[Federal Register Volume 81, Number 65 (Tuesday, April 5, 2016)]
[Proposed Rules]
[Pages 19519-19526]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-07670]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2015-0518; FRL-9944-50-Region 4]


Air Plan Approval; North Carolina; Regional Haze

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve a revision to North Carolina's regional haze State 
Implementation Plan (SIP), submitted by the North Carolina Department 
of Environment and Natural Resources (NC DENR) on October 31, 2014, 
that relies on an alternative to Best Available Retrofit Technology 
(BART) to satisfy BART requirements for electric generating units 
(EGUs) formerly subject to the Clean Air Interstate Rule (CAIR). EPA 
also proposes to find that final approval of this SIP revision would 
correct the deficiencies that led to EPA's limited disapproval of the 
State's regional haze SIP on June 7, 2012, and proposes to convert 
EPA's June 27, 2012, limited approval to a full approval. This 
submittal addresses the requirements of the Clean Air Act (CAA or Act) 
and EPA's rules that require states to prevent any future, and remedy 
any existing, manmade impairment of visibility in mandatory Class I 
areas caused by emissions of air pollutants from numerous sources 
located over a wide geographic area (also referred to as the regional 
haze program). States are required to assure reasonable progress toward 
the national goal of achieving natural visibility conditions in Class I 
areas.

DATES: Written comments must be received on or before April 26, 2016.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2015-0518 at http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. EPA may publish any comment 
received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e. on the web, cloud, or other file sharing 
system). For additional submission methods, the full EPA public comment 
policy, information about CBI or multimedia submissions, and general 
guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Michele Notarianni, Air Regulatory 
Management Section, Air Planning and Implementation Branch, Air, 
Pesticides and Toxics Management Division, U.S. Environmental 
Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 
30303-8960. Ms. Notarianni can be reached by telephone at (404) 562-
9031 or via electronic mail at [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background for EPA's Proposed Action

A. Overview of the Regional Haze Rule

    Regional haze is visibility impairment that is produced by a 
multitude of sources and activities which are located across a broad 
geographic area and emit fine particles (e.g., sulfates, nitrates, 
organic carbon, elemental carbon, and soil dust) and their precursors 
(e.g., sulfur dioxide (SO2), nitrogen oxides 
(NOX), and in some cases, ammonia and volatile organic 
compounds). Fine particle precursors react in the atmosphere to form 
fine particulate matter (PM2.5) which impairs visibility by 
scattering and absorbing light. Visibility impairment reduces the

[[Page 19520]]

clarity, color, and visible distance that one can see.
    In section 169A of the 1977 Amendments to the CAA, Congress created 
a program for protecting visibility in the nation's national parks and 
wilderness areas. This section of the CAA establishes as a national 
goal the ``prevention of any future, and the remedying of any existing, 
impairment of visibility in mandatory Class I Federal areas (Class I 
areas) which impairment results from manmade air pollution.'' It also 
directs states to evaluate the use of retrofit controls at certain 
larger, often uncontrolled, older stationary sources in order to 
address visibility impacts from these sources. Specifically, section 
169A(b)(2)(A) of the CAA requires states to revise their SIPs to 
contain such measures as may be necessary to make reasonable progress 
towards the national visibility goal, including a requirement that 
certain categories of existing major stationary sources built between 
1962 and 1977 (known as ``BART-eligible'' sources) procure, install, 
and operate BART. In the 1990 CAA Amendments, Congress amended the 
visibility provisions in the CAA to focus attention on the problem of 
regional haze.
    In 1999, EPA promulgated the Regional Haze Rule, which requires 
states to develop and implement SIPs to ensure reasonable progress 
toward improving visibility in Class I areas by reducing emissions that 
cause or contribute to regional haze. See 64 FR 35713 (July 1, 1999). 
The Regional Haze Rule requires each state, the District of Columbia, 
and the Virgin Islands to each submit a regional haze SIP no later than 
December 17, 2007. Under 40 CFR 51.308(e), the SIP must contain 
emission limitations representing BART and schedules for compliance 
with BART for each BART-eligible source, unless the SIP demonstrates 
that an emissions trading program or other alternative (BART 
Alternative) will achieve greater reasonable progress toward natural 
visibility conditions than would have resulted from the installation 
and operation of BART at all sources subject to BART and covered by the 
BART Alternative. An approvable BART Alternative must meet the criteria 
in 40 CFR 51.308(e)(2) as described in section II.B, below.
    CAA Section 169A and the Regional Haze Rule require states to 
establish a long-term strategy for making reasonable progress toward 
meeting the national goal of achieving natural visibility conditions in 
Class I areas. The long-term strategy is the compilation of all 
enforceable emission limitations, compliance schedules, and other 
measures as necessary for a state to meet applicable reasonable 
progress goals during an implementation period. For the first 
implementation period, the long-term strategy includes BART as well as 
any other controls necessary to ensure reasonable progress.

B. North Carolina's Regional Haze SIP

    North Carolina submitted its regional haze SIP on December 17, 
2007, the regional haze SIP submittal deadline. Fully consistent with 
EPA's regulations at the time, the SIP relied on CAIR to satisfy 
NOX and SO2 BART requirements for CAIR-subject 
EGUs in the State and to partially satisfy the requirement for a long-
term strategy sufficient to achieve the state-adopted reasonable 
progress goals.
    CAIR, promulgated in 2005, required 27 states and the District of 
Columbia to reduce emissions of NOX and SO2 that 
significantly contribute to, or interfere with maintenance of, the 1997 
national ambient air quality standards (NAAQS) for fine particulates 
and for ozone in any downwind state. CAIR imposed specified emissions 
reduction requirements on each affected state and established an EPA-
administered cap and trade program for EGUs that states could join as a 
means to meet these requirements.
    EPA demonstrated that CAIR achieved greater reasonable progress 
toward the national visibility goal than BART for NOX and 
SO2 at BART-eligible EGUs in CAIR affected states, and the 
Agency revised the Regional Haze Rule to provide that states 
participating in CAIR's cap-and-trade program need not require affected 
BART-eligible EGUs to install, operate, and maintain BART for emissions 
of SO2 and NOx. See 70 FR 39104 (July 6, 2005). As a result, 
a number of states in the CAIR region designed their regional haze SIPs 
to rely on CAIR as an alternative to NOx and SO2 BART for 
CAIR-subject EGUs. These states also relied on CAIR as an element of a 
long-term strategy for achieving their reasonable progress goals.
    The United States Court of Appeals for the District of Columbia 
Circuit (D.C. Circuit) initially vacated CAIR in 2008,\1\ but 
ultimately remanded the rule to EPA without vacatur to preserve the 
environmental benefits provided by CAIR.\2\ On August 8, 2011, acting 
on the D.C. Circuit's remand, EPA promulgated the Cross-State Air 
Pollution Rule (CSAPR) to replace CAIR and thus to address the 
interstate transport of emissions contributing to nonattainment and 
interfering with maintenance of the two air quality standards covered 
by CAIR as well as the 2006 PM2.5 NAAQS.\3\ See 76 FR 48208.
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    \1\ North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
    \2\ North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008).
    \3\ Although a number of parties challenged the legality of 
CSAPR and the D.C. Circuit initially vacated and remanded CSAPR to 
EPA in EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 38 (D.C. 
Cir. 2012), the United States Supreme Court reversed the D.C. 
Circuit's decision on April 29, 2014, and remanded the case to the 
D.C. Circuit to resolve remaining issues in accordance with the high 
court's ruling. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 
1584 (2014). On remand, the D.C. Circuit affirmed CSAPR in most 
respects and CSAPR is now in effect. EME Homer City Generation, L.P. 
v. EPA, 795 F.3d 118 (D.C. Cir. 2015).
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    Due to CAIR's status as a temporary measure following the D.C. 
Circuit's 2008 ruling, EPA could not fully approve regional haze SIP 
revisions to the extent that they relied on CAIR to satisfy the BART 
requirement and the requirement for a long-term strategy sufficient to 
achieve the state-adopted reasonable progress goals. On these grounds, 
EPA finalized a limited disapproval of North Carolina's regional haze 
SIP on June 7, 2012, triggering the requirement for EPA to promulgate a 
FIP unless North Carolina submitted and EPA approved a SIP revision 
that corrected the deficiency. See 77 FR 33642. EPA finalized a limited 
approval of North Carolina's regional haze SIP on June 27, 2012, as 
meeting the remaining applicable regional haze requirements set forth 
in the CAA and the Regional Haze Rule. See 77 FR 38185.

II. Analysis of North Carolina's Regional Haze SIP Submittal

    On October 31, 2014, NC DENR submitted a revision to North 
Carolina's regional haze SIP to correct the deficiencies identified in 
the June 7, 2012, limited disapproval by replacing reliance on CAIR 
with reliance on a BART Alternative to satisfy NOx and SO2 
BART requirements for EGUs formerly subject to CAIR. EPA is proposing 
to approve this SIP revision because EPA is proposing to determine that 
the BART Alternative contained therein meets the requirements of 40 CFR 
51.308(e)(2) and that final approval of this SIP revision would correct 
the deficiencies that led to EPA's limited disapproval of the State's 
regional haze SIP.

A. North Carolina's BART Alternative

    North Carolina's October 31, 2014, SIP revision relies on the 
State's Clean Smokestacks Act (CSA) as a BART Alternative for 
NOX and SO2 at the BART-eligible EGUs formerly 
covered by CAIR. North Carolina enacted the

[[Page 19521]]

CSA in 2002 to improve air quality by imposing firm caps on the total 
annual emissions of NOx and SO2 from 42 coal-fired EGUs at 
the 14 power plants identified in Table 1, below, operated by Duke 
Energy Progress, LLC (Progress Energy) and Duke Energy Carolinas, LLC 
(Duke Energy).\4\ The CSA requires Duke Energy EGUs and Progress Energy 
EGUs to reduce SO2 emissions to 150,000 tons and 100,000 
tons, respectively, by the end of 2009 and to further reduce 
SO2 emissions to 80,000 tons and 50,000 tons, respectively, 
by the end of 2013. The CSA limits NOx emissions from Duke Energy EGUs 
and Progress Energy EGUs to 35,000 tons and 25,000 tons, respectively, 
beginning on January 1, 2007, and tightens the emissions cap on Duke 
Energy EGUs to 31,000 tons as of January 1, 2009. Collectively, the 
caps require these utilities to: (1) Reduce actual emissions of 
NOX from 245,000 tons in 1998 to 56,000 tons by 2009 (a 77 
percent reduction), and (2) reduce actual SO2 emissions from 
489,000 tons in 1998 to 250,000 tons by 2009 (a 49 percent reduction) 
and to 130,000 tons by 2013 (a 73 percent reduction).
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    \4\ More information on the CSA regulation can be found at 
http://daq.state.nc.us/news/leg/cleanstacks.shtml. At the time that 
the CSA was enacted, the Progress Energy units were owned by 
Progress Energy Carolinas, Inc. and the Duke Energy units were owned 
by Duke Power.
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    Duke Energy and Progress Energy must meet the CSA emission caps 
through actual reductions. The CSA does not allow these units to buy or 
trade emissions credits (also referred to as ``allowances'') under 
CSAPR to meet these caps even though each utility may decide how to 
allocate emission reductions across its affected units.\5\ Furthermore, 
any CSAPR allowances in excess of the CSA emissions caps must be 
surrendered to the North Carolina State Treasurer thereby preventing 
the transfer of these allowances to EGUs located in other states within 
the CSAPR trading program.\6\ EPA approved the CSA emissions caps into 
North Carolina's SIP on September 26, 2011. See 76 FR 59250.
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    \5\ The CSA also prohibited the purchase and trade of CAIR 
credits to meet the CSA caps when CAIR was in effect. Allowances 
cannot be traded between the units owned by Progress Energy and 
those owned by Duke Energy.
    \6\ In 2013, Duke Energy reported an excess of 58,961 CAIR 
SO2 allowances and 1,987 CAIR NOx allowances above CSA 
emissions limits and Progress Energy reported 78,050 excess CAIR 
SO2 allowances. All of these excess allowances have been 
verified and transferred to the State.
    \7\ This category includes EGUs that were converted from coal to 
natural gas.
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    Progress Energy and Duke Energy have shut down 22 of the coal-fired 
EGUs subject to the CSA and have installed scrubbers to control 
SO2 emissions and Selective Catalytic Reduction (SCR) or 
Selective Non-catalytic Reduction (SNCR) to control NOX 
emissions on all of the currently operating coal-fired EGUs subject to 
the CSA in order to meet the emissions caps. Table 1, below, identifies 
the retired units and the NOX and SO2 emissions 
controls on the operating units.

                                                            Table 1--EGUs Subject to the CSA
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             Status                     Facility         Parent company *       Unit ID        BART-eligible         NOX Control          SO2 Control
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Operating \7\...................  Allen..............  Duke...............             1-5  ...................  SNCR...............  FGD
                                  Asheville..........  Progress...........             1-2  Y..................  SCR................  FGD
                                  Buck...............  Duke...............             5-9  ...................  SNCR...............  **
                                  Belews Creek.......  Duke...............             1-2  Y..................  SCR................  FGD
                                  Cliffside..........  Duke...............               5  Y..................  SCR................  FGD
                                                                                         6  ...................  SCR................  FGD
                                  Marshall...........  Duke...............          1-2, 4  Y..................  SNCR...............  FGD
                                                                                         3                       SCR................  FGD
                                  Mayo...............  Progress...........               1  ...................  SCR................  FGD
                                  Roxboro............  Progress...........             1-3  Y..................  SCR................  FGD
                                                                                         4                       SCR................  FGD
Retired.........................  Cape Fear..........  Progress...........             5-6
                                  Cliffside..........  Duke...............               4
                                  Dan River..........  Duke...............             1-3
                                  Lee................  Progress...........             1-3
                                  Riverbend..........  Duke...............            7-10
                                  Sutton.............  Progress...........               3  Y..................
                                  Weatherspoon.......  Progress...........             1-3
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* Duke Energy and Progress Energy merged on July 2, 2012.
** Units converted from coal to natural gas.

B. EPA's Evaluation of North Carolina's BART Alternative

    The Regional Haze Rule requires that a SIP revision establishing a 
BART Alternative include the three elements listed below, and EPA has 
evaluated North Carolina's BART Alternative with respect to each of 
these elements.
     A demonstration that the emissions trading program or 
other alternative measure will achieve greater reasonable progress than 
would have resulted from the installation and operation of BART at all 
sources subject to BART in the state and covered by the alternative 
program. See 40 CFR 51.308(e)(2)(i).
     A requirement that all necessary emissions reductions take 
place during the period of the first long-term strategy for regional 
haze. See 40 CFR 51.308(e)(2)(iii).
     A demonstration that the emissions reductions resulting 
from the alternative measure will be surplus to those reductions 
resulting from measures adopted to meet requirements of the CAA as of 
the baseline date of the SIP. See 40 CFR 51.308(e)(2)(iv).

EPA seeks comments on its proposed findings under each of these 
elements, which are described in detail below.
1. Demonstration That the BART Alternative Will Achieve Greater 
Reasonable Progress Than BART
    Pursuant to 40 CFR 51.308(e)(2)(i), the state must demonstrate that 
the BART Alternative will achieve greater reasonable progress than 
would have resulted from the installation and operation of BART at all 
sources subject to BART in the state and covered by the alternative 
program. This demonstration

[[Page 19522]]

must be based on the five criteria addressed below.
a. List of All BART-Eligible Sources Within the State
    Pursuant to 40 CFR 51.308(e)(2)(i)(A), the SIP submission must 
include a list of all BART-eligible sources within the state. In its 
December 31, 2007, regional haze SIP submittal, North Carolina 
identified all 17 BART-eligible sources located in the State. See 77 FR 
11858, 11873-11874 (February 28, 2012). Of these 17 sources, six were 
subject to CAIR and 11 were non-EGUs. North Carolina determined that 
one non-EGU source was subject to BART, nine were exempt from BART, and 
one was shut down. See 77 FR 11873, 11874 (February 28, 2012). The 
State relied on CAIR to satisfy the NOX and SO2 
BART requirements for the 13 BART-eligible EGUs at the six CAIR-subject 
sources. EPA approved the State's identification of BART-eligible and 
BART-subject sources and the BART determination for the one BART-
subject source not subject to CAIR (Blue Ridge Paper). See 77 FR 38185 
(June 27, 2012). EPA issued a limited disapproval of the State's SIP 
submittal based on its reliance on CAIR to satisfy NOX and 
SO2 BART requirements for certain sources and to satisfy the 
long-term strategy requirements of its EGUs. See 77 FR 33642 (June 7, 
2012). In its October 31, 2014, SIP revision, the State lists the 13 
BART-eligible EGUs impacted by EPA's limited disapproval. Because the 
State identified all BART-eligible units in its regional haze SIP and 
identified all outstanding BART-eligible units in its BART Alternative 
SIP revision, EPA proposes to find that the State has met the 
requirement of 40 CFR 51.308(e)(2)(i)(A).
b. List of All BART-Eligible Sources and All Bart Source Categories 
Covered by the Alternative Program
    Pursuant to 40 CFR 51.308(e)(2)(i)(B), the SIP submission must 
include a list of all BART-eligible sources and all BART source 
categories covered by the BART Alternative, and each BART-eligible 
source in the state must be subject to the requirements of the 
alternative program or have a federally enforceable emission limitation 
determined by the state and approved by EPA as meeting BART. As 
previously mentioned, EPA approved the BART determinations for all 
BART-eligible units in North Carolina with the exception of 
NOX and SO2 BART for the 13 BART-eligible EGUs 
formerly covered by CAIR, and these 13 units are subject to the BART 
Alternative. Therefore, EPA proposes to find that the SIP revision 
satisfies 40 CFR 51.308(e)(2)(i)(B).
c. Analysis of BART and Associated Emissions Reductions
    Pursuant to 40 CFR 51.308(e)(2)(i)(C), the SIP submission must 
include an analysis of the best system of continuous emissions control 
technology available and associated emission reductions achievable for 
each source subject to BART and covered by the alternative program. 
This analysis must be conducted by making a BART determination for each 
source subject to BART and covered by the alternative program unless 
the alternative has been designed to meet a requirement other than 
BART. In this latter case, the State may determine the best system of 
continuous emissions control technology and associated emission 
reductions for similar types of sources within a source category based 
on both source-specific and category-wide information, as appropriate. 
North Carolina opted to use the simplified approach because North 
Carolina created the CSA to meet requirements other than BART.
    In using the simplified approach for EGUs, states may estimate the 
emissions reductions associated with BART based on an analysis of what 
BART is likely to be for similar types of sources within the source 
category using the presumptions for EGUs in the Guidelines for BART 
Determinations under the Regional Haze Rule located at 40 CFR part 51, 
Appendix Y (BART Guidelines). The BART Guidelines contain presumptive 
NOX and SO2 emissions limits for EGUs greater 
than 200 megawatt (MW) capacity at plants with a total generating 
capacity in excess of 750 MW. When a state is estimating the emissions 
reductions achievable through BART at the BART-eligible EGUs covered by 
the BART Alternative, it should assume that these EGUs would control at 
the presumptive level unless the state determines that such 
presumptions are not appropriate.
i. SO2 Emissions Reductions
    The BART Guidelines specify the presumptive SO2 BART 
limit at 95 percent control or 0.15 pounds per million British Thermal 
Units (lbs/MMBtu) for uncontrolled EGUs greater than 200 MW at 750 MW 
power plants unless an alternative control level is justified. See 40 
CFR part 51, App. Y, IV.E.4. North Carolina used this presumptive limit 
to calculate SO2 BART emissions by multiplying the limit by 
each BART-eligible EGU's 2002 heat input in MMBtu. When compared to 
actual 2002 SO2 emissions, the State calculated that BART 
would reduce SO2 emissions by 274,668 tons. See Table 3 in 
North Carolina's October 31, 2014, submittal.
ii. NOX Emissions Reductions
    All of the BART-eligible EGUs subject to the CSA burn bituminous 
coal and have either wall-fired or tangential-fired boilers. See Table 
1 of the State's October 31, 2014, submittal. The presumptive 
NOX emission limits for these EGUs are 0.39 and 0.28 lb/
MMbtu for wall-fired and tangential-fired boilers, respectively, unless 
an alternative control level is justified. See 40 CFR part 51, App. Y, 
IV.E.5. North Carolina used these presumptive limits to calculate 
NOX BART emissions by multiplying the corresponding limits 
by each BART-eligible EGU's 2002 heat input in MMBtu. When compared to 
actual 2002 NOX emissions, the State calculated that BART 
would reduce NOX emissions by 19,364 tons. See Table 8 in 
North Carolina's October 31, 2014, submittal.
d. Analysis of Emissions Reductions Associated With the BART 
Alternative
    Pursuant to 40 CFR 51.308(e)(2)(i)(D), the SIP submission must 
include an analysis of the projected emissions reductions achievable 
through the BART Alternative. North Carolina projected these reductions 
using four different methods: (1) CSA emissions caps; (2) 2018 
emissions projected by the Visibility Improvement--State and Tribal 
Association of the Southeast (VISTAS) \8\ and presented in North 
Carolina's December 17, 2007, regional haze SIP submission; (3) 2018 
emissions projected by EPA's Integrated Planning Model (IPM); and (4) 
2018 emissions projected by Duke Energy after the merger with Progress 
Energy. North Carolina also evaluated actual emissions reductions from 
the CSA units by comparing 2009, 2010, 2011, 2012, and 2013 emissions 
to 2002 levels. Table 2 shows the emissions reductions associated with 
the BART Alternative using the CSA caps and 2018

[[Page 19523]]

projections identified above, and Tables 3 and 4 show the reductions 
using actual emissions from 2009-2015.
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    \8\ VISTAS is a collaborative effort of state governments, 
tribal governments, and various Federal agencies established to 
initiate and coordinate activities associated with the management of 
regional haze, visibility, and other air quality issues in the 
southeastern United States. Member state and tribal governments 
include: Alabama, Florida, Georgia, Kentucky, Mississippi, North 
Carolina, South Carolina, Tennessee, Virginia, West Virginia, and 
the Eastern Band of the Cherokee Indians.

                      Table 2--BART Alternative Emissions Reductions (Tons) From 2002 Baseline Using CSA Caps and 2018 Projections
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                                                      Pollutant            2002 Baseline      CSA Cap       2018 VISTAS      2018 IPM        2018 Duke
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Emissions.................................  SO2.........................         467,321         130,000          89,343          24,732          23,901
Reductions from Baseline..................  ............................  ..............         337,321         377,978         442,589         443,420
Emissions.................................  NOX.........................         142,879          56,000          42,133          22,792          22,414
Reductions from Baseline..................  ............................  ..............          86,879         100,746         120,087         120,465
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                          Table 3--BART Alternative Emissions Reductions From 2002 Baseline Using Actual Emissions (Tons)--SO2
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                                                    2002 Baseline          2009 Actuals    2010 Actuals    2011 Actuals    2012 Actuals    2013 Actuals
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Emissions.................................  467,321.....................         110,818         116,529          73,457          53,458          42,080
Reductions from Baseline..................  ............................         356,503         350,792         393,864         413,863         425,241
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                          Table 4--BART Alternative Emissions Reductions From 2002 Baseline Using Actual Emissions (Tons)--NOX
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                                                    2002 Baseline          2009 Actuals    2010 Actuals    2011 Actuals    2012 Actuals    2013 Actuals
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Emissions.................................  142,879.....................          37,829          47,373          39,361          42,147          40,410
Reductions from Baseline..................  ............................         105,050          95,506         103,518         100,732         102,469
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i. CSA Caps
    Under the CSA, Duke Energy EGUs and Progress Energy EGUs were 
required to reduce SO2 emissions to 150,000 tons and 100,000 
tons, respectively, by the end of 2009 and to further reduce 
SO2 emissions to 80,000 tons and 50,000 tons, respectively, 
by the end of 2013. Using the 2013 emissions caps, the BART Alternative 
would reduce SO2 emissions by 337,321 tons from 2002 levels.
    The CSA limited NOX emissions from Duke Energy EGUs and 
Progress Energy EGUs to 35,000 tons and 25,000 tons, respectively, 
beginning on January 1, 2007, and tightened the emissions cap on Duke 
Energy EGUs to 31,000 tons as of January 1, 2009. Using the 2009 
emissions caps, the BART Alternative would reduce NOX 
emissions by 86,879 tons from 2002 levels.
ii. 2018 Projections
    VISTAS developed 2018 emissions projections for the states in the 
VISTAS region to use when preparing the states' regional haze SIP 
submissions. VISTAS accounted for the CSA emissions caps and other 
control programs, including CAIR, in its 2018 modeling and projected 
total NOX and SO2 emissions from North Carolina's 
EGUs at 42,133 tons and 89,343 tons, respectively. See 77 FR 11866 
(February 28, 2012). North Carolina compared these 2018 VISTAS 
emissions projections for the CSA units with 2002 actual emissions and 
estimated that NOX and SO2 emissions from these 
units would decrease by 100,746 tons and 377,978 tons, respectively. 
The projected NOX and SO2 emissions reductions 
from only the BART-eligible sources in the CSA would be 69,485 tons and 
276,998 tons, respectively.
    North Carolina also included EPA IPM modeling year 2018 
NOX and SO2 emissions estimates for the CSA EGUs. 
The IPM predicted that these units would emit approximately 22,792 tons 
of NOXemissions in 2018, resulting in a projected reduction 
of 120,087 tons when compared with 2002 actual emissions. The IPM also 
predicted 24,732 tons of SO2 emissions from these units in 
2018, resulting in a projected reduction of 442,589 tons compared to 
2002 actual emissions. These predictions are well below VISTAS' 2018 
projections and the CSA emissions caps.
    Following the merger with Progress Energy, Duke Energy projected 
2018 emissions for its EGUs in North Carolina due to the significant 
shift from coal to natural gas and the retirement of several EGUs in 
the State. These estimates were prepared by Duke Energy based on its 
economic modeling, and they differ only slightly from the IPM forecast. 
The primary difference between the Duke Energy and IPM estimates is 
that EPA assumed in the IPM that the Allen facility's coal-fired EGUs 
would be shut down by 2018.\9\ Duke Energy projected that the CSA units 
would emit approximately 22,414 tons of NOX and 23,901 tons 
of SO2 in 2018, a reduction of approximately 120,465 and 
443,420 tons of NOX and SO2, respectively, from 
2002 levels, respectively.
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    \9\ Duke Energy must retire Allen Units 1 and 2 by December 31, 
2024, pursuant to a consent decree entered by the United States 
District Court for the Middle District of North Carolina on October 
20, 2015. Consent Decree, United States, et al. v. Duke Energy 
Corporation, Civil Case No. 1:00-cv-1262 (M.D.N.C. October 20, 
2015).
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iii. Actual Emissions Reductions
    North Carolina analyzed actual emissions reductions achieved with 
the CSA for each year from 2009 to 2013 using emissions reported to 
EPA's Clean Air Markets Division. North Carolina started with 2009 
because this is the year when Duke Energy and Progress Energy were 
required to comply with the CSA's first SO2 cap and the 
final NOX cap. Emissions of SO2 steadily 
decreased from 116,529 tons in 2010 to 42,080 tons in 2013. Actual 
NOX emissions ranged from 47,373 tons in 2010 to 40,410 tons 
in 2013. See Tables 6 and 11 in North Carolina's October 31, 2014, 
submittal for actual emissions by CSA facility.
e. Determination That the BART Alternative Achieves Greater Reasonable 
Progress Than BART
    Pursuant to 40 CFR 51.308(e)(2)(i)(E), the state must provide a 
determination that the alternative achieves greater reasonable progress 
than BART under 40 CFR 51.308(e)(3) or otherwise based on the clear 
weight of evidence. 40 CFR

[[Page 19524]]

51.308(e)(3) provides two different tests for determining whether the 
alternative achieves greater reasonable progress than BART. Under the 
first test, if the distribution of emissions is not substantially 
different than under BART, and the alternative measure results in 
greater emission reductions, then the alternative measure may be deemed 
to achieve greater reasonable progress. If the distribution of 
emissions is significantly different, however, then the state must use 
the second test and conduct dispersion modeling to determine 
differences in visibility between BART and the alternative program for 
each impacted Class I area, for the worst and best 20 percent of days. 
See 40 CFR 51.308(e)(3). The modeling would demonstrate ``greater 
reasonable progress'' if: (1) Visibility does not decline in any Class 
I area, and (2) there is an overall improvement in visibility, 
determined by comparing the average differences between BART and the 
alternative over all affected Class I areas. North Carolina did not 
provide dispersion modeling because it believes that greater reasonable 
progress can be shown through an emissions reduction analysis under the 
first 40 CFR 51.308(e)(3) test and/or through a weight-of-evidence 
analysis based on the types of controls installed on the BART-eligible 
CSA units, the reductions in visibility impairing pollutants associated 
with the CSA, and the uniform nature of these reductions across all 
EGUs subject to the CSA.
    EPA proposes to determine that the CSA achieves greater reasonable 
progress than would be achieved through the installation and operation 
of BART at the BART-eligible EGUs covered by the CSA based on the 
following weight of evidence.
    First, BART would result in controls for NOX and 
SO2 only at the 13 BART-eligible EGUs, whereas the BART 
Alternative applies to 42 EGUs. Of these 42 EGUs, 17 have retired, five 
have converted from coal to natural gas, and the remaining 20 coal-
fired EGUs in operation are controlled for NOX and 
SO2.
    Second, the 20 operating coal-fired EGUs in the BART Alternative 
have installed emissions controls to meet the CSA that are, with the 
exception of NOX control at Allen Units 1-5 and Marshall 
Units 1, 2, and 4, the most stringent controls available for 
SO2 and NOX. All of the CSA EGUs use flue gas 
desulphurization (i.e., scrubbers) to remove SO2. 
SO2 controls are of particular importance because, as North 
Carolina demonstrated in its regional haze SIP, sulfates are the major 
contributor to PM2.5 mass and visibility impairment at Class 
I areas in the VISTAS region and in states neighboring this region.\10\ 
See 77 FR 11867, 11877 (February 28, 2012). Thus, North Carolina 
concluded that reducing SO2 emissions from EGU and non-EGU 
point sources in the VISTAS states would have the greatest visibility 
benefits for the North Carolina Class I areas and the Class I areas 
that the State's sources impact. See 77 FR 11868 (February 28, 2012).
---------------------------------------------------------------------------

    \10\ The VISTAS region includes North Carolina and the two 
states, Virginia and Tennessee, that North Carolina identified as 
having a Class I area potentially impacted by its sources.
---------------------------------------------------------------------------

    Regarding NOX, all of the CSA-subject EGUs in operation 
are using SCR for post-combustion NOX control, with the 
exception of Allen Units 1-5 (not BART-eligible) and Marshall Units 1, 
2, and 4 (BART-eligible) that use SNCR. Although SCR is the most 
stringent NOX control technology available for EGU 
retrofits, it is unlikely that a BART determination would result in the 
installation of SCR at Marshall Units 1, 2, and 4 given the EGUs' 
NOX emissions, the distance from Class I areas, the cost of 
replacing SNCR with SCR, and the incremental visibility improvement 
associated with the switch from SNCR to SCR. As discussed in North 
Carolina's 2007 regional haze SIP submittal, nitrates are a relatively 
small contributor to PM2.5 mass and visibility impairment on 
the 20 percent worst days at the inland Class I areas in VISTAS, which 
include all of the North Carolina Class I areas except for the 
Swanquarter National Wilderness Area. Therefore, the visibility 
benefits of reducing NOX emissions at these Class I areas 
are small. See 77 FR 11868 (February 28, 2012).
    Third, the emissions reductions under the BART Alternative are 
greater than those that would result from the installation and 
operation of BART at the BART-eligible EGUs covered by the CSA under a 
variety of scenarios.\11\ As discussed in section II.B.1.c, above, 
North Carolina compared CSA emissions to BART emissions using the CSA 
caps, 2018 emissions projections prepared by VISTAS, IPM, and Duke 
Energy, and actual NOX and SO2 emissions. Only 
the emission reductions required by the CSA cap are federally 
enforceable by virtue of being included in North Carolina's SIP. North 
Carolina's calculations of emission reductions relative to the various 
projections provide additional information and support for its 
assertion that the BART Alternative achieves greater reasonable 
progress than BART. Tables 5 through 7, below, identify the additional 
emissions reductions achieved through the BART Alternative.
---------------------------------------------------------------------------

    \11\ As discussed above, North Carolina used EPA's presumptive 
limits for NOX and SO2 as the BART benchmark.

                          Table 5--BART Alternative Emissions Reductions Beyond BART Using CSA Caps and 2018 Projections (Tons)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Pollutant                BART           CSA cap       2018 VISTAS      2018 IPM        2018 Duke
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reductions from 2002 Baseline.............  SO2.........................         274,668         337,321         377,978         442,589         443,420
Reductions beyond BART....................  ............................  ..............          62,653         103,310         167,921         168,752
Reductions from 2002 Baseline.............  NOX.........................          19,364          86,879         100,746         120,087         120,465
Reductions beyond BART....................  ............................  ..............          67,515          81,382         100,723         101,101
--------------------------------------------------------------------------------------------------------------------------------------------------------


                              Table 6--BART Alternative Emissions Reductions Beyond BART Using Actual Emissions (Tons)--SO2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               BART        2009 Actuals    2010 Actuals    2011 Actuals    2012 Actuals    2013 Actuals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reductions from 2002 Baseline...........................         274,668         356,503         350,791         393,864         413,862         425,241
Reductions beyond BART..................................  ..............          81,835          76,123         119,196         139,194         150,573
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 19525]]


                             Table 7--BART Alternative Emissions Reductions Beyond BART Using Actual Emissions (Tons)-- NOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               BART        2009 Actuals    2010 Actuals    2011 Actuals    2012 Actuals    2013 Actuals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reductions from 2002 Baseline...........................          19,364         105,049          95,506         103,518         100,732         102,468
Reductions beyond BART..................................  ..............          85,685          76,142          84,154          81,368          83,104
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Compared with BART, North Carolina's current CSA caps achieve an 
additional SO2 reduction of 62,653 tons and an additional 
NOX reduction of 67,515 tons relative to the 2002 baseline. 
Table 5 also shows that, depending on the origin of the 2018 
projections, the BART Alternative results in an additional 
SO2 reduction of 103,310 to 168,752 tons and an additional 
NOX reduction of 81,382 to 101,101 tons beyond BART. The 
comparison of actual emissions under the BART Alternative to estimated 
BART emissions in Tables 6 and 7 shows that, between 2009 and 2013, the 
CSA achieved 76,123 to 150,573 tons of additional SO2 
reductions and 76,142 to 84,154 tons of additional NOX 
reductions beyond BART. Regardless of the reduction scenario, the BART 
Alternative results in significantly lower NOX and 
SO2 emissions when compared to BART.
    Fourth, the NOX and SO2 emissions controls 
needed to comply with CSA requirements began operating before any 
controls would begin operation under BART. BART must be installed and 
operated as expeditiously as practicable, but no later than five years 
after the date of EPA approval of the regional haze SIP. See CAA 
section 169A(g)(4); 40 CFR 51.308(e)(1)(iv). The CSA, enacted in 2002, 
required compliance with the initial emissions caps for SO2 
in 2007 and NOX in 2009, and therefore resulted in emissions 
reductions before EPA issued a limited approval of North Carolina's 
regional haze SIP on June 27, 2012. See 77 FR 38185. Even if EPA had 
approved source-specific BART determinations for the CAIR-subject units 
in North Carolina at that time, the BART installation and operation 
deadline would have been set after compliance with the CSA began.
    Lastly, although the CSA does allow for limited emissions shifting, 
there is no indication that implementation of the CSA would result in 
any ``hot spots,'' as compared to BART. The shifting of emissions under 
the CSA is limited by the prohibition on emissions credit trading 
between the EGUs owned by Progress Energy and those owned by Duke 
Energy before the 2012 merger, as mentioned above. Additionally, the 
2009-2013 SO2 and NOX emissions data summarized 
in Tables 6 and 11, respectively, of North Carolina's submittal 
indicate that emissions have not shifted to any significant degree 
between the EGUs subject to the CSA during this time period. Emissions 
reductions were taking place at each EGU facility and not isolated to 
any one facility or group of facilities. To the extent that any 
shifting might occur in the future, all of the operating Progress 
Energy units subject to the CSA operate with the most stringent 
NOX and SO2 control equipment, and all of the 
Duke Energy units subject to the CSA operate with the most stringent 
NOX and SO2 controls with the exception of Allen, 
Marshall, and Buck which operate SNCR. Of the SNCR units, only Marshall 
is BART-eligible. Even assuming that a BART analysis would result in a 
requirement to install SCR at Marshall, any shifting of emissions to 
Marshall would be restricted by its available capacity. Furthermore, 
any incremental decrease in NOX emissions if the State were 
to require SCR at Marshall would not be expected to have a significant 
impact on visibility at Class I areas due, in part, to the fact that 
nitrates are a relatively small contributor to PM2.5 mass 
and visibility impairment on the 20 percent worst days at the Class I 
areas in closest proximity to Marshall.
    Based on the evidence provided above, EPA proposes to find that the 
BART Alternative achieves greater reasonable progress than BART and 
thus satisfies the requirements of 40 CFR 51.308(e)(2)(i)(E).
2. Requirement That Emissions Reductions Occur During the First 
Implementation Period
    Pursuant to 40 CFR 51.308(e)(2)(iii), the state must ensure that 
all necessary emission reductions take place during the period of the 
first long-term strategy for regional haze (i.e., by December 31, 
2018). The Regional Haze Rule further provides that, to meet this 
requirement, the state must provide a detailed description of the 
alternative measure, including schedules for implementation, the 
emission reductions required by the program, all necessary 
administrative and technical procedures for implementing the program, 
rules for accounting and monitoring emissions, and procedures for 
enforcement. Id. EPA proposes to find that the BART Alternative meets 
this requirement because the State has fully described the CSA, the CSA 
prescribes emissions reductions through the use of emissions caps, the 
emissions caps are in effect and incorporated into North Carolina's 
SIP, and all CSA-subject EGUs are required to meet the accounting and 
monitoring requirements of CSAPR.\12\ Furthermore, all CSA-related 
permitting and construction activities have been completed to meet the 
CSA emissions caps. EPA therefore proposes to find that North Carolina 
has satisfied the requirements of 40 CFR 51.308(e)(2)(iii).
---------------------------------------------------------------------------

    \12\ See 76 FR 48208 (August 8, 2011).
---------------------------------------------------------------------------

3. Demonstration That Emissions Reductions Are Surplus
    Pursuant to 40 CFR 51.308(e)(2)(iv), the SIP must demonstrate that 
the emissions reductions resulting from the alternative measure will be 
surplus to those reductions resulting from measures adopted to meet 
requirements of the CAA as of the baseline date of the SIP. The 
baseline date for regional haze SIPs is 2002, and the first 
NOX and SO2 CSA emissions caps were not effective 
until 2007 and 2009, respectively. See 64 FR 35742. Therefore, EPA 
proposes to find that the reductions associated with the CSA are 
surplus in accordance with 40 CFR 51.308(e)(2)(iv).

B. Reasonable Progress Evaluation

    EPA finalized a limited disapproval of North Carolina's regional 
haze SIP based on its reliance on CAIR to satisfy the BART requirement 
and the requirement for a long-term strategy sufficient to achieve the 
state-adopted reasonable progress goals. See 77 FR 33653. In that 
action, EPA also finalized limited disapprovals of a number of other 
states' regional haze SIPs that relied on CAIR to satisfy these 
requirements and finalized Federal Implementation Plans (FIPs) that 
substituted reliance on CSAPR for reliance on CAIR for several states. 
Id. However, North Carolina's 2014 regional haze SIP submission relies 
on the CSA, rather than CSAPR, to correct the deficiencies in its 
regional haze SIP. EPA therefore must evaluate whether inclusion of the 
CSA in lieu of CAIR in the state's long-term strategy is sufficient to 
ensure reasonable progress.
    As discussed in section II.B.1.e, sulfates are the major 
contributor to visibility impairment at Class I areas in

[[Page 19526]]

the VISTAS region. Based on its conclusion that SO2 
reductions would result in the greatest visibility improvements, North 
Carolina's 2007 regional haze SIP submission focused its reasonable 
progress control analysis on emission units that fall within the 
SO2 area of influence of any Class I area, as modeled by 
VISTAS, and have a one percent or greater contribution to the sulfate 
visibility impairment in at least one Class I area. See 77 FR 11869. 
Sixteen EGUs subject to the CSA and formerly subject to CAIR met North 
Carolina's reasonable process screening criteria. The State 
subsequently concluded in its regional haze SIP submission that no 
additional controls beyond CAIR and the CSA were reasonable for these 
units during the first implementation period. See 77 FR 11870, 11872. 
North Carolina's long-term strategy relied, in part, on this 
conclusion.
    Ten of the 16 aforementioned units have shut down or converted to 
natural gas. The remaining coal-fired units have each installed FGD to 
comply with the CSA. Given North Carolina's focus on reducing 
SO2 emissions to achieve reasonable progress and the fact 
that coal-fired EGUs remaining in operation are already subject to the 
most stringent SO2 controls available, EPA proposes to find 
that no additional controls are necessary for these units to achieve 
reasonable progress during the first implementation period. This 
proposed finding and the proposed finding that North Carolina's BART 
Alternative meets the requirements of the Regional Haze Rule form the 
basis for EPA's proposal to convert EPA's limited disapproval of the 
State's regional haze SIP to a full approval.

III. Proposed Action

    EPA is proposing to find that North Carolina's regional haze SIP 
revision meets the applicable requirements of the CAA and Regional Haze 
Rule, including the requirement that the BART Alternative achieve 
greater reasonable progress than would be achieved through the 
installation and operation of BART. EPA also proposes to find that 
final approval of this SIP revision would correct the deficiencies that 
led to EPA's limited disapproval of the State's regional haze SIP on 
June 7, 2012, and proposes to convert the EPA's June 27, 2012, limited 
approval to a full approval. These proposed actions, if finalized, 
would eliminate the need for EPA to issue a FIP to remedy the 
deficiencies in North Carolina's December 17, 2007, SIP submission.

IV. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve State choices, 
provided that they meet the criteria of the CAA. Accordingly, these 
proposed actions merely approve State law as meeting Federal 
requirements and does not impose additional requirements beyond those 
imposed by State law. For that reason, these proposed actions:
     Are not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     do not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     are certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     do not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     do not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     are not an economically significant regulatory action 
based on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     are not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     are not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     do not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    The SIP is not approved to apply on any Indian reservation land or 
in any other area where EPA or an Indian tribe has demonstrated that a 
tribe has jurisdiction. In those areas of Indian country, the rule does 
not have tribal implications as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000), nor will it impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon mo 
NOX ide, Incorporation by reference, Intergovernmental 
relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and 
recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

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

    Dated: March 25, 2016.
Heather McTeer Toney,
Regional Administrator, Region 4.
[FR Doc. 2016-07670 Filed 4-4-16; 8:45 am]
 BILLING CODE 6560-50-P