[Federal Register Volume 72, Number 148 (Thursday, August 2, 2007)]
[Proposed Rules]
[Pages 42344-42349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14981]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2007-0360-200717; FRL-8449-2]


Approval of Implementation Plans of Florida: Clean Air Interstate 
Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a revision to the Florida State 
Implementation Plan (SIP) submitted on March 16, 2007. This revision 
addresses the requirements of EPA's Clean Air Interstate Rule (CAIR), 
promulgated on May 12, 2005, and subsequently revised on April 28, 
2006, and December 13, 2006. EPA is proposing to determine that the SIP 
revision fully implements the CAIR requirements for Florida. Therefore, 
as a consequence of the SIP approval, EPA will also withdraw the CAIR 
Federal Implementation Plans (CAIR FIPs) concerning sulfur dioxide 
(SO2), nitrogen oxides (NOX) annual, and 
NOX ozone season emissions for Florida. The CAIR FIPs for 
all States in the CAIR region were promulgated on April 28, 2006, and 
subsequently revised on December 13, 2006.
    CAIR requires States to reduce emissions of SO2 and 
NOX that significantly contribute to nonattainment of, and 
interfere with maintenance of, the national ambient air quality 
standards (NAAQS) for fine particulates and/or ozone in any downwind 
state. CAIR establishes State budgets for SO2 and 
NOX and requires States to submit SIP revisions that 
implement these budgets in States that EPA concluded did contribute to 
nonattainment in downwind states. States have the flexibility to choose 
which control measures to adopt to achieve the budgets, including 
participating in the EPA-administered cap-and-trade programs. In the 
SIP revision that EPA is proposing to approve, Florida would meet CAIR 
requirements by participating in the EPA-administered cap-and-trade 
programs addressing SO2, NOX annual, and 
NOX ozone season emissions.

DATES: Comments must be received on or before September 4, 2007.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2007-0360 by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. E-mail: [email protected].
    3. Fax: 404-562-9019.
    4. Mail: ``EPA-R04-OAR-2007-0360,'' 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.
    5. Hand Delivery or Courier: Stacy Harder, 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. Such deliveries are only 
accepted during the Regional Office's normal hours of operation. The 
Regional Office's official hours of business are Monday through Friday, 
8:30 a.m. to 4:30 p.m., excluding federal holidays.
    Instructions: Direct your comments to Docket ID No. ``EPA-R04-OAR-
2007-0360.'' EPA's policy is that all comments received will be 
included in the public docket without change and may be made available 
online at http://www.regulations.gov, including any personal 
information provided, unless the comment includes information claimed 
to be Confidential

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Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit through http://www.regulations.gov 
or e-mail, information that you consider to be CBI or otherwise 
protected. The http://www.regulations.gov Web site is an ``anonymous 
access'' system, which means EPA will not know your identity or contact 
information, unless you provide it in the body of your comment. If you 
send an e-mail comment directly to EPA without going through http://www.regulations.gov, your e-mail address will be automatically captured 
and included as part of the comment that is placed in the public docket 
and made available on the Internet. If you submit an electronic 
comment, EPA recommends that you include your name and other contact 
information in the body of your comment and with any disk or CD-ROM you 
submit. If EPA cannot read your comment due to technical difficulties 
and cannot contact you for clarification, EPA may not be able to 
consider your comment. Electronic files should avoid the use of special 
characters and any form of encryption and should be free of any defects 
or viruses. For additional information about EPA's public docket visit 
the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the electronic docket are listed in the 
http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in http://www.regulations.gov or in hard copy at the 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. EPA requests that if at all 
possible, you contact the person listed in the FOR FURTHER INFORMATION 
CONTACT section to schedule your inspection. The Regional Office's 
official hours of business are Monday through Friday, 8:30 to 4:30, 
excluding federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions concerning this 
proposal, please contact Ms. Stacy Harder, 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. The telephone number is (404) 
562-9042. Ms. Harder can also be reached via electronic mail at 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. What Action Is EPA Proposing To Take?
II. What Is the Regulatory History of CAIR and the CAIR FIPs?
III. What Are the General Requirements of CAIR and the CAIR FIPs?
IV. What Are the Types of CAIR SIP Submittals?
V. Analysis of Florida's CAIR SIP Submittal
    A. State Budgets for Allowance Allocations
    B. CAIR Cap-and-Trade Programs
    C. Applicability Provisions for non-EGU NOX SIP Call 
Sources
    D. NOX Allowance Allocations
    E. Allocation of NOX Allowances from Compliance 
Supplement Pool
    F. Individual Opt-In Units
VI. Proposed Actions
VII. Statutory and Executive Order Reviews

I. What Action Is EPA Proposing To Take?

    EPA is proposing to approve a revision to Florida's SIP, submitted 
on March 16, 2007. In its SIP revision, Florida would meet CAIR 
requirements by requiring certain electric generating units (EGUs) to 
participate in the EPA-administered State CAIR cap-and-trade programs 
addressing SO2, NOX annual, and NOX 
ozone season emissions. EPA is proposing to determine that the SIP, as 
revised, will meet the applicable requirements of CAIR. Any final 
action approving the SIP will be taken by the Regional Administrator 
for Region 4. As a consequence of the SIP approval, the Administrator 
of EPA will also issue a final rule to withdraw the FIPs concerning 
SO2, NOX annual, and NOX ozone season 
emissions for Florida. This action will delete and reserve 40 CFR 
52.540 and 40 CFR 52.541. The withdrawal of the CAIR FIPs for Florida 
is a conforming amendment that must be made once the SIP is approved 
because EPA's authority to issue the FIPs was premised on a deficiency 
in the SIP for Florida. Once the SIP is fully approved, EPA no longer 
has authority for the FIPs. Thus, EPA will not have the option of 
maintaining the FIPs following the full SIP approval. Accordingly, EPA 
does not intend to offer an opportunity for a public hearing or an 
additional opportunity for written public comment on the withdrawal of 
the FIPs.

II. What Is the Regulatory History of the CAIR and the CAIR FIPs?

    The CAIR was published by EPA on May 12, 2005 (70 FR 25162). In 
this rule, EPA determined that 28 States and the District of Columbia 
contribute significantly to nonattainment and interfere with 
maintenance of the NAAQS for fine particles (PM2.5) and/or 
8-hour ozone in downwind States in the eastern part of the country. As 
a result, EPA required those upwind States to revise their SIPs to 
include control measures that reduce emissions of SO2, which 
is a precursor to PM2.5 formation, and/or NOX, 
which is a precursor to both ozone and PM2.5 formation. For 
jurisdictions that contribute significantly to downwind 
PM2.5 nonattainment, CAIR sets annual State-wide emission 
reduction requirements (i.e., budgets) for SO2 and annual 
State-wide emission reduction requirements for NOX. 
Similarly, for jurisdictions that contribute significantly to 8-hour 
ozone nonattainment, CAIR sets State-wide emission reduction 
requirements for NOX for the ozone season (May 1st to 
September 30th). Under CAIR, States may implement these reduction 
requirements by participating in the EPA-administered cap-and-trade 
programs or by adopting any other control measures.
    CAIR explains to subject States what must be included in SIPs to 
address the requirements of section 110(a)(2)(D) of the Clean Air Act 
(CAA) with regard to interstate transport with respect to the 8-hour 
ozone and PM2.5 NAAQS. EPA made national findings, effective 
on May 25, 2005, that the States had failed to submit SIPs meeting the 
requirements of section 110(a)(2)(D). The SIPs were due in July 2000, 
three years after the promulgation of the 8-hour ozone and 
PM2.5 NAAQS. These findings started a two-year clock for EPA 
to promulgate a FIP to address the requirements of section 
110(a)(2)(D). Under CAA section 110(c)(1), EPA may issue a FIP anytime 
after such findings are made and must do so within two years, unless a 
SIP revision correcting the deficiency is approved by EPA before the 
FIP is promulgated.
    On April 28, 2006, EPA promulgated FIPs for all States covered by 
CAIR in order to ensure the emissions reductions required by CAIR are 
achieved on schedule. Each CAIR State is subject to the FIPs until the 
State fully adopts, and EPA approves, a SIP revision meeting the 
requirements of CAIR. The CAIR FIPs require EGUs to participate in the 
EPA-administered CAIR SO2, NOX annual, and 
NOX ozone season trading programs, as appropriate. The CAIR 
FIP SO2, NOX annual, and NOX ozone 
season trading programs impose essentially the same requirements as, 
and are integrated with, the respective CAIR SIP trading programs. The

[[Page 42346]]

integration of the FIP and SIP trading programs means that these 
trading programs will work together to create effectively a single 
trading program for each regulated pollutant (SO2, 
NOX annual, and NOX ozone season) in all States 
covered by the CAIR FIP or SIP trading program for that pollutant. The 
CAIR FIPs also allow States to submit abbreviated SIP revisions that, 
if approved by EPA, will automatically replace or supplement certain 
CAIR FIP provisions (e.g., the methodology for allocating 
NOX allowances to sources in the State), while the CAIR FIP 
remains in place for all other provisions.
    On April 28, 2006, EPA published two additional CAIR-related final 
rules that added the States of Delaware and New Jersey to the list of 
States subject to CAIR for PM2.5 and announced EPA's final 
decisions on reconsideration of five issues, without making any 
substantive changes to the CAIR requirements.

III. What Are the General Requirements of CAIR and the CAIR FIPs?

    CAIR establishes State-wide emission budgets for SO2 and 
NOX and is to be implemented in two phases. The first phase 
of NOX reductions starts in 2009 and continues through 2014, 
while the first phase of SO2 reductions starts in 2010 and 
continues through 2014. The second phase of reductions for both 
NOX and SO2 starts in 2015 and continues 
thereafter. CAIR requires States to implement the budgets by either: 
(1) Requiring EGUs to participate in the EPA-administered cap-and-trade 
programs; or (2) adopting other control measures of the State's 
choosing and demonstrating that such control measures will result in 
compliance with the applicable State SO2 and NOX 
budgets.
    The May 12, 2005, and April 28, 2006, CAIR rules provide model 
rules that States must adopt (with certain limited changes, if desired) 
if they want to participate in the EPA-administered trading programs.
    With two exceptions, only States that choose to meet the 
requirements of CAIR through methods that exclusively regulate EGUs are 
allowed to participate in the EPA-administered trading programs. One 
exception is for States that adopt the opt-in provisions of the model 
rules to allow non-EGUs individually to opt into the EPA-administered 
trading programs. The other exception is for States that include all 
non-EGUs from their NOX SIP Call trading programs in their 
CAIR NOX ozone season trading programs.

IV. What Are the Types of CAIR SIP Submittals?

    States have the flexibility to choose the type of control measures 
they will use to meet the requirements of CAIR. EPA anticipates that 
most States will choose to meet the CAIR requirements by selecting an 
option that requires EGUs to participate in the EPA-administered CAIR 
cap-and-trade programs. For such States, EPA has provided two 
approaches for submitting and obtaining approval for CAIR SIP 
revisions. States may submit full SIP revisions that adopt the model 
CAIR cap-and-trade rules. If approved, these SIP revisions will fully 
replace the CAIR FIPs. Alternatively, States may submit abbreviated SIP 
revisions. These SIP revisions will not replace the CAIR FIPs; however, 
the CAIR FIPs provide that, when approved, the provisions in these 
abbreviated SIP revisions will be used instead of or in conjunction 
with, as appropriate, the corresponding provisions of the CAIR FIPs 
(e.g., the NOX allowance allocation methodology).
    A State submitting a full SIP revision may either adopt regulations 
that are substantively identical to the model rules or incorporate by 
reference the model rules. CAIR provides that States may only make 
limited changes to the model rules if the States want to participate in 
the EPA-administered trading programs. A full SIP revision may change 
the model rules, only by altering their applicability and allowance 
allocation provisions to:
    1. Include NOX SIP Call trading sources that are not 
EGUs under CAIR in the CAIR NOX ozone season trading 
program;
    2. Provide for State allocation of NOX annual or ozone 
season allowances using a methodology chosen by the State;
    3. Provide for State allocation of NOX annual allowances 
from the compliance supplement pool (CSP) using the State's choice of 
allowed, alternative methodologies; or
    4. Allow units that are not otherwise CAIR units to opt 
individually into the CAIR SO2, NOX annual, or 
NOX ozone season trading programs under the opt-in 
provisions in the model rules.
    An approved CAIR full SIP revision addressing EGUs' SO2, 
NOX annual, or NOX ozone season emissions will 
replace the CAIR FIP for that State for the respective EGU emissions.

V. Analysis of Florida's CAIR SIP Submittal

A. State Budgets for Allowance Allocations

    The CAIR NOX annual and ozone season budgets were 
developed from historical heat input data for EGUs. Using these data, 
EPA calculated annual and ozone season regional heat input values, 
which were multiplied by 0.15 pounds per million British thermal units 
(lb/mmBtu), for phase 1, and 0.125 lb/mmBtu, for phase 2, to obtain 
regional NOX budgets for 2009-2014 and for 2015 and 
thereafter, respectively. EPA derived the State NOX annual 
and ozone season budgets from the regional budgets using State heat 
input data adjusted by fuel factors.
    The CAIR State SO2 budgets were derived by discounting 
the tonnage of emissions authorized by annual allowance allocations 
under the Acid Rain Program under title IV of the CAA. Under CAIR, each 
allowance allocated in the Acid Rain Program for the years in phase 1 
of CAIR (2010 through 2014) authorizes 0.5 ton of SO2 
emissions in the CAIR trading program, and each Acid Rain Program 
allowance allocated for the years in phase 2 of CAIR (2015 and 
thereafter) authorizes 0.35 ton of SO2 emissions in the CAIR 
trading program.
    In this action, EPA is proposing approval of Florida's SIP revision 
that adopts the budgets established for the State in CAIR, i.e., 99,445 
(2009-2014) and 82,871 (2015-thereafter) tons for NOX annual 
emissions, 47,912 (2009-2014) and 39,926 (2015-thereafter) tons for 
NOX ozone season emissions, and 253,450 (2010-2014) and 
177,415 (2015-thereafter) tons for SO2 emissions. Florida's 
SIP revision sets these budgets as the total amounts of allowances 
available for allocation for each year under the EPA-administered cap-
and-trade programs.
    Florida has committed to revising the definitions of ``permitting 
authority'' and ``State'' in its CAIR rules in order to ensure that 
allowances issued by all States with approved rules providing for 
participation in the respective EPA-administered cap-and-trade programs 
are fungible and can be traded and used by all sources in all these 
States, as intended. EPA discovered after review of other States' 
rules, but after Florida had adopted its CAIR rules, that there was an 
issue related to these definitions when they are revised to refer only 
to a specific State.
    In Florida's rules for CAIR, the EPA model trading rules were 
revised to limit all references to ``permitting authority'' to refer to 
the Florida

[[Page 42347]]

Department of Environmental Protection. Similarly, references to 
``State'' were limited to refer to Florida. These changes are 
acceptable in most, but not all, instances under the current model 
rules. In certain definitions in the model rules incorporated by 
Florida (i.e., ``allocate'' or ``allocation,'' ``CAIR NOX 
allowance,'' ``CAIR SO2 allowance,'' and ``CAIR 
NOX Ozone Season allowance''), it is important that the term 
``permitting authority'' cover permitting authorities in all States 
that choose to participate in the respective EPA-administered trading 
programs and that the term ``State'' cover all such States. This is 
necessary to ensure that all allowances issued in each EPA-administered 
trading program are fungible and can be traded and used for compliance 
with the allowance-holding requirement in any State in the program.
    On May 24, 2007, EPA participated in a teleconference with Florida 
and outlined necessary definition revisions. EPA received a letter from 
Florida dated June 22, 2007, and a supplemental electronic mail 
submission on July 11, 2007, that provide a commitment to make these 
rule revisions in its CAIR rules in early 2008. Specifically, in the 
June 22, 2007, letter and supplemental submission on July 11, 2007, 
Florida commits to revising section 62-296.470(1) of Florida's rule to 
state that: the limitation of the ``permitting authority'' definition 
only to Florida does not apply when this term is used in the 
definitions of ```allocate' or `allocation','' ``CAIR NOX 
allowance,'' ``CAIR SO2 allowance,'' and ``CAIR 
NOX Ozone Season allowance;'' and the limitation of the 
``State'' definition only to Florida does not apply when the term is 
used in the definitions of ``CAIR NOX allowance,'' ``CAIR 
SO2 allowance,'' and ``CAIR NOX Ozone Season 
allowance.''

B. CAIR Cap-and-Trade Programs

    The CAIR NOX annual and ozone-season model trading rules 
both largely mirror the structure of the NOX SIP Call model 
trading rule in 40 CFR part 96, subparts A through I. While the 
provisions of the NOX annual and ozone-season model rules 
are similar, there are some differences. For example, the 
NOX annual model rule (but not the NOX ozone 
season model rule) provides for a CSP, which is discussed below and 
under which allowances may be awarded for early reductions of 
NOX annual emissions. As a further example, the 
NOX ozone season model rule reflects the fact that the CAIR 
NOX ozone season trading program replaces the NOX 
SIP Call trading program after the 2008 ozone season and is coordinated 
with the NOX SIP Call program. The NOX ozone 
season model rule provides incentives for early emissions reductions by 
allowing banked, pre-2009 NOX SIP Call allowances to be used 
for compliance in the CAIR NOX ozone-season trading program. 
In addition, States have the option of continuing to meet their 
NOX SIP Call requirement by participating in the CAIR 
NOX ozone season trading program and including all their 
NOX SIP Call trading sources in that program.
    The provisions of the CAIR SO2 model rule are also 
similar to the provisions of the NOX annual and ozone season 
model rules. However, the SO2 model rule is coordinated with 
the ongoing Acid Rain SO2 cap-and-trade program under CAA 
title IV. The SO2 model rule uses the title IV allowances 
for compliance, with each allowance allocated for 2010-2014 authorizing 
only 0.5 ton of emissions and each allowance allocated for 2015 and 
thereafter authorizing only 0.35 ton of emissions. Banked title IV 
allowances allocated for years before 2010 can be used at any time in 
the CAIR SO2 cap-and-trade program, with each such allowance 
authorizing 1 ton of emissions. Title IV allowances are to be freely 
transferable among sources covered by the Acid Rain Program and sources 
covered by the CAIR SO2 cap-and-trade program.
    EPA also used the CAIR model trading rules as the basis for the 
trading programs in the CAIR FIPs. The CAIR FIP trading rules are 
virtually identical to the CAIR model trading rules, with changes made 
to account for federal rather than state implementation. The CAIR model 
SO2, NOX annual, and NOX ozone season 
trading rules and the respective CAIR FIP trading rules are designed to 
work together as integrated SO2, NOX annual, and 
NOX ozone season trading programs.
    In the SIP revision, Florida chooses to implement its CAIR budgets 
by requiring EGUs to participate in EPA-administered cap-and-trade 
programs for SO2, NOX annual, and NOX 
ozone season emissions. Florida has adopted a full SIP revision that 
adopts, with certain allowed changes discussed below, the CAIR model 
cap-and-trade rules for SO2, NOX annual, and 
NOX ozone season emissions.

C. Applicability Provisions for Non-EGU NOX SIP Call Sources

    In general, the CAIR model trading rules apply to any stationary, 
fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion 
turbine serving at any time, since the later of November 15, 1990, or 
the start-up of the unit's combustion chamber, a generator with 
nameplate capacity of more than 25 MWe producing electricity for sale.
    States have the option of bringing in, for the CAIR NOX 
ozone season program only, those units in the State's NOX 
SIP Call trading program that are not EGUs as defined under CAIR. EPA 
advises States exercising this option to add the applicability 
provisions in the State's NOX SIP Call trading rule for non-
EGUs to the applicability provisions in 40 CFR 96.304 in order to 
include in the CAIR NOX ozone season trading program all 
units required to be in the State's NOX SIP Call trading 
program that are not already included under 40 CFR 96.304. Under this 
option, the CAIR NOX ozone season program must cover all 
large industrial boilers and combustion turbines, as well as any small 
EGUs (i.e. units serving a generator with a nameplate capacity of 25 
MWe or less) that the State currently requires to be in the 
NOX SIP Call trading program.
    Because Florida was not included in the NOX SIP Call 
trading program, Florida did not have an option of expanding the 
applicability provisions of the CAIR NOX ozone season 
trading program.

D. NOX Allowance Allocations

    Under the NOX allowance allocation methodology in the 
CAIR model trading rules and in the CAIR FIP, NOX annual and 
ozone season allowances are allocated to units that have operated for 
five years, based on heat input data from a three-year period that are 
adjusted for fuel type by using fuel factors of 1.0 for coal, 0.6 for 
oil, and 0.4 for other fuels. The CAIR model trading rules and the CAIR 
FIP also provide a new unit set-aside from which units without five 
years of operation are allocated allowances based on the units' prior 
year emissions.
    States may establish in their SIP submissions a different 
NOX allowance allocation methodology that will be used to 
allocate allowances to sources in the States, if certain requirements 
are met concerning the timing of submission of units' allocations to 
the Administrator for recordation and the total amount of allowances 
allocated for each control period. In adopting alternative 
NOX allowance allocation methodologies, States have 
flexibility with regard to:
    1. The cost to recipients of the allowances, which may be 
distributed for free or auctioned;
    2. The frequency of allocations;
    3. The basis for allocating allowances, which may be distributed, 
for example, based on historical heat input or electric and thermal 
output; and

[[Page 42348]]

    4. The use of allowance set-asides and, if used, their size.
    Florida has chosen to replace the provisions of the CAIR 
NOX annual model trading rule concerning the allocation of 
NOX annual allowances with its own methodology. Florida has 
chosen to distribute NOX annual allowances based upon a 
methodology that is similar, but not identical, to that in the CAIR 
model trading rule for existing and new units. Under Florida's rule and 
the CAIR model rule, existing units are allocated NOX 
allowances in proportion to their ``fuel-adjusted control period heat 
input'' during the baseline period. However, in addition to the fuel 
adjustment factors used to calculate adjusted heat input in the CAIR 
model rule, Florida has also developed a separate 150% fuel factor for 
existing biomass-fired units that use best available control technology 
(BACT). Further, in Florida's rule, as in the CAIR model rule, new 
units are allocated NOX allowances in proportion to their 
``converted control period heat input.'' However, unlike the CAIR model 
rule, Florida's rule categorizes new units as those commencing 
operation on or after January 1, 2007, (rather than January 1, 2001), 
and establishes a new unit set set-aside of five percent for all 
control years (rather than five percent through 2014 and three percent 
thereafter). Moreover, under Florida's rule, allocations are scheduled 
to be made in 2006, 2009, and every three years thereafter, with three-
year blocks of allocations being made generally four years in advance. 
Florida's rule also limits the number of years for which permanently 
retired units are allocated allowances after retirement.
    Florida has chosen to replace the provisions of the CAIR 
NOX ozone season model trading rule concerning allowance 
allocations with its own methodology. Florida has chosen to distribute 
NOX ozone season allowances based upon the same allowance 
allocation methodology described above for NOX annual 
allowances.

E. Allocation of NOX Allowances From Compliance Supplement 
Pool

    The CAIR rule establishes a CSP to provide an incentive for early 
reductions in NOX annual emissions. The CSP consists of 
200,000 CAIR NOX annual allowances of vintage 2009 for the 
entire CAIR region, and a State's share of the CSP is based upon the 
projected magnitude of the emission reductions required by CAIR in that 
State. States may distribute CSP allowances, one allowance for each ton 
of early reduction, to sources that make NOX reductions 
during 2007 or 2008 beyond what is required by any applicable State or 
Federal emission limitation. States also may distribute CSP allowances 
based upon a demonstration of need for an extension of the 2009 
deadline for implementing emission controls.
    The CAIR annual NOX model trading rule establishes 
specific methodologies for allocations of CSP allowances. States may 
choose an allowed, alternative CSP allocation methodology to be used to 
allocate CSP allowances to sources in the States.
    Florida has not chosen to modify the provisions of the CAIR 
NOX annual model trading rule concerning the allocation of 
allowances from the CSP. Florida has chosen to distribute CSP 
allowances using an allocation methodology that is the same as EPA's 
model rule. The CSP is an additional 8,335 annual NOX 
allowances given to the State for 2009, and there is no CSP for ozone-
season allowances.

F. Individual Opt-In Units

    The opt-in provisions of the CAIR SIP model trading rules allow 
certain non-EGUs (i.e., boilers, combustion turbines, and other 
stationary fossil-fuel-fired devices) that do not meet the 
applicability criteria for a CAIR trading program to participate 
voluntarily in (i.e., opt into) the CAIR trading program. A non-EGU may 
opt into one or more of the CAIR trading programs. In order to qualify 
to opt into a CAIR trading program, a unit must vent all emissions 
through a stack and be able to meet monitoring, recordkeeping, and 
recording requirements of 40 CFR part 75. The owners and operators 
seeking to opt a unit into a CAIR trading program must apply for a CAIR 
opt-in permit. If the unit is issued a CAIR opt-in permit, the unit 
becomes a CAIR unit, is allocated allowances, and must meet the same 
allowance-holding and emissions monitoring and reporting requirements 
as other units subject to the CAIR trading program. The opt-in 
provisions provide for two methodologies for allocating allowances for 
opt-in units, one methodology that applies to opt-in units in general 
and a second methodology that allocates allowances only to opt-in units 
that the owners and operators intend to repower before January 1, 2015.
    States have several options concerning the opt-in provisions. 
States may adopt the CAIR opt-in provisions entirely or may adopt them 
but exclude one of the methodologies for allocating allowances. States 
may also decline to adopt the opt-in provisions at all.
    Florida has chosen not to allow non-EGUs meeting certain 
requirements to opt into the CAIR NOX annual trading 
program.
    Florida has chosen not to allow non-EGUs meeting certain 
requirements to opt into the CAIR NOX ozone season trading 
program.
    Florida has chosen not to allow certain non-EGUs to opt into the 
CAIR SO2 trading program.

VI. Proposed Actions

    EPA is proposing to approve Florida's full CAIR SIP revision 
submitted on March 16, 2007. Under this SIP revision, Florida is 
choosing to participate in the EPA-administered cap-and-trade programs 
for SO2, NOX annual, and NOX ozone 
season emissions. The SIP revision (revised as discussed above) meets 
the applicable requirements in 40 CFR 51.123(o) and (aa), with regard 
to NOX annual and NOX ozone season emissions, and 
40 CFR 51.124(o), with regard to SO2 emissions. Further, 
Florida has agreed to make the technical corrections to certain 
definitions as discussed above. Therefore, EPA is proposing to 
determine that the SIP, as revised, will meet the requirements of CAIR. 
As a consequence of the SIP approval, the Administrator of EPA will 
also issue, without providing an opportunity for a public hearing or an 
additional opportunity for written public comment, a final rule to 
withdraw the CAIR FIPs concerning SO2, NOX 
annual, NOX ozone season emissions for Florida. This action 
will delete and reserve 40 CFR 52.540 and 40 CFR 52.541.

VII. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is not a ``significant regulatory action'' and therefore is not 
subject to review by the Office of Management and Budget. For this 
reason, this action is also not subject to Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This action 
merely proposes to approve State law as meeting Federal requirements 
and would impose no additional requirements beyond those imposed by 
State law. Accordingly, the Administrator certifies that this proposed 
rule would not have a significant economic impact on a substantial 
number of small entities under the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.). Because this action proposes to approve pre-existing 
requirements under State law and would not impose any additional

[[Page 42349]]

enforceable duty beyond that required by State law, it does not contain 
any unfunded mandate or significantly or uniquely affect small 
governments, as described in the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4).
    This proposal also does not have tribal implications because it 
would not have a substantial direct effect on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes, as specified by Executive 
Order 13175 (65 FR 67249, November 9, 2000). This proposed action also 
does not have Federalism implications because it would not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This 
action merely proposes to approve a State rule implementing a Federal 
standard and will result, as a consequence of that approval, in the 
Administrator's withdrawal of the CAIR FIP. It does not alter the 
relationship or the distribution of power and responsibilities 
established in the CAA. This proposed rule also is not subject to 
Executive Order 13045 ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), because 
it would approve a State rule implementing a Federal Standard.
    In reviewing SIP submissions, EPA's role is to approve State 
choices, provided that they meet the criteria of the CAA. In this 
context, in the absence of a prior existing requirement for the State 
to use voluntary consensus standards (VCS), EPA has no authority to 
disapprove a 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 CAA. Thus, the requirements of section 
12(d) of the National Technology Transfer and Advancement Act of 1995 
(15 U.S.C. 272 note) do not apply. This proposed rule would not impose 
an information collection burden under the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Electric 
utilities, Intergovernmental relations, Nitrogen oxides, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
dioxide.

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

    Dated: July 25, 2007.
J.I. Palmer, Jr.,
Regional Administrator, Region 4.
 [FR Doc. E7-14981 Filed 8-1-07; 8:45 am]
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