[Federal Register Volume 72, Number 171 (Wednesday, September 5, 2007)]
[Proposed Rules]
[Pages 50913-50916]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-17414]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 62

[EPA-R07-OAR-2007-0655; FRL-8462-8]


Approval and Promulgation of State Plans for Designated 
Facilities and Pollutants; Iowa; Clean Air Mercury Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve the State Plan submitted by Iowa 
on August 15, 2006, and revisions submitted on April 26, 2007. The plan 
addresses the requirements of EPA's Clean Air Mercury Rule (CAMR), 
promulgated on May 18, 2005, and subsequently revised on June 9, 2006. 
EPA is proposing to determine that the submitted State Plan fully meets 
the CAMR requirements for Iowa.
    CAMR requires States to regulate emissions of mercury (Hg) from 
large coal-fired electric generating units (EGUs). CAMR establishes 
State budgets for annual EGU Hg emissions and requires States to submit 
State Plans to ensure that annual EGU Hg emissions will not exceed the 
applicable State budget. States have the flexibility to choose which 
control measures to adopt to achieve the budgets, including 
participating in the EPA-administered CAMR cap-and-trade program. In 
the State Plan that EPA is proposing to approve Iowa would meet CAMR 
requirements by participating in the EPA trading program.

DATES: Comments must be received on or before October 5, 2007.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-
OAR-2007-0655, 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. Mail: Michael Jay, Environmental Protection Agency, Air Planning 
and Development Branch, 901 North 5th Street, Kansas City, Kansas 
66101.
    4. Hand Delivery or Courier: Deliver your comments to: Michael Jay, 
Environmental Protection Agency, 901 North 5th Street, Kansas City, 
Kansas 66101. 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 a.m. to 4:30 p.m., 
excluding Federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R07-OAR-
2007-0655. 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 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

[[Page 50914]]

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.
    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 Environmental Protection 
Agency, Air Planning and Development Branch, 901 North 5th Street, 
Kansas City, Kansas 66101. 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 a.m. to 4:30 p.m., 
excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT: Michael Jay at (913) 551-7460 or by e-
mail at [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. What Action Is EPA Proposing to Take?
II. What Is the Regulatory History of CAMR?
III. What Are the General Requirements of CAMR State Plans?
IV. How Can States Comply With CAMR?
V. Analysis of Iowa's CAMR State Plan Submittal
    A. State Budgets
    B. CAMR State Plan
VI. Statutory and Executive Order Reviews

I. What Action Is EPA Proposing to Take?

    EPA is proposing to approve Iowa's State Plan, submitted on August 
15, 2006, and April 26, 2007. In its State Plan, Iowa would meet CAMR 
by requiring certain coal-fired EGUs to participate in the EPA-
administered cap-and-trade program addressing Hg emissions. EPA is 
proposing to determine that the State Plan meets the applicable 
requirements of CAMR.

II. What Is the Regulatory History of CAMR?

    CAMR was published by EPA on May 18, 2005 (70 FR 28606, ``Standards 
of Performance for New and Existing Stationary Sources: Electric 
Utility Steam Generating Units; Final Rule''). In this rule, acting 
pursuant to its authority under section 111(d) of the Clean Air Act 
(CAA), 42 U.S.C. 7411(d), EPA required that all States and the District 
of Columbia (all of which are referred to herein as States) meet 
Statewide annual budgets limiting Hg emissions from coal-fired EGUs (as 
defined in 40 CFR 60.24(h)(8)) under CAA section 111(d). EPA required 
all States to submit State Plans with control measures that ensure that 
total, annual Hg emissions from the coal-fired EGUs located in the 
respective States do not exceed the applicable statewide annual EGU 
mercury budget. Under CAMR, States may implement and enforce these 
reduction requirements by participating in the EPA-administered cap-
and-trade program or by adopting any other effective and enforceable 
control measures.
    CAA section 111(d) requires States, and along with CAA section 
301(d) and the Tribal Air Rule (40 CFR part 49) allows Tribes granted 
treatment as States (TAS), to submit State Plans to EPA that implement 
and enforce the standards of performance. CAMR explains what must be 
included in State Plans to address the requirements of CAA section 
111(d). The State Plans were due to EPA by November 17, 2006. Under 40 
CFR 60.27(b), the Administrator will approve or disapprove the State 
Plans.

III. What Are the General Requirements of CAMR State Plans?

    CAMR establishes Statewide annual EGU Hg emission budgets and is to 
be implemented in two phases. The first phase of reductions starts in 
2010 and continues through 2017. The second phase of reductions starts 
in 2018 and continues thereafter. CAMR requires States to implement the 
budgets by either: (1) Requiring coal-fired EGUs to participate in the 
EPA-administered cap-and-trade program; or (2) adopting other coal-
fired EGU control measures of the respective State's choosing and 
demonstrating that such control measures will result in compliance with 
the applicable State annual EGU Hg budget.
    Each State Plan must require coal-fired EGUs to comply with the 
monitoring, recordkeeping, and reporting provisions of 40 CFR part 75 
concerning Hg mass emissions. Each State Plan must also show that the 
State has the legal authority to adopt emission standards and 
compliance schedules necessary for attainment and maintenance of the 
State's annual EGU Hg budget and to require the owners and operators of 
coal-fired EGUs in the State to meet the monitoring, recordkeeping, and 
reporting requirements of 40 CFR part 75.

IV. How Can States Comply With CAMR?

    Each State Plan must impose control requirements that the State 
demonstrates will limit Statewide annual Hg emissions from new and 
existing coal-fired EGUs to the amount of the State's applicable annual 
EGU Hg budget. States have the flexibility to choose the type of EGU 
control measures they will use to meet the requirements of CAMR. EPA 
anticipates that many States will choose to meet the CAMR requirements 
by selecting an option that requires EGUs to participate in the EPA-
administered CAMR cap-and-trade program. EPA also anticipates that many 
States may chose to control Statewide annual Hg emissions for new and 
existing coal-fired EGUs through an alternative mechanism other than 
the EPA-administered CAMR cap-and-trade program. Each State that 
chooses an alternative mechanism must include with its plan a 
demonstration that the State Plan will ensure that the State will meet 
its assigned State annual EGU Hg emission budget.
    A State submitting a State Plan that requires coal-fired EGUs to 
participate in the EPA-administered CAMR cap-and-trade program may 
either adopt regulations that are substantively identical to the EPA 
model Hg trading rule (40 CFR part 60, subpart HHHH) or incorporate by 
reference the model rule. CAMR provides that States may only make 
limited changes to the model rule if the States want to participate in 
the EPA-administered trading program. A State Plan may change the model 
rule only by altering the allowance allocation provisions to provide 
for State-specific allocation of Hg allowances using a methodology 
chosen by the State. A State's alternative allowance allocation 
provisions must meet certain allocation timing requirements and must 
ensure that total allocations for each calendar year will not exceed 
the State's annual EGU Hg budget for that year.

V. Analysis of Iowa's CAMR State Plan Submittal

A. State Budgets

    In this action, EPA is proposing to approve Iowa's State Plan that 
adopts the annual EGU Hg budgets established for the State in CAMR, 
i.e., 0.727 tons for EGU Hg emissions in 2010-2017 and 0.287 tons for 
EGU Hg emissions in 2018 and thereafter. Iowa's State Plan sets these 
budgets as the total amount of allowances available for allocation for

[[Page 50915]]

each year under the EPA-administered CAMR cap-and-trade program.

B. CAMR State Plan

    The Iowa State Plan requires coal-fired EGUs to participate in the 
EPA-administered CAMR cap-and-trade program. The State Plan 
incorporates by reference the EPA model Hg trading rule but has adopted 
an alternative allowance allocation methodology. Under the Hg allowance 
allocation methodology in the model rule, Hg allowances are allocated 
to units that have operated for 5 years, based on heat input data from 
a 3-year period that are adjusted for coal rank by using coal factors 
of 3.0 for the lignite combusted by the unit, 1.25 for the 
subbituminous combusted by the unit, and 1 for other coal ranks 
combusted by the unit. The model rule also provides a new unit set-
aside from which units without 5 years of operation are allocated 
allowances based on the units' prior year emissions.
    States may establish in their State Plan submissions a different Hg 
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 Hg 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
    4. The use of allowance set-asides and, if used, their size.
    In Iowa's alternative allowance methodology, Iowa has modified the 
portion of the model rule relating to the basis for allocating 
allowances to new units commencing operation on or after January 1, 
2001. In Iowa's rule 567-34.304, the State has limited the timeframe 
within which a unit can meet the requirements to apply for allowances 
under the new unit set-aside to units that commence operation on or 
after January 1, 2001, and commence construction before January 1, 
2006. As a result, one facility meets this criterion and is provided 
the full allocation under the new source set-aside for both phases 
amounting to 5 percent of the State's budget for phase I and 3 percent 
for phase II. Also in the section relating to new units, in the event a 
generator is served by two or more units, the nameplate capacity will 
be attributed to each unit in equal fraction of the total nameplate 
capacity multiplied by 7900 British Thermal Units per Kilowatt Hour for 
the determination of heat input for each unit.
    Iowa's State Plan requires coal-fired EGUs to comply with the 
monitoring, recordkeeping, and reporting provisions of 40 CFR part 75 
concerning Hg mass emissions. Iowa's State Plan also demonstrates that 
the State has the legal authority to adopt emission standards and 
compliance schedules necessary for attainment and maintenance of the 
State's annual EGU Hg budget and to require the owners and operators of 
coal-fired EGUs in the State to meet the monitoring, recordkeeping, and 
reporting requirements of 40 CFR part 75. Iowa cites Section 455B.133 
of the Iowa Code, which contains the broad enabling authority for 
Iowa's air pollution control regulations, as containing the legal 
authority for the Iowa Environmental Protection Commission to adopt the 
State's rule that allows for Iowa's participation in the nationwide cap 
and trade program for mercury.
    Iowa has committed to revise a definition in its rule to fully 
ensure allowances can be traded among all sources participating in the 
EPA-administered cap-and-trade program for mercury as intended. EPA 
discovered after review of other States' rules, but after Iowa had 
adopted its Clean Air Interstate Rule (CAIR) and CAMR rules, an issue 
related to the definition of ``permitting authority'' when it is 
revised to refer to a specific State's permitting authority.
    In Iowa's rule designed to meet CAMR, the EPA model trading rule 
was revised to limit all references to ``permitting authority'' to 
refer to the Iowa Department of Natural Resources. This change is 
acceptable in most, but not all, instances under the current model 
rule. In certain definitions in the model rule incorporated by Iowa 
(i.e., ``allocate'' or ``allocation,'' and ``Hg 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 program. This is necessary to ensure that all 
allowances issued in the 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 February 17, 2007, EPA provided a letter to Iowa that requested 
and outlined necessary definition revisions for all rules intended to 
meet CAIR and CAMR. EPA received a letter from Iowa on February 28, 
2007, that provided a commitment to make the EPA suggested rule 
revisions as soon as is practicable upon publication of the final rule 
concerning the proposed Clean Air Mercury Rule (CAMR) Federal plan. The 
CAMR Federal plan was proposed on December 22, 2006, and the rulemaking 
also included changes to the CAMR model rule to integrate it with the 
proposed Federal plan. Any final changes will need to be incorporated 
in State rules, and Iowa prefers to wait and make one set of amendments 
to its State rule to address both the above-referenced definition 
changes and any final changes to the CAMR model rule reflecting the 
final Federal plan. On April 11, 2007, EPA received an electronic 
correspondence from Iowa stating that Iowa will, in any event, complete 
these rule revisions before January 1, 2008. The State will be able to 
simultaneously revise the ``permitting authority'' definition in all 
cap-and-trade rules for both CAIR and CAMR, and properly update the 
State's rule as necessary to meet the requirements of the EPA-
administered cap-and-trade-program for mercury.
    The final rule concerning the CAMR Federal plan is expected to be 
published before the earliest, major deadline for compliance with 
requirements for source owners and operators under the CAIR trading 
programs, i.e., the January 1, 2008, deadline for emissions monitoring 
requirements under the CAIR Annual Trading Program. EPA expects that, 
by timing adoption of the EPA requested rule revisions to both Iowa's 
CAIR and CAMR rules to be soon after the publication of the final rule 
concerning the CAMR Federal plan, the State will ensure the revisions 
to the definition of ``permitting authority'' will be completed prior 
to any of the major compliance deadlines for source owners and 
operators under the CAIR trading programs. Even if the final rule 
concerning the CAMR Federal plan is not published in the expected 
timeframe, the State will still need to ensure the necessary State rule 
revisions are completed and submitted to EPA in advance of January 1, 
2008.

VI. 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

[[Page 50916]]

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 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. 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 proposes to approve a 
State rule implementing a Federal standard.
    Executive Order 12898, ``Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations,'' requires 
Federal agencies to consider the impact of programs, policies, and 
activities on minority populations and low-income populations. EPA 
guidance \1\ states that EPA is to assess whether minority or low-
income populations face risk or a rate of exposure to hazards that is 
significant and that ``appreciably exceed[s] or is likely to 
appreciably exceed the risk or rate to the general population or to the 
appropriate comparison group.'' (EPA, 1998) Because this rule merely 
proposes to approve a state rule implementing the Federal standard 
established by CAMR, EPA lacks the discretionary authority to modify 
today's regulatory decision on the basis of environmental justice 
considerations. However, EPA has already considered the impact of CAMR, 
including this Federal standard, on minority and low-income 
populations. In the context of EPA's CAMR published in the Federal 
Register on May 18, 2005, in accordance with Executive Order 12898, the 
Agency has considered whether CAMR may have disproportionate negative 
impacts on minority or low income populations and determined it would 
not.
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    \1\ U.S. Environmental Protection Agency, 1998. Guidance for 
Incorporating Environmental Justice Concerns in EPA's NEPA 
Compliance Analyses. Office of Federal Activities, Washington, DC, 
April, 1998.
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    In reviewing State Plan 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 State Plan for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a State Plan 
submission, to use VCS in place of a State Plan 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 Part 62

    Environmental protection, Air pollution control, Electric 
utilities, Intergovernmental relations, Mercury, Reporting and 
recordkeeping requirements.

    Dated: August 23, 2007.
John B. Askew,
Regional Administrator, Region 7.
[FR Doc. E7-17414 Filed 9-4-07; 8:45 am]
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