[Federal Register Volume 85, Number 27 (Monday, February 10, 2020)]
[Rules and Regulations]
[Pages 7449-7452]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01747]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2019-0155; FRL-10004-69-Region 4]


Air Plan Approval; Kentucky: Cross-State Air Pollution Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving changes 
to the Kentucky State Implementation Plan (SIP) concerning the Cross-
State Air Pollution Rule (CSAPR) submitted by Kentucky on September 14, 
2018, as later clarified on December 18, 2018. Under CSAPR, large 
electricity generating units (EGUs) in Kentucky are subject to Federal 
Implementation Plans (FIPs) requiring the units to participate in 
CSAPR's federal trading program for annual emissions of nitrogen oxides 
(NOX), one of CSAPR's two federal trading programs for ozone 
season emissions of NOX, and one of CSAPR's two federal 
trading programs for annual emissions of sulfur dioxide 
(SO2). This action approves into the SIP the Commonwealth's 
regulations requiring large Kentucky EGUs to participate in CSAPR state 
trading programs for annual NOX emissions and annual 
SO2 emissions integrated with the CSAPR federal trading 
programs, replacing the corresponding FIP requirements. EPA is 
approving the portions of the SIP revision concerning these CSAPR state 
trading programs because the SIP revision meets the requirements of the 
Clean Air Act (CAA or Act) and EPA's regulations for approval of a 
CSAPR full SIP revision replacing the requirements of a CSAPR FIP. 
Under the CSAPR regulations, approval of these portions of the SIP 
revision automatically eliminates Kentucky units' obligations to 
participate in CSAPR's federal trading programs for annual 
NOX emissions and annual SO2 emissions under the 
corresponding CSAPR FIPs addressing interstate transport requirements 
for the 1997 annual fine particulate matter (PM2.5) national 
ambient air quality standard (NAAQS) and the 2006 24-hour 
PM2.5 NAAQS. Approval of these portions of the SIP revision 
would also satisfy Kentucky's good neighbor obligation under the CAA to 
prohibit emissions which will significantly contribute to nonattainment 
or interfere with maintenance of the 1997 annual PM2.5 NAAQS 
and 2006 24-hour PM2.5 NAAQS.

DATES: This rule is effective March 11, 2020.

ADDRESSES: EPA has established a docket for this action under Docket 
Identification No. EPA-R04-OAR-2019-0155. All documents in the docket 
are listed on the www.regulations.gov website. Although listed in the 
index, some information is not publicly available, i.e., Confidential 
Business Information or other information whose disclosure is 
restricted by statute. Certain other material, such as copyrighted 
material, is not placed on the internet and will be publicly available 
only in hard copy form. Publicly available docket materials are 
available either electronically through www.regulations.gov or in hard 
copy at the Air Regulatory Management Section, Air Planning and 
Implementation Branch, Air and Radiation Division, U.S. Environmental 
Protection Agency, Region 4, 61 Forsyth Street SW, Atlanta, Georgia 
30303-8960. EPA requests that if at all possible, you contact the 
person listed in the FOR FURTHER INFORMATION CONTACT section to 
schedule your inspection. The Regional Office's official hours of 
business are Monday through Friday 8:30 a.m. to 4:30 p.m., excluding 
Federal holidays.

FOR FURTHER INFORMATION CONTACT: D. Brad Akers, Air Regulatory 
Management Section, Air Planning and Implementation Branch, Air and 
Radiation Division, U.S. Environmental Protection Agency, Region 4, 61 
Forsyth Street SW, Atlanta, Georgia 30303-8960. Mr. Akers can be 
reached by telephone at (404) 562-9089 or via electronic mail at 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background on CSAPR and CSAPR-Related SIP Revisions

    EPA issued CSAPR in July 2011 to address the requirements of CAA 
section 110(a)(2)(D)(i)(I) concerning interstate transport of air 
pollution. As amended (including the 2016 CSAPR Update),\1\ CSAPR 
requires 27 Eastern states to limit their statewide emissions of 
SO2 and/or NOX in order to mitigate transported 
air pollution unlawfully impacting other states' ability to attain or 
maintain four NAAQS: The 1997 annual PM2.5 NAAQS, the 2006 
24-hour PM2.5 NAAQS, the 1997 8-hour ozone NAAQS, and the 
2008 8-hour ozone NAAQS. The CSAPR emissions limitations are defined in 
terms of maximum statewide ``budgets'' for emissions of annual 
SO2, annual NOX, and/or ozone season 
NOX by each covered state's large EGUs. The CSAPR state 
budgets are implemented in two phases of generally increasing 
stringency, with the Phase 1 budgets applying to emissions in 2015 and 
2016 and the Phase 2 (and CSAPR Update) budgets applying to emissions 
in 2017 and later years. As a mechanism for achieving compliance with 
the emissions limitations, CSAPR establishes five federal emissions 
trading programs: A program for annual NOX emissions, two 
geographically separate programs for annual SO2 emissions, 
and two geographically separate programs for ozone-season 
NOX emissions. CSAPR also establishes FIP requirements 
applicable to the large EGUs in each covered state. Currently, the 
CSAPR FIP provisions require each state's units to participate in up to 
three of the five CSAPR trading programs.
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    \1\ See 81 FR 74504 (October 26, 2016). The CSAPR Update was 
promulgated to address interstate pollution with respect to the 2008 
ozone NAAQS and to address a judicial remand of certain original 
CSAPR ozone season NOX budgets promulgated with respect 
to the 1997 ozone NAAQS. See 81 FR at 74505. The CSAPR Update 
established new emission reduction requirements addressing the more 
recent NAAQS and coordinated them with the remaining emission 
reduction requirements addressing the older NAAQS, so that starting 
in 2017, CSAPR includes two geographically separate trading programs 
for ozone season NOX emissions covering EGUs in a total 
of 23 states. See 40 CFR 52.38(b)(1)-(2). EPA acknowledges that the 
D.C. Circuit issued decisions in Wisconsin v. EPA, 938 F.3d 303 
(Sept. 13, 2019) and New York v. EPA, 781 Fed. Appx. 4 (Oct. 1, 
2019) regarding the CSAPR Update; however, those decisions did not 
address the annual programs designed to fulfill the requirements of 
the 1997 and 2006 PM2.5 NAAQS.
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    CSAPR includes provisions under which states may submit and EPA 
will approve SIP revisions to modify or replace the CSAPR FIP 
requirements while allowing states to continue to meet their transport-
related obligations using either CSAPR's federal emissions

[[Page 7450]]

trading programs or state emissions trading programs integrated with 
the federal programs.\2\ Through such a SIP revision, a state may 
replace EPA's default provisions for allocating emission allowances 
among the state's units, employing any state-selected methodology to 
allocate or auction the allowances, subject to timing conditions and 
limits on overall allowance quantities. In the case of CSAPR's federal 
trading programs for ozone season NOX emissions (or an 
integrated state trading program), a state may also expand trading 
program applicability to include certain smaller electricity generating 
units.\3\ If a state wants to replace CSAPR FIP requirements with SIP 
requirements under which the state's units participate in a state 
trading program that is integrated with and identical to the federal 
trading program even as to the allocation and applicability provisions, 
the state may submit a SIP revision for that purpose as well. However, 
no emissions budget increases or other substantive changes to the 
trading program provisions are allowed. A state whose units are subject 
to multiple CSAPR FIPs and federal trading programs may submit SIP 
revisions to modify or replace either some or all of those FIP 
requirements.
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    \2\ See 40 CFR 52.38, 52.39. States also retain the ability to 
submit SIP revisions to meet their transport-related obligations 
using mechanisms other than the CSAPR federal trading programs or 
integrated state trading programs.
    \3\ States covered by both the CSAPR Update and the 
NOX SIP Call have the additional option to expand 
applicability under the CSAPR NOX Ozone Season Group 2 
Trading Program to include non-electric generating units that would 
have participated in the former NOX Budget Trading 
Program.
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    States can submit two basic forms of CSAPR-related SIP revisions 
effective for emissions control periods in 2017 or later years (or 2019 
or later years in the case of the CSAPR NOX Ozone Season 
Group 2 Trading Program).\4\ Under the first alternative--an 
``abbreviated'' SIP revision--a state may submit a SIP revision that 
upon approval replaces the default allowance allocation and/or 
applicability provisions of a CSAPR federal trading program for the 
state.\5\ Approval of an abbreviated SIP revision leaves the 
corresponding CSAPR FIP and all other provisions of the relevant 
federal trading program in place for the state's units.
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    \4\ CSAPR also provides for a third, more streamlined form of 
SIP revision that is effective only for control periods in 2016 (or 
2018 in the case of the CSAPR NOX Ozone Season Group 2 
Trading Program) and is not relevant here. See 40 CFR 52.38(a)(3), 
(b)(3), (b)(7); 52.39(d), (g).
    \5\ See 40 CFR 52.38(a)(4), (b)(4), (b)(8); 52.39(e), (h).
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    Under the second alternative--a ``full'' SIP revision--a state may 
submit a SIP revision that upon approval replaces a CSAPR federal 
trading program for the state with a state trading program integrated 
with the federal trading program, so long as the state trading program 
is substantively identical to the federal trading program or does not 
substantively differ from the federal trading program except as 
discussed above with regard to the allowance allocation and/or 
applicability provisions.\6\ For purposes of a full SIP revision, a 
state may either adopt state rules with complete trading program 
language, incorporate the federal trading program language into its 
state rules by reference (with appropriate conforming changes), or 
employ a combination of these approaches.
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    \6\ See 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
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    The CSAPR regulations identify several important consequences and 
limitations associated with approval of a full SIP revision. First, 
upon EPA's approval of a full SIP revision as correcting the deficiency 
in the state's implementation plan that was the basis for a particular 
set of CSAPR FIP requirements, the obligation to participate in the 
corresponding CSAPR federal trading program is automatically eliminated 
for units subject to the state's jurisdiction without the need for a 
separate EPA withdrawal action, so long as EPA's approval of the SIP is 
full and unconditional.\7\ Second, approval of a full SIP revision does 
not terminate the obligation to participate in the corresponding CSAPR 
federal trading program for any units located in any Indian country 
within the borders of the state, and if and when a unit is located in 
Indian country within a state's borders, EPA may modify the SIP 
approval to exclude from the SIP, and include in the surviving CSAPR 
FIP instead, certain trading program provisions that apply jointly to 
units in the state and to units in Indian country within the state's 
borders.\8\
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    \7\ See 40 CFR 52.38(a)(6), (b)(10)(i); 52.39(j).
    \8\ See 40 CFR 52.38(a)(5)(iv)-(v), (a)(6), (b)(5)(v)-(vi), 
(b)(9)(vi)-(vii), (b)(10)(i); 52.39(f)(4)-(5), (i)(4)-(5), (j).
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    Finally, if at the time a full SIP revision is approved EPA has 
already started recording allocations of allowances for a given control 
period to a state's units, the federal trading program provisions 
authorizing EPA to complete the process of allocating and recording 
allowances for that control period to those units will continue to 
apply, unless EPA's approval of the SIP revision provides otherwise.\9\
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    \9\ See 40 CFR 52.38(a)(7), (b)(11)(i); 52.39(k).
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    In the 2011 CSAPR rulemaking, among other findings, EPA determined 
that air pollution transported from Kentucky would unlawfully affect 
other states' ability to attain and maintain the 1997 annual 
PM2.5 NAAQS and the 2006 24-hour PM2.5 NAAQS, 
established annual NOX and SO2 budgets for 
Kentucky's EGUs representing full remedies for the Commonwealth's 
interstate transport obligations with respect to these NAAQS, and 
implemented the budgets by including the EGUs in annual NOX 
and SO2 trading programs.\10\ Consequently, Kentucky's units 
meeting the CSAPR applicability criteria are currently subject to CSAPR 
FIPs that require participation in the CSAPR NOX Annual 
Trading Program and the CSAPR SO2 Group 1 Trading Program in 
order to address, in full, the Commonwealth's interstate transport 
obligations with respect to both the 1997 annual PM2.5 NAAQS 
and the 2006 24-hour PM2.5 NAAQS.\11\
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    \10\ See 76 FR at 48209-13.
    \11\ See 40 CFR 52.38(a)(2)(i); 52.39(b); 52.940(a)(1); 
52.941(a).
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    In a notice of proposed rulemaking (NPRM) published on July 30, 
2019 (84 FR 36852), EPA proposed to approve Kentucky's September 14, 
2018, SIP submittal designed to replace the CSAPR federal annual 
SO2 and NOX trading programs and ozone season 
NOX trading program. Comments on the NPRM were due on or 
before August 29, 2019. EPA received adverse comments on the proposed 
action to approve the portions of Kentucky's submittal designed to 
replace the CSAPR federal ozone season NOX trading program. 
However, EPA received no adverse comments on the proposed action to 
approve the portions of Kentucky's submittal designed to replace the 
CSAPR federal annual SO2 and NOX trading 
programs.
    In this action, EPA is finalizing approval of the portions of 
Kentucky's SIP which replace the CSAPR federal annual SO2 
and NOX trading programs only. EPA will address the 
remaining portions of the September 14, 2018, SIP submittal in a 
separate action. Please refer to the NPRM for more detailed information 
regarding the SIP revision and the Agency's rationale for today's final 
rulemaking.

II. Incorporation by Reference

    In this document, EPA is finalizing regulatory text that includes 
incorporation by reference. In

[[Page 7451]]

accordance with requirements of 1 CFR 51.5, EPA is finalizing the 
incorporation by reference of the Kentucky Regulations 401 KAR 51:240, 
entitled ``Cross-State Air Pollution Rule (CSAPR) NOX annual 
trading program'' and 401 KAR 51.260, entitled ``Cross-State Air 
Pollution Rule (CSAPR) SO2 group 1 trading program.'' EPA is 
approving the portions of the SIP revision concerning these CSAPR state 
trading programs because the SIP revision meets the requirements of the 
Act and EPA's regulations for approval of a CSAPR full SIP revision 
replacing the requirements of a CSAPR FIP. The rules became state-
effective as of July 5, 2018. EPA has made, and will continue to make, 
these materials generally available through www.regulations.gov and at 
the EPA Region 4 Office (please contact the person identified in the 
``For Further Information Contact'' section of this preamble for more 
information). Therefore, these materials have been approved by EPA for 
inclusion in the State implementation plan, have been incorporated by 
reference by EPA into that plan, are fully federally enforceable under 
sections 110 and 113 of the CAA as of the effective date of the final 
rulemaking of EPA's approval, and will be incorporated by reference in 
the next update to the SIP compilation.\12\
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    \12\ See 62 FR 27968 (May 22, 1997).
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III. Final Action

    EPA is approving portions of Kentucky's September 14, 2018, SIP 
submittal, as clarified by the December 18, 2018, letter, concerning 
the establishment of CSAPR state trading programs for Kentucky units 
for annual NOX and SO2 emissions. These portions 
of this SIP revision adopt into the SIP state trading program rules 
codified in Kentucky regulations at 401 KAR 51:240, ``Cross-State Air 
Pollution Rule (CSAPR) NOX annual trading program'' and 401 
KAR 51.260, ``Cross-State Air Pollution Rule (CSAPR) SO2 
group 1 trading program.'' These Kentucky CSAPR state trading programs 
will be integrated with the federal CSAPR NOX Annual Trading 
Program and the federal CSAPR SO2 Group 1 Trading Program, 
respectively, and are substantively identical to the federal trading 
programs. Kentucky units therefore will generally be required to meet 
requirements under Kentucky's CSAPR state trading programs equivalent 
to the requirements the units otherwise would have been required to 
meet under the corresponding CSAPR federal trading programs. Under the 
Commonwealth's regulations, Kentucky will retain EPA's default 
allowance allocation methodology and EPA will remain the implementing 
authority for administration of the trading programs. EPA is approving 
the SIP revision because it meets the requirements of the CAA and EPA's 
regulations for approval of a CSAPR full SIP revision replacing a 
federal trading program with a state trading program that is integrated 
with and substantively identical to the federal trading program.
    EPA promulgated the FIP provisions requiring Kentucky units to 
participate in the federal CSAPR NOX Annual Trading Program 
and the federal CSAPR SO2 Group 1 Trading Program in order 
to address Kentucky's obligations under CAA section 110(a)(2)(D)(i)(I) 
with respect to the 1997 Annual PM2.5 NAAQS and the 2006 24-
hour PM2.5 NAAQS in the absence of SIP provisions addressing 
those requirements. Approving the Kentucky SIP submittal adopting CSAPR 
state trading program rules for annual NOX and 
SO2 substantively identical to the corresponding CSAPR 
federal trading program regulations (or differing only with respect to 
the allowance allocation methodology) corrects the same deficiencies in 
the SIP that otherwise would be corrected by those CSAPR FIPs. Under 
the CSAPR regulations, upon EPA's full and unconditional approval of a 
SIP revision as correcting the SIP's deficiency that is the basis for a 
particular CSAPR FIP, the obligation to participate in the 
corresponding CSAPR federal trading program is automatically eliminated 
for units subject to the state's jurisdiction (but not for any units 
located in any Indian country within the state's borders).\13\ EPA's 
approval of portions of Kentucky's SIP submittal establishing CSAPR 
state trading program rules for annual NOX emissions and 
annual SO2 emissions therefore results in automatic 
termination of the obligations of Kentucky units to participate in the 
federal CSAPR NOX Annual Trading Program and the federal 
CSAPR SO2 Group 1 Trading Program.
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    \13\ See 40 CFR 52.38(a)(6); 52.39(j).
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IV. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. These actions merely 
approve state law as meeting Federal requirements and do not impose 
additional requirements beyond those imposed by state law. For that 
reason, these actions:
     Are not significant regulatory actions subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Are not Executive Order 13771 (82 FR 9339, February 2, 
2017) regulatory actions because SIP approvals are exempted under 
Executive Order 12866;
     Do not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Are certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Do not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Do not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Are not economically significant regulatory actions based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Are not significant regulatory actions subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Are not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Do not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    The SIP is not approved to apply on any Indian reservation land or 
in any other area where EPA or an Indian tribe has demonstrated that a 
tribe has jurisdiction. In those areas of Indian country, the rule does 
not have tribal implications as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000), nor will it impose substantial direct 
costs on tribal governments or preempt tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a

[[Page 7452]]

copy of the rule, to each House of the Congress and to the Comptroller 
General of the United States. EPA will submit a report containing these 
actions and other required information to the U.S. Senate, the U.S. 
House of Representatives, and the Comptroller General of the United 
States prior to publication of the rule in the Federal Register. A 
major rule cannot take effect until 60 days after it is published in 
the Federal Register. This action is not a ``major rule'' as defined by 
5 U.S.C. 804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of these actions must be filed in the United States Court of Appeals 
for the appropriate circuit by April 10, 2020. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of these actions for the purposes of judicial review nor 
does it extend the time within which a petition for judicial review may 
be filed, and shall not postpone the effectiveness of such rule or 
action. These actions may not be challenged later in proceedings to 
enforce its requirements. See section 307(b)(2).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
oxides.

    Dated: January 15, 2020.
Mary S. Walker,
Regional Administrator, Region 4.

    40 CFR part 52 is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart A-General Provisions

0
2. Amend Sec.  52.38 by revising paragraph (a)(8)(iii) to read as 
follows:


Sec.  52.38   What are the requirements of the Federal Implementation 
Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) relating to 
emissions of nitrogen oxides?

    (a) * * *
    (8) * * *
    (iii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (a)(5) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (a)(1), (a)(2)(i), and 
(a)(3) and (4) of this section with regard to sources in the State (but 
not sources in any Indian country within the borders of the State): 
Alabama, Georgia, Indiana, Kentucky, Missouri, and South Carolina.
* * * * *

0
3. Amend Sec.  52.39 by revising paragraph (l)(3) to read as follows:


Sec.  52.39   What are the requirements of the Federal Implementation 
Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) relating to 
emissions of sulfur dioxide?

* * * * *
    (l) * * *
    (3) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (f) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (a), (b), (d), and (e) of 
this section with regard to sources in the State (but not sources in 
any Indian country within the borders of the State): Indiana, Kentucky, 
and Missouri.
* * * * *

Subpart S--Kentucky

0
4. Amend Sec.  52.920, in paragraph (c), in Table 1 under the heading 
``Chapter 51 Attainment and Maintenance of the National Ambient Air 
Quality Standards'' by adding in numerical order entries for ``401 KAR 
51:240'' and ``401 KAR 51:260'' to read as follows:


Sec.  52.920   Identification of plan.

* * * * *
    (c) * * *

                                   Table 1--EPA-Approved Kentucky Regulations
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                                                          State
         State citation             Title/subject       effective     EPA approval date        Explanation
                                                          date
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                                                  * * * * * * *
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               Chapter 51 Attainment and Maintenance of the National Ambient Air Quality Standards
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                                                  * * * * * * *
401 KAR 51:240.................  Cross-State Air           7/5/2018  2/10/2020 [Insert   .......................
                                  Pollution Rule                      Federal Register
                                  (CSAPR) NOX                         citation].
                                  annual trading
                                  program.
401 KAR 51:260.................  Cross-State Air           7/5/2018  2/10/2020 [Insert   .......................
                                  Pollution Rule                      Federal Register
                                  (CSAPR) SO2 group                   citation].
                                  1 trading program.
 
                                                  * * * * * * *
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[FR Doc. 2020-01747 Filed 2-7-20; 8:45 am]
BILLING CODE 6560-50-P