[Federal Register Volume 84, Number 220 (Thursday, November 14, 2019)]
[Proposed Rules]
[Pages 61850-61863]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24286]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-R06-OAR-2016-0611; FRL-10001-85-Region 6]


Promulgation of Air Quality Implementation Plans; State of Texas; 
Regional Haze and Interstate Visibility Transport Federal 
Implementation Plan: Proposal of Best Available Retrofit Technology 
(BART) and Interstate Visibility Transport Provisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Supplemental notice of proposed rulemaking.

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SUMMARY: In this supplemental notice of proposed rulemaking (SNPRM), 
the Environmental Protection Agency (EPA) is supplementing the proposal 
published on August 27, 2018 to affirm the Agency's October 2017 
Federal Implementation Plan (FIP), which partially approved the 2009 
Texas Regional Haze State Implementation Plan (SIP) submission and 
promulgated a Federal Implementation Plan (FIP) for Texas to address 
certain outstanding Clean Air Act (CAA) regional haze requirements. The 
October 2017 FIP established the Texas SO2 Trading Program, 
an intrastate trading program for certain electric generating units 
(EGUs) in Texas, as a Best Available Retrofit Technology (BART) 
alternative for sulfur dioxide (SO2). In response to certain 
comments received on the August 2018 proposal to affirm the October 
2017 FIP, we are proposing revisions to the Texas SO2 
Trading Program, including provisions for penalties on the total annual 
SO2 emissions from sources covered by the rule exceeding a 
proposed assurance level.

DATES: Comments must be received on or before January 13, 2020.
    Public Hearing: A public hearing, if requested, will be held in 
Room 5220, 1201 Elm Street, Suite 500, Dallas, Texas 75270 on December 
9, 2019 beginning at 1:00 p.m. If you wish to request a hearing and 
present testimony or attend the hearing, you should notify, on or 
before November 27, 2019, Ms. Jennifer Huser, Air and Radiation 
Division (ARSH), Environmental Protection Agency Region 6, 1201 Elm 
Street, Suite 500; telephone number: (214) 665-7347; email address: 
[email protected]. Oral testimony will be limited to 5 minutes 
each. The hearing will be strictly 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. 
Written statements (duplicate copies preferred) should be submitted to 
Docket ID No. EPA-R06-OAR-2016-0611, at the address listed above for 
submitted comments. The hearing location and schedule will be posted on 
EPA's web page at https://www.epa.gov/publicnotices/notices-search/location/Texas. Verbatim English--language transcripts of the hearing 
and written statements will be included in the rulemaking docket. If no 
requests for a public hearing are received by close of business on 
November 27, 2019, a hearing will not be held, and this announcement 
will be made on the web page at the address shown above.
    For additional logistical information regarding the public hearing 
please see the SUPPLEMENTARY INFORMATION section of this action.

ADDRESSES: Submit your comments, identified by Docket No. EPA-R06-OAR-
2016-0611, at http://www.regulations.gov or via email to [email protected].
    Follow the online instructions for submitting comments. Once 
submitted, comments cannot be edited or removed from Regulations.gov. 
The 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. The 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.
    Docket: The index to the docket for this action is available 
electronically at http://www.regulations.gov and in hard copy at the 
EPA Region 6, 1201 Elm Street, Suite 500, Dallas, Texas 75270. While 
all documents in the docket are listed in the index, some information 
may be publicly available only at the hard copy location (e.g., 
copyrighted material), and some may not be publicly available at either 
location (e.g., CBI).

FOR FURTHER INFORMATION CONTACT: Jennifer Huser, Air and Radiation 
Division, Environmental Protection Agency, Region 6, 1201 Elm Street, 
Suite 500, Dallas, Texas 75270, telephone 214-665-7347; email address 
[email protected].

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,'' 
``us,'' or ``our'' is used, we mean the EPA.
    A public hearing, if requested, will provide interested parties the 
opportunity to present information and opinions to us concerning our 
proposal. Interested parties may also submit written comments, as 
discussed in the proposal. Written statements and supporting 
information submitted during the comment period will be considered with 
the same weight as any oral comments and supporting information 
presented at the public hearing. We will not respond to comments during 
the public hearing. When we publish our final action, we will provide 
written responses to all significant oral and written comments received 
on our proposal.
    At the public hearing, the hearing officer may limit the time 
available for each commenter to address the proposal to three minutes 
or less if the hearing officer determines it to be appropriate. We will 
not be providing equipment for commenters to show overhead slides or 
make computerized slide presentations. Any person may provide written 
or oral comments and data pertaining to our proposal at the public 
hearing. Verbatim English--language transcripts of the hearing and 
written statements will be included in the rulemaking docket.

[[Page 61851]]

Table of Contents

I. Background
II. Public Comment
III. Texas SO2 BART Alternative Trading Program
    A. Proposed Changes to Specific Texas SO2 Trading 
Program Features
    1. Addition of Assurance Provisions
    2. Revision of Supplemental Allowance Pool Allocation Provisions
    3. Termination of Opt-In Provisions
    4. Revision of Allowance Recordation Provisions
    B. Interstate Visibility Transport
IV. Supplemental Proposed Action
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Overview, 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    I. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act (NTTAA)
    K. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. Background

    On August 27, 2018, we proposed to affirm our October 2017 FIP and 
provided an opportunity to comment on relevant aspects of the rule, as 
well as other specified related issues.\1\ To address the 
SO2 BART requirements for EGUs, we proposed to affirm our 
October 2017 FIP, which relied on an intrastate SO2 trading 
program as a BART alternative for certain EGUs in Texas (``Texas 
SO2 Trading Program''). We proposed to affirm our approval 
of the portion of the 2009 Texas Regional Haze SIP that addresses the 
BART requirement for EGUs for particulate matter (PM). We also proposed 
to affirm our determination that the BART alternatives addressing 
SO2 and nitrogen oxides (NOX) BART at Texas' EGUs 
were adequate to satisfy the interstate visibility transport 
requirements for the following national ambient air quality standards 
(NAAQS): (1) 1997 8-hour ozone; (2) 1997 PM2.5 (annual and 
24-hour); (3) 2006 PM2.5 (24-hour); (4) 2008 8-hour ozone; 
(5) 2010 1-hour NO2; and (6) 2010 1-hour SO2. The 
August 2018 proposal contains more detailed discussion of previous EPA 
actions on Texas Regional Haze and the rationale for our proposed 
action to affirm.
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    \1\ 83 FR 43586 (August 27, 2018). Additional information 
regarding the regulatory background of the CAA and regional haze 
requirements can be found in the October 2017 FIP, 82 FR 48324 (Oct. 
17, 2017), and our January 2017 notice of proposed rulemaking for 
Texas Regional Haze, 82 FR 912 (Jan. 4, 2017).
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    The comment period on the August 2018 proposal closed on October 
26, 2018. We received timely comments on the proposal, and we will 
address all comments received on the original proposal and on this 
supplemental proposal in our final action.

II. Public Comment

    We are reopening the public comment period with respect to the 
specific proposed changes in this notice. Comments are due January 13, 
2020. EPA is not reopening the comment period for any other aspects of 
our August 2018 proposal. Comments should be limited to the items 
discussed in this supplemental proposal.

III. Texas SO2 BART Alternative Trading Program

A. Proposed Changes to Specific Texas SO2 Trading Program Features

    In this supplemental proposal, EPA proposes to make four sets of 
amendments to the Texas SO2 Trading Program: (1) The 
addition of assurance provisions; (2) revisions to the Supplemental 
Allowance Pool allocation provisions; (3) termination of the opt-in 
provisions; and (4) revision of the allowance recordation provisions. 
The four subsections of this section discuss each of these proposed 
sets of amendments in turn, along with the associated rationales. In 
general, these proposed changes, if finalized, would strengthen our 
finding in October 2017,\2\ which we proposed to affirm in August 2018, 
that the Texas SO2 Trading Program will result in 
SO2 emission levels from Texas EGUs that are similar to or 
less than the emission levels from Texas EGUs that would have been 
realized had Texas continued to participate in the SO2 
trading program under the Cross-State Air Pollution Rule (CSAPR).\3\
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    \2\ 82 FR 48324, 48329.
    \3\ See 83 FR at 43599.
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    The proposed changes to the Texas SO2 Trading Program 
would be implemented through revisions to the existing regulations at 
40 CFR part 97, subpart FFFFF. A redline/strike-out document showing 
subpart FFFFF with the proposed revisions has been added to the docket 
for this proposed action.
1. Addition of Assurance Provisions
    In the August 2018 proposal, EPA proposed to affirm that the Texas 
SO2 Trading Program is an appropriate SO2 BART 
alternative for EGUs in Texas on the basis that the program ``will 
achieve greater reasonable progress than BART towards restoring 
visibility, consistent with the June 2012 `CSAPR better than BART' and 
September 2017 `CSAPR still better than BART' determinations.'' \4\ 
(Further background on those determinations is set forth in the August 
2018 proposal.) In support, EPA explained that the Texas SO2 
Trading Program, despite some difference in the scope of coverage of 
EGUs, would be comparable in stringency to, if not more stringent than, 
the CSAPR SO2 trading program as applied to Texas 
sources.\5\ EPA further explained that its analysis of the stringency 
of the CSAPR program was premised on the CSAPR program's structure of 
state emission budgets plus ``assurance levels.'' \6\
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    \4\ Id. at 43590.
    \5\ Id. at 43591-92.
    \6\ Id. at 43594-95.
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    In each of the CSAPR trading programs, EPA set an assurance level 
for each state in order to ensure that, despite the broad, interstate 
trading region, emissions reductions would be achieved appropriately in 
a geographically distributed way commensurate with states' ``good 
neighbor'' obligations as determined by EPA through its analysis under 
CAA section 110(a)(2)(D)(i)(I).\7\ EPA set these assurance levels for 
states by first establishing a ``variability limit'' as a percentage of 
each state's total emission budget in order to account for year-to-year 
variability in the amount of fossil fuel combusted to produce 
electricity required to meet customer demand. EPA then set the amount 
of each state's assurance level as the sum of the state's budget and 
its variability limit.\8\ If a state's sources' emissions exceed the 
statewide assurance level, the emissions above that level are 
``penalized'' through a three-to-one allowance surrender ratio.\9\ The 
CSAPR assurance levels are thus designed to provide the sources in each 
state with a strong incentive not to exceed a state-specific target in 
any compliance period, consistent with the state-specific nature of the 
good neighbor obligations, while providing

[[Page 61852]]

flexibility to respond to year-to-year variability in electricity 
demand.\10\
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    \7\ 76 FR 48208, 48265-66 (Aug. 8, 2011).
    \8\ Id. at 48266-68.
    \9\ 83 FR at 43594-95.
    \10\ For more information on assurance levels in the CSAPR 
program, see U.S. EPA, Cross-State Air Pollution Rule (CSAPR) Fact 
Sheet--Assurance Provisions, available at https://www.epa.gov/sites/production/files/2016-05/documents/fact_sheet_assurance_provisions_0.pdf and in the docket for this 
action.
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    The Texas SO2 Trading Program, as promulgated in October 
2017, does not include an assurance level. In contrast to CSAPR, the 
Texas SO2 Trading Program does not allow for sources to 
purchase allowances from sources in other states. Therefore, the number 
of allowances available to the Texas sources is limited by the total 
number of allowances allocated under the program. While this limits the 
average annual emissions under the program, we recognize, as discussed 
in further detail below, that the potential use of banked allowances 
and allowances allocated from the Supplemental Allowance Pool could 
result in potentially significant year-to-year variability in 
emissions. Therefore, the EPA is proposing to add an assurance level 
provision to the Texas SO2 Trading Program in order to 
maintain consistency with the CSAPR program and to provide additional 
support for our determination that SO2 emissions under the 
Texas SO2 Trading Program will remain below the requisite 
level on an annual basis. In order to explain our proposed 
determination of the appropriate stringency at which to set the 
assurance level, in this supplemental proposal we will first review our 
prior analysis of the stringency of the Texas SO2 Trading 
Program in the August 27, 2018 notice. We will then summarize the 
relevant public comments EPA received on this issue in response to that 
notice, and propose an appropriate assurance level based on our review 
of the information.
    In the August 2018 proposal, we summarized relevant Texas-related 
aspects of the 2011 proposed and 2012 final ``CSAPR better than BART'' 
rulemaking.\11\ We described how, for purposes of comparing the impacts 
of CSAPR and BART nationwide in the 2011 proposed rule, EPA initially 
used a model projection of 266,600 tons for Texas EGUs' annual 
SO2 emissions under the CSAPR program.\12\ We then explained 
that because of intervening increases in some CSAPR emissions budgets--
including an increase of 50,517 tons in the CSAPR SO2 budget 
for Texas--EPA conducted a sensitivity analysis for the 2012 final rule 
to assess the effects of the CSAPR budget adjustments, making a 
conservative assumption that SO2 emissions from Texas EGUs 
under CSAPR could potentially increase by the full amount of the Texas 
budget increase, or up to 317,100 tons per year (266,600 + 50,517).\13\ 
Finally, we noted the results of that sensitivity analysis, namely that 
CSAPR was expected to provide for greater reasonable progress than BART 
nationwide even with potential SO2 emissions from Texas EGUs 
under CSAPR as high as 317,100 tons.\14\
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    \11\ See 83 FR at 43594-95 (citing 77 FR 33642 (June 7, 2012)).
    \12\ See Technical Support Document for Demonstration of the 
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011-
0729-0014 (December 2011), available in the docket for this action, 
at table 2-4.
    \13\ See Sensitivity Analysis Accounting for Increases in Texas 
and Georgia Transport Rule State Emissions Budgets, Docket ID No. 
EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), available in the docket 
for this action.
    \14\ 83 FR at 43595.
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    In our August 2018 proposal, EPA used this benchmark (317,100 tons 
of SO2 emissions per year) to gauge whether the Texas 
SO2 Trading Program was sufficiently stringent for EPA to 
continue to rely on the BART-alternative analysis we conducted in the 
2012 ``CSAPR better than BART'' rulemaking. EPA found that the ``annual 
average emissions'' under the Texas SO2 Trading Program 
would remain below the 317,100 tons-per-year benchmark relied upon in 
the 2012 sensitivity analysis, because the yearly allocation to Texas 
EGUs under the Texas SO2 Trading Program was 238,393 tons of 
allowances, plus 10,000 tons allocated to the Supplemental Allowance 
Pool.\15\ Although there may be some year-to-year variability in 
emissions, EPA reasoned that variability for units within the Texas 
program would be constrained by the number of banked allowances and the 
number of allowances that can be allocated in a control period from the 
Supplemental Allowance Pool. (Annual allocations from the Supplemental 
Allowance Pool are limited to 54,711 tons.) The total number of 
allowances that can be allocated in a single year is therefore 293,104, 
which is the sum of the 238,393-ton budget for existing units plus 
54,711. EPA further explained that certain sources that had been 
subject to the CSAPR program, but which are not covered by the Texas 
SO2 Trading Program, emitted less than 27,500 tons of 
SO2 in 2016 and their emissions were not projected to 
significantly increase from this level. Taking into account these 
figures, as well as recent emissions data, EPA concluded that ``annual 
average EGU emissions'' under the Texas SO2 Trading Program 
were anticipated to remain ``well below'' the 317,100 ton per year 
benchmark and would be similar to emissions anticipated under CSAPR. 
Relying on this information, EPA concluded that the weight of evidence 
supported the conclusion that the Texas SO2 Trading Program 
met the requirements of a BART alternative.\16\
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    \15\ Id. at 43598.
    \16\ Id. at 43602.
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    Commenters on the August 2018 proposal identified several specific 
concerns with the Texas SO2 Trading Program. EPA has 
considered these comments, and they inform this supplemental proposal. 
Stated broadly, these commenters are concerned that the Texas 
SO2 Trading Program is insufficiently stringent to meet the 
requirements for a BART alternative under 40 CFR 51.308(e)(2). 
Commenters specifically questioned EPA's reliance on the 317,100-ton 
benchmark and argued that the Texas SO2 Trading Program 
would, unlike source-specific BART control requirements, allow for 
emissions to increase compared to recent emission levels. Commenters 
also identified the availability of supplemental allowances, the 
issuance of allocations to already-retired units, the general method of 
allocating allowances, and the availability of unlimited allowance 
banking as features which, according to them, undermine the stringency 
of the Texas SO2 Trading Program.
    EPA proposes to reaffirm its finding that the current Texas 
SO2 Trading Program budget, in general, compares favorably 
in stringency to the CSAPR SO2 trading program. Further, 
certain features of the Texas SO2 Trading Program that were 
raised as concerns by commenters, such as allocations to retired units 
and use of allowance banking, are consistent with elements of the CSAPR 
trading programs. However, EPA recognizes that the current Texas 
SO2 Trading Program, unlike CSAPR, does not impose an 
``assurance level''--a total level of annual emissions above which 
units in the program would be penalized with a higher allowance 
surrender ratio (i.e., a three-to-one rate) than the one-to-one ratio 
that applies to emissions below the assurance level. In EPA's analysis 
summarized above, EPA relied on the number of allowances allocated 
annually to indicate ``average'' annual emission levels. This analysis 
did not account for the variability in emissions due to the 
availability of banking or the build-up of allowances through 
allocations to retired units. Although these features are available to 
sources participating in the CSAPR programs, their effect on emissions 
in

[[Page 61853]]

that program is significantly constrained by the program's assurance 
provisions.
    Although assurance levels in the CSAPR program were, as discussed 
above, originally implemented to meet requirements relevant to 
interstate transport under the good neighbor provision, this feature of 
the program was also relevant to the BART-alternative analysis for 
CSAPR because the presence of the three-for-one penalty provision 
established a practical upper bound on each state's emissions in each 
year of the program. This informed the level of emissions EPA could 
project with confidence under the CSAPR program when determining 
whether it could serve as a BART alternative. EPA recognizes that, in 
the absence of an assurance level for the Texas SO2 Trading 
Program, there are no analogous means of guaranteeing that emissions 
would remain below a certain amount on an annual basis. The resulting 
growth in the number of allowances available for use in future years, 
without some constraint on annual emissions, could in theory impact the 
stringency of the program in terms of annual emissions for purposes of 
the BART-alternative analysis.
    Therefore, EPA is proposing to add an assurance level to the Texas 
SO2 Trading Program. EPA is proposing to set the assurance 
level using the same methodology applied in the original CSAPR 
rulemaking.\17\ There, for each state covered by a given CSAPR program, 
EPA analyzed the historical year-to-year variability in the total 
annual quantity of fossil fuel consumed to generate electricity in the 
state. From this analysis, EPA developed for each state a statistical 
percentage measure representing, at a 95% confidence level, the maximum 
expected one-year deviation from average annual fossil fuel consumption 
for electricity generation. EPA used the highest of these state-
specific statistical percentage measures for any state covered by a 
given CSAPR program to define ``variability limits'' for all the states 
covered by the program, where each state's variability limit was 
computed as that specific state's emissions budget multiplied by the 
highest of the state-specific statistical percentage measures for all 
the states in the program. EPA proposes here to set the assurance level 
for the Texas SO2 Trading Program by relying on the same 
analysis and methodology that were used to set assurance levels in the 
original CSAPR rulemaking. This approach maintains consistency with the 
methodology used for the CSAPR programs while accounting for the fact 
that the Texas SO2 Trading Program is intrastate-only (i.e., 
does not permit interstate trading). On a state-specific basis for 
Texas, EPA determined in the CSAPR rulemaking that the statistical 
percentage measure representing the maximum expected one-year deviation 
from the state's average annual fossil fuel consumption for electricity 
generation was seven percent.\18\ Applying that same percentage to the 
current Texas SO2 Trading Program budget, EPA proposes to 
set the variability limit for Texas at 16,688 tons, which is seven 
percent of the trading budget of 238,393 tons. The proposed assurance 
level is the sum of the budget and the variability limit, or 255,081 
tons. EPA proposes to amend the Texas SO2 Trading Program's 
regulations to impose a penalty surrender ratio of three allowances for 
each ton of emissions in any year in excess of the 255,081-ton 
assurance level, and to impose the penalty proportionately to emissions 
from those groups of sources represented by a common designated 
representative that emit in excess of the groups' annual allocations of 
allowances. These requirements are in nearly all respects identical to 
the CSAPR program's assurance provisions. The specific amendments to 
the regulatory text are described in more detail below.
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    \17\ See Power Sector Variability Final Rule TSD (July 2011), 
available at https://www.epa.gov/csapr/power-sector-variability-final-rule-tsd and in the docket for this action.
    \18\ Id.
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    In addition to being consistent with the original CSAPR methodology 
for setting assurance levels, EPA also believes that an assurance level 
set at 255,081 is appropriate for the Texas SO2 Trading 
Program because, if finalized, it will provide further support for our 
October 2017 finding that the Texas SO2 Trading Program will 
result in SO2 emission levels from Texas EGUs that are 
similar to or less than the emission levels from Texas EGUs that would 
have been realized from participation in the SO2 trading 
program under CSAPR. At an assurance level of 255,081 tons of emissions 
annually, EPA has high confidence that emissions will be below the 
amount assumed in the BART-alternative sensitivity analysis utilized 
for the 2012 CSAPR-better-than-BART determination (i.e., 317,100 tons), 
and thus visibility levels at Class I areas impacted by sources in 
Texas are anticipated to be at least as good as the levels projected in 
the 2012 analysis that assumed Texas would be in the larger CSAPR 
SO2 trading program.\19\ In reaching that conclusion, EPA 
includes in its analysis a reasonable estimate of projected emissions 
from units that would have been in the CSAPR program, but are not in 
the Texas SO2 Trading Program. EPA proposes to use a more 
conservative (i.e., higher) estimate of these emissions than in its 
August 2018 proposal. We propose to assume that these units will emit 
35,000 tons of SO2 annually based on a maximum annual 
emission level of 34,129 tons over the past five years (2014-2018) and 
considering that several of these units have recently shut down or have 
been announced for shutdown in the near future.\20\ Adding that amount 
to the assurance level of 255,081 tons yields 290,081 tons. Assuming 
this figure represents a firm upper bound on annual SO2 
emissions from the relevant EGUs in Texas, this is less than the 
317,100 ton figure EPA had demonstrated was acceptable in the original 
2012 CSAPR analysis, as discussed above and in the August 2018 
proposal.\21\ We note that, as demonstrated in Table 1, SO2 
emissions from power plants in Texas are currently well below the Texas 
SO2 Trading Program budget of 238,293 tons (as well as the 
proposed assurance level of 255,081 tons) and are anticipated to 
continue to decrease due to the low cost of natural gas and increasing 
renewable energy production.\22\
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    \19\ Two organizations have filed a petition for reconsideration 
of EPA's September 29, 2017 determination that CSAPR continues to 
satisfy the BART-alternative analysis under 40 CFR 51.308(e)(4) 
notwithstanding certain changes to the geographic scope of the 
program, including the removal of Texas from the CSAPR program for 
annual SO2 and NOx emissions. See Sierra Club and 
National Parks Conservation Association, Petition for Partial 
Reconsideration of Interstate Transport of Fine Particulate Matter: 
Revision of Federal Implementation Plan Requirements for Texas, 82 
FR 45481 (Sept. 29, 2017); EPA-HQ-OAR-2016-0598; FRL09968-46-OAR 
(dated Nov. 28, 2017). EPA is not proposing to address that 
determination through this action, and EPA is not addressing or 
revisiting the larger reaffirmation of the BART-alternative analysis 
for CSAPR at issue in that separate action taken in September 2017. 
EPA intends to take action at a later date responding to the 
petition for reconsideration in that matter.
    \20\ See ``Texas EGU SO2 emissions, 2014-2018.xlsx'', 
available in the docket for this action. Sandow Station units 5A and 
5B have been permanently retired. AEP has announced retirement of 
Oklaunion by September 2020. Gibbons Creek is currently not 
operating although it has not been officially retired.
    \21\ See ``Sensitivity Analysis Accounting for Increases--EPA-
HQ-OAR-2011-0729-0323'' available in the docket for this action.
    \22\ http://www.ercot.com/content/wcm/lists/144927/2018_LTSA_Report.pdf.

[[Page 61854]]



                                  Table 1--Recent SO2 Emissions Trends in Texas
                                                     [Tons]
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                                       2014            2015            2016            2017            2018
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Texas total EGU emissions.......         343,425         260,138         245,799         275,993         211,025
Participating sources' emissions         309,296         236,754         218,291         245,870         179,628
Non-participating sources'                34,129          23,384          27,509          30,124          31,397
 emissions......................
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    EPA also notes that the addition of an assurance level guaranteeing 
that SO2 emissions can be expected to remain below a certain 
level each year has the effect of also addressing a number of other 
specific concerns about the Texas SO2 Trading Program raised 
by commenters. In particular, to the extent that commenters claimed the 
program would be inadequately stringent due to the allowance allocation 
methodology, including allocations to retired units, or due to the 
Supplemental Allowance Pool or allowance banking, these concerns are 
effectively rendered moot by the addition of the assurance level. This 
is because when a mass-based trading program includes a ``cap'' on 
overall annual emissions, as the Texas SO2 Trading Program 
would with the addition of the proposed assurance provisions, that 
overall ``cap'' on emissions set by the program (here, the assurance 
level) effectively determines the stringency of the program in each 
year. How allowances to emit are allocated annually within that overall 
cap, and whether allowances may be banked across years by certain 
market participants, will not impact the annual stringency of the 
program as a whole. Allocations to retired units and the availability 
of banking are important to ensure market stability, avoid perverse 
incentives, and potentially aid in sources' operational planning.\23\ 
With the addition of an assurance level, the potential risk of an undue 
relaxation of the annual stringency in the program is minimized, 
because sources will remain strongly incentivized to keep annual 
emissions below the level at which the three-for-one surrender penalty 
is imposed. The effectiveness of assurance levels in guaranteeing the 
stringency of trading programs has been borne out in CSAPR, where no 
state's sources' emissions have exceeded a state's assurance level to-
date.\24\
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    \23\ See CSAPR Update Final Rule, 81 FR 74506, 74559, 74566 
(Oct. 26, 2016) (discussing rationales for these features in the 
context of the CSAPR Update ozone season NOX trading 
program).
    \24\ See 2017 and 2018 CSAPR Budgets Emissions and Assurance 
Levels Spreadsheets, available at U.S. EPA, CSAPR Assurance 
Provision, https://www.epa.gov/csapr/csapr-assurance-provision. 
Copies of the spreadsheets, fact sheet, and web page are also 
provided in the docket for this action.
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    EPA requests comment on its proposal to add assurance provisions to 
the Texas SO2 Trading Program. EPA also requests comment on 
its proposal to set the assurance level at 255,081 tons. The specific 
mechanics for the addition of this feature to the program are discussed 
in more detail below.
    EPA proposes to make the assurance level effective beginning with 
the 2021 compliance period and for each period thereafter. The proposed 
assurance provisions would be implemented through the addition of new 
provisions at multiple locations in the Texas SO2 Trading 
Program regulations at 40 CFR part 97, subpart FFFFF (40 CFR 97.901 
through 97.935). In Sec.  97.902, new definitions of several terms used 
in the assurance provisions (``assurance account,'' ``common designated 
representative,'' ``common designated representative's assurance 
level,'' and ``common designated representative's share'') would be 
added. New Sec.  97.906(c)(2) and (c)(3)(ii) would set forth the 
central requirement of the assurance provisions--namely, that if 
SO2 emissions from all covered sources in 2021 or any 
subsequent year collectively exceed the program's assurance level, then 
the owners and operators of the groups of sources determined to be 
responsible for the collective exceedance would be required to 
surrender allowances totaling twice the amount of the exceedance by a 
specified deadline, in addition to the allowances surrendered to 
account for the sources' total emissions. New Sec.  97.910(b) and (c) 
would establish the variability limit that would be added to the 
trading program budget to determine the amount of the assurance level. 
New Sec.  97.920(b) would provide for the establishment of assurance 
accounts, when appropriate, to hold the additional allowances to be 
surrendered. New Sec.  97.925 would set forth additional procedures for 
EPA's administration of and sources' compliance with the assurance 
provisions.
    Besides the addition of the new provisions just described, in 
Sec. Sec.  97.906 and 97.920, several existing paragraphs would be 
renumbered and internal cross-references would be updated to reflect 
the added and renumbered paragraphs. Finally, revisions would be made 
to existing language at Sec. Sec.  97.902 (definitions of ``general 
account'' and ``Texas SO2 Trading Program allowance 
deduction''), 97.906(b)(2), 97.913(c), 97.926(b), 97.928(b), and 
renumbered 97.906(c)(4)(ii) to integrate the new assurance provisions 
with various existing provisions of the Texas program regulations.
    The language of the proposed revisions to the Texas SO2 
Trading Program regulations would generally parallel the analogous 
language from the CSAPR regulations at 40 CFR part 97, subparts AAAAA 
through EEEEE, streamlined to reflect the Texas program's narrower 
applicability (i.e., specific units located only in Texas, excluding 
any new units built either in Texas or in Indian country within Texas' 
borders). The only substantive differences from the analogous CSAPR 
assurance provisions concern the approach used to impute allocation 
amounts--for use in apportioning responsibility for any collective 
exceedance of the assurance level--to any units that do not receive 
actual allowance allocations from the trading program budget. Under 
CSAPR, the only units potentially in this situation are new units that 
do not receive allowance allocations from the CSAPR new unit set-
asides, and the CSAPR regulations include a methodology for computing 
unit-specific imputed allocation amounts based on several data elements 
relating to the new units' design and potential operation.\25\ In 
contrast, under the Texas SO2 Trading Program, the only 
units potentially in this situation would be existing units that have 
ceased operation for an extended period, thereby losing their 
allocations from the trading budget under Sec.  97.911(a), and that 
subsequently resume operation.\26\

[[Page 61855]]

Because the Texas SO2 Trading Program regulations already 
identify the unit-specific allowance allocations that these units would 
formerly have received from the trading budget, the proposed Texas 
SO2 Trading Program assurance provisions would use these 
previously established amounts for purposes of assurance provision 
calculations instead of requiring new imputed allocation amounts to be 
computed according to the more complex methodology in the CSAPR 
assurance provisions. The simpler approach proposed for the Texas 
SO2 Trading Program assurance provisions appears at 
paragraph (2) of the proposed new definition of ``common designated 
representative's assurance level'' in Sec.  97.902.
---------------------------------------------------------------------------

    \25\ See, e.g., paragraph (3) of the definition of ``common 
designated representative's share'' at 40 CFR 97.702.
    \26\ Although the owners and operators of a unit in this 
situation might receive an allocation of allowances from the 
Supplemental Allowance Pool under Sec.  97.912 based in part on the 
unit's emissions following resumption of operations, under the Texas 
program assurance provisions as proposed, any allocations of 
allowances from the Supplemental Allowance Pool would not be 
considered when apportioning responsibility for a collective 
exceedance of the assurance level.
---------------------------------------------------------------------------

    The simpler approach we are proposing for determining any imputed 
allocation amounts allows for some additional simplifications elsewhere 
in the proposed Texas SO2 Trading Program assurance 
provisions. The CSAPR assurance provisions include regulatory text 
addressing the submission of data required to compute the imputed 
allocation amounts and the consequences of appeals relating to EPA's 
use of the data; the CSAPR provisions also call for issuance of an 
initial notice in advance of the required data submissions. Because 
under the proposed Texas SO2 Trading Program assurance 
provisions the specific imputed allocation amounts would already be 
stated in the regulations, analogous provisions addressing data 
submissions and appeals are unnecessary and the contents of the initial 
notice can be consolidated into a later notice. Consequently, the 
corresponding paragraphs of the proposed Texas SO2 Trading 
Program assurance provisions at proposed new Sec.  97.925(b)(1)(ii), 
(b)(2)(i), and (b)(6)(ii) would contain no regulatory language and 
instead appear as ``reserved.''
2. Revision of Supplemental Allowance Pool Allocation Provisions
    Section 97.912 of the existing Texas SO2 Trading Program 
regulations establishes how allowances are allocated from the 
Supplemental Allowance Pool to sources (collections of participating 
units at a facility) that have reported total emissions for that 
control period exceeding the total amounts of allowances allocated to 
the participating units at the source for that control period (before 
any allocation from the Supplemental Allowance Pool). While all other 
sources required to participate in the trading program have flexibility 
to transfer allowances among multiple participating units under the 
same owner/operator when planning operations, Coleto Creek consists of 
only one coal-fired unit, and at the time of our October 2017 FIP, was 
the only coal-fired unit in Texas owned and operated by Dynegy. To 
provide this source additional flexibility, under the current program, 
Coleto Creek is allocated its maximum supplemental allocation from the 
Supplemental Allowance Pool as long as there are sufficient allowances 
in the Supplemental Allowance Pool available for allocation, and its 
actual allocation will not be reduced in proportion with any reductions 
made to the supplemental allocations to other sources. In our August 
2018 proposal, we noted that Dynegy has merged with Vistra, which owns 
other units that are subject to the trading program. In the August 2018 
proposal, we solicited comment on eliminating this additional 
flexibility for Coleto Creek in light of the recent change in 
ownership, and we received no adverse comments on such a change. In 
this SNPRM, we propose to make this change to the regulations.
    Some commenters on the August 2018 proposal supported an analogous 
further change to the methodology for allocating allowances from the 
Supplemental Allowance Pool. These commenters observed that any owner 
with multiple sources has the ability to use surplus allowances 
allocated to one source to cover emissions from its other sources that 
exceed those other sources' base allowance allocations. Based on this 
observation, the commenters expressed the view that it would be more 
equitable to make allocations from the Supplemental Allowance Pool in 
proportion to each owner's total emissions in excess of the owner's 
total base allowance allocations instead of in proportion to each 
individual source's emissions in excess of the individual source's base 
allowance allocation. EPA agrees that this change would be equitable 
and notes that it would also be consistent with the rationale for 
eliminating the special flexibility in the existing regulations for 
Coleto Creek. Accordingly, EPA proposes to amend the Supplemental 
Allowance Pool allocation provisions to reflect this further change in 
the allocation methodology.
    The proposed modifications to the methodology for allocating 
allowances from the Supplemental Allowance Pool would be implemented 
through several revisions to Sec. Sec.  97.911 and 97.912. In Sec.  
97.912, paragraph (a) would be edited to limit applicability of the 
current allocation methodology to the 2019 and 2020 control periods, 
and a new paragraph (b) would be added setting forth the revised 
allocation methodology proposed for the control periods in 2021 and 
subsequent years. Two existing paragraphs of the section would be 
renumbered to accommodate the new paragraph (b), and internal cross-
references would be updated to reflect the renumbering and to integrate 
the provisions of the revised allocation methodology with other 
existing provisions.
    Proposed new Sec.  97.912(b)(1) of the revised allocation 
methodology sets forth a procedure for assigning units into groups 
under common ownership called ``affiliated ownership groups.'' Under 
the proposed procedure, the group assignments would remain constant 
unless and until revised by EPA to reflect an ownership transfer. The 
proposed initial group assignments for all covered units are specified 
in a proposed new column that would be added to the existing allowance 
allocation table in Sec.  97.911(a)(1).
    Finally, consistent with the existing language in renumbered Sec.  
97.912(d) capping the number of allowances that can be allocated from 
the Supplemental Allowance Pool for any given control period, non-
substantive revisions to Sec. Sec.  97.911(a)(2) and (c)(5) would 
clarify that allowances from the trading budget that are transferred to 
the Supplemental Allowance Pool are not necessarily ``allocated under'' 
Sec.  97.912, but instead are made available for ``potential allocation 
in accordance with'' Sec.  97.912.
    EPA requests comment on the proposed revisions to the Supplemental 
Allowance Pool allocation provisions.
3. Termination of Opt-In Provisions
    Under Sec.  97.904(b) of the existing Texas SO2 Trading 
Program regulations, the EPA provided an opportunity for any other unit 
in the State of Texas that was previously subject to the CSAPR 
SO2 Group 2 Trading Program and would have received an 
allowance allocation under that program to opt into the Texas 
SO2 Trading Program. Under Sec.  97.911(b), a unit that opts 
into the Texas SO2 Trading Program would receive the same 
allowance allocation that it would have received under the CSAPR 
SO2 Group 2 Trading Program. These allowance allocations 
would be in addition to the allocations to other units from the Texas 
SO2 Trading Program budget and would therefore increase the 
total number of allowances available under the program. As of the date 
of this supplemental proposal, no source has notified EPA of intent to 
opt into the Texas SO2 Trading Program.

[[Page 61856]]

    A commenter on the August 2018 proposal asserted that the opt-in 
provision weakened the functional equivalence of the Texas 
SO2 Trading Program to CSAPR. The commenter cited EPA's 
determination not to include opt-in provisions in the CSAPR trading 
programs on the basis that opt-in provisions would undermine 
achievement of the CSAPR program's emission reduction objectives. The 
commenter also cited EPA's discussion of the reasons for this 
determination, including the difficulty of distinguishing new emission 
reductions from reductions that opt-in sources would have made anyway, 
and the consequent likelihood that the amounts of allowances allocated 
to the sources would exceed their starting emissions levels. The 
allocations to the sources opting in would thus introduce ``extra'' 
allowances into the CSAPR trading programs, increasing the quantity of 
allowances available to be traded to other sources and thereby 
decreasing the programs' stringency.\27\ EPA believes that these 
considerations about potentially introducing ``extra'' allowances also 
apply to the current opt-in provisions in the Texas SO2 
Trading Program. Therefore, consistent with this supplemental 
proposal's overall objective of strengthening our finding that the 
Texas SO2 Trading Program will result in SO2 
emission levels from Texas EGUs that are similar to or less than the 
emission levels from Texas EGUs that would have been realized from 
participation in the SO2 trading program under CSAPR, EPA 
proposes to terminate the opt-in provisions in the Texas SO2 
Trading Program.
---------------------------------------------------------------------------

    \27\ See generally 76 FR at 48276.
---------------------------------------------------------------------------

    EPA requests comment on the proposed termination of the opt-in 
provisions. EPA also solicits comment as to what other relevant 
provisions in the Texas SO2 Trading Program may offset the 
expressed concerns with the opt-in provisions.
    The proposed termination of the opt-in provisions would be 
implemented through revisions in three locations. In Sec.  
97.904(b)(2), revised language would provide that the opportunity to 
participate in the Texas SO2 Trading Program by opting in is 
available only for the 2019 and 2020 control periods. Revisions to 
Sec. Sec.  97.911(b) and 97.921(d) would similarly provide that 
allowance allocations to opt-in units could be made and recorded only 
for the 2019 and 2020 control periods.
4. Revision of Allowance Recordation Provisions
    Under Sec.  97.921(a) of the existing Texas SO2 Trading 
Program regulations, ``[t]he Administrator may delay recordation of 
Texas SO2 Trading Program allowances for the specified 
control periods if the State of Texas submits a SIP revision before the 
recordation deadline.'' Similarly, under Sec.  97.921(b), ``[t]he 
Administrator may delay recordation of the Texas SO2 Trading 
Program allowances for the applicable control periods if the State of 
Texas submits a SIP revision by May 1 of the year of the applicable 
recordation deadline under this paragraph.'' In this SNPRM, we are 
proposing to amend the language in the recordation provisions such that 
the Administrator can delay recordation in the event that Texas submits 
a SIP revision and EPA takes final action to approve it. These 
revisions are necessary to ensure that the program remains fully 
operational unless it is replaced by a SIP revision that is approved by 
EPA as meeting the SO2 BART requirements for the covered 
units.
    The proposed amendment to condition any exceptions to scheduled 
allowance recordation activities on EPA's approval, rather than Texas' 
submission, of a SIP revision would be implemented through revisions to 
three paragraphs of Sec.  97.921. In Sec.  97.921(a), the existing 
language providing for a possible delay of recordation activities 
scheduled for November 1, 2018, would be deleted without replacement; 
the language is moot because the recordation date has already passed. 
In Sec.  97.921(b), which governs future recordation of allowances 
allocated from the trading budget under Sec.  97.911(a), the existing 
language would be revised to provide that future recordation activities 
will take place as scheduled unless provided otherwise in EPA's 
approval of a SIP revision replacing the provisions of subpart FFFFF. 
The same revised condition would also be added to Sec.  97.921(c), 
which governs future recordation of allowances allocated from the 
Supplemental Allowance Pool under Sec.  97.912.
    EPA requests comment on the proposed revisions to the allowance 
recordation provisions.

B. Interstate Visibility Transport

    In our August 2018 proposal, we proposed to affirm that Texas' 
participation in CSAPR to satisfy NOx BART and the Texas SO2 
Trading Program fully addresses Texas' interstate visibility transport 
obligations for the following six NAAQS: (1) 1997 8-hour ozone; (2) 
1997 PM2.5 (annual and 24-hour); (3) 2006 PM2.5 
(24-hour); (4) 2008 8-hour ozone; (5) 2010 1-hour NO2; and 
(6) 2010 1-hour SO2.\28\ The basis of this proposed 
affirmation was our determination in the October 2017 FIP that the 
regional haze measures in place for Texas are adequate to ensure that 
emissions from the State do not interfere with measures to protect 
visibility in nearby states because the emission reductions are 
consistent with the level of emissions reductions relied upon by other 
states during consultation and when setting their reasonable progress 
goals. As discussed in our August 2018 proposal, the 2009 Texas 
Regional Haze SIP relied on CAIR to meet SO2 and 
NOX BART requirements for EGUs. Under CAIR, Texas EGU 
sources were projected to emit approximately 350,000 tons of 
SO2 annually. In today's SNPRM, EPA proposes to make four 
revisions to strengthen the Texas SO2 Trading Program and 
increase its consistency with CSAPR, including the addition of an 
assurance level consistent with the 2012 CSAPR demonstration. As 
discussed elsewhere in this SNPRM, Texas EGU annual SO2 
emissions for sources covered by the trading program would be 
constrained by the assurance level of 255,081 tons. Including an 
estimated 35,000 tons per year of emissions from units not covered by 
the Texas SO2 Trading Program yields 290,081 tons of 
SO2, well below the 350,000-ton emissions projection for 
Texas sources under CAIR or the 317,100-ton emissions benchmark for 
Texas sources under CSAPR discussed in section III.A.1. Additionally, 
the October 2017 FIP relies on CSAPR as an alternative to EGU BART for 
NOX, which exceeds the NOX emission reductions 
from Texas relied upon by other states during consultation. Because the 
proposed revisions to the Texas SO2 Trading Program in this 
SNPRM would make the program consistent with or below those emission 
levels relied upon by other states during consultation, we believe 
these revisions provide further support for our earlier finding that 
the BART alternatives in the October 2017 FIP result in emission 
reductions adequate to satisfy the requirements of CAA section 
110(a)(2)(D)(i)(II) with respect to visibility for the six identified 
NAAQS. We invite comment on how the proposed revisions in this SNPRM 
impact our August 2018 proposal to affirm our October 2017 
determination regarding Texas' visibility transport

[[Page 61857]]

obligations with respect to the NAAQS identified above.
---------------------------------------------------------------------------

    \28\ 83 FR at 43593, 43604, and 43605.
---------------------------------------------------------------------------

IV. Supplemental Proposed Action

    In this SNPRM, EPA proposes to make four sets of amendments to the 
Texas SO2 Trading Program: (1) The addition of assurance-
level provisions; (2) revisions to the Supplemental Allowance Pool 
allocation provisions; (3) termination of the opt-in provisions; and 
(4) revision of the allowance recordation provisions. The proposed 
changes to the Texas SO2 Trading Program would be 
implemented through revisions to the existing regulations at 40 CFR 
part 97, subpart FFFFF. A redline/strike-out document showing subpart 
FFFFF with the proposed revisions has been added to the docket for this 
proposed action.
    In this proposed action we are only soliciting comment on the four 
proposed revisions to the Texas SO2 Trading Program, and how 
those proposed changes impact our August 2018 proposal to affirm that 
(1) the Texas SO2 Trading Program will result in 
SO2 emission levels from Texas EGUs that are similar to or 
less than the emission levels from Texas EGUs that would have been 
realized from participation in the SO2 trading program under 
CSAPR, and (2) Texas' interstate visibility transport obligations with 
respect to six NAAQS (listed in the preceding section) are satisfied. 
The EPA is not reopening the comment period on any other aspect of the 
August 2018 proposal. The EPA will not respond to comments received 
during the reopened comment period outside the above-defined scope. We 
will respond to all comments received on this SNPRM and our August 2018 
proposal to affirm our October 2017 FIP in a single final rulemaking.

V. Statutory and Executive Order Reviews

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

    This proposed action is not a ``significant regulatory action'' 
under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) 
and is therefore not subject to review under Executive Orders 12866 and 
13563 (76 FR 3821, January 21, 2011).

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This proposed action is not an Executive Order 13771 regulatory 
action because this action is not significant under Executive Order 
12866.

C. Paperwork Reduction Act

    This proposed action does not impose any new information collection 
burden under the PRA. OMB has previously approved the information 
collection activities for the Texas SO2 Trading Program as 
part of the most recent information collection request renewal for the 
CSAPR trading programs and has assigned OMB control number 2060-0667. 
This proposed action would not change any information collection 
requirements for any entity affected underthe Texas SO2 
Trading Program.

D. Regulatory Flexibility Act

    I certify that this proposed action will not have a significant 
impact on a substantial number of small entities. In making this 
determination, the impact of concern is any significant adverse 
economic impact on small entities. An agency may certify that a rule 
will not have a significant economic impact on a substantial number of 
small entities if the rule relieves regulatory burden, has no net 
burden or otherwise has a positive economic effect on the small 
entities subject to the rule. This proposed rule does not impose any 
requirements or create impacts on small entities. This proposed action 
to modify a FIP action previously issued under Section 110 of the CAA 
will not create any new requirement with which small entities must 
comply. Accordingly, it affords no opportunity for the EPA to fashion 
for small entities less burdensome compliance or reporting requirements 
or timetables or exemptions from all or part of the rule. The fact that 
the CAA prescribes that various consequences (e.g., emission 
limitations) may or will flow from this action does not mean that the 
EPA either can or must conduct a regulatory flexibility analysis for 
this action. We have therefore concluded that this proposed action will 
have no net regulatory burden for all directly regulated small 
entities.

E. Unfunded Mandates Reform Act (UMRA)

    This proposed action does not contain an unfunded mandate of $100 
million or more as described in UMRA, 2 U. S. C. 1531-1538, and does 
not significantly or uniquely affect small governments.

F. Executive Order 13132: Federalism

    This proposed 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.

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

    This proposed rule does not have tribal implications, as specified 
in Executive Order 13175. It will not have substantial direct effects 
on tribal governments. Thus, Executive Order 13175 does not apply to 
this rule.

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

    Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks \29\ applies to any rule that: (1) Is 
determined to be economically significant as defined under Executive 
Order 12866; and (2) concerns an environmental health or safety risk 
that we have reason to believe may have a disproportionate effect on 
children. EPA interprets E.O. 13045 as applying only to those 
regulatory actions that concern health or safety risks, such that the 
analysis required under Section 5-501 of the E.O. has the potential to 
influence the regulation. This proposed action is not subject to 
Executive Order 13045 because it is not economically significant as 
defined in Executive Order 12866, and because the EPA does not believe 
the environmental health or safety risks addressed by this proposed 
action present a disproportionate risk to children. This proposed 
action is not subject to E.O. 13045 because it implements specific 
standards established by Congress in statutes. However, to the extent 
this proposed rule will limit emissions of SO2, the proposed 
rule will have a beneficial effect on children's health by reducing air 
pollution.
---------------------------------------------------------------------------

    \29\ 62 FR 19885 (Apr. 23, 1997).
---------------------------------------------------------------------------

I. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This proposed action is not subject to Executive Order 13211 (66 FR 
28355 (May 22, 2001)), because it is not a significant regulatory 
action under Executive Order 12866.

J. National Technology Transfer and Advancement Act (NTTAA)

    This proposed action does not involve technical standards.

[[Page 61858]]

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

    The EPA believes that this proposed action does not have 
disproportionately high and adverse human health or environmental 
effects on minority populations, low-income populations and/or 
indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, 
February 16, 1994). We have determined that this proposed rule will not 
have disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations without 
having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population. The proposed rule limits emissions of SO2 
from certain facilities in Texas.

List of Subjects

40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
dioxides, Visibility, Interstate transport of pollution, Regional haze, 
Best available retrofit technology.

 40 CFR Part 97

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Intergovernmental relations, Nitrogen dioxide, 
Reporting and recordkeeping requirements, Sulfur dioxides.

    Dated: November 1, 2019.
David Gray,
Acting Regional Administrator, Region 6.
    For the reasons stated in the preamble, Part 97 of chapter I of 
title 40 of the Code of Federal Regulations is proposed to be amended 
as follows:

PART 97--FEDERAL NOX BUDGET TRADING PROGRAM, CAIR NOX AND SO2 
TRADING PROGRAMS, CSAPR NOX AND SO2 TRADING PROGRAMS, AND TEXAS SO2 
TRADING PROGRAM

0
1. The authority citation for Part 97 is revised to read as follows:

    Authority: 42 U. S. C. 7401, 7403, 7410, 7426, 7491, 7601, and 
7651, et seq.

Subpart FFFFF--TEXAS SO2 TRADING PROGRAM

0
2. Section 97.902 is amended by:
0
a. In the definitions of ``Acid Rain Program'', ``Allowance Management 
System'', and ``Allowance Management System account'', capitalizing the 
first three words;
0
b. Adding in alphabetical order a definition of ``Assurance account'';
0
c. In the definition of ``authorized account representative'', 
capitalizing the word ``trading'' the first time it appears;
0
d. Adding in alphabetical order definitions of ``Common designated 
representative'', ``Common designated representative's assurance 
level'', and ``Common designated representative's share''; and
0
e. Revising the definitions of ``General account'' and ``Texas 
SO2 Trading Program allowance deduction''.
    The additions and revisions read as follows:


Sec.  97.902   Definitions.

* * * * *
    Assurance account means an Allowance Management System account, 
established by the Administrator under Sec.  97.925(b)(3) for certain 
owners and operators of a group of one or more Texas SO2 
Trading Program sources and units, in which are held Texas 
SO2 Trading Program allowances available for use for a 
control period in a given year in complying with the Texas 
SO2 Trading Program assurance provisions in accordance with 
Sec. Sec.  97.906 and 97.925.
* * * * *
    Common designated representative means, with regard to a control 
period in a given year, a designated representative where, as of April 
1 immediately after the allowance transfer deadline for such control 
period, the same natural person is authorized under Sec. Sec.  
97.913(a) and 97.915(a) as the designated representative for a group of 
one or more Texas SO2 Trading Program sources and units.
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and control 
period in a given year for which the State assurance level is exceeded 
as described in Sec.  97.906(c)(2)(iii):
    (1) The amount (rounded to the nearest allowance) equal to the sum 
of the total amount of Texas SO2 Trading Program allowances 
allocated for such control period under Sec.  97.911, or deemed to have 
been allocated under paragraph (2) of this definition, to the group of 
one or more Texas SO2 Trading Program units having the 
common designated representative for such control period multiplied by 
the sum for such control period of the Texas SO2 Trading 
Program budget under Sec.  97.910(a)(1) and the variability limit under 
Sec.  97.910(b) and divided by the sum of the total amount of Texas 
SO2 Trading Program allowances allocated for such control 
period under Sec.  97.911, or deemed to have been allocated under 
paragraph (2) of this definition, to all Texas SO2 Trading 
Program units;
    (2) Provided that, in the case of a Texas SO2 Trading 
Program unit that operates during, but has no amount of Texas 
SO2 Trading Program allowances allocated under Sec.  97.911 
for, such control period, the unit shall be treated, solely for 
purposes of this definition, as being allocated the amount of Texas 
SO2 Trading Program allowances shown for the unit in Sec.  
97.911(a)(1).
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and the total amount of SO2 emissions from all 
Texas SO2 Trading Program units during such control period, 
the total tonnage of SO2 emissions during such control 
period from the group of one or more Texas SO2 Trading 
Program units having the common designated representative for such 
control period.
* * * * *
    General account means an Allowance Management System account, 
established under this subpart, that is not a compliance account or an 
assurance account.
* * * * *
    Texas SO2 Trading Program allowance deduction or deduct Texas SO2 
Trading Program allowances means the permanent withdrawal of Texas 
SO2 Trading Program allowances by the Administrator from a 
compliance account (e.g., in order to account for compliance with the 
Texas SO2 Trading Program emissions limitation) or from an 
assurance account (e.g., in order to account for compliance with the 
assurance provisions under Sec. Sec.  97.906 and 97.925).
* * * * *


Sec.  97.904   [Amended]

0
3. Section 97.904 is amended in paragraph (b)(2) by removing the text 
``Program, provided'' and adding in its place the text ``Program for 
the control periods in years before 2021, provided''.
0
4. Section 97.906 is amended by:
0
a. In paragraph (b)(2), adding after the text ``emissions limitation'' 
the text ``and assurance provisions'';
0
b. Redesignating paragraphs (c)(2) through (6) as paragraphs (c)(3) 
through (7) and adding a new paragraph (c)(2);
0
c. Redesignating the text of newly redesignated paragraph (c)(3) after 
the paragraph heading as paragraph (c)(3)(i) and adding a new paragraph 
(c)(3)(ii);

[[Page 61859]]

0
d. In newly redesignated paragraph (c)(4)(ii), removing the text 
``paragraph (c)(1)(ii)(A)'' and adding in its place the text 
``paragraphs (c)(1)(ii)(A) and (c)(2)(i) through (iii)''.
    The additions read as follows:


Sec.  97.906   General provisions.

* * * * *
    (c) * * *
    (2) Texas SO2 Trading Program assurance provisions. (i) If total 
SO2 emissions during a control period in a given year from 
all Texas SO2 Trading Program units at Texas SO2 
Trading Program sources exceed the State assurance level, then the 
owners and operators of such sources and units in each group of one or 
more sources and units having a common designated representative for 
such control period, where the common designated representative's share 
of such SO2 emissions during such control period exceeds the 
common designated representative's assurance level for such control 
period, shall hold (in the assurance account established for the owners 
and operators of such group) Texas SO2 Trading Program 
allowances available for deduction for such control period under Sec.  
97.925(a) in an amount equal to two times the product (rounded to the 
nearest whole number), as determined by the Administrator in accordance 
with Sec.  97.925(b), of multiplying--
    (A) The quotient of the amount by which the common designated 
representative's share of such SO2 emissions exceeds the 
common designated representative's assurance level divided by the sum 
of the amounts, determined for all common designated representatives 
for such sources and units for such control period, by which each 
common designated representative's share of such SO2 
emissions exceeds the respective common designated representative's 
assurance level; and
    (B) The amount by which total SO2 emissions from all 
Texas SO2 Trading Program units at Texas SO2 
Trading Program sources for such control period exceed the State 
assurance level.
    (ii) The owners and operators shall hold the Texas SO2 
Trading Program allowances required under paragraph (c)(2)(i) of this 
section, as of midnight of November 1 (if it is a business day), or 
midnight of the first business day thereafter (if November 1 is not a 
business day), immediately after the year of such control period.
    (iii) Total SO2 emissions from all Texas SO2 
Trading Program units at Texas SO2 Trading Program sources 
during a control period in a given year exceed the State assurance 
level if such total SO2 emissions exceed the sum, for such 
control period, of the Texas SO2 Trading Program budget 
under Sec.  97.910(a)(1) and the variability limit under Sec.  
97.910(b).
    (iv) It shall not be a violation of this subpart or of the Clean 
Air Act if total SO2 emissions from all Texas SO2 
Trading Program units at Texas SO2 Trading Program sources 
during a control period exceed the State assurance level or if a common 
designated representative's share of total SO2 emissions 
from the Texas SO2 Trading Program units at Texas 
SO2 Trading Program sources during a control period exceeds 
the common designated representative's assurance level.
    (v) To the extent the owners and operators fail to hold Texas 
SO2 Trading Program allowances for a control period in a 
given year in accordance with paragraphs (c)(2)(i) through (iii) of 
this section,
    (A) The owners and operators shall pay any fine, penalty, or 
assessment or comply with any other remedy imposed under the Clean Air 
Act; and
    (B) Each Texas SO2 Trading Program allowance that the 
owners and operators fail to hold for such control period in accordance 
with paragraphs (c)(2)(i) through (iii) of this section and each day of 
such control period shall constitute a separate violation of this 
subpart and the Clean Air Act.
    (3) * * *
    (ii) A Texas SO2 Trading Program unit shall be subject 
to the requirements under paragraph (c)(2) of this section for the 
control period starting on January 1, 2021 and for each control period 
thereafter.
* * * * *
0
5. Section 97.910 is amended by:
0
a. Revising the section heading; and
0
b. Adding paragraphs (b) and (c).
    The revision and additions read as follows:


Sec.  97.910   Texas SO2 Trading Program budget, Supplemental Allowance 
Pool budget, and variability limit.

* * * * *
    (b) The variability limit for the Texas SO2 Trading 
Program budget for the control periods in 2021 and thereafter is 16,688 
tons.
    (c) The Texas SO2 Trading Program budget in paragraph 
(a)(1) of this section does not include any tons in the Supplemental 
Allowance Pool budget in paragraph (a)(2) of this section or the 
variability limit in paragraph (b) of this section.
0
6. Section 97.911 is amended by:
0
a. Revising paragraph (a)(1);
0
b. In paragraph (a)(2), removing the text ``allocated under the Texas 
Supplemental Allowance Pool under 40 CFR 97.912.'' and adding in its 
place the text ``transferred to the Texas Supplemental Allowance Pool 
for potential allocation in accordance with Sec.  97.912.'';
0
c. In paragraph (b)(1), removing the text ``SO2 allocation'' 
and adding in its place the text ``allocation'', and adding after the 
text ``each year'' the text ``before 2021''; and
0
d. In paragraph (c)(5), removing the text ``under 40 CFR 97.912.'' and 
adding in its place the text ``for potential allocation in accordance 
with Sec.  97.912.''.
    The revision reads as follows:


Sec.  97.911   Texas SO2 Trading Program allowance allocations.

    (a)(1) Except as provided in paragraph (a)(2) of this section, 
Texas SO2 Trading Program allowances from the Texas 
SO2 Trading Program budget will be allocated, for the 
control periods in 2019 and each year thereafter, as provided in Table 
1 to this paragraph (a)(1):

                       Table 1 to Paragraph (a)(1)--Texas SO2 Trading Program Allocations
----------------------------------------------------------------------------------------------------------------
                                                                Texas SO2
                                                                 trading
      Texas SO2 trading program units           ORIS code        program          Affiliated ownership group
                                                               allocation
                                                                 (tons)
----------------------------------------------------------------------------------------------------------------
Big Brown Unit 1...........................            3497           8,473  Vistra Energy.
Big Brown Unit 2...........................            3497           8,559  Vistra Energy.
Coleto Creek Unit 1........................            6178           9,057  Vistra Energy.
Fayette/Sam Seymour Unit 1.................            6179           7,979  Lower Colorado River Authority/City
                                                                              of Austin.
Fayette/Sam Seymour Unit 2.................            6179           8,019  Lower Colorado River Authority/City
                                                                              of Austin.

[[Page 61860]]

 
Graham Unit 2..............................            3490             226  Vistra Energy.
H W Pirkey Power Plant Unit 1..............            7902           8,882  American Electric Power.
Harrington Unit 061B.......................            6193           5,361  Xcel Energy.
Harrington Unit 062B.......................            6193           5,255  Xcel Energy.
Harrington Unit 063B.......................            6193           5,055  Xcel Energy.
JT Deely Unit 1............................            6181           6,170  City of San Antonio.
JT Deely Unit 2............................            6181           6,082  City of San Antonio.
Limestone Unit 1...........................             298          12,081  NRG Energy.
Limestone Unit 2...........................             298          12,293  NRG Energy.
Martin Lake Unit 1.........................            6146          12,024  Vistra Energy.
Martin Lake Unit 2.........................            6146          11,580  Vistra Energy.
Martin Lake Unit 3.........................            6146          12,236  Vistra Energy.
Monticello Unit 1..........................            6147           8,598  Vistra Energy.
Monticello Unit 2..........................            6147           8,795  Vistra Energy.
Monticello Unit 3..........................            6147          12,216  Vistra Energy.
Newman Unit 2..............................            3456               1  El Paso Electric.
Newman Unit 3..............................            3456               1  El Paso Electric.
Newman Unit 4..............................            3456               2  El Paso Electric.
Sandow Unit 4..............................            6648           8,370  Vistra Energy.
Sommers Unit 1.............................            3611              55  City of San Antonio.
Sommers Unit 2.............................            3611               7  City of San Antonio.
Stryker Unit ST2...........................            3504             145  Vistra Energy.
Tolk Station Unit 171B.....................            6194           6,900  Xcel Energy.
Tolk Station Unit 172B.....................            6194           7,062  Xcel Energy.
WA Parish Unit WAP4........................            3470               3  NRG Energy.
WA Parish Unit WAP5........................            3470           9,580  NRG Energy.
WA Parish Unit WAP6........................            3470           8,900  NRG Energy.
WA Parish Unit WAP7........................            3470           7,653  NRG Energy.
Welsh Power Plant Unit 1...................            6139           6,496  American Electric Power.
Welsh Power Plant Unit 2...................            6139           7,050  American Electric Power.
Welsh Power Plant Unit 3...................            6139           7,208  American Electric Power.
Wilkes Unit 1..............................            3478              14  American Electric Power.
Wilkes Unit 2..............................            3478               2  American Electric Power.
Wilkes Unit 3..............................            3478               3  American Electric Power.
----------------------------------------------------------------------------------------------------------------

* * * * *
0
7. Section 97.912 is amended by:
0
a. In paragraph (a) introductory text, removing the text ``each control 
period in 2019 and thereafter,'' and adding in its place the text ``the 
control periods in 2019 and 2020,'';
0
b. In paragraph (a)(1), removing the text ``each subsequent February 
15,'' and adding in its place the text ``February 15, 2021,'';
0
c. In paragraph (a)(3)(ii)(A), removing the text ``paragraph (b)'' and 
adding in its place the text ``paragraph (d)'';
0
d. In paragraph (a)(3)(ii)(B), removing the text ``paragraph (b)'' 
wherever it appears and adding in its place the text ``paragraph (d)'';
0
e. In paragraph (a)(3)(iii), removing the text ``paragraph (b)'' and 
adding in its place the text ``paragraph (d)'';
0
f. Redesignating paragraphs (a)(4) and (b) as paragraphs (c) and (d) 
and adding a new paragraph (b); and
0
g. In newly redesignated paragraph (d), adding after the text 
``paragraph (a)(3)(iii)'' the text ``or (b)(4)(ii)''.
    The addition reads as follows:


Sec.  97.912   Texas SO2 Trading Program Supplemental Allowance Pool.

* * * * *
    (b) For each control period in 2021 and thereafter, the 
Administrator will allocate Texas SO2 Trading Program 
allowances from the Texas SO2 Trading Program Supplemental 
Allowance Pool as follows:
    (1) For each control period, the Administrator will assign each 
Texas SO2 Trading Program unit to an affiliated ownership 
group reflecting the unit's ownership as of December 31 of the control 
period. The affiliated ownership group assignments for each control 
period will be as shown in Sec.  97.911(a)(1) except that the 
Administrator will revise the assignments, based on the information 
required to be submitted in accordance with Sec.  97.915(c) and any 
other information available to the Administrator, as necessary to 
reflect any ownership transfer resulting in a 50% or greater ownership 
share of a unit being held by a new owner that the Administrator 
determines is not affiliated with the previous holder of a 50% or 
greater ownership share of the unit.
    (2) No later than February 15, 2022 and each subsequent February 
15, the Administrator will review all the quarterly SO2 
emissions reports provided under Sec.  97.934(d) for each Texas 
SO2 Trading Program unit for the previous control period. 
The Administrator will identify each affiliated ownership group of 
Texas SO2 Trading Program units as of December 31 of such 
control period for which the total amount of emissions reported for the 
units in the group for that control period exceeds the total amount of 
allowances allocated to the units in the group for that control period 
under Sec.  97.911.
    (3) For each affiliated ownership group of Texas SO2 
Trading Program units identified under paragraph (b)(2) of this 
section, the Administrator will calculate the amount by which the total 
amount of reported emissions for that control period exceeds the total 
amount

[[Page 61861]]

of allowances allocated for that control period under Sec.  97.911.
    (4)(i) The Administrator will allocate and record allowances from 
the Supplemental Allowance Pool as follows:
    (A) If the total for all such affiliated ownership groups of the 
amounts calculated under paragraph (b)(3) of this section is less than 
or equal to the total number of allowances in the Supplemental 
Allowance Pool available for allocation under paragraph (d) of this 
section, then the Administrator will allocate and record in the 
compliance accounts for the sources at which the units in each such 
group are located a total amount of allowances from the Supplemental 
Allowance Pool equal to the amount calculated for the group under 
paragraph (b)(3) of this section.
    (B) If the total for all such affiliated ownership groups of the 
amounts calculated under paragraph (b)(3) of this section is greater 
than the total number of allowances in the Supplemental Allowance Pool 
available for allocation under paragraph (d) of this section, then the 
Administrator will calculate each such group's allocation of allowances 
from the Supplemental Allowance Pool by dividing the amount calculated 
under paragraph (b)(3) of this section for the group by the sum of the 
amounts calculated under paragraph (b)(3) of this section for all such 
groups, then multiplying by the number of allowances in the 
Supplemental Allowance Pool available for allocation under paragraph 
(d) of this section and rounding to the nearest allowance. The 
Administrator will then record the calculated allocations of allowances 
in the applicable compliance accounts.
    (C) When an affiliated ownership group receives an allocation of 
allowances under paragraph (b)(4)(i)(A) or (B) of this section, each 
unit in the group whose emissions during the control period for which 
allowances are being allocated exceed the amount of allowances 
allocated to the unit under Sec.  97.911 will receive a share of the 
group's allocation. The Administrator will compute each such unit's 
share by dividing the amount of the unit's emissions during the control 
period exceeding the unit's allocation under Sec.  97.911 by the sum 
for all such units of the amounts of the units' emissions during the 
control period exceeding the units' allocations under Sec.  97.911, 
then multiplying by the group's allocation under paragraph (b)(4)(i)(A) 
or (B) of this section and rounding to the nearest allowance.
    (ii) Any unallocated allowances remaining in the Supplemental 
Allowance Pool after the allocations determined under paragraph 
(b)(4)(i) of this section will be maintained in the Supplemental 
Allowance Pool. These allowances will be available for allocation by 
the Administrator in subsequent control periods to the extent 
consistent with paragraph (d) of this section.
* * * * *
0
8. Section 97.913 is amended by revising paragraph (c) to read as 
follows:


Sec.  97.913   Authorization of designated representative and alternate 
designated representative.

* * * * *
    (c) Except in this section, Sec.  97.902, and Sec. Sec.  97.914 
through 97.918, whenever the term ``designated representative'' (as 
distinguished from the term ``common designated representative'') is 
used in this subpart, the term shall be construed to include the 
designated representative or any alternate designated representative.
0
9. Section 97.920 is amended by:
0
a. Revising the section heading;
0
b. Redesignating paragraphs (b) through (d) as paragraphs (c) through 
(e) and adding a new paragraph (b);
0
c. In newly redesignated paragraph (c)(2)(i) introductory text, 
removing the text ``paragraph (b)(1)'' and adding in its place the text 
``paragraph (c)(1)'';
0
d. In newly redesignated paragraph (c)(2)(ii), removing the text 
``paragraph (b)(5)'' and adding in its place the text ``paragraph 
(c)(5)'';
0
e. In newly redesignated paragraphs (c)(3)(i) and (ii), removing the 
text ``paragraph (b)(1)'' and adding in its place the text ``paragraph 
(c)(1)'';
0
f. In newly redesignated paragraph (c)(4)(i), removing the text 
``paragraph (b)(1)'' wherever it appears and adding in its place the 
text ``paragraph (c)(1)'';
0
g. In newly redesignated paragraph (c)(4)(ii), removing the text 
``paragraph (b)(4)(i)'' and adding in its place text ``paragraph 
(c)(4)(i)'';
0
h. In newly redesignated paragraph (c)(5)(iii) introductory text and 
paragraph (c)(5)(iii)(C), removing the text ``paragraph (b)(5)(i)'' and 
adding in its place the text ``paragraph (c)(5)(i)'';
0
i. In newly redesignated paragraph (c)(5)(iii)(D), removing the text 
``97.920(b)(5)(iv)'' and adding in its place the text 
``97.920(c)(5)(iv)'';
0
j. In newly redesignated paragraph (c)(5)(iii)(E), removing the text 
``97.920(b)(5)(iv),'' and adding in its place the text 
``97.920(c)(5)(iv),'', and removing the text ``97.920(b)(5)'' and 
adding in its place the text ``97.920(c)(5)'';
0
k. In newly redesignated paragraph (c)(5)(iv), removing the text 
``paragraph (b)(5)(iii)'' and adding in its place the text ``paragraph 
(c)(5)(iii)'';
0
l. In newly redesignated paragraph (c)(5)(v), removing the text 
``paragraph (b)(5)(iii)(D)'' and adding in its place the text 
``paragraph (c)(5)(iii)(D)'', and removing the text ``paragraph 
(b)(5)(iv)'' and adding in its place the text ``paragraph (c)(5)(iv)'';
0
m. In newly redesignated paragraph (d), removing the text ``paragraphs 
(a) and (b)'' and adding in its place the text ``paragraphs (a), (b), 
and (c)''; and
0
n. In newly redesignated paragraph (e), removing the text ``paragraphs 
(b)(2)(ii) and (b)(5)'' and adding in its place the text ``paragraphs 
(c)(2)(ii) and (c)(5)''.
    The revision and addition read as follows:


Sec.  97.920   Establishment of compliance accounts, assurance 
accounts, and general accounts.

* * * * *
    (b) Assurance accounts. The Administrator will establish assurance 
accounts for certain owners and operators and States in accordance with 
Sec.  97.925(b)(3).
* * * * *
0
10. Section 97.921 is amended by:
0
a. In paragraph (a), removing the second sentence;
0
b. Revising paragraphs (b) and (c); and
0
c. In paragraph (d), removing the text ``July 1 of each year 
thereafter,'' and adding in its place the text ``July 1, 2020,''.
    The revision reads as follows:


Sec.  97.921   Recordation of Texas SO2 Trading Program allowance 
allocations.

* * * * *
    (b) By July 1, 2019, the Administrator will record in each Texas 
SO2 Trading Program source's compliance account the Texas 
SO2 Trading Program allowances allocated to the Texas 
SO2 Trading Program units at the source in accordance with 
Sec.  97.911(a) for the control period in the fourth year after the 
year of the applicable recordation deadline under this paragraph, 
unless provided otherwise in the Administrator's approval of a SIP 
revision replacing the provisions of this subpart.
    (c) By February 15, 2020, and February 15 of each year thereafter, 
the Administrator will record in each Texas SO2 Trading 
Program source's compliance account the allowances allocated from the 
Texas SO2 Trading Program Supplemental Allowance Pool in 
accordance with Sec.  97.912 for the control period in the year of the 
applicable recordation deadline under this paragraph, unless provided 
otherwise in the Administrator's

[[Page 61862]]

approval of a SIP revision replacing the provisions of this subpart.
* * * * *
0
11. Section 97.925 is added to read as follows:


Sec.  97.925   Compliance with Texas SO2 Trading Program assurance 
provisions.

    (a) Availability for deduction. Texas SO2 Trading 
Program allowances are available to be deducted for compliance with the 
Texas SO2 Trading Program assurance provisions for a control 
period in a given year by the owners and operators of a group of one or 
more Texas SO2 Trading Program sources and units only if the 
Texas SO2 Trading Program allowances:
    (1) Were allocated for a control period in a prior year or the 
control period in the given year or in the immediately following year; 
and
    (2) Are held in the assurance account, established by the 
Administrator for such owners and operators of such group of Texas 
SO2 Trading Program sources and units under paragraph (b)(3) 
of this section, as of the deadline established in paragraph (b)(4) of 
this section.
    (b) Deductions for compliance. The Administrator will deduct Texas 
SO2 Trading Program allowances available under paragraph (a) 
of this section for compliance with the Texas SO2 Trading 
Program assurance provisions for a control period in a given year in 
accordance with the following procedures:
    (1) By June 1, 2022 and June 1 of each year thereafter, the 
Administrator will:
    (i) Calculate the total SO2 emissions from all Texas 
SO2 Trading Program units at Texas SO2 Trading 
Program sources during the control period in the year before the year 
of this calculation deadline and the amount, if any, by which such 
total SO2 emissions exceed the State assurance level as 
described in Sec.  97.906(c)(2)(iii).
    (ii) [Reserved]
    (2) If the calculations under paragraph (b)(1)(i) of this section 
indicate that the total SO2 emissions from all Texas 
SO2 Trading Program units at Texas SO2 Trading 
Program sources during such control period exceed the State assurance 
level as described in Sec.  97.906(c)(2)(iii):
    (i) [Reserved]
    (ii) By August 1 immediately after the deadline for the 
calculations under paragraph (b)(1)(i) of this section, the 
Administrator will calculate, for such control period and each common 
designated representative for such control period for a group of one or 
more Texas SO2 Trading Program sources and units, the common 
designated representative's share of the total SO2 emissions 
from all Texas SO2 Trading Program units at Texas 
SO2 Trading Program sources, the common designated 
representative's assurance level, and the amount (if any) of Texas 
SO2 Trading Program allowances that the owners and operators 
of such group of sources and units must hold in accordance with the 
calculation formula in Sec.  97.906(c)(2)(i). By each such August 1, 
the Administrator will promulgate a notice of data availability of the 
results of the calculations under this paragraph and paragraph 
(b)(1)(i) of this section, including separate calculations of the 
SO2 emissions from each Texas SO2 Trading Program 
source.
    (iii) The Administrator will provide an opportunity for submission 
of objections to the calculations referenced by the notice of data 
availability required in paragraph (b)(2)(ii) of this section.
    (A) Objections shall be submitted by the deadline specified in such 
notice and shall be limited to addressing whether the calculations 
referenced in the notice required under paragraph (b)(2)(ii) of this 
section are in accordance with Sec.  97.906(c)(2)(iii), Sec. Sec.  
97.906(b) and 97.930 through 97.935, the definitions of ``common 
designated representative'', ``common designated representative's 
assurance level'', and ``common designated representative's share'' in 
Sec.  97.902, and the calculation formula in Sec.  97.906(c)(2)(i).
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(iii)(A) of this section. By October 1 
immediately after the promulgation of such notice, the Administrator 
will promulgate a notice of data availability of the calculations 
incorporating any adjustments that the Administrator determines to be 
necessary and the reasons for accepting or rejecting any objections 
submitted in accordance with paragraph (b)(2)(iii)(A) of this section.
    (3) The Administrator will establish one assurance account for each 
set of owners and operators referenced, in the notice of data 
availability required under paragraph (b)(2)(iii)(B) of this section, 
as all of the owners and operators of a group of Texas SO2 
Trading Program sources and units having a common designated 
representative for such control period and as being required to hold 
Texas SO2 Trading Program allowances.
    (4)(i) As of midnight of November 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(2)(iii)(B) of this section, the owners and operators described in 
paragraph (b)(3) of this section shall hold in the assurance account 
established for them and for the appropriate Texas SO2 
Trading Program sources and Texas SO2 Trading Program units 
under paragraph (b)(3) of this section a total amount of Texas 
SO2 Trading Program allowances, available for deduction 
under paragraph (a) of this section, equal to the amount such owners 
and operators are required to hold with regard to such sources and 
units as calculated by the Administrator and referenced in such notice.
    (ii) Notwithstanding the allowance-holding deadline specified in 
paragraph (b)(4)(i) of this section, if November 1 is not a business 
day, then such allowance-holding deadline shall be midnight of the 
first business day thereafter.
    (5) After November 1 (or the date described in paragraph (b)(4)(ii) 
of this section) immediately after the promulgation of each notice of 
data availability required in paragraph (b)(2)(iii)(B) of this section 
and after the recordation, in accordance with Sec.  97.923, of Texas 
SO2 Trading Program allowance transfers submitted by 
midnight of such date, the Administrator will determine whether the 
owners and operators described in paragraph (b)(3) of this section 
hold, in the assurance account for the appropriate Texas SO2 
Trading Program sources and Texas SO2 Trading Program units 
established under paragraph (b)(3) of this section, the amount of Texas 
SO2 Trading Program allowances available under paragraph (a) 
of this section that the owners and operators are required to hold with 
regard to such sources and units as calculated by the Administrator and 
referenced in the notice required in paragraph (b)(2)(iii)(B) of this 
section.
    (6) Notwithstanding any other provision of this subpart and any 
revision, made by or submitted to the Administrator after the 
promulgation of the notice of data availability required in paragraph 
(b)(2)(iii)(B) of this section for a control period in a given year, of 
any data used in making the calculations referenced in such notice, the 
amounts of Texas SO2 Trading Program allowances that the 
owners and operators are required to hold in accordance with Sec.  
97.906(c)(2)(i) for such control period shall continue to be such 
amounts as calculated by the Administrator and referenced in such 
notice required in paragraph (b)(2)(iii)(B) of this section, except as 
follows:
    (i) If any such data are revised by the Administrator as a result 
of a decision in or settlement of litigation concerning such data on 
appeal under part 78 of

[[Page 61863]]

this chapter of such notice, or on appeal under section 307 of the 
Clean Air Act of a decision rendered under part 78 of this chapter on 
appeal of such notice, then the Administrator will use the data as so 
revised to recalculate the amounts of Texas SO2 Trading 
Program allowances that owners and operators are required to hold in 
accordance with the calculation formula in Sec.  97.906(c)(2)(i) for 
such control period with regard to the Texas SO2 Trading 
Program sources and Texas SO2 Trading Program units 
involved, provided that such litigation under part 78 of this chapter, 
or the proceeding under part 78 of this chapter that resulted in the 
decision appealed in such litigation under section 307 of the Clean Air 
Act, was initiated no later than 30 days after promulgation of such 
notice required in paragraph (b)(2)(iii)(B) of this section.
    (ii) [Reserved]
    (iii) If the revised data are used to recalculate, in accordance 
with paragraph (b)(6)(i) of this section, the amount of Texas 
SO2 Trading Program allowances that the owners and operators 
are required to hold for such control period with regard to the Texas 
SO2 Trading Program sources and Texas SO2 Trading 
Program units involved--
    (A) Where the amount of Texas SO2 Trading Program 
allowances that the owners and operators are required to hold increases 
as a result of the use of all such revised data, the Administrator will 
establish a new, reasonable deadline on which the owners and operators 
shall hold the additional amount of Texas SO2 Trading 
Program allowances in the assurance account established by the 
Administrator for the appropriate Texas SO2 Trading Program 
sources and Texas SO2 Trading Program units under paragraph 
(b)(3) of this section. The owners' and operators' failure to hold such 
additional amount, as required, before the new deadline shall not be a 
violation of the Clean Air Act. The owners' and operators' failure to 
hold such additional amount, as required, as of the new deadline shall 
be a violation of the Clean Air Act. Each Texas SO2 Trading 
Program allowance that the owners and operators fail to hold as 
required as of the new deadline, and each day in such control period, 
shall be a separate violation of the Clean Air Act.
    (B) For the owners and operators for which the amount of Texas 
SO2 Trading Program allowances required to be held decreases 
as a result of the use of all such revised data, the Administrator will 
record, in all accounts from which Texas SO2 Trading Program 
allowances were transferred by such owners and operators for such 
control period to the assurance account established by the 
Administrator for the appropriate Texas SO2 Trading Program 
sources and Texas SO2 Trading Program units under paragraph 
(b)(3) of this section, a total amount of the Texas SO2 
Trading Program allowances held in such assurance account equal to the 
amount of the decrease. If Texas SO2 Trading Program 
allowances were transferred to such assurance account from more than 
one account, the amount of Texas SO2 Trading Program 
allowances recorded in each such transferor account will be in 
proportion to the percentage of the total amount of Texas 
SO2 Trading Program allowances transferred to such assurance 
account for such control period from such transferor account.
    (C) Each Texas SO2 Trading Program allowance held under 
paragraph (b)(6)(iii)(A) of this section as a result of recalculation 
of requirements under the Texas SO2 Trading Program 
assurance provisions for such control period must be a Texas 
SO2 Trading Program allowance allocated for a control period 
in a year before or the year immediately following, or in the same year 
as, the year of such control period.


Sec.  97.926   [Amended]

0
12. Amend Sec.  97.926 paragraph (b) by adding after the text ``Sec.  
97.924,'' the text ``Sec.  97.925,''.


Sec.  97.928   [Amended]

0
13. Amend Sec.  97.928 paragraph (b) by removing the text ``a 
compliance account,'' and adding in its place the text ``a compliance 
account or an assurance account,''.


Sec.  97.931   [Amended]

0
14. Amend Sec.  97.931 paragraph (d)(3) introductory text by removing 
after the text ``is replaced by'' the text ``with''.

[FR Doc. 2019-24286 Filed 11-13-19; 8:45 am]
 BILLING CODE 6560-50-P