[Federal Register Volume 72, Number 246 (Wednesday, December 26, 2007)]
[Rules and Regulations]
[Pages 72953-72955]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24962]


-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 62

[EPA-R07-OAR-2007-0655; FRL-8510-6]


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: EPA is taking final action to approve the State Plan submitted 
by Iowa on August 15, 2006, and updates to rules 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 has determined 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 approving today, Iowa has met the CAMR 
requirements by electing to participate in the EPA trading program.

DATES: This rule is effective on January 25, 2008.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-R07-OAR-2007-0655. All documents in the docket are listed on 
the http://www.regulations.gov Web site. 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 through 
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. The Regional Office's official hours 
of business are Monday through Friday, 8 to 4:30 excluding Federal 
holidays. The interested persons wanting to examine these documents 
should make an appointment with the office at least 24 hours in 
advance.

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 Taking?
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 Taking?

    EPA is taking final action to approve Iowa's State Plan, submitted 
on August 15, 2006, and the incorporation by reference date changes 
submitted on April 26, 2007. In its State Plan, Iowa has met CAMR by 
requiring certain coal-fired EGUs to participate in the EPA-
administered cap-and-trade program addressing Hg emissions. EPA 
proposed to approve Iowa's request to amend the State's Plan on 
September 5, 2007 (72 FR 50913). 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 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 EPA proposes, and subsequently approves or 
disapproves, 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

[[Page 72954]]

that many States may choose 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 from the model rule if the States want to participate 
in the EPA-administered trading program. A State Plan may deviate from 
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 taking final action 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 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. 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, as authorized by the 
CAMR, Iowa has deviated from the portion of the model rule, described 
above, 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 addressed the issue related to the definition of ``permit 
authority'' discussed in the proposal of September 5, 2007 (72 FR 
50913). As discussed in more detail in that notice, on February 17, 
2007, EPA provided a letter to Iowa that requested and outlined 
necessary definition revisions for all rules intended to meet the Clean 
Air Interstate Rule (CAIR) and CAMR. The EPA requested revisions were 
adopted by the Iowa Environmental Protection Commission on October 1, 
2007, and were published in the Iowa Administrative Code on October 24, 
2007. The revisions became State effective on November 28, 2007. Once 
submitted to EPA, and through separate rulemaking, EPA will act on the 
State's revisions to its 111(d) plan for CAMR and its SIP for CAIR.
    EPA's review of Iowa's State Plan has found that it meets the 
requirements of CAMR. As a result, EPA is taking final action to 
approve Iowa's State Plan.

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 imposes 
no additional requirements beyond those imposed by State law. 
Accordingly, the Administrator certifies that this 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 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 action 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 action also does not have Federalism implications because it 
does

[[Page 72955]]

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. It does not alter the relationship or the distribution of 
power and responsibilities established in the CAA. This action 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.
    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 
approves 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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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 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 February 25, 2008. 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 Part 62

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

    Dated: December 14, 2007.
John B. Askew,
Regional Administrator, Region 7.

0
Chapter I, title 40 of the Code of Federal Regulations is amended as 
follows:

PART 62--[AMENDED]

0
1. The authority citation for part 62 continues to read as follows:

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

Subpart Q--Iowa

0
2. Subpart Q is amended by adding an undesignated center heading and 
Sec.  62.3918 to read as follows:

Mercury Emissions From Coal-Fired Electric Steam Generating Units


Sec.  62.3918  Identification of Plan.

    (a) Identification of plan. Section 111(d) plan and associated 
State regulations as adopted in the Iowa Administrative Bulletin on 
June 7, 2006, page 1811 and associated amendments on February 28, 2007, 
page 1157.
    (b) Identification of sources. The plan applies to all new and 
existing mercury budget units meeting the applicability requirements in 
Iowa's State rule 567-34.301.
    (c) Effective date. The effective date for the portion of the plan 
applicable to mercury budget units as described in Iowa State rule 567-
34.301 is January 25, 2008.
[FR Doc. E7-24962 Filed 12-21-07; 8:45 am]
BILLING CODE 6560-50-P