[Federal Register Volume 68, Number 84 (Thursday, May 1, 2003)]
[Proposed Rules]
[Pages 23270-23272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10760]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[KY-142, 144-200321, FRL-7491-3]


Approval and Promulgation of Implementation Plans: Revisions to 
the Kentucky Nitrogen Oxides Budget and Allowance Trading Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve the State Implementation Plan 
revision that was submitted by the Commonwealth of Kentucky on February 
28, 2003. This submittal revises the new source set-aside program by 
altering the methodology for distributing nitrogen oxides allowances. 
Rather than grant allowances, the Commonwealth of Kentucky will sell 
them. This revision also includes clarification language and changes to 
definitions.

DATES: Written comments must be received on or before June 2, 2003.

ADDRESSES: All comments should be addressed to: Sean Lakeman; 
Regulatory Development Section; Air Planning Branch; Air, Pesticides 
and Toxics Management Division; U.S. Environmental Protection Agency

[[Page 23271]]

Region 4; 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Copies 
of Kentucky's submittals and other information relevant to this action 
are available for inspection during normal business hours at the 
following addresses: Environmental Protection Agency, Region 4, Air 
Planning Branch, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960.
    Commonwealth of Kentucky, Division for Air Quality, 803 Schenkel 
Lane, Frankfort, Kentucky, 40601-1403.
    Persons wanting to examine these documents should make an 
appointment at least 24 hours before the visiting day and reference 
files KY-142.

FOR FURTHER INFORMATION CONTACT: Sean Lakeman; Regulatory Development 
Section; Air Planning Branch; Air, Pesticides and Toxics Management 
Division; U.S. Environmental Protection Agency Region 4; 61 Forsyth 
Street, SW., Atlanta, Georgia 30303-8960. Mr. Lakeman can also be 
reached by phone at (404) 562-9043 or by electronic mail at 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On February 28, 2003, the Commonwealth of Kentucky's Natural 
Resources and Environmental Protection Cabinet submitted revisions to 
EPA that revises the new source set-aside program by altering the 
methodology for distributing nitrogen oxides (NOX) 
allowances. Rather than grant allowances, the Commonwealth of Kentucky 
will sell them.

II. Analysis of Kentucky's Submittal

Regulation 401 KAR 51:001 Definitions for 401 KAR Chapter 51

    This regulation was revised to allow for the addition of the 
definitions ``General fund'', ``NOX Allowance Tracking 
System (NATS)'' and the removal of ``Low NOX burners'' that 
is not used in any of the administrative regulations in 401 KAR Chapter 
51.

Regulation 401 KAR 51:160 NOX Requirements for Large Utility 
and Industrial Boilers

    This revision added language to clarify how to establish a general 
account, which forms to utilize, and the procedures for moving 
NOX allowances between accounts in the NOX 
allowance tracking system (NATS). This revision also revises the new 
source set-aside program to allow Kentucky to sell all allowances which 
were previously reserved to allocate to new sources. The new source set 
aside comprises an established percentage of the electric generating 
unit (EGU) and non-EGU budgets taken off the top and reserved for new 
units. The allocation period that begins in 2004 for EGUs that commence 
commercial operation after May 1, 2001, and before May 1, 2006, is five 
percent of the tons of NOX emissions in the Commonwealth 
trading program budget apportioned to EGUs. For allocation periods 
beginning in 2007 or later, the allocation for new EGU units is two 
percent of the tons of NOX emissions in the Commonwealth 
trading program budget apportioned to EGUs for the given allocation 
period. For non-EGUs, for all allocation periods, the allocation for 
new units is two percent of the NOX allowances in the 
Commonwealth trading budget apportioned to non-EGUs for the given 
allocation period.
    In a letter from Kentucky to EPA Region 4, dated February 28, 2003, 
Kentucky stated that their general account is being established and 
Kentucky has a contract with a brokerage firm to sell the 
NOX allowances. Once a satisfactory sale has been 
negotiated, Kentucky will transfer the shares from the general account 
to that of the broker, who will then transfer the allowances from that 
account to the buyer. An accounting of transfer of the NOX 
allowances will be done electronically through NATS. The Kentucky Model 
Procurement Code provides the Commonwealth the authority to contract 
with vendors for various services, including advisory and sales 
services for revenue-generation. The Kentucky Model Procurement Code is 
set forth at Chapter 45A, Title VI of the Kentucky Revised Statutes and 
may be viewed at http://www.lrc.state.ky.us/krs/titles.htm.

III. Proposed Action

    EPA is proposing to approve the aforementioned changes to the SIP 
because the revisions are consistent with Clean Air Act and EPA 
regulatory requirements.

IV. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
proposed action is not a ``significant regulatory action'' and 
therefore is not subject to review by the Office of Management and 
Budget. For this reason, this action is also not subject to Executive 
Order 13211, ``Actions Concerning Regulations That Significantly Affect 
Energy Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This 
proposed action merely proposes to approve state law as meeting Federal 
requirements and imposes no additional requirements beyond those 
imposed by state law. Accordingly, the Administrator certifies that 
this proposed 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 proposes to approve 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 (Pub. L. 104-4).
    This proposed rule also does not have tribal implications because 
it will not have a substantial direct effect on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes, as specified by Executive 
Order 13175 (65 FR 67249, November 9, 2000). This action also does not 
have Federalism implications because it does not have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government, as specified 
in Executive Order 13132 (64 FR 43255, August 10, 1999). This action 
merely proposes to approve a state rule implementing a Federal 
standard, and does not alter the relationship or the distribution of 
power and responsibilities established in the Clean Air Act. This 
proposed rule also is not subject to Executive Order 13045 ``Protection 
of Children from Environmental Health Risks and Safety Risks'' (62 FR 
19885, April 23, 1997), because it 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, 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. This proposed 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.).

[[Page 23272]]

List of Subjects in 40 CFR Part 52

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

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

    Dated: April 23, 2003.
J.I. Palmer, Jr.,
Regional Administrator, Region 4.
[FR Doc. 03-10760 Filed 4-30-03; 8:45 am]
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