authorized account representative..............  Subpart B, section 96.10 . . . the NOX authorized
                                                          account representative. 96.11, Alternate NOX
                                                          authorized account representative. 96.12, Changing the
                                                          account representative. 96.13, Account certificate of
                                                          representation. 96.14, Objections re: NOX account
                                                          representative.
03, NOX budget permit..................................  Subpart C, section 96.20, NOX budget permit
                                                          requirements. 96.21, Submission of NOX budget permit
                                                          application. 96.22, Information requirements for NOX
                                                          budget permit applications. 96.23, content. 96.25,
                                                          revisions.
04, Compliance certification...........................  Subpart D, section 96.30, Compliance certification
                                                          report. 96.31, State and USEPA's action on compliance
                                                          certification.
05, NOX allowance allocations..........................  Subpart E, section 96.40, NOX allowance allocations.
                                                          96.41, Timing requirements. 96.42 NOX allowance
                                                          allocations. 96.55 Banking (Early reduction credit
                                                          portion of this section).
06, NOX allowance tracking system......................  Subpart F, section 96.50, NOX allowance tracking system
                                                          (ATS) accounts. 96.51, Establishment of accounts.
                                                          96.52, NOX ATS responsibilities of NOX authorized
                                                          account rep. 96.53, Recordation of NOX allowance
                                                          allocations. 96.54, Compliance. 96.55, Banking. 96.56,
                                                          Account error. 96.57, Closing of general accounts.
07, NOX allowance transfers............................  Subpart G, section 96.60, Submission of NOX allowance
                                                          transfers transfers. 96.61, EPA recordation. 96.62,
                                                          Notification.
08, Monitoring and reporting...........................  Subpart H, Monitoring and Reporting. 96.70, 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.
09, NOX budget opt-in units............................  Subpart I, Individual Unit Opt-ins. Section 96.80,
                                                          Applicability. 96.81, General. 96.82, NOX authorized
                                                          account representative. 96.83, Applying for NOX budget
                                                          opt-in permit. 96.84, Opt-in process. 96.85, NOX
                                                          budget opt-in permit contents. 96.86, Withdrawal from
                                                          NOX budget trading program. 96.87, Change in
                                                          regulatory status. 96.88, NOX allowance allocations to
                                                          opt-in units.
10, Alternative compliance plans.......................  This rule allows a source to participate in alternate
                                                          compliance multi-pollutant reduction schemes such as
                                                          the President's Clear Skies proposal.
11, Portland cement kilns..............................  Part 98, subpart B, Emissions from cement
                                                          manufacturing, proposed rules, October 21, 1998.
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    Ohio's plan includes opportunities for sources to obtain, beginning 
in 2006, an allocation for energy efficiency/ renewable energy 
projects. The Ohio rule contains a provision which sets aside one 
percent of the tons of NOX emissions in the State trading 
budget. This set-aside is for units that during the control period 
reduce end-use demand for electricity or displace electrical energy 
utilization by use of wind power,

[[Page 2214]]

solar power, biomass or landfill methane gas generation.
    Ohio's plan also sets aside one percent of the trading budget 
beginning in 2006 for innovative technology projects. This means that 
an industry can compete for a set-aside, using stationary or mobile 
source technology which has not yet been adequately demonstrated in 
practice but where there is a likelihood that the technology will 
reduce NOX emissions and increase energy efficiency.

C. Does the Ohio EPA NOX Plan Meet the Federal 
NOX Statewide Emissions Budget?

    Yes, on July 11, 2002, Ohio submitted a plan containing rules in 
OAC Chapter 3745-14 to respond to USEPA's NOX SIP Call 
published in the Federal Register on October 27, 1998. We reviewed the 
plan and found it complete on July 23, 2002. (See 67 FR 50600, dated 
August 5, 2002)
     USEPA's NOX SIP Call affected sources of oxides of 
nitrogen (NOX) in 22 states (including Ohio) and the 
District of Columbia. The NOX SIP Call rulemaking 
established statewide budgets for NOX emissions beginning in 
the 2003 ozone season (May 1 to September 30). Each state was required 
to submit a State Implementation Plan (SIP) containing rules necessary 
to reduce NOX emissions to the NOX budget levels.
    On March 2, 2000, USEPA published a final rule amending state 
NOX budgets (65 FR 11222). Ohio used the information from 
this final rule to develop its budget. Further, Ohio describes the 
process it used to develop the budget in the budget demonstration 
contained in its plan submittal. A summary of the base and budget 
NOX emissions contained in this rule for Ohio are provided 
in table 2.

                                                    Table 2.--NOX Emissions Budget by Source Category
                                                                        [In tons]
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                                                                                                  Source Category
                                                         -----------------------------------------------------------------------------------------------
                       2007 final                                                                            non-road         Highway
                                                                EGU           non-EGU       Area source       mobile          mobile           Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base....................................................         163,132          50,001          21,860          43,380          94,850         373,223
Budget..................................................          48,990          40,194          21,860          43,380          94,850         249,274
Reduction...............................................         114,142           9,807               0               0               0         123,949
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    On November 15, 2000, Ohio informally provided draft rules for 
preliminary review to stakeholders and USEPA to start the rulemaking 
process. Ohio received comments on these draft rules from USEPA and 22 
other interested parties. Ohio's draft rules were revised to take into 
account the comments received, and the revised draft rules were 
distributed to interested parties on November 19, 2001. Ohio EPA, 
again, received comments on these draft rules from USEPA and 38 other 
interested parties. The rules, to be submitted to Ohio's Joint 
Committee for Administrative Rule Review (JCARR), were revised again 
taking into consideration the comments. Ohio believes that these rules 
will achieve the NOX reductions required by USEPA's 
NOX SIP Call, and has finalized them for inclusion in its 
submitted NOX plan.
    The budget projections used to prepare Ohio's submission are the 
same as the State budget established by USEPA in the final rule 
published in the Federal Register on March 2, 2000 (65 FR 11222). A 
minor change was made by Ohio EPA and is addressed in the State's 
submittal. This change corresponds with a technical correction to the 
Ohio inventory made by USEPA on October 31, 2001 (66 FR 54992).
    Ohio's budgets for Area Sources, Mobile Sources and Non-Mobile 
sources reflect emissions during the ozone control period from May 1 
through September 30 for each year. The original USEPA budgets that 
Ohio used in it's analysis can be found on the electronic file entitled 
``OH.zip'' on USEPA's web site ftp://ftp.epa.gov/EmisInventory/NOXSIPCall--Mar2--2000. Ohio submitted similar budgets for 
area, mobile and non-mobile source categories on a compact disk (CD) 
along with the Budget Demonstration. The CD is available in the Region 
5 Docket. Table 3 identifies the 2007 base budgets for these sources 
and the name of the attached file in which they are found. No 
NOX reductions from these source categories (mobile, area, 
and non-mobile) are projected for Ohio's budget demonstration. 
Furthermore, Ohio does not expect to have to develop additional 
NOX emission reduction measures to meet the statewide budget 
during the 5-month ozone season.

                                     Table 3.--Unaffected Source Categories
                                                    [In tons]
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                                                             2007 base
                      Source category                         budget                    File name
----------------------------------------------------------------------------------------------------------------
Area Sources..............................................      21,860  OH--ar.wb3
Mobile Sources............................................      94,850  OH--mb.wb3
Non-Road Mobile Sources...................................      43,380  OH--nr.wb3
----------------------------------------------------------------------------------------------------------------

    Table 4 contains the base and final NOX budget for EGUs. 
Ohio obtained these data from USEPA Clean Air Markets Division. The 
file was not part of the technical amendment to the NOX SIP 
Call of March 2, 2000 (see 65 FR 11222). The files for EGUs on USEPA's 
Web site ``ftp://ftp.epa.gov/EmisInventory/NOX SIPCall--Mar2--2000'' 
did not contain 2007 base or budget numbers. This file contains 
information which includes the base and final budgets for EGUs. Ohio 
submitted this file (along with other files referenced here) on a CD 
with the Budget Demonstration. The CD is available in the Region 5 
Docket.

[[Page 2215]]



                                        Table 4.--Base and Final Budgets
                                                    [In tons]
----------------------------------------------------------------------------------------------------------------
                                              2007 base    2007 final
              Source category                   budget       budget                    File name
----------------------------------------------------------------------------------------------------------------
EGU........................................      163,132       48,990  UT--budget.wb3
----------------------------------------------------------------------------------------------------------------

    Table 5 contains the original budget that USEPA calculated for 
large industrial boilers (non-EGUs) located in Ohio. The information in 
Table 5 can be found on USEPA's web-site at ``ftp://ftp.epa.gov/ 
EmisInventory/NOXSIPCall--Mar2--2000,'' in the file entitled 
``OH--pt.wb3.'' USEPA modified the original non-EGU budget because on 
October 31, 2001, we made a determination (66 FR 54992) that Marathon 
Ashland Petroleum LLC's Plant 1576000301, emissions unit B015 was not a 
NOX budget unit. USEPA's original non-EGU budget was 
modified to remove 18 NOX allowances initially designated 
for B015 and to add 36 tons of uncontrolled NOX emissions 
from B015 to the total budget for this source category. The budget 
submitted by Ohio EPA reflects these changes and the electronic file 
reflecting these changes is located on the CD submitted by Ohio in the 
file entitled ``NonEGU Adjusted.wb3.''

                                   Table 5.--Sources Regulated by State Rules
----------------------------------------------------------------------------------------------------------------
                                                  2007 Base    2007 Final
                    Source                         budget        budget                   File name
----------------------------------------------------------------------------------------------------------------
non-EGUs......................................        50,001        40,194  OH--pt.wb3
----------------------------------------------------------------------------------------------------------------

    The information in Table 6, presents the components of Ohio's 
NOX budget for EGUs and non-EGUs.

                                            Table 6.--Ohio NOX Budget
                                                    [In tons]
----------------------------------------------------------------------------------------------------------------
                                                                                EGU                   non-EGU
                                                                 -----------------------------------------------
                                                                                      2006 and
                                                                     2004,2005         after      2004 and after
----------------------------------------------------------------------------------------------------------------
      Total for source categories...............................          48,990          48,990          40,194
                                                                 -----------------
non-Regulated Units.............................................           3,558           3,558          36,127
Set-Asides......................................................       \1\ 2,272       \2\ 3,181         \1\ 203
Allowances available for existing units.........................          43,160          42,251          3,846
----------------------------------------------------------------------------------------------------------------
\1\ In each year, 5% of the Regulated Units' budget will be set aside to be allocated to new units.
\2\ After 2005, an additional 2% of the EGU Regulated Units' budget will be set aside to fund two set-asides: 1%
  for Energy Efficiency/Renewable Energy Projects and 1% for Innovative Technology Projects.

    USEPA believes the Ohio NOX sources addressed here, 
which includes a cap and an allowance trading program, will be 
adequately controlled to ensure the sources in the State will meet the 
statewide NOX budget established by USEPA.

D. What Public Review Opportunities Were Provided?

    The Director of the Ohio Environmental Protection Agency ``* * * 
may conduct public hearings on any plans for the prevention, control, 
and abatement of air pollution that the director is required to submit 
to the federal government.'' (Ohio Revised Code chapter 3704.03, Powers 
of the director of environmental protections.) Ohio's Director held 
several meetings early on in the rule development process, shortly 
after the USEPA promulgated the Finding of Significant Contribution and 
Rulemaking for the Purpose of Reducing Regional Transportation of Ozone 
Rule (see 63 FR 57356, dated October 27, 1998). During the course of 
development, Ohio sent draft rules to stakeholders for review and 
comment. This process was repeated several times until the State was 
satisfied it had fulfilled the public process. Stakeholders included 
affected utilities, major heavy industry, environmental groups (both 
local and national), consultants, industry and manufacturing 
associations, planning commissions and councils of government, and one 
university.
    Finally, a public hearing was held in Columbus, Ohio, on April 11, 
2002, and Ohio accepted written comments until April 26, 2002. The 
transcript of the public hearing is included as part of the State's 
submittal and can be found in the Docket at Region 5.

E. What Guidance Did USEPA Use To Evaluate Ohio's NOX 
Control Program?

    USEPA used the final NOX SIP Call rule at 40 CFR part 96 
for review of portions of the Ohio submittal. We also used 40 CFR 
51.121 and 51.122 to evaluate Ohio's rules and the plan. The Ohio rules 
also apply to portland cement kilns. For USEPA's current position on 
these types of sources the public can consult USEPA's proposed part 98, 
dated October 21, 1998 (see 63 FR 56394), which USEPA expects to 
finalize shortly.

F. Does the Ohio Plan Meet Federal NOX SIP Call 
Requirements?

    USEPA is satisfied that the Ohio plan meets the requirements of the 
NOX SIP

[[Page 2216]]

Call. Ohio's rules are patterned directly from the USEPA model rule and 
Ohio EPA included in the rules all of the requirements needed for 
approval by USEPA. The plan includes a budget trading program, and 
addresses all of the components of the emissions budget listed in the 
USEPA technical amendment. Ohio's analysis indicates that additional 
NOX control strategies will not be necessary to meet the 
NOX budget for the State. USEPA has previously determined, 
on August 5, 2002 (67 FR 50600), that Ohio had satisfied the 
requirements for submittal of a complete plan to address NOX 
controls on major sources of emission.

G. What Deficiencies Were Noted in the Ohio EPA NOX Plan?

    USEPA found a small deficiency in Ohio's submittal regarding the 
trigger date for flow control. In reviewing Ohio's July 11, 2002, 
NOX SIP Call submittal, USEPA found that the State's rule 
triggers flow control in 2006. (See OAC chapter 3745-14-06(E)(6)) The 
NOX SIP Call model rule requires flow control to be 
triggered in the second year of the program. This means Ohio's rule 
should require flow control to be triggered in 2005. Flow control is a 
mechanism to limit the excessive use of banked allowances. It is more 
of an insurance policy, rather than a provision that is routinely 
expected to be carried out. Furthermore, we do not believe it is 
appropriate to delay implementation of flow control beyond 2005.
    Ohio used the model rule (63 FR 57356, dated October 27, 1998) to 
develop its plan. The State also used language from elements of the 
section 126 rule (65 FR 2674, dated January 18, 2000) in place of some 
of the language from the model rule. An amendment to the section 126 
rule dated April 30, 2002, (see 67 FR 21522) extended the flow control 
date to 2006. This one year extension corresponds to the extension of 
the compliance date noted earlier. While the extension by one year of 
flow control to 2006 is appropriate for section 126, it is not 
appropriate for Ohio's rule in the NOX SIP Call. A detailed 
discussion regarding the difference in the trigger dates for flow 
control between section 126 program and the NOX SIP Call can 
be found in 65 FR 2674, dated January 18, 2000. We do not expect there 
will be any States subject to section 126. All affected States are 
expected to implement an NOX SIP Call plan by the compliance 
date of May 2004. In order for flow control to be universally applied 
to all sources in the NOX SIP Call region, the flow control 
trigger date must be the same for all of the States in the ozone 
transport region.
    USEPA believes the 2006 date in the Ohio rule is a deficiency which 
can be cured by Ohio via the submittal of a State rule to revise the 
flow control date at the soonest possible time before the 
NOX compliance date.
    USEPA also found a deficiency in OAC chapter 3745-14-09(G)(7) 
entitled NOX Budget Opt-in Units. The Ohio rule states that 
opt-in units that have withdrawn from the program can reapply for a 
permit after 2 years. A previous version of the Ohio rule had this time 
period as 4 years, which is the time period found in both the 
NOX SIP Call model rule and the section 126 rule. The 
purpose of the 4 year period in the model rule is to discourage these 
opt-in sources from coming in and out of the budget trading program at 
a frequency that would be disruptive to the operation of the trading 
program. USEPA recommends Ohio change this time period from 2 years to 
4 years.

III. USEPA Action

    We are approving, in this direct final rule, the Ohio 
NOX SIP because it meets the requirements of the USEPA 
NOX trading program by meeting Ohio's NOX budget. 
Ohio's rule mirrors the USEPA model rule for the NOX SIP 
Call and the State adequately responded to all of the concerns of 
stakeholders during the public process. Ohio's plan is approved with 
the understanding that it will take action to change the date (the flow 
control trigger date) in OAC 3745-14-06(E) (6) from 2006 to 2005. If 
this date is not changed from 2006 to 2005, and Ohio fails to submit 
the change as a revision to its plan by May 31, 2004, USEPA will remove 
the approval of Ohio's NOX SIP and take subsequent 
rulemaking action, as necessary. USEPA is publishing this action 
without prior proposal because we view this as a noncontroversial 
revision and we anticipate no adverse comments. However, in a separate 
document in this Federal Register publication, USEPA is proposing to 
approve the State's NOX plan should adverse written comments 
be filed. This action will be effective without further notice unless 
USEPA receives relevant adverse written comment by February 18, 2003. 
Should USEPA receive such comments, we will publish a final rule 
informing the public that this action will not take effect. Any parties 
interested in commenting on this action should do so at this time. If 
no comments are received, the public is advised that this action will 
be effective on March 17, 2003.

IV. 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, USEPA'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 USEPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise

[[Page 2217]]

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, USEPA has taken the necessary steps to eliminate drafting 
errors and ambiguity, minimize potential litigation, and provide a 
clear legal standard for affected conduct. USEPA 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. USEPA 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 February 18, 2003.
    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 March 17, 2003. 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: December 13, 2002.
Bharat Mathur,
Acting 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. 7401 et seq.

Subpart KK--Ohio

    2. Section 52.1870 is amended by adding paragraph (c)(127) to read 
as follows:


Sec.  52.1870  Identification of plan.

* * * * *
    (c) * * *
    (127) On July 11, 2002, the Ohio Environmental Protection Agency 
submitted revisions to Chapter 3745-14-(1 through 11 and Appendices A 
and B) of the Ohio Administrative Code (OAC), an oxides of nitrogen 
(NOX) budget trading program in Ohio, with a request that 
the Ohio State Implementation Plan be revised to include these 
NOX rules.
    (i) Incorporation by reference.
    (A) Ohio NOX rules: 3745-14-01, 3745-14-02, 3745-14-03, 
3745-14-04, 3745-14-05, 3745-14-06, 3745-14-07, 3745-14-08, 3745-14-09, 
3745-14-10, 3745-14-11, Appendix A to Chapter 3745-14 Annual NoX 
allowance allocations to regulated electric generating units for each 
year from 2004 through 2007, Appendix B to Chapter 3745-14 Annual 
NOX allowance allocation for the control period in years 
2004 through 2007 for non-electrical generating units, in the OAC all 
with an effective date of July 18, 2002.

[FR Doc. 03-962 Filed 1-15-03; 8:45 am]
BILLING CODE 6560-50-P