[Federal Register Volume 72, Number 191 (Wednesday, October 3, 2007)]
[Rules and Regulations]
[Pages 56268-56272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19320]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2007-0167-200734; FRL-8475-8]


Approval and Promulgation of Implementation Plans; Mississippi: 
Clean Air Interstate Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is taking final action to approve a revision to the 
Mississippi State Implementation Plan (SIP) submitted on January 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 has determined 
that the SIP revision fully implements the CAIR requirements for 
Mississippi. As a result of this action, EPA will also withdraw, 
through a separate rulemaking, the CAIR Federal Implementation Plans 
(FIPs) concerning sulfur dioxide (SO2), nitrogen oxides 
(NOX) annual, and NOX ozone season emissions for 
Mississippi. 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, and interfere with 
maintenance of, the National Ambient Air Quality Standards (NAAQS) for 
fine particulates (PM2.5) 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 approving today, Mississippi has met the CAIR 
requirements by electing to participate in the EPA-administered cap-
and-trade programs addressing SO2, NOX annual, 
and NOX ozone season emissions for Mississippi.

DATES: This rule is effective on November 2, 2007.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-R04-OAR-2007-0167. All documents in the docket are listed on 
the www.regulations.gov Web site. Although listed in the index, some 
information is not publicly available, i.e., Confidential Business 
Information 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 through 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: Heidi LeSane, Regulatory Development 
Section, Air Planning Branch, Air, Pesticides and Toxics Management 
Division, Region 4, U.S. Environmental Protection Agency, 61 Forsyth 
Street,

[[Page 56269]]

SW., Atlanta, Georgia 30303-8960. The telephone number is (404) 562-
9074. Ms. LeSane can also be reached via electronic mail at 
[email protected].

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA.

Table of Contents

I. What Action Is EPA Taking?
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. Analysis of Mississippi's CAIR SIP Submittal
    A. State Budgets for Allowance Allocations
    B. CAIR Cap-and-Trade Programs
    C. NOX Allowance Allocations
    D. Allocation of NOX Allowances From the Compliance 
Supplement Pool
    E. Individual Opt-in Units
V. Final Action
VI. Statutory and Executive Order Reviews

I. What Action Is EPA Taking?

    EPA is taking final action to approve a revision to Mississippi's 
SIP submitted on January 16, 2007. Mississippi adopts by reference most 
of the provisions of EPA's SO2, NOX annual, and 
NOX ozone season model trading rules, with certain changes 
discussed below. In its SIP revision, Mississippi has met the 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. Under this SIP revision, Mississippi is 
choosing to participate in the EPA-administered cap-and-trade programs 
for SO2, NOX annual, and NOX ozone 
season emissions. The SIP revision meets the applicable requirements in 
40 CFR 51.123(o) and (aa), with regard to NOX annual and 
NOX ozone emissions and 40 CFR 51.124(o), with regard to 
SO2 emissions.
    EPA has determined that the SIP as revised will meet the applicable 
requirements of CAIR. As a result of this action, the Administrator of 
EPA will also issue a final rule to withdraw the FIPs concerning 
SO2, NOX annual, and NOX ozone season 
emissions for Mississippi. The Administrator's action will delete and 
reserve 40 CFR 52.1284 and 40 CFR 52.1285, relating to the CAIR FIP 
obligations for Mississippi. The withdrawal of the CAIR FIPs for 
Mississippi 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 Mississippi. 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.
    EPA proposed to approve Mississippi's request to amend the SIP on 
July 12, 2007 (72 FR 38051). In that proposal, EPA also stated its 
intent to withdraw the FIP, as described above. The comment period 
closed on August 13, 2007. No comments were received. EPA is finalizing 
the approval as proposed based on the rationale stated in the proposal 
and in this final action.

II. What Is the Regulatory History of 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 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 1 to 
September 30). 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.

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. Analysis of Mississippi's CAIR SIP Submittal

A. State Budgets for Allowance Allocations

    Today, EPA is taking final action to approve Mississippi's SIP 
revision that adopts the budgets established for the State in CAIR, 
i.e., 17,807 (2009-2014) and 14,839 (2015-thereafter) tons for 
NOX annual emissions, 8,714 (2009-2014) and 7,262 (2015-
thereafter) tons for NOX ozone season emissions, and 33,763 
(2010-2014) and 23,634 (2015-thereafter) tons for SO2 
emissions. Mississippi's SIP revision establishes these budgets as the 
total amount of allowances available for allocation for each year under 
the EPA-administered cap-and-trade programs.

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 compliance supplement pool (CSP),

[[Page 56270]]

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 0.50 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 one 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 this SIP revision, Mississippi has chosen 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. Mississippi has adopted with 
certain allowed changes discussed below, the CAIR model cap-and-trade 
rules for SO2, NOX annual, and NOX 
ozone season emissions.

C. 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 (4) the use of allowance set-asides 
and, if used, their size.
    Mississippi has not replaced the provisions of the CAIR 
NOX annual model trading rule concerning the allocation of 
NOX annual allowances with its own methodology.
    Mississippi has not replaced the provisions of the CAIR 
NOX ozone season model trading rule concerning allowance 
allocations with its own methodology.

D. Allocation of NOX Allowances From the Compliance Supplement Pool

    The CAIR establishes a compliance supplement pool 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.
    Mississippi has not modified the provisions from the CAIR 
NOX annual model trading rule concerning the allocation of 
allowances from the CSP. Mississippi has chosen to distribute CSP 
allowances using the allocation methodology provided in 40 CFR 96.143 
and has adopted this section by reference.

E. 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.
    Mississippi has chosen to allow non-EGUs meeting certain 
requirements to opt into the CAIR trading programs by adopting by 
reference the entirety of EPA's model rule provisions for opt-in units 
in the CAIR SO2, CAIR NOX annual, and CAIR 
NOX ozone season trading programs.

[[Page 56271]]

V. Final Action

    EPA is taking final action to approve Mississippi's full CAIR SIP 
revision submitted on January 16, 2007. Under this SIP revision, 
Mississippi is choosing to participate in the EPA-administered cap-and-
trade programs for SO2, NOX annual, and 
NOX ozone season emissions. EPA has determined that the SIP 
revision 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. EPA has determined that the SIP as revised will meet the 
requirements of CAIR. 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, and 
NOX ozone season emissions for Mississippi. The 
Administrator's action will delete and reserve 40 CFR 52.1284 and 40 
CFR 52.1285. EPA will take final action to withdraw the CAIR FIPs for 
Mississippi in a separate rulemaking.

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 22, 2001). This action 
merely approves State law as meeting Federal requirements and would 
impose 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 action 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 (Pub. L. 104-4).
    This 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 approves a State rule 
implementing a Federal standard, and does not alter the relationship or 
the distribution of power and responsibilities established in the CAA. 
This 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 approves 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 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. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by December 3, 2007. 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, Intergovernmental 
relations, Nitrogen oxides, Ozone, Particulate matter, Reporting and 
recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    Dated: September 21, 2007.
J.I. Palmer, Jr.,
Regional Administrator, Region 4.

0
40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart Z--Mississippi

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2. Section 52.1270(c) is amended under subchapter ``APC-S-1'' by adding 
a new entry in numerical order to read as follows:


Sec.  52.1270  Identification of plan.

* * * * *
    (c) * * *

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                                      EPA-Approved Mississippi Regulations
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                                                            State
          State citation               Title/subject      effective     EPA approval date        Explanation
                                                             date
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APC-S-1..........................
             Air Emission Regulations for the Prevention, Abatement, and Control of Air Contaminants
 
                                                  * * * * * * *
Section 14.......................  Provision for the        12/17/06  10/03/07 [Insert
                                    Clean Air                          citation of
                                    Interstate Rule.                   publication].
 
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[FR Doc. E7-19320 Filed 10-2-07; 8:45 am]
BILLING CODE 6560-50-P