[Federal Register Volume 83, Number 144 (Thursday, July 26, 2018)]
[Notices]
[Pages 35473-35475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16000]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9981-31-OAR]


Allocations of Cross-State Air Pollution Rule Allowances From New 
Unit Set-Asides for 2018 Control Periods

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of data availability.

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SUMMARY: The Environmental Protection Agency (EPA) is providing notice 
of the availability of data on emission allowance allocations to 
certain units under the Cross-State Air Pollution Rule (CSAPR) trading 
programs. EPA has completed final calculations for the first round of 
allocations of allowances from the CSAPR new unit set-asides (NUSAs) 
for the 2018 control periods and has posted spreadsheets containing the 
calculations on EPA's website. Several changes were made to the 
preliminary allocation spreadsheets to eliminate allocations to 
existing units that had been incorrectly identified as new units 
eligible to receive NUSA allocations. No changes were made to the 
calculations of the amounts of allocations to any units correctly 
identified as new units, and no additional units were identified as new 
units.

DATES: July 26, 2018.

FOR FURTHER INFORMATION CONTACT: Questions concerning this action 
should be addressed to Kenon Smith at (202) 343-9164 or 
[email protected] or Jason Kuhns at (202) 564-3236 or 
[email protected].

SUPPLEMENTARY INFORMATION: Under each CSAPR trading program where EPA 
is responsible for determining emission allowance allocations, a 
portion of each state's emissions budget for the program for each 
control period is reserved in a NUSA (and in an additional Indian 
country NUSA in the case of states with Indian country within their 
borders) for allocation to certain units that would not otherwise 
receive allowance allocations. The procedures for identifying the 
eligible units for each control period and for allocating allowances 
from the NUSAs and Indian country NUSAs to these units are set forth in 
the CSAPR trading program regulations at 40 CFR 97.411(b) and 97.412 
(NOX Annual), 97.511(b) and 97.512 (NOX Ozone 
Season Group 1), 97.611(b) and 97.612 (SO2 Group 1), 
97.711(b) and 97.712 (SO2 Group 2), and 97.811(b) and 97.812 
(NOX Ozone Season Group 2). Each NUSA allowance allocation 
process involves up to two rounds of allocations to eligible units, 
termed ``new'' units, followed by the allocation to ``existing'' units 
of any allowances not allocated to new units. In a NODA published in 
the Federal Register on May 10, 2018 (83 FR 21772), we provided notice 
of preliminary calculations for the first-round 2018

[[Page 35474]]

NUSA allowance allocations. We also described the process for 
submitting any objections to the preliminary calculations. This NODA 
concerns the final calculations for the first round of 2018 NUSA 
allocations.
    EPA received three sets of written objections in response to the 
May 10, 2018 NODA. For the reasons discussed below, we have concluded 
that none of the written objections provides a valid basis for altering 
the preliminary calculations of NUSA allowance allocations.
    The first two sets of objections, from Madison Gas & Electric 
Company (MG&E) and the Wisconsin Department of Natural Resources, are 
substantively identical and raise two issues concerning units U1 and U2 
at the West Campus Cogeneration Facility (WCCF) in Madison, Wisconsin. 
The first objection asserts that January 1, 2017 is the date as of 
which units U1 and U2 ``commenced commercial operation'' for CSAPR 
purposes. EPA has already addressed this specific issue with respect to 
the WCCF units in response to an objection submitted regarding the 2017 
NUSA allocations. Our earlier response, which we are not revising, was 
published in the Federal Register on February 16, 2018 (83 FR 7034). 
Briefly, we agree that, according to the information provided by MG&E, 
January 1, 2017 is the date as of which units U1 and U2 should be 
considered to have ``commenced commercial operation'' for CSAPR 
purposes. Further, we have in fact been using this date for purposes of 
determining the units' eligibility to receive 2018 NUSA allocations, 
and that is why units U1 and U2 appear in the preliminary first-round 
2018 NUSA allocation spreadsheets. However, we acknowledge that our use 
of the January 1, 2017 date for this purpose is not clear from the 
preliminary NUSA allocation spreadsheets which, instead of displaying 
the January 1, 2017 date, display the 2005 date on which the units 
commenced commercial operation for other purposes before becoming 
subject to CSAPR. The final first-round 2018 NUSA allocation 
spreadsheets display the January 1, 2017 date.
    The second objection raised with respect to WCCF units U1 and U2 
asserts that EPA's exclusion of reported emissions occurring before 
July 2017 in calculating the units' NUSA allocations is incorrect. We 
disagree. For purposes of the NUSA allocation calculations, we have 
properly used the units' reported emissions occurring on and after 
their monitor certification deadline of June 30, 2017. We explained the 
regulatory basis for this approach in a NODA published on July 28, 2015 
(80 FR 44882) regarding 2015 NUSA allocations. Briefly, under the CSAPR 
regulations, only emissions that occur during a ``control period'' for 
a unit are used in calculating the amounts of any NUSA allocations to 
that unit. Because a unit's first control period excludes any period 
before the unit's monitor certification deadline, any reported 
emissions occurring before the monitor certification deadline are 
excluded from the NUSA allocation calculations. A unit's monitor 
certification deadline is generally 180 days after the date on which 
the unit commences commercial operation for CSAPR purposes,\1\ making 
the monitor certification deadline for WCCF units U1 and U2 June 30, 
2017. For further explanation, see the July 28, 2015 Federal Register 
notice referenced above.
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    \1\ Under the CSAPR programs for ozone season NOX, if 
emissions data for a unit are reported only for the May-September 
ozone season rather than for the entire year, and if the 180th day 
after the date on which a unit commences commercial operation for 
CSAPR purposes falls outside the ozone season, then the unit's 
monitor certification deadline is the following May 1. See, e.g., 40 
CFR 97.830(b)(3).
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    The remaining set of written objections, from Grand River Dam 
Authority (GRDA), also raises two issues. GRDA's first objection 
concerns the amount of reported 2017 ozone season NOX 
emissions used to calculate the amount of the first-round 2018 NUSA 
allocation to unit 3 at Grand River Energy Center (GREC) in Chouteau, 
Oklahoma. Specifically, GRDA asserts that EPA should not have used 0 
tons for this purpose. We disagree. The reported date on which GREC 
unit 3 commenced commercial operation was March 17, 2017, making the 
unit's monitor certification deadline September 13, 2017. As discussed 
above with respect to the WCCF facility, only reported emissions 
occurring after a unit's monitor certification deadline are used in 
computing NUSA allocations because any earlier emissions did not occur 
during a control period for the unit. Although GREC unit 3 reported 66 
tons of emissions during the entire 2017 ozone season, the unit 
reported 0 tons during the portion of the 2017 ozone season on and 
after September 13, so our use of 0 tons for purposes of calculating 
unit 3's first-round 2018 NUSA allocation is consistent with the 
regulations. For further explanation, see the July 28, 2015 Federal 
Register notice reference above.
    GRDA's second objection consists of a request to revise the total 
amount of the NUSA for Oklahoma under the CSAPR NOX Ozone 
Season Group 2 Trading Program. This objection is outside the scope of 
the May 10, 2018 NODA. EPA's determination regarding the NUSA total 
amount was made in the CSAPR Update rulemaking, and the NUSA amount is 
codified in the CSAPR regulations at 40 CFR 97.810(a)(17)(ii). The 
process of allocating NUSA allowances is strictly an administrative 
process that implements regulations already in effect. The total amount 
of the NUSA for Oklahoma can be revised only through another 
rulemaking, not through this administrative process.
    Although no changes were made to the preliminary first-round 2018 
NUSA allocations in response to the objections received, based on 
internal data reviews EPA has determined that several units listed in 
the preliminary allocation spreadsheets in fact are existing units not 
eligible to receive 2018 NUSA allocations. Specifically, 14 units in 
Illinois, Kansas, and Nebraska were incorrectly included in the 
preliminary first-round NUSA allocation spreadsheet for the 
SO2 programs, and the Illinois and Nebraska units were also 
incorrectly included in the preliminary first-round NUSA allocation 
spreadsheet for the annual NOX program.\2\ Generally, these 
units were misidentified as eligible units because of discrepancies 
between the identification numbers used for the units in different data 
sets. In addition, 21 units in Arkansas, Louisiana, Oklahoma, and Texas 
were incorrectly included in the preliminary first-round NUSA 
allocation spreadsheet for the ozone season NOX programs. 
Generally, these units were misidentified as eligible units because a 
screening procedure designed to identify units eligible for NUSA 
allocations due to relocation between states was executed without 
setting appropriate limits on the dates of relocation. We have removed 
all the ineligible units from the final first-round 2018 NUSA 
allocation spreadsheets.
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    \2\ Kansas, not EPA, is responsible for determining all 2018 
allowance allocations to Kansas units under the annual 
NOX program.
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    The detailed unit-by-unit data and final allowance allocation 
calculations are set forth in Excel spreadsheets titled 
``CSAPR_NUSA_2018_NOX_Annual_1st_Round_Final_Data'', 
``CSAPR_NUSA_2018_NOX_OS_1st_Round_Final_Data'', and 
``CSAPR_NUSA_2018_SO2_1st_Round_Final_Data,'' available on 
EPA's website at https://www.epa.gov/csapr/csapr-compliance-year-2018-nusa-nodas.
    EPA notes that an allocation or lack of allocation of allowances to 
a given unit does not constitute a determination that CSAPR does or 
does not apply to the unit. EPA also notes that under 40

[[Page 35475]]

CFR 97.411(c), 97.511(c), 97.611(c), 97.711(c), and 97.811(c), 
allocations are subject to potential correction if a unit to which 
allowances have been allocated for a given control period is not 
actually an affected unit as of the start of that control period.

    Authority: 40 CFR 97.411(b), 97.511(b), 97.611(b), 97.711(b), 
and 97.811(b).

    Dated: June 28, 2018.
Reid P. Harvey,
Director, Clean Air Markets Division, Office of Atmospheric Programs, 
Office of Air and Radiation.
[FR Doc. 2018-16000 Filed 7-25-18; 8:45 am]
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