[Federal Register Volume 72, Number 246 (Wednesday, December 26, 2007)]
[Proposed Rules]
[Pages 72978-72981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24967]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 62

[EPA-R07-OAR-2007-1143; FRL-8510-7]


Approval and Promulgation of State Plans for Designated 
Facilities and Pollutants; Kansas; 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 Kansas 
on June 19, 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 Kansas.
    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

[[Page 72979]]

participating in the EPA-administered CAMR cap-and-trade program. In 
the State Plan that EPA is proposing to approve, Kansas would meet CAMR 
requirements by participating in the EPA trading program.

DATES: Comments must be received on or before January 25, 2008.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-
OAR-2007-1143, by one of the following methods:
    1. 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-
2007-1143. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
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 www.regulations.gov or e-
mail, information that you consider to be CBI or otherwise protected. 
The 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 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.
    Docket: All documents in the electronic docket are listed in the 
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 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 Kansas'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 Kansas's State Plan, submitted on June 
19, 2007. In its State Plan, Kansas 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. Kansas 
has included as part of its submittal Kansas rule K.A.R. 28-19-720, 
relating to new source performance standards. EPA will take action on 
those provisions in a separate rulemaking.

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,

[[Page 72980]]

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 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 Kansas's CAMR State Plan Submittal

A. State Budgets

    In this action, EPA is proposing to approve Kansas's State Plan 
that adopts the annual EGU Hg budgets established for the State in 
CAMR, i.e., 0.723 tons for EGU Hg emissions in 2010-2017 and 0.285 tons 
for EGU Hg emissions in 2018 and thereafter. Kansas'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 Kansas 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 Kansas's alternative allowance methodology, as authorized by the 
CAMR, Kansas has deviated from the portion of the model rule described 
above relating to the basis for allocating allowances to new units and 
existing units. For existing units, 97 percent of the total annual 
allowances are distributed based on the individual unit's pro-rata 
share of total heat input for all existing units, adjusted by coal 
type, for the years 2000 through 2004. The baseline for each unit was 
established by averaging the three highest annual adjusted heat input 
rates for the five-year period. For new units, allowances will be 
distributed from a set-aside pool of allowances equal to 3 percent of 
the State's budget for each year of the program. The new unit 
methodology distributes allowances based on an emission rate (up to 5 
ounces of Hg/MW for 2010-2017 and up to 2 ounces of Hg/MW in 2018 and 
thereafter) multiplied by the nameplate capacity. However, no single 
unit can receive more than one-third of the set-aside in a control 
period nor can the total number of new units receive more than the 3 
percent set-aside pool of allowances. Mercury allowances for new and 
existing units are permanent. Because allocations are considered 
permanent, if the new unit set-aside is fully subscribed as new units 
make requests for allowances, there may be future new units that are 
not allocated allowances from the new unit set-aside. There are also 
provisions for distribution of allowances in the new unit set-aside for 
the case of undersubscription. The Kansas allowance distribution 
methodologies are acceptable under CAMR.
    Kansas'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. Kansas'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. The State cites provisions in 
Kansas State Law, K.S.A. 65-3005, as containing the legal authority for 
the Kansas Department of Health and Environment to adopt the State's 
rule that allows for Kansas's participation in the nationwide cap-and-
trade program for mercury.
    EPA's review of Kansas's State Plan has found that it meets the 
requirements of CAMR. As a result, EPA is proposing to approve Kansas'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 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

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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 40 CFR Part 62

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

    Dated: December 14, 2007.
John B. Askew,
Regional Administrator, Region 7.
[FR Doc. E7-24967 Filed 12-21-07; 8:45 am]
BILLING CODE 6560-50-P