[Federal Register Volume 76, Number 199 (Friday, October 14, 2011)]
[Proposed Rules]
[Pages 63860-63878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-26521]


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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-HQ-OAR-2009-0491; FRL-9479-1]
RIN 2060-AR22


Revisions to Federal Implementation Plans To Reduce Interstate 
Transport of Fine Particulate Matter and Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: EPA is proposing or seeking comment on revisions to the final 
Transport Rule promulgated on August 8, 2011. These revisions address 
discrepancies in unit-specific modeling assumptions that affect the 
proper calculation of Transport Rule state budgets and assurance levels 
in Florida, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, New 
York, Texas, and Wisconsin, as well as new unit set-asides in Arkansas 
and Texas. EPA is

[[Page 63861]]

also proposing to revise allowance allocations to specific units 
covered by certain consent decrees that restrict the use of those 
allowances. These important technical fixes maintain the Transport 
Rule's ability to achieve the elimination of significant contribution 
and interference with maintenance as quantified by the proper 
application of these methodologies.
    EPA is also proposing to amend the assurance penalty provisions of 
the rule to make them effective beginning January 1, 2014, rather than 
in 2012, in order to promote the development of allowance market 
liquidity as these revisions are finalized. EPA believes that deferring 
the effective date of the assurance provisions would provide additional 
confidence and would not compromise the air quality goals of the 
program.
    In addition, we are proposing to correct typographical errors in 
the rule.

DATES: Comments: Comments must be received on or before November 14, 
2011 unless a public hearing is requested in which event comments must 
be received on or before November 28, 2011.
    Public Hearing: On October 12, 2011, EPA published a document 
announcing that if a public hearing on this proposal is requested by 
October 19, 2011, it will be held on October 28, 2011, at 9 a.m. at 
USEPA. Please refer to the public hearing notice published at 76 FR 
63251 for additional information on the public hearing.
    EPA will provide further information about the hearing on its Web 
page if a hearing is requested. Oral testimony will be limited to the 
subject matter of the proposal, the scope of which is discussed below. 
Any member of the public may file a written statement by the close of 
the comment period.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2009-0491, by one of the following methods:
     http://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     Mail: Air and Radiation Docket and Information Center, 
U.S. Environmental Protection Agency, Mailcode: 2822T, 1200 
Pennsylvania Avenue, NW., Washington, DC 20460.
     Hand Delivery: Air and Radiation Docket, EPA West 
Building, Room 3334, 1301 Constitution Avenue, NW., Washington, DC 
20460. Such deliveries are only accepted during the Docket's normal 
hours of operation, and special arrangements should be made for 
deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2009-0491. 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 information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. 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, any form of encryption, and 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 docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Air and Radiation 
Docket, EPA West Building, Room 3334, 1301 Constitution Avenue, NW., 
Washington, DC 20460. The Public Reading Room is open from 8:30 a.m. to 
4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is (202) 566-1744, and the 
telephone number for the Air and Radiation Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Gabrielle Stevens, U.S. Environmental 
Protection Agency, Clean Air Markets Division, MC 6204J, Ariel Rios 
Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460, telephone 
(202) 343-9252, e-mail at [email protected]. Electronic copies 
of this document can be accessed through the EPA Web site at: http://epa.gov/crossstaterule.

SUPPLEMENTARY INFORMATION: 

I. General Information

A. Does this action apply to me?

    Regulated Entities. Entities regulated by this action primarily are 
fossil fuel-fired boilers, turbines, and combined cycle units that 
serve generators that produce electricity for sale or cogenerate 
electricity for sale and steam. Regulated categories and entities 
include:

------------------------------------------------------------------------
                                                          Examples of
                                                          potentially
            Category                  NAICS code           regulated
                                                           industries
------------------------------------------------------------------------
Industry.......................      2211, 2212, 2213  Electric service
                                                        providers.
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather to provide 
a guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities which EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in this table could also be regulated. To determine whether 
your facility, company, business, organization, etc., is regulated by 
this action, you should carefully examine the applicability criteria in 
Sec. Sec.  97.404, 97.504, and 97.604 of title 40 of the Code of 
Federal Regulations. If you have questions regarding the applicability 
of this action to a particular entity, consult the person listed in the 
preceding FOR FURTHER INFORMATION CONTACT section.

B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this proposal will also be available on the

[[Page 63862]]

World Wide Web. Following signature by the EPA Administrator, a copy of 
this action will be posted on the transport rule Web site http://www.epa.gov/airtransport.

C. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
http://www.regulations.gov or email. Clearly mark the part or all of 
the information that you claim to be CBI. For CBI information in a disk 
or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM 
as CBI and then identify electronically within the disk or CD-ROM the 
specific information that is claimed as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2. Send or deliver information 
identified as CBI only to the following address: Roberto Morales, OAQPS 
Document Control Officer (C404-02), U.S. EPA, Research Triangle Park, 
NC 27711, Attention Docket ID No. EPA-HQ-OAR-2009-0491.
    2. Tips for preparing your comments.
When submitting comments, remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

D. How is this preamble organized?

I. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document and other related 
information?
    C. What should I consider as I prepare my comments for EPA?
    D. How is the preamble organized?
II. Summary of Proposed Rule and Background
III. Specific Revisions
    A. Budgets/New Unit Set-Aside Revisions
    B. Allowance Allocation Revisions to Units Covered by Existing 
Utility Consent Decrees
    C. Amend the Assurance Penalty Provisions To Make Them Effective 
Starting in 2014
    D. Correct Typographical Errors
IV. Recordation of Transport Rule Allowances
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

II. Summary of Proposed Rule and Background

    EPA has identified errors or potential errors in unit-specific 
modeling assumptions that affect the proper calculation of Transport 
Rule state budgets in Florida, Louisiana, Michigan, Mississippi, 
Nebraska, New Jersey, New York, Texas, and Wisconsin, as well as new 
unit set-asides in Arkansas and Texas. EPA is proposing to take the 
following distinct actions to revise individual state budgets and new-
unit set asides: (1) Revise Michigan's annual NOX budget to 
account for an erroneously assumed selective catalytic reduction (SCR) 
emission control device at one unit; (2) revise Nebraska's annual 
NOX budget to account for an erroneously assumed SCR 
emission control device at one unit; (3) revise the Texas 
SO2 budget to account for erroneously assumed flue gas 
desulphurization (FGD, or scrubber) emission control devices at three 
units and revised assumptions regarding flue gas treatment in existing 
scrubbers at seven units; (4) revise the Arkansas ozone-season new unit 
set-aside to account for erroneously omitted projected emissions from 
one new unit; (5) revise the Texas new unit set-aside to account for 
erroneously omitted projected emissions for SO2, ozone-
season NOX, and annual NOX; (6) revise New 
Jersey's ozone season NOX, annual NOX, and 
SO2 budgets to account for an erroneously assumed FGD and 
SCR emission control devices at one unit, and taking into account 
operational constraints likely to necessitate non-economic generation 
at six facilities; (7) revise Wisconsin's SO2 and annual 
NOX budgets to account for erroneously assumed FGD and SCR 
devices at two units; (8) revise New York's SO2, annual 
NOX, and ozone season NOX budgets taking into 
account operational constraints likely to necessitate non-economic 
generation at ten units; (9) revise Louisiana's ozone season 
NOX budget taking into account operational constraints 
likely to necessitate non-economic generation at twelve units; (10) 
revise Mississippi's ozone season NOX budget taking into 
account operational constraints likely to necessitate non-economic 
generation at four units; (11) revise the Texas annual NOX 
and ozone season NOX budgets taking into account operational 
constraints likely to necessitate non-economic generation at seven 
units; and (12) revise Florida's ozone-season NOX budget 
taking into account the unavailability of a previously operating 
nuclear unit. See section III.A of this preamble for further 
explanation of these revisions.
    These proposed revisions to state budgets also entail revisions to 
the affected states' assurance levels, as the variability limits for 
each state are calculated as a percentage of the applicable budget. See 
the final Transport Rule, 76 FR 48208, 48267-68, August 8, 2011 
(explaining variability limit derivation). The purpose of these 
revisions is to establish state budgets and new unit set-asides that 
are consistent with the proper application of methodologies established 
in the final Transport Rule.
    The resulting budgets maintain significant emission reductions from 
historic levels and are consistent with the final Transport Rule's 
methodology for defining significant contribution and interference with 
maintenance. The changes represent the proper application of the 
methodology established in the final Transport Rule. No changes to that 
methodology are being proposed, and EPA is not reopening the 
methodology established in the final Transport Rule for public comment. 
EPA is also not proposing any change to the levels of stringency (i.e., 
cost per ton) selected in the final

[[Page 63863]]

Transport Rule's determination of significant contribution and 
interference with maintenance and is not reopening that issue for 
public comment. See ``Significant Contribution Assessment TSD'' in the 
docket for this rulemaking for a demonstration of how the revisions in 
this rulemaking represent the proper application of and are consistent 
with the methodology developed in the final Transport Rule.
    It is EPA's intent, in conducting this rulemaking, to make the 
revisions in this proposal as well as to conduct a clearly defined, 
time-limited process by which any similarly justified revisions to the 
final Transport Rule state budgets are identified and effectuated in a 
timely and expeditious manner. To that end, EPA is seeking that all 
relevant information that may support similar revisions be submitted in 
full by the comment deadline on this rulemaking, such that the Agency 
may consider whether a subsequent and timely rulemaking should address 
any further revisions to the final Transport Rule state budgets. EPA 
believes that the likelihood of additional substantive revisions 
merited to the Transport Rule state budgets is limited, considering 
that EPA has already conducted several notice-and-comment processes 
through initial proposal of the Transport Rule and multiple notices of 
data availability (NODAs) to prompt the public to provide the relevant 
input information that informs the calculation of the Transport Rule 
state budgets. Please see section III.A of this preamble for a more 
detailed description of the type of information EPA is requesting in 
comments on this rulemaking for this purpose.
    EPA is also proposing revisions to allowance allocations at certain 
units in six states that are affected by existing utility consent 
decrees. EPA has identified provisions in certain utility consent 
decrees which the Agency believes would restrict the use of Transport 
Rule allowances allocated to certain units and effectively make certain 
Transport Rule reduction requirements marginally more stringent than 
intended by making certain allowances intended for compliance purposes 
unavailable. When establishing the state budgets under the final 
Transport Rule, EPA successfully accounted for the emission reduction 
requirements of these consent decrees; therefore, the Transport Rule 
state budgets sustain the environmental protection secured by those 
existing utility consent decrees. However, when dividing those state 
budgets into individual unit-level allowance allocations, EPA included 
allowance allocations to certain units that exceed those units' 
allowable emissions under the terms of the applicable consent decree. 
Under these conditions, the consent decree provisions of concern 
identified in this proposal would determine the quantity of allocated 
allowances in excess of allowable emissions at the unit in question and 
prevent them from being available for compliance use by any source 
under the Transport Rule programs. Because EPA has already secured the 
environmental improvements required by the consent decrees by 
incorporating their emission reductions into the Transport Rule state 
budgets, there is no environmental need to prevent the allowances from 
being used for compliance by sources subject to the Transport Rule 
aside from those sources whose emissions are restricted by the terms of 
the consent decrees to which they are subject. Therefore, EPA is 
proposing to revise Transport Rule unit-level allowance allocations to 
the specific units affected by these consent decrees to reflect their 
maximum allowable emissions, such that none of the allowances affected 
by the provisions of concern are unnecessarily removed from use for 
compliance by other units. While EPA intends to perform this revision 
to benefit program implementation, EPA does not believe resolution of 
this issue is a necessary precondition for successful implementation of 
and compliance with the Transport Rule programs in 2012, because as 
described in section IV of this preamble, notwithstanding these 
proposed revisions, EPA will still be able to distribute 99.7 percent 
of all existing unit allowances under the state budgets established in 
the final Transport Rule by that rule's November 7 deadline. See 
section III.B of this preamble for further explanation of this 
revision.
    EPA is also proposing in this action to amend the assurance penalty 
provisions of the Transport Rule to make them effective January 1, 
2014. This change takes account of the fact that the revisions 
described above are being proposed, and any information described above 
concerning requested additional revisions may be submitted, close to 
the commencement of the Transport Rule programs. The proposed amendment 
to the assurance provisions is intended to promote the development of 
allowance market liquidity as these revisions are finalized, thereby 
smoothing the transition from the Clean Air Interstate Rule (CAIR) 
programs to the Transport Rule programs in 2012. See section III.C of 
this preamble for further explanation of this revision.
    EPA is also proposing to correct typographical errors in certain 
sections of rule text in parts 52 and 97 in the final Transport Rule. 
See section III.D of this preamble for further explanation of these 
corrections.

III. Specific Revisions

A. Budget and New Unit Set-Aside Revisions

    After the final Transport Rule was published, EPA identified 
discrepancies in certain data assumptions that substantially affected 
the calculation of a few states' budgets in the final rule. Therefore, 
EPA is proposing the following revisions:
    (1) Increase Michigan's 2012 and 2014 annual NOX budgets 
in accordance with a revision to the final Transport Rule analysis that 
erroneously assumed that an SCR exists at Monroe Unit 2.
    EPA is proposing to revise Michigan's 2012 and 2014 annual 
NOX budgets in accordance with a revision to the final 
Transport Rule analysis that erroneously assumed an SCR exists at 
Monroe Unit 2. This SCR is planned, but is not expected to be online in 
2012 or 2014. Therefore, EPA is proposing to adjust its 2012 and 2014 
projections to reflect projected emissions without an SCR at this unit. 
This would result in a 5,228 ton increase in the state's annual 
NOX budget. See ``Technical Revisions and Adjustments to 
State Budgets TSD'' in the docket for this rulemaking for a 
quantitative demonstration of this proposed revision, as well as for 
the impacts this revision would have on the state's assurance level, 
new unit set-aside, and Indian country new unit set-aside, and 
``Revisions to Unit Level Allocations under the FIP'' in the docket for 
a quantitative demonstration of the effect of this revision on unit-
level allocations under the FIP.
    This revised assumption about Monroe Unit 2 would also affect the 
calculation of Michigan's potential ozone-season NOX budget 
(as well as the state's assurance level, new unit set-aside, Indian 
country new unit set-aside, and unit-level allocations under the FIP) 
if that state is included in the Transport Rule ozone-season 
NOX program as previously proposed (76 FR 40662, July 11, 
2011). EPA will address this issue, along with other public comments 
submitted on that rulemaking, when the Agency finalizes that rulemaking 
later this year.
    (2) Increase Nebraska's 2012 and 2014 annual NOX budgets 
in accordance with a revision to the final Transport Rule analysis that 
erroneously assumed that an SCR exists at Nebraska City Unit 1.

[[Page 63864]]

    EPA is proposing to increase Nebraska's 2012 and 2014 annual 
NOX budgets in accordance with a revision to the final 
Transport Rule analysis that erroneously assumed that an SCR exists at 
Nebraska City Unit 1. There is no SCR that is present, planned, or 
under construction at the unit. Therefore, EPA is proposing to adjust 
its baseline emission projections for the state to reflect projected 
emissions without an SCR at this unit. This adjustment results in an 
increase of 3,599 tons to the state's annual NOX budget. See 
``Technical Revisions and Adjustments to State Budgets TSD'' in the 
docket for this rulemaking for a quantitative demonstration of this 
proposed revision, as well as for the impacts this revision would have 
on the state's assurance level, new unit set-aside, and Indian country 
new unit set-aside, and ``Revisions to Unit Level Allocations under the 
FIP'' in the docket to this rulemaking for a quantitative demonstration 
of the effect of this proposed revision on unit-level allocations under 
the FIP.
    (3) Increase the Texas 2012 and 2014 SO2 budgets in 
accordance with a revision to the final Transport Rule analysis that 
erroneously assumed that scrubbers exist at W.A. Parish Unit 6, J.T. 
Deely Unit 1, and J.T. Deely Unit 2, and that assumed full flue gas 
treatment in existing scrubbers at Martin Lake, Monticello, Sandow, 
W.A. Parish, and Oklaunion facilities.
    EPA is proposing to address several revisions to the modeling 
assumptions affecting the calculation of the Texas SO2 
budget. In particular, EPA is proposing to increase the Texas 
SO2 budget in accordance with a revision to the final 
Transport Rule analysis that erroneously assumed flue-gas 
desulfurization (FGD) technology is installed on J.T. Deely Units 1 and 
2 and W.A. Parish Unit 6 by 2012. At the time that EPA conducted its 
final Transport Rule analysis to determine state budgets, EPA had 
information (both from public sources, as cited below, as well as from 
a private subscription-only power sector pollution control database) 
showing that FGD retrofits for these sources were originally planned or 
announced to be installed by 2012.1 2 However, newer 
information shows that these FGDs are no longer scheduled to be 
installed in 2012.
---------------------------------------------------------------------------

    \1\ Corporate Sustainability Report'', CPS Energy, 2010. P.57. 
Retrieved from http://www.cpsenergy.com/files/Sustainability_Report.pdf.
    \2\ Business Wire, (2006). NRG Announces Comprehensive 
Repowering Initiative [Press release]. Retrieved from http://phx.corporate-ir.net/phoenix.zhtml?c=121544&p=irol-newsArticle_Print&ID=874575&highlight.
---------------------------------------------------------------------------

    A number of facilities in Texas currently face limitations 
regarding the amount of flue gas that can be treated in their existing 
FGDs. In the final Transport Rule analysis, EPA relied on the 
SO2 removal efficiency that these facilities reported at 
their scrubbers to the Energy Information Administration (EIA). 
However, EPA has now determined that the facilities' reports only 
intended to address the removal efficiency for the portion of the flue 
gas treated in the scrubber. For this reason, that removal efficiency 
should not be applied to the total amount of sulfur combusted in the 
coal consumed (as some of the flue gas at these units must be vented 
without being treated in the scrubber as originally constructed). When 
the SO2 removal rates are decreased to reflect the reported 
operational constraint of each affected scrubber's flue gas treatment, 
the projected emission level for Texas, after all significant 
contribution identified in the final Transport Rule is addressed, 
correspondingly rises.
    Therefore, in accordance with the revised unit-level input 
assumptions regarding existing scrubbers and flue gas treatment at the 
Texas units described above, EPA is proposing to increase the state's 
2012 and 2014 SO2 budgets each by 70,067 tons. See 
``Technical Revisions and Adjustments to State Budgets TSD'' in the 
docket for this rulemaking for a quantitative demonstration of how each 
of these unit-level adjustments affects the calculation of this 
proposed revision, as well as for the impacts this revision would have 
on the state's assurance levels, new unit set-aside, and Indian country 
new unit set-aside.
    (4) Increase Arkansas' ozone-season NOX new unit set-
aside in accordance with a revision to the final Transport Rule's 
calculation of the new unit set-aside that erroneously omitted Plum 
Point Unit 1's projected emissions.
    EPA is not proposing to adjust Arkansas' ozone season 
NOX budget in this rulemaking. However, EPA is proposing to 
adjust the portion of that budget dedicated to the new unit set-aside 
account. In the final Transport Rule, EPA had determined a 2 percent 
new unit set-aside for ozone season NOX in the state. That 
value would be changed to 5 percent in this rulemaking. The revision is 
consistent with the new unit set-aside methodology described in the 
final rule. The updated value simply reflects the revised 
classification of one unit to be treated as a new unit for purposes of 
unit-level allowance allocation. This unit, Plum Point Unit 1, 
commenced commercial operation on or after January 1, 2010, and 
therefore should be considered a new unit under the final Transport 
Rule's unit-level allocation methodology (76 FR 48290); however, the 
final Transport Rule erroneously omitted this unit's projected 
emissions from the calculation of Arkansas' ozone-season NOX 
new unit set-aside. Including this unit's projected emissions in the 
calculation would yield a revised new unit set-aside of 5 percent of 
the state's budget instead of the previous 2 percent value. See the 
``Technical Revisions and Adjustments to State Budgets TSD'' in the 
docket for this rulemaking for a quantitative demonstration of this 
proposed revision.
    This proposed revision to Arkansas' new unit set-aside would 
necessarily result in changes to allowance allocations to existing 
units. See ``Revisions to Unit Level Allocations under the FIP'' tables 
in the docket to this rulemaking for a quantitative demonstration of 
the effect of this revision on unit-level allocations under the FIP.
    (5) Increase Texas' ozone-season NOX, annual 
NOX, and SO2 new unit set-asides in accordance 
with a revision to the final Transport Rule's calculations of the new 
unit set-asides that erroneously omitted Oak Grove Unit 2's projected 
emissions.
    EPA is also proposing a revision to the calculation of the new unit 
set-asides for ozone-season NOX, annual NOX, and 
SO2 in Texas. The updated values would simply reflect the 
revised classification of one unit to be treated as a new unit for 
purposes of unit-level allowance allocation. This unit, Oak Grove Unit 
2, commenced commercial operation on or after January 1, 2010, and 
therefore should be considered a new unit under the final Transport 
Rule's unit-level allocation methodology; however, the final Transport 
Rule erroneously omitted this unit's projected emissions from the 
calculation of Texas's ozone-season NOX, annual 
NOX, and SO2 new unit set-asides. Including this 
unit's projected emissions in the calculation would yield revised new 
unit set-asides of 4 percent of the state's ozone-season NOX 
budget, 4 percent of the state's annual NOX budget, and 5 
percent of the state's SO2 budget. See the ``Technical 
Revisions and Adjustments to State Budgets TSD'' in the docket for this 
rulemaking for a quantitative demonstration of this proposed revision.
    (6) Increase New Jersey's 2012 and 2014 ozone-season 
NOX, annual NOX, and SO2 budgets in 
accordance with revisions to the final Transport Rule analysis that 
erroneously assumed that

[[Page 63865]]

an SCR and scrubber exist at BL England Unit 1 and to reflect 
operational constraints likely to necessitate non-economic dispatch at 
six other facilities in 2012.
    EPA is proposing to revise New Jersey's ozone-season 
NOX, annual NOX, and SO2 budgets in 
accordance with revisions to assumed control technologies at BL England 
Unit 1 as well as operational constraints affecting units at six other 
facilities. The SCR and scrubber that had been planned to be installed 
at BL England Unit 1, and which EPA assumed would be in place in 2012, 
are not actually required by a New Jersey administrative order until 
December 2013. Furthermore, the agreement limits operation of the unit 
to the ozone season. Therefore, EPA is proposing to adjust New Jersey's 
2012 state budgets to reflect projected emissions without an SCR or 
scrubber at this unit and its operation only during the ozone season.
    EPA is also proposing revisions to New Jersey's state budgets based 
on information demonstrating that northern New Jersey is an out-of-
merit-order dispatch area, meaning that units in that area are 
frequently dispatched out of regional economic order as a result of 
short-run limitations on the ability to meet local electricity demand 
with generation from outside the area. Conditions in this out-of-merit-
order dispatch area are likely to necessitate what would otherwise be 
non-economic generation at six New Jersey plants (Bergen, Edison, 
Essex, Kearny, Linden, and Sewaren Generating Stations) in the 
immediate future. EPA did not consider these immediate-term conditions 
in its calculation of the New Jersey emission budgets in the final 
Transport Rule. EPA is proposing to adjust New Jersey's emission 
budgets based on analysis of the frequency these units have recently 
been called to run for non-economic purposes, according to data 
provided by the utility operating those units.
    For this proposal, EPA has calculated the net change in the state's 
2012 and 2014 total emissions (that inform the state budgets) to 
account for increased generation (and related emissions) from the 
specific units affected by the immediate-term non-economic constraints 
described above, as well as for a corresponding reduction in generation 
(and related emissions) at other units within the state, to maintain 
the electricity supply and demand equilibrium modeled in the final 
Transport Rule.
    EPA re-calculated the emissions from BL England Unit 1 and the six 
plants with non-economic generation to account for the input assumption 
changes described above. These calculations yield increases to the New 
Jersey 2012 state budgets for SO2 of 2,096 tons, annual 
NOX of 420 tons, and ozone-season NOX of 592 
tons; and 2014 state budget increases for annual NOX of 112 
tons, and ozone-season NOX of 195 tons. See ``Technical 
Revisions and Adjustments to State Budgets TSD'' in the docket for this 
rulemaking for a quantitative demonstration of this proposed revision, 
as well as for the impacts this revision would have on the state's 
assurance level and new unit set-aside, and ``Revisions to Unit Level 
Allocations under the FIP'' in the docket for a quantitative 
demonstration of the effect of this revision on unit-level allocations 
under the FIP.
    (7) Increase Wisconsin's 2014 SO2 budget and 2012 and 
2014 annual NOX budget in accordance with a revision to the 
final Transport Rule analysis that erroneously assumed that an FGD 
exists at Weston Unit 3, wet FGDs (instead of dry FGDs) exist at 
Columbia Units 1 and 2, and a SCR exists at John P. Madgett Unit 1.
    EPA is proposing to increase Wisconsin's SO2 budget in 
accordance with revisions to the Weston Unit 3 and Columbia Units 1 and 
2 FGD status in 2014. EPA had assumed that a scrubber would be 
available at Weston Unit 3 in 2014 in its base case modeling. There is 
no FGD expected to be online at the facility in 2014. The final 
Transport Rule did not assume an operating scrubber at Weston Unit 3 in 
2012, but did assume the FGD would be in place and operating by 2014. 
Therefore, EPA is proposing to adjust Wisconsin's 2014 SO2 
budget to reflect the unit's operation without an FGD in 2014.
    EPA had also assumed that the two scrubbers being installed at 
Columbia Units 1 and 2 were wet scrubbers. Instead, dry scrubbers have 
been planned and approved at these units. In EPA's modeling, the 
assumed removal rate of a new wet scrubber is 96 percent and a new dry 
scrubber is 92 percent. Therefore, the 2014 modeled remedy emissions 
from these units would be twice their current amount, if the assumption 
of wet scrubbers was changed to dry scrubbers for the facility. No 
change is needed for 2012 since EPA did not model any scrubbers 
operating at those units in that year.
    To account for these adjustments, EPA is proposing to increase the 
Wisconsin SO2 budget by a total of 7,757 tons in 2014.
    EPA is also proposing to increase Wisconsin's annual NOX 
budget in 2012 and 2014. EPA had assumed a SCR would be installed at 
John P. Madgett Unit 1 in 2012 in its budget determination and remedy 
modeling. There is no SCR expected to be online in 2012 or 2014 at the 
unit. Therefore, EPA is proposing to adjust Wisconsin's annual 
NOX budgets to reflect the unit's operation without a SCR. 
This would result in a 2,473 ton increase to the state's annual 
NOX budget.
    The revised assumptions about John P. Madgett Unit 1 would also 
affect the calculation of Wisconsin's potential ozone-season 
NOX budget (as well as the state's assurance level, new unit 
set-aside, Indian country new unit set-aside, and unit-level 
allocations under the FIP) if that state is included in the Transport 
Rule ozone-season NOX program as previously proposed (76 FR 
40662, July 11, 2011). EPA will address this issue, along with other 
public comments submitted on that rulemaking, when the Agency finalizes 
that rulemaking later this year.
    See the ``Technical Revisions and Adjustments to State Budgets 
TSD'' in the docket for this rulemaking for a quantitative 
demonstration of this proposed revision, as well as for the impacts 
this revision would have on the state's assurance level, new unit set-
aside, and Indian country new unit set-aside, and ``Revisions to Unit 
Level Allocations under the FIP'' in the docket for a quantitative 
demonstration of the effect of this revision on unit-level allocations 
under the FIP.
    (8) Increase New York's 2012 and 2014 ozone-season NOX, 
annual NOX, and SO2 budgets in accordance with a 
revision to the final Transport Rule analysis that did not reflect 
operational constraints likely to necessitate non-economic dispatch at 
certain units.
    EPA is proposing to increase the New York state ozone-season 
NOX, annual NOX, and SO2 budgets in 
accordance with revisions to the assumed operation of several specific 
units in 2012, to satisfy three specific immediate-term operational 
constraints documented by the New York Independent System Operator 
(NYISO). These three constraints are referred to here as the N-1-1 
Contingency, the Minimum Oil Burn Rules, and out-of-merit-order 
dispatch conditions, which collectively affect the likely 2012 and 2014 
operations of specific units in the New York City and Long Island 
areas.
    The N-1-1 Contingency requires that certain units be available to 
deliver generation with advance notice of only 30 seconds at certain 
times during the year. These specific units require several hours to 
reach the necessary level of generation under these contingency 
circumstances; therefore, the contingency requirement frequently 
necessitates their ongoing operation

[[Page 63866]]

whether or not the contingency is actually triggered at any given time. 
Based on information published by NYISO, EPA identified Arthur Kill 
Generating Station, Ravenswood, and Astoria Generating Station as 
needing to maintain minimum generation levels at two units in each 
facility to meet the N-1-1 Contingency constraint.
    The Minimum Oil Burn Rules require that certain units be able to 
immediately burn oil in the event of a natural gas supply disruption to 
the New York City and Long Island area infrastructure. Some units are 
incapable of immediately switching fuel, so they must burn a minimum 
amount of oil on an ongoing basis when operating to comply with this 
requirement. EPA determined that the Minimum Oil Burn Rules would 
require residual fuel oil consumption at the Arthur Kill Generating 
Station, Ravenswood, Astoria Generating Station, and Northport 
facilities. Based on information published by the NYISO, EPA determined 
that these units would burn oil in 2012 and 2014 at the same proportion 
of total projected heat input as shown for the share of historic heat 
input reported as residual fuel oil at those facilities.
    Data presented in the NYISO 2010 Comprehensive Area Transmission 
Review Study and the NYISO Operating Study, Summer 2011, demonstrate 
that Long Island is an out-of-merit-order dispatch area, meaning that 
units in that area are frequently dispatched out of regional economic 
order as a result of short-run limitations on the ability to meet local 
electricity demand with generation from outside the area. Conditions in 
this out-of-merit-order dispatch area are likely to necessitate in the 
immediate future what would otherwise be non-economic generation at 3 
units at the Northport facility.
    For this proposal, EPA has calculated the net change in the state's 
total emissions (that inform the state budgets) to account for 
increased generation (and related emissions) from the specific units 
affected by the immediate-term non-economic constraints described 
above, as well as for a corresponding reduction in generation (and 
related emissions) at other units within the state, to maintain the 
electricity supply and demand equilibrium modeled in the final 
Transport Rule. These calculations yield increases to the New York 2012 
and 2014 state budgets for SO2 of 3,527 tons, annual 
NOX of 3,485 tons, and ozone-season NOX of 1,911 
tons. See ``Technical Revisions and Adjustments to State Budgets TSD'' 
in the docket for this rulemaking for a quantitative demonstration of 
this proposed revision, as well as for the impacts this revision would 
have on the state's assurance levels, new unit set-aside, and Indian 
country new unit set-aside.
    (9) Increase Louisiana's 2012 and 2014 ozone-season NOX 
budgets in accordance with a revision to the final Transport Rule 
analysis to reflect operational constraints likely to necessitate non-
economic dispatch at twelve units.
    EPA is proposing revisions to Louisiana's 2012 and 2014 state ozone 
season NOX budgets based on information demonstrating that 
the West of the Atchafalaya Basin (WOTAB), Downstream of Gypsy (DSG), 
and Amite South regions of Louisiana are out-of-merit-order dispatch 
areas, meaning that units in those areas are frequently dispatched out 
of regional economic order as a result of short-run limitations on the 
ability to meet local electricity demand with generation from outside 
the area. Conditions in these out-of-merit-order dispatch areas are 
likely to necessitate what would otherwise be non-economic generation 
at five Louisiana plants (R.S. Nelson, Nine Mile Point, Michoud, Little 
Gypsy, and Waterford) in the immediate future. EPA did not consider 
these immediate-term conditions in its calculation of the Louisiana 
emission budget in the final Transport Rule. EPA is proposing to adjust 
Louisiana's ozone season NOX emission budget based on 
analysis projecting the minimum frequency these units will have to run 
in the immediate term for non-economic purposes, according to data 
provided by the utility operating those units.
    For this proposal, EPA has calculated the net change in the state's 
total emissions (that inform the state budgets) to account for 
increased generation (and related emissions) from the specific units 
affected by the immediate-term non-economic constraints described 
above, as well as for a corresponding reduction in generation (and 
related emissions) at other units within the state, to maintain the 
electricity supply and demand equilibrium modeled in the final 
Transport Rule.
    EPA re-calculated the emissions from the five plants with non-
economic generation to account for the input assumption changes 
described above. These calculations yield increases to Louisiana's 2012 
and 2014 state budgets for ozone-season NOX of 4,231 tons. 
See ``Technical Revisions and Adjustments to State Budgets TSD'' in the 
docket for this rulemaking for a quantitative demonstration of this 
proposed revision, as well as for the impacts this revision would have 
on the state's assurance level, new unit set-aside, and Indian country 
new unit set-aside, and ``Revisions to Unit Level Allocations under the 
FIP'' in the docket for a quantitative demonstration of the effect of 
this revision on unit-level allocations under the FIP.
    (10) Increase Mississippi's 2012 and 2014 ozone-season 
NOX budgets in accordance with a revision to the final 
Transport Rule analysis to reflect operational constraints likely to 
necessitate non-economic dispatch at certain units.
    EPA is proposing revisions to Mississippi's state ozone season 
NOX budget based on information demonstrating that the 
Mississippi Region is an out-of-merit-order dispatch area, meaning that 
units in that area are frequently dispatched out of regional economic 
order as a result of short-run limitations on the ability to meet local 
electricity demand with generation from outside the area. Conditions in 
this out-of-merit-order dispatch area are likely to necessitate what 
would otherwise be non-economic generation at three Mississippi plants 
(Rex Brown, Gerald Andrus, and Baxter Wilson) in the immediate future. 
EPA did not consider these immediate-term conditions in its calculation 
of the Mississippi emission budget in the final Transport Rule. EPA is 
proposing to adjust Mississippi's 2012 and 2014 ozone season 
NOX emission budgets based on analysis projecting the 
minimum frequency these units will have to run in the immediate-term 
for non-economic purposes, according to data provided by the utility 
operating those units.
    For this proposal, EPA has calculated the net change in the state's 
total emissions (that inform the state budgets) to account for 
increased generation (and related emissions) from the specific units 
affected by the immediate-term non-economic constraints described 
above, as well as for a corresponding reduction in generation (and 
related emissions) at other units within the state, to maintain the 
electricity supply and demand equilibrium modeled in the final 
Transport Rule.
    EPA re-calculated the emissions from the three plants with non-
economic generation to account for the input assumption changes 
described above. These calculations yield increases to Mississippi's 
2012 and 2014 state budgets for ozone-season NOX of 2,136 
tons. See ``Technical Revisions and Adjustments to State Budgets TSD'' 
in the docket for this rulemaking for a quantitative demonstration of 
this proposed revision, as well as for the impacts this revision would 
have on the state's assurance level, new unit set-aside, and Indian 
country new unit set-

[[Page 63867]]

aside, and ``Revisions to Unit Level Allocations under the FIP'' in the 
docket for a quantitative demonstration of the effect of this revision 
on unit-level allocations under the FIP.
    (11) Increase Texas's 2012 and 2014 annual and ozone-season 
NOX budgets in accordance with a revision to the final 
Transport Rule analysis to reflect operational constraints likely to 
necessitate non-economic dispatch at certain units.
    EPA is proposing revisions to Texas's 2012 and 2014 state annual 
and ozone season NOX budgets based on information 
demonstrating that the West of the Atchafalaya Basin (WOTAB) and 
Western Regions are out-of-merit-order dispatch areas, meaning that 
units in those areas are frequently dispatched out of regional economic 
order as a result of short-run limitations on the ability to meet local 
electricity demand with generation from outside the area. Conditions in 
these out-of-merit-order dispatch areas are likely to necessitate what 
would otherwise be non-economic generation at two Texas plants (Lewis 
Creek and Sabine) in the immediate future. EPA did not consider these 
immediate-term conditions in its calculation of the Texas emission 
budgets in the final Transport Rule. EPA is proposing to adjust Texas's 
emission budgets based on analysis projecting the minimum frequency 
these units will have to run in the immediate-term for non-economic 
purposes, according to data provided by the utility operating those 
units.
    For this proposal, EPA has calculated the net change in the state's 
total emissions (that inform the state budgets) to account for 
increased generation (and related emissions) from the specific units 
affected by the immediate-term non-economic constraints described 
above, as well as for a corresponding reduction in generation (and 
related emissions) at other units within the state, to maintain the 
electricity supply and demand equilibrium modeled in the final 
Transport Rule.
    EPA re-calculated the emissions from the two plants with non-
economic generation to account for the input assumption changes 
described above. These calculations yield increases to Texas's 2012 and 
2014 state budgets for annual NOX of 1,375 tons and ozone-
season NOX of 1,375 tons. See ``Technical Revisions and 
Adjustments to State Budgets TSD'' in the docket for this rulemaking 
for a quantitative demonstration of this proposed revision, as well as 
for the impacts this revision would have on the state's assurance 
level, new unit set-aside, and Indian country new unit set-aside, and 
``Revisions to Unit Level Allocations under the FIP'' in the docket for 
a quantitative demonstration of the effect of this revision on unit-
level allocations under the FIP.
    (12) Increase Florida's 2012 ozone-season NOX budget in 
accordance with a revision to the final Transport Rule analysis to 
reflect the unavailability of Crystal River Unit 3, a nuclear unit.
    EPA's power sector analysis in the final Transport Rule that 
informed its calculation of Florida's state ozone-season budget 
included generation from Crystal River Unit 3, a nuclear unit that has 
operated historically. However, utilities in Florida have notified EPA 
that this unit will be offline for repairs throughout 2012 and is 
expected to return to service in 2013. As such, EPA expects that the 
generation previously projected in the Transport Rule analysis from 
this unit in 2012 will necessarily have a different origin with 
different emission consequences that should be considered in the 
calculation of Florida's ozone-season NOX state budget. EPA 
has calculated that this replacement generation would yield an increase 
of 819 tons of ozone-season NOX in 2012 and is proposing to 
increase Florida's 2012 ozone-season NOX budget by 819 tons, 
accordingly. See ``Technical Revisions and Adjustments to State Budgets 
TSD'' in the docket for this rulemaking for a quantitative 
demonstration of this proposed revision, as well as for the impacts 
this revision would have on the state's assurance level, new unit set-
aside, and Indian country new unit set-aside, and ``Revisions to Unit 
Level Allocations under the FIP'' in the docket for a quantitative 
demonstration of the effect of this revision on unit-level allocations 
under the FIP.
    EPA has also received and is making available in the public docket 
for this proposal additional unit-level information provided by Florida 
utilities addressing assumptions of each unit's ability to control 
ozone-season NOX. EPA requests comment on all aspects of the 
data in the docket, including whether the emission data provided in 
this information is a more accurate representation of achievable 
NOX emission rates in 2012, and whether using this data 
would be consistent with the methodology used in the Transport Rule. 
EPA specifically requests comment on whether this information could 
support a further revision to the state's ozone-season NOX 
budget, and if so, how such a revision should be calculated. See 
``Information Submitted by Florida Utilities'' in the docket for this 
rulemaking.
    Further Explanation on Revisions and Request for Comments. All of 
the proposed revisions to state budgets and new unit set-asides 
described above would correspondingly affect unit-level allowance 
allocations in the states involved. Specifically, any changes to the 
levels of new unit set-asides or state budgets would be carried through 
to unit-level allocations based on the final Transport Rule allocation 
methodology for existing units (including any amendments made to 
specific unit-level allocations in this rulemaking, described below). 
For example, if a state budget would increase, then the share of that 
increase going to existing units would be apportioned based on the 
final Transport Rule's allocation methodology to existing units (aside 
from specific unit-level allocation adjustments included in this 
proposal pertinent to utility consent decrees, discussed below in 
section III.B of this preamble). Unit-level allocations to potential 
covered sources under the Transport Rule have been updated to reflect 
all of the proposed revisions described in this proposal and are set 
forth in the ``Revisions to Unit Level Allocations under the FIP'' TSD 
in the docket for this rulemaking.
    EPA evaluated the likely air quality impacts of the revisions 
presented above using the air quality assessment tool, on a state-by-
state and case-by-case basis, for the SO2 budget increases 
in 2014 for Texas, New York, and Wisconsin, and compared those 
estimates to the final Transport Rule air quality analysis. The results 
do not change the conclusions that EPA made about the appropriateness 
of controlling upwind emissions at the cost-effective thresholds 
selected in the final Transport Rule to successfully quantify and 
eliminate significant contribution to nonattainment and interference 
with maintenance at downwind receptors. For more information, this 
evaluation can be found in the ``Significant Contribution Assessment 
Technical Support Document'' in the docket for this rulemaking.
    For this proposal, EPA also assessed this proposal's revisions to 
annual NOX and ozone-season NOX state budgets 
against each state's total NOX emission inventories which 
informed the air quality projections in the final Transport Rule 
analysis. The annual NOX budget increases for Michigan, 
Nebraska, New Jersey, New York, Texas, and Wisconsin are 5,228, 3,599, 
112, 3,485, 1,375 and 2,473 tons, respectively. Comparing those budget 
increases to the total 2014 annual NOX emission inventories 
in those states under the final Transport Rule's control

[[Page 63868]]

scenario analysis, EPA calculates that these revisions represent 
increases of 1.2 percent, 2.1 percent, 0.1 percent, 0.8 percent, 0.1 
percent, and 1.0 percent, respectively, of the total annual 
NOX emission inventories for those states in the final 
Transport Rule's 2014 control scenario analysis. See the ``Significant 
Contribution Assessment TSD'' in the docket for this rulemaking for 
more details. These increases represent only a small portion of each 
state's total NOX emissions.
    The ozone-season NOX budget increases in 2014 for 
Louisiana, Mississippi, New Jersey, New York, and Texas are 4,231, 
2,136, 195, 1,911, and 1,375 tons, respectively. Comparing those budget 
increases to the total 2014 ozone-season NOX emission 
inventories in those states under the final Transport Rule's control 
scenario analysis, EPA calculates that these revisions represent 
increases of 2.2 percent, 2.4 percent, 0.2 percent, 1.0 percent, and 
0.2 percent, respectively, of the total ozone-season NOX 
emission inventories for those states in the final Transport Rule's 
2014 control scenario analysis. See the ``Significant Contribution 
Assessment TSD'' in the docket for this rulemaking for more details. 
These increases represent only a small portion of each state's total 
ozone-season NOX emissions.
    EPA requests comment on the revised unit-level and utility-system 
operational information described above and on the corresponding 
proposed revisions in state budgets, variability limits, new unit set-
asides, Indian country new unit set-asides, and unit-level allocations 
resulting from the application of such revised information using the 
methodologies set forth in the final Transport Rule for developing 
state budgets, variability limits, new unit set-asides, Indian country 
new unit set-asides, and unit-level allocations. EPA is not requesting 
comment on those methodologies set forth in the final Transport Rule. 
For example, EPA is not seeking comment on the methodology by which 
existing unit allocations are determined with regard to any given 
Transport Rule state budget.\3\
---------------------------------------------------------------------------

    \3\ Further, EPA notes that the proposed rule text includes 
tables that are complete in that they show, for each Transport Rule 
trading program, both (i) The amounts for certain state budgets, new 
unit set-asides, Indian country set-asides, and state variability 
limits that reflect proposed revisions discussed in this notice; and 
(ii) the amounts for other state budgets, new unit set-asides, 
Indian country set-asides, and state variability limits amounts that 
do not reflect any proposed revisions discussed in this notice. 
Except as discussed below in this section of the notice, EPA is not 
requesting comment on those budgets, new unit set-asides, Indian 
country set-asides, and variability limits that are shown in the 
proposed rule text tables but that do not reflect the proposed 
revisions discussed in this notice. For example, the budget and new 
unit set-aside revisions discussed in this section of the notice 
involve only a limited number of states (i.e., Arkansas, Florida, 
Louisiana, Michigan, Mississippi, Nebraska, New Jersey, New York, 
Texas, and Wisconsin). Except as discussed below in this section of 
the notice, EPA is not reopening, or requesting comment on, amounts 
in the proposed rule text tables for any other states. By further 
example, this section of the notice discusses a revision of 
Arkansas' new unit set-aside, but not of Arkansas' budget. Except as 
discussed below in this section of the notice, EPA is not requesting 
comment on the amount of Arkansas' budget.
---------------------------------------------------------------------------

    Moreover, EPA recognizes that parties may be aware of other 
immediate-term unit-specific operational constraints not accounted for 
in the final Transport Rule whose inclusion may warrant revisions in 
state budgets, with associated revisions to the state assurance levels 
and unit-level allocations for existing units. EPA has already provided 
several opportunities--through the proposed Transport Rule and 
subsequent notices of data availability--for the public, including 
stakeholders, to present unit-level information demonstrating 
constraints on immediate-term operations. However, EPA will accept--by 
the deadline for comment on this proposal--submission of additional 
unit-level operational information that would have a material impact on 
the calculation of Transport Rule state budgets (with associated 
impacts on corresponding assurance levels and unit-level allocations 
for existing units). For this purpose, EPA intends a ``material 
impact'' to reflect a corresponding recalculation of the relevant state 
budget that would be at least 1 percent different from that budget's 
value as calculated in the final Transport Rule (76 FR 48208, August 8, 
2011). EPA remains focused on successful implementation of the 
Transport Rule programs and does not believe that a change of less than 
1 percent in a state's budget would be a meaningful action to further 
this goal. As a result, EPA encourages commenters to consider whether 
or not revisions to a given unit's or group of units' input assumptions 
would yield a material impact of at least a 1 percent difference in the 
calculation of the relevant state budget before submitting this 
information to EPA for review.
    EPA is therefore accepting for review information provided in 
comments on this rulemaking specifically addressing the following 
topics for specific electric generating units:
    (1) Post-combustion pollution control equipment (such as SCRs and 
FGDs) assumed in the final Transport Rule analyses to be present by 
2012 at the unit in question; and/or
    (2) Immediate-term (i.e., binding on 2012) operational requirements 
necessitating non-economic generation at the unit in question, 
including data that demonstrate why the unit in question is required to 
generate in the immediate term for reasons other than the regional 
economic sale of electricity, and how often during the ozone season and 
during the calendar year that such non-economic generation is 
necessitated from that unit.
    EPA will review information provided in comments addressing the 
topics described above and will determine if any of the information 
merits a subsequent proposal of revisions to the Transport Rule 
programs beyond the actions presented in this proposal.

B. Allowance Allocation Revisions to Units Covered by Existing Utility 
Consent Decrees

    After the final Transport Rule was published, EPA determined that 
while the state budgets accurately incorporated the emission reduction 
requirements of existing utility consent decrees, the unit-level 
allowance allocations under the Transport Rule FIPs did not properly 
account for provisions in those consent decrees that effectively 
require the surrender, or restrict the trading, of ``excess'' Transport 
Rule allowances. As a result, Transport Rule allowance allocations to 
certain units may unintentionally reduce the availability of some of 
those allowances to other sources, given the restrictions on the use of 
those allowances by the initial recipient unit imposed by the 
applicable consent decree.
    In today's action, EPA is proposing to add a constraint on 
Transport Rule unit-level allowance allocations designed to reflect the 
maximum allowable emissions at the units affected by existing utility 
consent decrees which contain annual tonnage limits and require the 
surrender or restrict trading of Transport Rule allowances allocated in 
excess of annual tonnage limits. See ``Assessment of Impact of Consent 
Decree Annual Tonnage Limits on Transport Rule Allocations TSD'' in the 
docket for this rulemaking for information on the consent decrees 
covered by the proposed addition of the new constraint for purposes of 
determining unit-level allocations.
    The addition of this constraint would align unit level allocations 
for units described in several existing Federally-enforceable consent 
decrees with the annual tonnage limits in those decrees. This 
constraint would prevent heat

[[Page 63869]]

input-based allocations from exceeding the terms of Federally-
enforceable consent decrees that contain annual tonnage limits for 
SO2 and/or NOX. Because existing consent decrees 
that establish annual tonnage limits for SO2 and/or 
NOX do so at the system or facility level, EPA calculated 
unit-level annual tonnage limit equivalents (unit-level caps) for 
purposes of allocating allowances to individual units. EPA is not 
seeking comment on any elements of the allocation methodology finalized 
in the final Transport Rule (76 FR 48288-90). Rather, EPA is seeking 
comment only on the addition of a unit-level consent decree constraint 
and unit-level cap apportionment methodology.
    The proposed additional constraint would affect unit-level 
allocations in six states--Alabama, Indiana, Kansas, Kentucky, Ohio, 
and Tennessee--with units subject to existing Federally-enforceable 
consent decree annual tonnage limits. These consent decree requirements 
have already been accounted for in the determination of budgets for 
these states. EPA is proposing to establish unit-level caps for 82 
units covered by annual tonnage limits in Federally-enforceable consent 
decrees in these six states. The addition of this constraint would not 
alter any state budget. This additional constraint also would have no 
impact on existing unit-level allocations in states that do not contain 
units covered by a Federally-enforceable consent decree with annual 
tonnage limits.
    EPA is proposing to revise the Transport Rule unit-level 
allocations for the specific units subject to these consent decrees, 
such that allowance allocations would be constrained by both historical 
emissions (as described in the final Transport Rule (76 FR 48290)) and 
a unit-level cap derived from the annual tonnage limit in the 
Federally-enforceable consent decree. Although these revisions would 
not alter the state budgets, they would have the effect of increasing 
the number of allowances within the budget that are available for use 
for compliance purposes and that would not otherwise be available 
without this proposed change to the allocation of allowances--such that 
the total number of allowances available would equal the state's 
emission budget, as intended. These proposed revisions are thus 
intended to revise the application of the final Transport Rule's unit-
level allowance allocation methodology to enable the proper 
implementation of state budgets under the programs. While EPA intends 
to perform this revision to benefit program implementation, EPA does 
not believe resolution of this issue is a necessary precondition for 
successful implementation of and compliance with the Transport Rule 
programs in 2012, as notwithstanding these proposed revisions, EPA will 
still be able to distribute 99.7 percent of all existing unit 
allowances under the state budgets established in the final Transport 
Rule by that rule's November 7 deadline. See section IV of this 
preamble for further information about allowance recordation.
    EPA calculated unit-level caps for each unit subject to an 
SO2 and/or NOX annual tonnage limit contained in 
a Federally-enforceable consent decree. A unit-level cap is an 
apportionment of the applicable system- or facility-wide consent decree 
annual tonnage limit. The apportionment of a system- or facility-wide 
consent decree annual tonnage limit to a unit level is solely for the 
purposes of Transport Rule allocations and does not modify, or create 
additional, consent decree requirements or limitations.
    EPA is not proposing to limit allocations to units covered by 
consent decrees that do not contain SO2 and or 
NOX annual tonnage limits. The Agency determined that 
calculation of unit-level caps where annual tonnage limits do not exist 
would require the use of unit-level projections whose application in 
setting unit-level allocations would be difficult to support and that, 
in any event, adjustment of unit--level allocations using such unit-
level caps would not be necessary. Calculating a unit-level cap from 
other consent decree directives would require projections about future 
utilization and emissions performance of each unit involved, increasing 
the complexity and uncertainty of the approach. Further, EPA believes 
that there are few Transport Rule allowances that might be rendered 
unavailable for compliance by the consent decrees that contain trading 
restrictions or allowance surrender requirements but that do not 
contain annual tonnage limits.
    EPA is proposing to follow a two-step methodology to identify the 
specific unit-level allocation constraints that would be associated 
with this proposed additional constraint. First, EPA would determine if 
the annual tonnage limit in an existing Federally-enforceable consent 
decree that is already reflected in a state budget is more restrictive 
than the unit-level allocations under the Transport Rule by comparing 
the Federally-enforceable consent decree annual tonnage limits for 
calendar year 2012 and thereafter to aggregate unit-level allocations 
(as determined using the approach finalized in the final Transport 
Rule) for all units affected by the annual tonnage limit. If in 2012 or 
thereafter the collective unit-level allocations are greater than the 
Federally-enforceable consent decree annual tonnage limit, EPA would 
apply unit-level caps equal, in aggregate, to the Federally-enforceable 
consent decree annual tonnage limit.
    If a unit is shut down by a Federally-enforceable consent decree 
or, in the case of SO2, repowers to natural gas or shuts 
down, the unit-level cap would be calculated as zero in any year 
following the required shut down or repower when the unit would 
otherwise receive allocations using the approach in the final Transport 
Rule (76 FR 48287 and 48289-90).
    Second, EPA would calculate unit-level caps for 2012 and thereafter 
on Transport Rule allowances for each unit covered by a system- or 
facility-wide annual tonnage limit in a Federally-enforceable consent 
decree that is more restrictive than current allocations for the units 
involved. To accomplish this, EPA would first calculate a ratio, 
expressed as a percentage, comparing the annual tonnage limit in the 
Federally-enforceable consent decree to the aggregate allocations 
listed in the ``Final Transport Rule Unit Level Allocations under the 
FIP'' (http://www.epa.gov/crossstaterule/actions.html) for units 
covered by the Federally-enforceable consent decree annual tonnage 
limit to the annual tonnage limit. EPA would then multiply this ratio 
by the unit-level allocation listed in the ``Final Transport Rule Unit 
Level Allocations under the FIP'' (http://www.epa.gov/crossstaterule/actions.html) for each unit involved. The allocations for a given year 
would be limited to this unit-level cap. As noted above, in some 
situations the unit level cap for a 2012 or thereafter would be zero if 
a Federally-enforceable consent decree requires the shutdown or 
repowering of a unit.
    An example of how EPA would determine unit level caps follows:

    Step 1--EPA determines that facility ABC consists of two units 
subject to both a Federally-enforceable consent decree annual 
tonnage limit and the Transport Rule NOX annual program. 
The consent decree system-wide annual tonnage limit is 3,000 tons in 
calendar year 2012. The NOX allowance heat input-based 
allocation (as described in the final Transport Rule (76 FR 48288-
90)) for the two units in calendar year 2012 is 4,000 allowances to 
Unit 1 and 2,000 allowances to Unit 2--a total of 6,000 allowances. 
Because the total of the allowances allocated to the two units is 
higher than the annual tonnage limit, EPA needs to calculate unit-
level caps for Unit 1 and Unit 2.
    Step 2a--The consent decree system-wide annual tonnage limit of 
3,000 tons is divided

[[Page 63870]]

by the system-wide heat input-based allocations of 6,000 tons 
resulting in a ratio of 0.5, or 50 percent.
    Step 2b--EPA calculates the unit-level cap for Unit 1 as 4,000 
allowances x 50 percent, or 2,000 allowances, and for Unit 2 as 
2,000 allowances x 50 percent, or 1,000 allowances.

    EPA would apply this additional unit-level constraint when 
calculating existing unit-level allocations under the final Transport 
Rule FIPs. This additional unit level constraint would be applied in 
steps 9 and 10 of the methodology described in the preamble to the 
final Transport Rule (76 FR 48290). This additional constraint would be 
applied in step 9 to limit allocations to existing units covered by 
consent decrees. This constraint would be applied in step 10 to ensure 
that any allowances that cannot be allocated to existing units (because 
all existing units are subject to either the constraint on maximum 
historical emissions or this additional constraint) would be directed 
to the state's new unit set aside. For example, EPA has determined 
that, if this additional constraint is finalized as proposed, all the 
units in the state of Tennessee would be constrained by either 
historical emissions or a unit-level cap for the Transport Rule 
SO2 Group 1 program in calendar years 2013, 2018, 2019, and 
each year thereafter. As described above, the new unit set aside for 
the state of Tennessee would increase in 2013, 2018, 2019, and each 
year thereafter, by 8,460, 3,173 and 5,225 tons respectively.
    EPA is not seeking comment on any aspects of the allocation 
methodology in the final Transport Rule (76 FR 48290). EPA is only 
seeking comment on the addition of the constraint described above to 
steps 9 and 10 of that methodology. See ``Assessment of Impact of 
Consent Decree Annual Tonnage Limits on Transport Rule Allocations 
TSD'' in the docket for this rulemaking for further information on the 
proposed addition of the new constraint for purposes of determining 
unit-level allocations.

C. Amend the Assurance Penalty Provisions To Make Them Effective 
Starting in 2014

    EPA is also proposing in this action to amend the effective date of 
the Transport Rule assurance provisions to make them effective 
beginning on January 1, 2014. During outreach discussions with various 
stakeholders, the application of assurance penalties at the outset of 
the program has been raised as a major concern for compliance and 
market development in the early years of the program. Several 
stakeholders have expressed concern that Transport Rule allowance 
market development may be delayed by uncertainty over how each state 
will transition from 2010 and 2011 emission levels to meet the 
projected Transport Rule assurance levels in 2012 and 2013.
    Under the assurance provisions, a state's emissions for any control 
period in a given year must not exceed the state assurance level, i.e., 
the state budget plus the state's variability limit. In order to 
implement this requirement, EPA first determines whether, for the 
control period, any state's total emissions exceeded the state's 
assurance level. If a state had emissions exceeding the state assurance 
level, then EPA applies additional criteria to determine which owners 
and operators of units in the state will be subject to the assurance 
penalty, which is a requirement to surrender additional allowances. In 
applying the additional criteria, EPA identifies which groups of units 
with a common designated representative (DR) in the state had emissions 
exceeding the respective common DR's share of the state assurance 
level, and calculates what percentage each such group's emissions above 
the common DR's share comprise of the state's emissions above the state 
assurance level. The assurance penalty applied to the owners and 
operators of each of those groups of units is the surrender of an 
amount of allowances equal to the state's emissions above the state 
assurance level multiplied by the group's percentage and multiplied by 
two (in order to reflect the penalty of two allowances for each ton of 
the state's excess emissions). EPA implements the assurance penalty 
provisions through a series of notices of data availability that make 
available the necessary calculations and provide an opportunity for 
public objections to the calculations. The requirements that owners and 
operators comply with the assurance provisions, including where 
appropriate the assurance penalty, and the procedures followed by the 
Administrator are set forth in 40 CFR 97.406(c)(2) and 97.425 (for the 
TR NOX annual program), 97.506(c)(2) and 97.525 (for the TR 
NOX ozone season program), 97.606(c)(2) and 97.625 (for the 
TR SO2 Group 1 program), and 97.706(c)(2) and 97.725 (for 
the TR SO2 Group 2 program).
    EPA proposes to determine that amending the assurance provisions to 
take effect starting in 2014 is appropriate. EPA believes that a 
limited postponement of the effectiveness of these provisions is 
justified in order to smooth the transition from the existing CAIR 
programs to the new Transport Rule programs.
    In line with the Court's remand of CAIR, EPA designed the Transport 
Rule to achieve necessary emission reductions by relevant NAAQS 
attainment deadlines and to ensure that necessary reductions will be 
achieved within each covered state. As explained in the final Transport 
Rule, EPA determined that it was appropriate for the Transport Rule 
programs to address emissions in 2012 and beyond in order to ensure 
that the deadlines in the rule were aligned, as legally required, with 
the downwind nonattainment deadlines (76 FR 48277-48279). CAIR remains 
in effect to address emissions through the end of the 2011 control 
periods, and the Transport Rule programs address emissions in 2012 and 
beyond.
    EPA took several steps in the final Transport Rule to ease the 
transition from the CAIR programs to the Transport Rule trading 
programs.
    The Transport Rule maintains programmatic elements that were 
successfully implemented and recognizable to sources from compliance 
experiences under CAIR while also addressing that rule's legal 
shortcomings identified by the Court. Under both CAIR and the Transport 
Rule, individual units have the flexibility to supplement their own 
emission reductions with the acquisition from the marketplace of any 
additional allowances needed to cover emissions under the Transport 
Rule programs. Robust markets (e.g., markets with a high level of 
liquidity and accessibility of price information) for the CAIR annual 
NOX, CAIR ozone-season NOX, and Acid Rain 
(SO2) program allowances have been in existence for many 
years. Sources covered by CAIR have relied on the availability of these 
robust markets when developing compliance plans. The Transport Rule 
(TR) creates new TR SO2 Group 1, TR SO2 Group 2, 
TR NOX, and TR ozone-season NOX allowances. 
Markets for these allowances are developing now, and EPA is beginning 
to record the allowances in allowance accounts and introduce the 
allowances into the marketplace over a year before the Transport Rule 
programs' first compliance deadlines (December 1, 2012, for the 2012 
ozone-season NOX program, and March 1, 2013, for the 2012 
annual NOX and SO2 programs). However, with the 
allocation revisions proposed in this rulemaking and the potential for 
additional revisions based on additional information that might be 
submitted in response to this rulemaking, some allowances would be 
recorded and introduced into the marketplace at later dates.

[[Page 63871]]

    Based on observed compliance planning behavior among sources 
anticipating the 2012 control periods, and in light of the proposed 
revisions in this rulemaking and the potential for additional revisions 
based on additional information, EPA believes that amending the 
effective date of the assurance provisions to apply in 2014 would ease 
the transition from CAIR to Transport Rule compliance for parties 
across the board by promoting the liquidity of, and accessibility of 
price information in, new Transport Rule allowance markets and 
instilling confidence that utilities can flexibly comply through a 
variety of unit-level operational strategies that are not limited by 
initial Transport Rule unit-level allowance allocations.
    EPA believes that this change would accelerate the development of 
robust Transport Rule allowance markets and facilitate a smooth 
transition to the Transport Rule programs. If, in response to concerns 
about when robust markets will develop, utilities were to artificially 
constrain 2012 operational plans to not exceed initially allocated 
allowances, the volume of early trading activity might be unnecessarily 
limited. Early trading activity is important for demonstrating market 
liquidity and assisting in price discovery to inform compliance 
planning by affected sources. Actions by utilities to limit early 
trading activity, therefore, could have negative impacts not only on 
those utilities, but on all participants in the Transport Rule trading 
programs. EPA believes that amending the effectiveness of the assurance 
provisions in 2012 and 2013 would encourage greater confidence among 
utilities for engaging immediately in cost-effective compliance 
planning that takes into account the flexibility of a robust market for 
acquiring allowances to cover emissions to the extent use of allowances 
is the most economic approach for compliance under the Transport Rule 
programs.
    Amending the assurance provisions would not affect, in any way, the 
requirements of the rule in 2014 and beyond. EPA is proposing only a 
short postponement of the assurance penalty provisions to ensure a 
smooth transition from CAIR to the Transport Rule programs. EPA 
believes that, notwithstanding postponement of the assurance penalty 
provisions, the states covered by the Transport Rule programs will 
still achieve the emission reductions in 2012 and 2013 necessary to 
eliminate each state's significant contribution to nonattainment and 
interference with maintenance identified in the final Transport Rule 
(with the revisions included in this proposal). The highly detailed 
state-specific bases on which individual state budgets were determined 
using the approach and methodologies developed in the final Transport 
Rule, and included in the record for the Transport Rule, together with 
the derivation of the variability limits from historic data reflecting 
state-level year-to-year variation in power sector emissions, support 
EPA's belief. EPA noted in the Transport Rule proposal that knowledge 
about installed air pollution control equipment ``* * * provides 
greater certainty of where [near-term] reductions will occur and how 
these reductions should impact air quality in downwind areas. * * * 
Consequently, EPA believes that there is a high level of certainty that 
emissions reductions projected for 2012-2013 with interstate trading 
would be achieved within the states where they are projected to occur, 
making imposition of the assurance provisions during 2012-2013 
unnecessary'' (75 FR 45314-45315).
    In the final Transport Rule, EPA did not disavow the proposal's 
rationale for starting the assurance provisions in 2014; however, the 
Agency chose to make the assurance provisions effective starting in 
2012 with the intent to err on the side of providing ``even further 
assurance'' of securing the targeted emission reductions in upwind 
states (76 FR 48296). EPA, therefore, has never concluded that starting 
the assurance provisions in 2014 would fail to meet the 110(a)(2)(D) 
obligation to eliminate significant contribution or interference with 
maintenance in 2012 and 2013. Moreover, this proposal's revisions to 
pollution control technology assumptions involve only 17 units of the 
approximately 3,600 units whose known controls inform the Transport 
Rule budgets. EPA continues to believe that, because the immediate-term 
Transport Rule state budgets for 2012 and 2013 (in contrast with the 
budgets for 2014 and thereafter) are uniquely based on the ability of 
the known existing fleet of EGUs and known existing or soon-to-be-
installed pollution control equipment to deliver emission reductions in 
specific upwind states, there is a high level of certainty that the 
state assurance levels will not be exceeded in 2012 and 2013. EPA 
believes that this near-term certainty allows the Agency to postpone 
the effectiveness of the Transport Rule's assurance penalty provisions 
until 2014 without sacrificing the Transport Rule's ability to ensure 
necessary near-term emission reductions in each upwind state, supported 
by the calculation of each upwind state's emission reduction potential 
(informing the determination of state budgets) under the rule.
    With the proposed, temporary postponement of the assurance 
provisions, EPA believes that, in the near term (as well as in the long 
term), Transport Rule allowance markets would provide compliance 
flexibility at the unit level and incentivize cost-effective, unit-
level emission reductions. In the aggregate, these flexibilities and 
reductions at the unit level would result in achievement in each state 
of the state-level cost-effective emission reductions projected in the 
final Transport Rule (with the revisions included in this proposal). In 
other words, EPA is only proposing to postpone temporarily the 
assurance penalty provisions to address the ability of owners and 
operators of individual units to make the cost-effective emission 
reductions in 2012 and 2013 on which EPA's state-level emission 
projections relied in determining each state's amount of significant 
contribution and interference with maintenance under the final 
Transport Rule. Consequently, EPA believes that this proposal to 
postpone temporarily the assurance provisions will not yield 
substantially different state-level emission outcomes under the 
Transport Rule programs in 2012 or 2013 than the state-level emissions 
reflected in the state-specific budgets and assurance levels in the 
respective Transport Rule program.
    EPA believes that a two year postponement of the effective date of 
the assurance penalty provisions is sufficient to guarantee robust 
market development, is consistent with the DC Circuit's decision 
leaving CAIR in place during the transition to a new rule, and will not 
interfere with the air quality objectives of the program. EPA does not, 
at this time, believe a longer postponement would be justified. EPA 
requests comment on all aspects of this proposal including the length 
of the postponement.
    Since under this proposal, the assurance provisions would continue 
to be effective for 2014 and thereafter, EPA maintains that the 
Transport Rule, revised consistent with this proposal, would continue 
to address and meet the Court's concerns in North Carolina.
    Any revisions to state budgets from this proposal that are 
finalized would also include corresponding revisions to the relevant 
assurance levels that would apply in 2014 with this proposed 
postponement.

D. Correct Typographical Errors

    EPA is proposing to correct typographical errors in certain 
sections

[[Page 63872]]

of rule text in parts 52 and 97 in the final Transport Rule. 
Specifically, EPA proposes to change an erroneous reference in 40 CFR 
52.39(i)(1)(ii) to ``TR SO2 Group 1 allowances'' to refer 
instead to ``TR SO2 Group 2 allowances'' and to redesignate 
sections 52.745 and 52.746 in 40 CFR part 52, subpart O as sections 
52.731 and 52.732 and redesignate section 52.2241 in 40 CFR part 52, 
subpart VV as section 52.2441. EPA also proposes to remove some 
redundant words in 40 CFR 97.406(e)(2), 97.606(e)(2), and 97.706(E)(2). 
EPA requests comment concerning only the specific corrections and not 
concerning any other aspect of the provisions in which these 
corrections would be made.

IV. Recordation of Transport Rule Allowances

Impacts on Allocations to Existing Units

    EPA recognizes that successful implementation of the Transport Rule 
programs in 2012 depends in part on the development of robust allowance 
markets, in which covered sources can locate and purchase any 
additional allowances necessary to comply with the rule. As such, EPA 
intends to allocate as many 2012 Transport Rule allowances as possible 
as early as possible to assist implementation and compliance planning. 
While none of the actions presented in this proposal would reduce any 
state's total number of allowances issued under that state's budgets, 
some of the actions presented in this proposal would slightly alter 
unit level allocations. For example, as described above, allocations to 
certain units covered by consent decrees would be limited. EPA does not 
believe it would be prudent or reasonable to record in allowance 
accounts, before taking final action on this proposal, allowance 
allocations in excess of the amount any given unit would receive if 
this proposal is finalized as proposed. EPA will record by November 7, 
2011 for each unit, the lesser of the amount that unit would receive 
under the allocation scheme finalized in the Transport Rule or the 
amount the unit would receive if this proposal is finalized as 
proposed. This approach will allow EPA to allocate over 99.7 percent of 
all existing unit allowances under the state budgets established in the 
final Transport Rule by that rule's November 7 deadline (76 FR 48398, 
48424, 48450, and 48475, August 8, 2011). During this timeframe, the 
only units that will receive substantially fewer allowances under this 
approach than under the allocations as finalized in the Transport Rule 
are units already subject to legally binding consent decrees that limit 
their emissions; therefore, EPA does not believe this approach will 
have any negative impact on compliance planning at sources in 
anticipation of the implementation of the Transport Rule programs. EPA 
is proposing to allocate the remaining 0.3 percent of the allowances no 
later than 7 days after finalization of this action is legally 
effective. In addition, if EPA finalizes the proposed actions that 
yield increases to state budgets, the Agency will act swiftly to record 
these additional allowances and thereby put them into the marketplace 
as quickly as possible following this rule's finalization, so that the 
allowances would be available significantly in advance of the 
compliance deadlines for the 2012 control periods (i.e., the allowance 
transfer deadlines of December 1, 2012 (for the NOX ozone 
season program) and March 1, 2013 (for the NOX and 
SO2 annual programs)). See the ``Transport Rule Allowance 
Recordation Schedule TSD'' in the docket for this rulemaking for a 
demonstration of how many allowances EPA will record by November 7, 
2011 in each state.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is a ``significant regulatory action.'' Accordingly, EPA 
submitted this action to the Office of Management and Budget (OMB) for 
review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 
2011) and any changes made in response to OMB recommendations have been 
documented in the docket for this action.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
This action makes relatively minor revisions to the emission budgets 
and allowance allocations or allowance allocations only in certain 
states in the final Transport Rule and corrects minor technical errors 
which are ministerial. However, the Office of Management and Budget 
(OMB) has previously approved the information collection requirements 
contained in the final Transport Rule under the provisions of the 
Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB 
control number 2060-0667. The OMB control numbers for EPA's regulations 
in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of today's action on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. The small 
entities directly regulated by this action are electric power 
generators whose ultimate parent entity has a total electric output of 
4 million megawatt-hours (MWh) or less in the previous fiscal year. We 
have determined that the changes considered in this proposed rulemaking 
pose no additional burden for small entities. The proposed revision to 
the new unit set-asides in Arkansas and Texas would yield an extremely 
small change in unit-level allowance allocations to existing units, 
including small entities, such that it would not affect the analysis 
conducted on small entity impacts under the finalized Transport Rule. 
In all other states, the revisions proposed in this rulemaking would 
yield additional allowance allocations to all units, including small 
entities, without increasing program stringency, such that it is not 
possible for the impact to small entities to be any larger than that 
already considered and reviewed in the finalized Transport Rule.

D. Unfunded Mandates Reform Act

    This action does not contain a Federal mandate that may result in 
expenditures of $100 million or more for State, local, and Tribal 
governments, in the aggregate, or the private sector in any

[[Page 63873]]

one year. This action is increasing the budgets and increasing the 
total number of allowances or maintaining the same budget but revising 
unit-level allocations in several other states in the Transport Rule. 
Thus, this rule is not subject to the requirements of sections 202 or 
205 of UMRA.
    In developing the final Transport Rule, EPA consulted with small 
governments pursuant to a plan established under section 203 of UMRA to 
address impacts of regulatory requirements in the rule that might 
significantly or uniquely affect small governments.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will 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. This action makes relatively minor 
revisions to the emissions budgets and allowance allocations or 
allowance allocations only in certain states in the final Transport 
Rule. Thus, Executive Order 13132 does not apply to this rule. EPA did 
provide information to state and local officials during development of 
both the proposed and final Transport Rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have Tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). This action 
makes relatively minor revisions to the emissions budgets and allowance 
allocations in several states in the final Transport Rule and helps 
ease the transition from CAIR. Indian country new unit set-asides will 
increase slightly or remain unchanged in the states affected by this 
action. Thus, Executive Order 13175 does not apply to this action. EPA 
consulted with Tribal officials during the process of promulgating the 
final Transport Rule to permit them to have meaningful and timely input 
into its development.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    This action is not subject to EO 13045 (62 FR 19885, April 23, 
1997) because it is not economically significant as defined in EO 
12866, and because the Agency does not believe the environmental health 
or safety risks addressed by this action present a disproportionate 
risk to children. Analyses by EPA that show how the emission reductions 
from the strategies in the final Transport Rule will further improve 
air quality and children's health can be found in the final Transport 
Rule RIA.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. EPA believes that there is no 
meaningful impact to the energy supply beyond that which is reported 
for the Transport Rule program in the final Transport Rule.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. NTTAA directs EPA to 
provide Congress, through OMB, explanations when the Agency decides not 
to use available and applicable voluntary consensus standards.
    As described in section XII.I of the preamble to the final 
Transport Rule, the Transport Rule program requires all sources to meet 
the applicable monitoring requirements of 40 CFR part 75. Part 75 
already incorporates a number of voluntary consensus standards. This 
action, however, does not involve technical standards. Therefore, EPA 
did not consider the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
Federal executive policy on environmental justice. Its main provision 
directs Federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this action will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it does not 
affect the level of protection provided to human health or the 
environment. EPA believes that the vast majority of communities and 
individuals in areas covered by the Transport Rule program inclusive of 
this action, including numerous low-income, minority, and Tribal 
individuals and communities in both rural areas and inner cities in the 
eastern and central U.S., will see significant improvements in air 
quality and resulting improvements in health. EPA's assessment of the 
effects of the final Transport Rule program on these communities is 
detailed in section XII.J of the preamble to the final Transport Rule.

List of Subjects

40 CFR Part 52

    Administrative practice and procedure, Air pollution control, 
Incorporation by reference, Intergovernmental relations, Nitrogen 
oxides, Ozone, Particulate matter, Regional haze, Reporting and 
recordkeeping requirements, Sulfur dioxide.

40 CFR Part 97

    Administrative practice and procedure, Air pollution control, 
Electric utilities, Nitrogen oxides, Reporting and recordkeeping 
requirements, Sulfur dioxide.

    Dated: October 6, 2011.
Lisa P. Jackson,
Administrator.

    For the reasons set forth in the preamble, parts 52 and 97 of 
chapter I of title 40 of the Code of Federal Regulations are proposed 
to be amended as follows:

PART 52--[AMENDED]

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

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

Subpart A--General Provisions


Sec.  52.39  [Amended]

    2. In Sec.  52.39 amend paragraph (i)(1)(ii) by removing the words 
``Group 1'' and adding, in their place, the words ``Group 2''.

[[Page 63874]]

Subpart O--Illinois


Sec.  52.745  [Redesignated as Sec.  52.731]

    3. Section 52.745, as published at 76 FR 48363, August 8, 2011, is 
redesignated as Sec.  52.731.


Sec.  52.746  [Redesignated as Sec.  52.732]

    4. Section 52.746 is redesignated as Sec.  52.732.

Subpart VV--Virginia


Sec.  52.2241  [Redesignated as Sec.  52.2441]

    5. Section 52.2241, as published at 76 FR 48376, August 8, 2011, is 
redesignated as Sec.  52.2441.

PART 97--[AMENDED]

    6. The authority citation for Part 97 continues to read as follows:

    Authority:  42 U.S.C. 7401, 7403, 7410, 7426, 7601, and 7651, et 
seq.

    7. Section 97.406 is amended:
    a. In paragraph (c)(3) by removing the words ``paragraphs (c)(1) 
and (2)'', adding in their place the words ``paragraph (c)(1)'' and 
designating the first sentence as paragraph (c)(3)(i);
    b. By adding a new paragraph (c)(3)(ii); and
    c. In paragraph (e)(2) by removing the words ``or or'' and adding, 
in their place, the word ``or''.
    The addition reads as follows:


Sec.  97.406  Standard requirements.

* * * * *
    (c) * * *
    (3) * * *
    (ii) A TR NOX Annual unit shall be subject to the 
requirements under paragraph (c)(2) of this section for the control 
period starting on the later of January 1, 2014 or the deadline for 
meeting the unit's monitor certification requirements under Sec.  
97.430(b) and for each control period thereafter.
* * * * *
    8. Section 97.410 is revised to read as follows:


Sec.  97.410  State NOX Annual trading budgets, new unit set-asides, 
Indian country new unit set-aside, and variability limits.

    (a) The State NOX Annual trading budgets, new unit set-
asides, and Indian country new unit set-asides for allocations of TR 
NOX Annual allowances for the control periods in 2012 and 
thereafter are as follows:

----------------------------------------------------------------------------------------------------------------
                                          NOX Annual trading       New unit set-aside    Indian country new unit
                State                  budget (tons)* for 2012    (tons) for 2012 and      set-aside (tons) for
                                               and 2013                   2013                2012 and 2013
----------------------------------------------------------------------------------------------------------------
Alabama..............................                   72,691                    1,454  .......................
Georgia..............................                   62,010                    1,240  .......................
Illinois.............................                   47,872                    3,830  .......................
Indiana..............................                  109,726                    3,292  .......................
Iowa.................................                   38,335                      729                       38
Kansas...............................                   30,714                      583                       31
Kentucky.............................                   85,086                    3,403  .......................
Maryland.............................                   16,633                      333  .......................
Michigan.............................                   65,421                    1,243                       65
Minnesota............................                   29,572                      561                       30
Missouri.............................                   52,374                    1,571  .......................
Nebraska.............................                   30,039                     1772                       30
New Jersey...........................                    7,686                      154  .......................
New York.............................                   21,028                      400                       21
North Carolina.......................                   50,587                    2,984                       51
Ohio.................................                   92,703                    1,854  .......................
Pennsylvania.........................                  119,986                    2,400  .......................
South Carolina.......................                   32,498                      617                       33
Tennessee............................                   35,703                      714  .......................
Texas................................                  134,970                    5,264                      135
Virginia.............................                   33,242                    1,662  .......................
West Virginia........................                   59,472                    2,974  .......................
Wisconsin............................                   34,101                    2,012                       34
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                          NOX Annual trading       New unit set-aside    Indian country new unit
                State                  budget (tons)* for 2014    (tons) for 2014 and      set-aside (tons) for
                                            and thereafter             thereafter          2014 and thereafter
----------------------------------------------------------------------------------------------------------------
Alabama..............................                   71,962                    1,439  .......................
Georgia..............................                   40,540                      811  .......................
Illinois.............................                   47,872                    3,830  .......................
Indiana..............................                  108,424                    3,253  .......................
Iowa.................................                   37,498                      712                       38
Kansas...............................                   25,560                      485                       26
Kentucky.............................                   77,238                    3,090  .......................
Maryland.............................                   16,574                      331  .......................
Michigan.............................                   63,040                    1,198                       63
Minnesota............................                   29,572                      561                       30
Missouri.............................                   48,717                    1,462  .......................
Nebraska.............................                   30,039                    1,772                       30
New Jersey...........................                    7,378                      148  .......................
New York.............................                   21,028                      400                       21
North Carolina.......................                   41,553                    2,451                       42
Ohio.................................                   87,493                    1,750  .......................
Pennsylvania.........................                  119,194                    2,384  .......................
South Carolina.......................                   32,498                      617                       33
Tennessee............................                   19,337                      387  .......................
Texas................................                  134,970                    5,264                      135

[[Page 63875]]

 
Virginia.............................                   33,242                    1,662  .......................
West Virginia........................                   54,582                    2,729  .......................
Wisconsin............................                   32,871                    1,939                       33
----------------------------------------------------------------------------------------------------------------
* Each trading budget includes the new unit set-aside and, where applicable, the Indian country new unit set-
  aside and does not include the variability limit.

    (b) The States' variability limits for the State NOX 
Annual trading budgets for the control periods in 2014 and thereafter 
are as follows:

------------------------------------------------------------------------
                                                           Variability
                         State                           limits for 2014
                                                         and thereafter
------------------------------------------------------------------------
Alabama...............................................            12,953
Georgia...............................................             7,297
Illinois..............................................             8,617
Indiana...............................................            19,516
Iowa..................................................             6,750
Kansas................................................             4,601
Kentucky..............................................            13,903
Maryland..............................................             2,983
Michigan..............................................            11,347
Minnesota.............................................             5,323
Missouri..............................................             8,769
Nebraska..............................................             5,407
New Jersey............................................             1,328
New York..............................................             3,785
North Carolina........................................             7,480
Ohio..................................................            15,749
Pennsylvania..........................................            21,455
South Carolina........................................             5,850
Tennessee.............................................             3,481
Texas.................................................            24,295
Virginia..............................................             5,984
West Virginia.........................................             9,825
Wisconsin.............................................             5,917
------------------------------------------------------------------------

Sec.  97.425  [Amended]

    9. Section 97.425 is amended in paragraph (b)(1) by removing the 
figure ``2013'' and adding in its place the figure ``2015''.
    10. Section 97.506 is amended:
    a. In paragraph (c)(3) by removing the words ``paragraphs (c)(1) 
and (2)'', adding in their place the words ``paragraph (c)(1)'' and 
designating the first sentence as paragraph (c)(3)(i); and
    b. Adding a new paragraph (c)(3)(ii).
    The addition reads as follows:


Sec.  97.506  Standard requirements.

* * * * *
    (c) * * *
    (3) * * *
    (ii) A TR NOX Ozone Season unit shall be subject to the 
requirements under paragraph (c)(2) of this section for the control 
period starting on the later of May 1, 2014 or the deadline for meeting 
the unit's monitor certification requirements under Sec.  97.530(b) and 
for each control period thereafter.
* * * * *
    11. Section 97.510 is revised to read as follows:


Sec.  97.510  State NOX Ozone Season trading budgets, new unit set-
asides, Indian country new unit set-aside, and variability limits.

    (a) The State NOX Ozone Season trading budgets, new unit 
set-asides, and Indian country new unit set-asides for allocations of 
TR NOX Ozone Season allowances for the control periods in 
2012 and thereafter are as follows:

----------------------------------------------------------------------------------------------------------------
                                           NOX Ozone Season        New unit set-aside    Indian country new unit
                State                  trading budget (tons) *    (tons) for 2012 and      set-aside (tons) for
                                          for 2012 and 2013               2013                2012 and 2013
----------------------------------------------------------------------------------------------------------------
Alabama..............................                   31,746                      635  .......................
Arkansas.............................                   15,037                      752  .......................
Florida..............................                   28,644                      544                       29
Georgia..............................                   27,944                      559  .......................
Illinois.............................                   21,208                    1,697  .......................
Indiana..............................                   46,876                    1,406  .......................
Kentucky.............................                   36,167                    1,447  .......................
Louisiana............................                   17,663                      512                       18
Maryland.............................                    7,179                      144  .......................
Mississippi..........................                   12,296                      234                       12
New Jersey...........................                    3,974                       79  .......................
New York.............................                   10,242                      195                       10
North Carolina.......................                   22,168                    1,308                       22
Ohio.................................                   40,063                      801  .......................
Pennsylvania.........................                   52,201                    1,044  .......................
South Carolina.......................                   13,909                      264                       14
Tennessee............................                   14,908                      298  .......................
Texas................................                   64,418                    2,513                       64
Virginia.............................                   14,452                      723  .......................
West Virginia........................                   25,283                    1,264  .......................
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                           NOX Ozone Season        New unit set-aside    Indian country new unit
                State                  trading budget (tons) *    (tons) for 2014 and      set-aside (tons) for
                                       for 2014 and thereafter         thereafter          2014 and thereafter
----------------------------------------------------------------------------------------------------------------
Alabama..............................                   31,499                      630  .......................
Arkansas.............................                   15,037                      752  .......................
Florida..............................                   27,825                      529                       28
Georgia..............................                   18,279                      366  .......................
Illinois.............................                   21,208                    1,697  .......................
Indiana..............................                   46,175                    1,385  .......................
Kentucky.............................                   32,674                    1,307  .......................

[[Page 63876]]

 
Louisiana............................                   17,663                      512                       18
Maryland.............................                    7,179                      144  .......................
Mississippi..........................                   12,296                      234                       12
New Jersey...........................                    3,577                       72  .......................
New York.............................                   10,242                      195                       10
North Carolina.......................                   18,455                    1,089                       18
Ohio.................................                   37,792                      756  .......................
Pennsylvania.........................                   51,912                    1,038  .......................
South Carolina.......................                   13,909                      264                       14
Tennessee............................                    8,016                      160  .......................
Texas................................                   64,418                     2513                       64
Virginia.............................                   14,452                      723  .......................
West Virginia........................                   23,291                    1,165  .......................
----------------------------------------------------------------------------------------------------------------
* Each trading budget includes the new unit set-aside and, where applicable, the Indian country new unit set-
  aside and does not include the variability limit.

    (b) The States' variability limits for the State NOX 
Ozone Season trading budgets for the control periods in 2014 and 
thereafter are as follows:

------------------------------------------------------------------------
                                                           Variability
                         State                           limits for 2014
                                                         and thereafter
------------------------------------------------------------------------
Alabama...............................................             6,615
Arkansas..............................................             3,158
Florida...............................................             5,843
Georgia...............................................             3,839
Illinois..............................................             4,454
Indiana...............................................             9,697
Kentucky..............................................             6,862
Louisiana.............................................             3,709
Maryland..............................................             1,508
Mississippi...........................................             2,582
New Jersey............................................               751
New York..............................................             2,151
North Carolina........................................             3,876
Ohio..................................................             7,936
Pennsylvania..........................................            10,902
South Carolina........................................             2,921
Tennessee.............................................             1,683
Texas.................................................            13,528
Virginia..............................................             3,035
West Virginia.........................................             4,891
------------------------------------------------------------------------

Sec.  97.525  [Amended]

    12. Section 97.525 is amended in paragraph (b)(1) by removing the 
figure ``2013'' and adding in its place the figure ``2015''.
    13. Section 97.606 is amended:
    a. In paragraph (c)(3) by removing the words ``paragraphs (c)(1) 
and (2)'' and adding in their place the words ``paragraph (c)(1)'' and 
designating the first sentence as paragraph (c)(3)(i);
    b. By adding a new paragraph (c)(3)(ii); and
    c. In paragraph (e)(2) by removing the words ``or or'' and adding, 
in their place, the word ``or''.
    The addition reads as follows:


Sec.  97.606  Standard requirements.

* * * * *
    (c) * * *
    (3) * * *
    (ii) A TR SO2 Group 1 unit shall be subject to the 
requirements under paragraph (c)(2) of this section for the control 
period starting on the later of January 1, 2014 or the deadline for 
meeting the unit's monitor certification requirements under Sec.  
97.630(b) and for each control period thereafter.
* * * * *
    14. Section 97.610 is revised to read as follows:


Sec.  97.610  State SO2 Group 1 trading budgets, new unit set-asides, 
Indian country new unit set-aside, and variability limits.

    (a) The State SO2 Group 1 trading budgets, new unit set-
asides, and Indian country new unit set-asides for allocations of TR 
SO2 Group 1 allowances for the control periods in 2012 and 
thereafter are as follows:

----------------------------------------------------------------------------------------------------------------
                                         SO2 Group 1 trading       New unit set-aside    Indian country new unit
                State                    budget (tons) * for      (tons) for 2012 and      set-aside (tons) for
                                            2012 and 2013                 2013                2012 and 2013
----------------------------------------------------------------------------------------------------------------
Illinois.............................                  234,889                   11,744  .......................
Indiana..............................                  285,424                    8,563  .......................
Iowa.................................                  107,085                    2,035                      107
Kentucky.............................                  232,662                   13,960  .......................
Maryland.............................                   30,120                      602  .......................
Michigan.............................                  229,303                    4,357                      229
Missouri.............................                  207,466                    4,149  .......................
New Jersey...........................                    7,670                      153  .......................
New York.............................                   30,852                      586                       31
North Carolina.......................                  136,881                   10,813                      137
Ohio.................................                  310,230                    6,205  .......................
Pennsylvania.........................                  278,651                    5,573  .......................
Tennessee............................                  148,150                    2,963  .......................
Virginia.............................                   70,820                    2,833  .......................
West Virginia........................                  146,174                   10,232  .......................
Wisconsin............................                   79,480                    3,099                       80
----------------------------------------------------------------------------------------------------------------


[[Page 63877]]


----------------------------------------------------------------------------------------------------------------
                                         SO2 Group 1 trading       New unit set-aside    Indian country new unit
                State                  budget (tons)* for 2014    (tons) for 2014 and      set-aside (tons) for
                                            and thereafter             thereafter          2014 and thereafter
----------------------------------------------------------------------------------------------------------------
Illinois.............................                  124,123                    6,206  .......................
Indiana..............................                  161,111                    4,833  .......................
Iowa.................................                   75,184                    1,429                       75
Kentucky.............................                  106,284                    6,377  .......................
Maryland.............................                   28,203                      564  .......................
Michigan.............................                  143,995                    2,736                      144
Missouri.............................                  165,941                    3,319  .......................
New Jersey...........................                    5,574                      111  .......................
New York.............................                   22,112                      420                       22
North Carolina.......................                   57,620                    4,552                       58
Ohio.................................                  137,077                    2,742  .......................
Pennsylvania.........................                  112,021                    2,240  .......................
Tennessee............................                   58,833                    1,177  .......................
Virginia.............................                   35,057                    1,402  .......................
West Virginia........................                   75,668                    5,297  .......................
Wisconsin............................                   47,883                     1867                       48
----------------------------------------------------------------------------------------------------------------
* Each trading budget includes the new unit set-aside and, where applicable, the Indian country new unit set-
  aside and does not include the variability limit.

    (b) The States' variability limits for the State SO2 
Group 1 trading budgets for the control periods in 2014 and thereafter 
are as follows:

------------------------------------------------------------------------
                                                           Variability
                         State                           limits for 2014
                                                         and thereafter
------------------------------------------------------------------------
Illinois..............................................            22,342
Indiana...............................................            29,000
Iowa..................................................            13,533
Kentucky..............................................            19,131
Maryland..............................................             5,077
Michigan..............................................            25,919
Missouri..............................................            29,869
New Jersey............................................             1,003
New York..............................................             3,980
North Carolina........................................            10,372
Ohio..................................................            24,674
Pennsylvania..........................................            20,164
Tennessee.............................................            10,590
Virginia..............................................             6,310
West Virginia.........................................            13,620
Wisconsin.............................................             8,619
------------------------------------------------------------------------

Sec.  97.625  [Amended]

    15. Section 97.625 is amended in paragraph (b)(1) by removing the 
figure ``2013'' and adding in its place the figure ``2015''.
    16. Section 97.706 is amended:
    a. In paragraph (c)(3) by removing the words ``paragraphs (c)(1) 
and (2)'' and adding in their place the words ``paragraph (c)(1)'' and 
designating the first sentence as paragraph (c)(3)(i);
    b. By adding a new paragraph (c)(3)(ii); and
    c. In paragraph (e)(2) by removing the words ``or or'' and adding, 
in their place, the word ``or''.
    The addition reads as follows:


Sec.  97.706  Standard requirements.

* * * * *
    (c) * * *
    (3) * * *
    (ii) A TR SO2 Group 2 unit shall be subject to the 
requirements under paragraph (c)(2) of this section for the control 
period starting on the later of January 1, 2014 or the deadline for 
meeting the unit's monitor certification requirements under Sec.  
97.730(b) and for each control period thereafter.
* * * * *
    14. Section 97.710 is revised to read as follows:


Sec.  97.710  State SO2 Group 2 trading budgets, new unit 
set-asides, Indian country new unit set-aside, and variability limits.

    (a) The State SO2 Group 2 trading budgets, new unit set-
asides, and Indian country new unit set-asides for allocations of TR 
SO2 Group 2 allowances for the control periods in 2012 and 
thereafter are as follows:

----------------------------------------------------------------------------------------------------------------
                                         SO2 Group 2 trading       New unit set-aside    Indian country new unit
                State                    budget (tons) * for      (tons) for 2012 and      set-aside (tons) for
                                            2012 and 2013                 2013                2012 and 2013
----------------------------------------------------------------------------------------------------------------
Alabama..............................                  216,033                    4,321  .......................
Georgia..............................                  158,527                    3,171  .......................
Kansas...............................                   41,528                      789                       42
Minnesota............................                   41,981                      798                       42
Nebraska.............................                   65,052                    2,537                       65
South Carolina.......................                   88,620                    1,683                       89
Texas................................                  314,021                   15,387                      314
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                         SO2 Group 2 trading       New unit set-aside    Indian country new unit
                State                    budget (tons) * for      (tons) for 2014 and      set-aside (tons) for
                                         2014 and thereafter           thereafter          2014 and thereafter
----------------------------------------------------------------------------------------------------------------
Alabama..............................                  213,258                    4,265  .......................
Georgia..............................                   95,231                    1,905  .......................
Kansas...............................                   41,528                      789                       42
Minnesota............................                   41,981                      798                       42
Nebraska.............................                   65,052                    2,537                       65
South Carolina.......................                   88,620                    1,683                       89

[[Page 63878]]

 
Texas................................                  314,021                   15,387                      314
----------------------------------------------------------------------------------------------------------------
* Each trading budget includes the new unit set-aside and, where applicable, the Indian country new unit set-
  aside and does not include the variability limit.

    (b) The States' variability limits for the State SO2 
Group 2 trading budgets for the control periods in 2014 and thereafter 
are as follows:

------------------------------------------------------------------------
                                                           Variability
                         State                           limits for 2014
                                                         and thereafter
------------------------------------------------------------------------
Alabama...............................................            38,386
Georgia...............................................            17,142
Kansas................................................             7,475
Minnesota.............................................             7,557
Nebraska..............................................            11,709
South Carolina........................................            15,952
Texas.................................................            56,524
------------------------------------------------------------------------

    15. Section 97.725 is amended by, in paragraph (b)(1), removing the 
word ``2013'' and adding, in its place, the word ``2015''.

[FR Doc. 2011-26521 Filed 10-13-11; 8:45 am]
BILLING CODE 6560-50-P