[Federal Register Volume 85, Number 211 (Friday, October 30, 2020)]
[Proposed Rules]
[Pages 68964-69113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23237]



[[Page 68963]]

Vol. 85

Friday,

No. 211

October 30, 2020

Part II





Environmental Protection Agency





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40 CFR Parts 52, 78, and 97





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Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS; 
Proposed Rule

  Federal Register / Vol. 85 , No. 211 / Friday, October 30, 2020 / 
Proposed Rules  

[[Page 68964]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52, 78, and 97

[EPA-HQ-OAR-2020-0272; FRL-10013-42-OAR]
RIN 2060-AU84


Revised Cross-State Air Pollution Rule Update for the 2008 Ozone 
NAAQS

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This proposed action is taken in response to the United States 
Court of Appeals for the District of Columbia Circuit's (D.C. Circuit) 
remand of the Cross-State Air Pollution Rule (CSAPR) Update in 
Wisconsin v. EPA on September 13, 2019. The CSAPR Update finalized 
Federal Implementation Plans (FIPs) for 22 states to address their 
interstate pollution-transport obligations under the Clean Air Act 
(CAA) for the 2008 ozone National Ambient Air Quality Standards 
(NAAQS). The D.C. Circuit found that the CSAPR Update, which was 
published on October 26, 2016, as a partial remedy to address upwind 
states' obligations prior to the 2018 Moderate area attainment date 
under the 2008 ozone NAAQS, was unlawful to the extent it allowed those 
states to continue their significant contributions to downwind ozone 
problems beyond the statutory dates by which downwind states must 
demonstrate their attainment of the air quality standards. On the same 
grounds, the D.C. Circuit also vacated the CSAPR Close-Out in New York 
v. EPA on October 1, 2019. This proposed rule, if finalized, will 
resolve 21 states' outstanding interstate ozone transport obligations 
with respect to the 2008 ozone NAAQS. The U.S. Environmental Protection 
Agency (EPA) is taking this action under the Clean Air Act section 
known as the ``good neighbor provision.''
    This action proposes to find that for 9 of the 21 states for which 
the CSAPR Update was found to be only a partial remedy (Alabama, 
Arkansas, Iowa, Kansas, Mississippi, Missouri, Oklahoma, Texas, and 
Wisconsin), their projected nitrogen oxides (NOX) emissions 
in the 2021 ozone season and thereafter do not significantly contribute 
to a continuing downwind nonattainment and/or maintenance problem, and 
therefore the states' CSAPR Update FIPs (or the SIPs subsequently 
approved to replace certain states' CSAPR Update FIPs) fully address 
their interstate ozone transport obligations with respect to the 2008 
ozone NAAQS. This action also proposes to find that for the 12 
remaining states (Illinois, Indiana, Kentucky, Louisiana, Maryland, 
Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West 
Virginia), their projected 2021 ozone season NOX emissions 
significantly contribute to downwind states' nonattainment and/or 
maintenance problems for the 2008 ozone NAAQS. EPA proposes to issue 
new or amended FIPs for these 12 states to replace their existing CSAPR 
NOX Ozone Season Group 2 emissions budgets for electricity 
generating units (EGUs) with revised budgets via a new CSAPR 
NOX Ozone Season Group 3 Trading Program. EPA is proposing 
to require implementation of the revised emission budgets beginning 
with the 2021 ozone season (which runs annually from May 1-September 
30). Based on EPA's assessment of remaining air quality issues and 
additional emission control strategies for EGUs and other emissions 
sources in other industry sectors (non-EGUs), EPA further proposes that 
the proposed NOX emission reductions fully eliminate these 
states' significant contributions to downwind air quality problems for 
the 2008 ozone NAAQS. EPA also proposes in this action an error 
correction for its June 2018 approval of Kentucky's good neighbor SIP.

DATES: Comments must be received on or before December 14, 2020.
    Public Hearing: EPA will hold a virtual public hearing on November 
12, 2020. Please refer to the SUPPLEMENTARY INFORMATION section for 
additional information on the public hearing.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2020-0272, via the Federal eRulemaking Portal: https://www.regulations.gov/. Follow the online instructions for submitting 
comments.
    Instructions: All submissions received must include the Docket ID 
No. for this rulemaking. Comments received may be posted without change 
to https://www.regulations.gov/, including any personal information 
provided. For detailed instructions on sending comments and additional 
information on the rulemaking process, see the ``Public Participation'' 
heading of the SUPPLEMENTARY INFORMATION section of this document. Out 
of an abundance of caution for members of the public and our staff, the 
EPA Docket Center and Reading Room are closed to the public, with 
limited exceptions, to reduce the risk of transmitting COVID-19. Our 
Docket Center staff will continue to provide remote customer service 
via email, phone, and webform. We encourage the public to submit 
comments via https://www.regulations.gov/ or email, as there may be a 
delay in processing mail and faxes. Hand deliveries and couriers may be 
received by scheduled appointment only. For further information on EPA 
Docket Center services and the current status, please visit us online 
at https://www.epa.gov/dockets.
    Throughout this proposal, EPA is soliciting comment on numerous 
aspects of the proposed rule. EPA has indexed each comment solicitation 
with an alpha-numeric identifier (e.g., ``C-1'', ``C-2'', ``C-3'', . . 
.). Accordingly, we ask that commenters include the corresponding 
identifier when providing comments relevant to that comment 
solicitation. We ask that commenters include the identifier in either a 
heading, or within the text of each comment (e.g., ``In response to 
solicitation of comment C-1, . . .'') to make clear which comment 
solicitation is being addressed. We emphasize that we are not limiting 
comment to these identified areas and welcome comments on any matters 
that are within scope of this action.
    EPA will announce further details on the virtual public hearing, as 
well as registration information, at https://www.epa.gov/csapr/revised-cross-state-air-pollution-update. Refer to the SUPPLEMENTARY 
INFORMATION section below for additional information.

FOR FURTHER INFORMATION CONTACT: Mr. Daniel Hooper, Clean Air Markets 
Division, Office of Atmospheric Programs (Mail Code 6204M), 
Environmental Protection Agency, 1200 Pennsylvania Avenue NW, 
Washington, DC 20460; telephone number: (202) 343-9167; email address: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Preamble Glossary of Terms and Abbreviations

    The following are abbreviations of terms used in the preamble.

4-Step Good Neighbor Framework 4-Step Framework
AEO Annual Energy Outlook
AQAT Air Quality Assessment Tool
AQM TSD Air Quality Modeling Technical Support Document
CAA or Act Clean Air Act
CAIR Clean Air Interstate Rule
CAMx Comprehensive Air Quality Model with Extensions
CBI Confidential Business Information
CEMS Continuous Emission Monitoring Systems
CFR Code of Federal Regulations
CMDb Control Measures Database

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CMV Commercial Marine Vehicle
CoST Control Strategy Tool
CRA Congressional Review Act
CSAPR Cross-State Air Pollution Rule
EGU Electric Generating Unit
EISA Energy Independence and Security Act
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
GWh Gigawatt-hour
IC Internal Combustion
ICI Industrial, Commercial, and Institutional
ICR Information Collection Request
IPM Integrated Planning Model
iSIP Infrastructure State Implementation Plan
km Kilometer
lb/mmBtu Pounds per Million British Thermal Units
LEC Low Emission Combustion
LNB Low-NOX Burners
MJO Multi-Jurisdictional Organizations
mmBtu Million British Thermal Units
MOVES Motor Vehicle Emission Simulator
MSAT2 Mobile Source Air Toxic Rule
NAAQS National Ambient Air Quality Standard
NEI National Emission Inventory
NESHAP National Emission Standards for Hazardous Air Pollutants
NOX Nitrogen Oxides
NODA Notice of Data Availability
Non-EGU Non-electric Generating Unit
NSPS New Source Performance Standard
NUSA New Unit Set-Aside
OSAT/APCA Ozone Source Apportionment Technology/Anthropogenic 
Precursor Culpability Analysis
OMB Office of Management and Budget
OTR Ozone Transport Region
PEMS Predictive Emissions Monitoring System
PM2.5 Fine Particulate Matter
ppb Parts Per Billion
RACT Reasonably Available Control Technology
RIA Regulatory Impact Analysis
RICE Reciprocating Internal Combustion Engines
RRF Relative Response Factor
SCR Selective Catalytic Reduction
SIP State Implementation Plan
SMOKE Sparse Matrix Operator Kernel Emissions
SNCR Selective Non-catalytic Reduction
SO2 Sulfur Dioxide
TIP Tribal Implementation Plan
TSD Technical Support Document
tpy Ton Per Year
ULNB Ultra-low NOX Burner
VOC Volatile Organic Compound
WRF Weather Research and Forecasting Model

Table of Contents

I. Executive Summary
    A. Purpose of Regulatory Action
    B. Summary of the Major Provisions of the Regulatory Action
    C. Benefits and Costs
II. Public Participation
    A. Written Comments
    B. Participation in Virtual Public Hearing
III. General Information
    A. Does this action apply to me?
IV. EPA's Legal Authority for the Proposed Rule
    A. Statutory Authority
    B. Prior Good Neighbor Rulemakings Addressing Regional Ozone
V. Air Quality Issues Addressed and Overall Approach for the 
Proposed Rule
    A. The Interstate Ozone Transport Challenge
    B. Relationship Between This Regulatory Action and the 2015 
Ozone NAAQS
    C. Proposed Approach To Address the Remanded Transport 
Obligations for the 2008 Ozone NAAQS
    1. Events Affecting Application of the Good Neighbor Provision 
for the 2008 Ozone NAAQS
    2. FIP Authority for Each State Covered by the Proposed Rule
    3. The 4-Step Good Neighbor Framework
VI. Analyzing Downwind Air Quality and Upwind-State Contributions
    A. Overview of Air Quality Modeling Platform
    B. Emission Inventories
    1. Foundation Emission Inventory Data Sets
    2. Development of Emission Inventories for EGUs
    3. Development of Emission Inventories for Non-EGU Point Sources
    4. Development of Emission Inventories for Onroad Mobile Sources
    5. Development of Emission Inventories for Commercial Marine 
Vessels
    6. Development of Emission Inventories for Other Nonroad Mobile 
Sources
    7. Development of Emission Inventories for Nonpoint Sources
    C. Air Quality Modeling To Identify Nonattainment and 
Maintenance Receptors
    D. Pollutant Transport From Upwind States
    1. Air Quality Modeling To Quantify Upwind State Contributions
    2. Application of Screening Threshold
VII. Quantifying Upwind-State NOX Reduction Potential To 
Reduce Interstate Ozone Transport for the 2008 NAAQS
    A. The Multi-Factor Test
    B. Identifying Levels of Control Stringency
    1. EGU NOX Mitigation Strategies
    2. Non-EGU NOX Mitigation Strategies
    3. Mobile Source NOX Mitigation Strategies
    C. Control Stringencies Represented by Cost Threshold ($ per 
ton) and Corresponding Emission Reductions
    1. EGU Emission Reduction Potential by Cost Threshold
    2. Non-EGU Emission Reduction Potential by Cost Threshold
    D. Assessing Cost, EGU and Non-EGU NOX Reductions, 
and Air Quality
    1. EGU Assessment
    2. Non-EGU Assessment
    3. Overcontrol Analysis
VIII. Implementation of Emissions Reductions
    A. Regulatory Requirements for EGUs
    B. Quantifying State Emissions Budgets
    C. Elements of Proposed Trading Program
    1. Applicability
    2. State Budgets, Variability Limits, Assurance Levels, and 
Penalties
    3. Unit-Level Allocations of Emission Allowances
    4. Transitioning From Existing CSAPR NOX Ozone-Season 
Group 2 Trading Program
    5. Compliance Deadlines
    6. Monitoring and Reporting
    7. Recordation of Allowances
    8. Proposed Conforming Revisions to Regulations for Existing 
Trading Programs
    D. Submitting a SIP
    1. SIP Option To Modify 2022 Allocations
    2. SIP Option To Modify Allocations in 2023 and Beyond
    3. SIP Revisions That Do Not Use the New Group 3 Trading Program
    4. Submitting a SIP To Participate in the New Group 3 Trading 
Program for States Not Included
    E. Title V Permitting
    F. Relationship to Other Emission Trading and Ozone Transport 
Programs
    1. Existing Trading Programs
    2. Title IV Interactions
    3. NOX SIP Call Interactions
IX. Costs, Benefits, and Other Impacts of the Proposed Rule
X. Summary of Proposed Changes to the Regulatory Text for the 
Federal Implementation Plans and Trading Programs
    A. Amended CSAPR Update FIP Provisions
    B. New CSAPR NOX Ozone Season Group 3 Trading Program 
Provisions
    C. Transitional Provisions
    D. Conforming Revisions, Corrections, and Clarifications to 
Existing Regulations
XI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    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 Concerning Regulations 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
    L. Determinations Under CAA Section 307(b)(1) and (d)

I. Executive Summary

    The 2008 ozone National Ambient Air Quality Standards (NAAQS) is an 
8-hour standard that was set at 75 parts

[[Page 68966]]

per billion (ppb).\1\ The U.S. Environmental Protection Agency (EPA) 
published the Cross-State Air Pollution Rule (CSAPR) Update on October 
26, 2016, which partially addressed the interstate transport of 
emissions from 21 states with respect to the 2008 ozone NAAQS.\2\ 81 FR 
74504. On December 21, 2018, EPA published the CSAPR Close-Out, which 
found that the CSAPR Update was a complete remedy based on air quality 
analysis of the year 2023.\3\
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    \1\ 73 FR 16436 (March 27, 2008).
    \2\ In the CSAPR Update, EPA found that the finalized Tennessee 
emission budget fully addressed Tennessee's good neighbor obligation 
with respect to the 2008 ozone NAAQS. 81 FR 74504, 74508 n. 19 (Oct. 
26, 2016).
    \3\ 83 FR 65878 (Dec. 21, 2018).
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    On September 13, 2019, the United States Court of Appeals for the 
District of Columbia Circuit (D.C. Circuit) remanded the CSAPR Update, 
concluding that it was invalid in one respect because it unlawfully 
allowed upwind states to continue their significant contributions to 
downwind air quality problems beyond the statutory dates by which 
downwind States must demonstrate their attainment of ozone air quality 
standards. Wisconsin v. EPA, 938 F.3d 303, 318-20 (D.C. Cir. 2019) 
(Wisconsin) (per curiam); see also id. 336-37 (concluding that remand 
without vacatur was appropriate). Subsequently, on October 1, 2019, in 
a judgment order, the D.C. Circuit vacated the CSAPR Close-Out on the 
same grounds on which it had remanded without vacatur the CSAPR Update 
in Wisconsin. New York v. EPA, 781 Fed. App'x 4, 7 (D.C. Cir. 2019) 
(New York). The court found the CSAPR Close-Out inconsistent with the 
Wisconsin holding because the rule analyzed the year 2023 rather than 
2021 (``the next applicable attainment date'') and failed to 
demonstrate that it was an impossibility to address significant 
contribution by the 2021 attainment date.
    In this proposal to revise the CSAPR Update on remand, in 
compliance with Wisconsin and New York, EPA has aligned its analysis 
and the implementation of emission reductions required to address 
significant contribution with the 2021 ozone season, which corresponds 
to the July 20, 2021, Serious area attainment date for the 2008 ozone 
NAAQS. EPA has further determined which emission reductions are 
impossible to achieve by the 2021 attainment date and whether any such 
additional emission reductions should be required beyond that date, see 
Wisconsin, 938 F.3d at 320; New York, 781 Fed. App'x at 7.
    Unless explicitly raised in this proposal, EPA is not reopening any 
determinations, findings, or statutory or regulatory interpretations 
that are not required to address the Wisconsin remand. This proposed 
action addressing the remand of the CSAPR Update in Wisconsin will also 
have the effect of addressing the outstanding obligations that resulted 
from the D.C. Circuit's vacatur of the CSAPR Close-Out in New York. See 
New York, 781 Fed. App'x at 7.

A. Purpose of the Regulatory Action

    The purpose of this rulemaking is to protect public health and 
welfare by reducing interstate transport of certain emissions that 
significantly contribute to nonattainment, or interfere with 
maintenance, of the 2008 ozone NAAQS in the U.S. Ground-level ozone 
causes a variety of negative effects on human health, vegetation, and 
ecosystems. In humans, acute and chronic exposure to ozone is 
associated with premature mortality and a number of morbidity effects, 
such as asthma exacerbation. Ozone exposure can also negatively impact 
ecosystems, for example, by limiting tree growth. Studies have 
established that ozone transport occurs on a regional scale (i.e., 
hundreds of miles) over much of the eastern U.S., with elevated 
concentrations occurring in rural as well as metropolitan 
areas.4 5 As discussed in more detail in Section V.A.1, 
assessments of ozone control approaches have concluded that nitrogen 
oxides (NOX) control strategies are effective to reduce 
regional-scale ozone transport.\6\
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    \4\ Bergin, M.S. et al. (2007) Regional air quality: Local and 
interstate impacts of NOX and SO2 emissions on 
ozone and fine particulate matter in the eastern United States. 
Environmental Sci & Tech. 41: 4677-4689.
    \5\ Liao, K. et al. (2013) Impacts of interstate transport of 
pollutants on high ozone events over the Mid-Atlantic United States. 
Atmospheric Environment 84, 100-112.
    \6\ See also 82 FR 51238, 51248 (Nov. 3, 2017) (citing 76 FR 
48208, 48222 (Aug. 8, 2011)) and 63 FR 57381 (Oct. 27, 1998).
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    Clean Air Act (CAA or the Act) section 110(a)(2)(D)(i)(I), which is 
also known as the ``good neighbor provision,'' requires states to 
prohibit emissions that will contribute significantly to nonattainment 
or interfere with maintenance in any other state with respect to any 
primary or secondary NAAQS.\7\ The statute vests states with the 
primary responsibility to address interstate emission transport through 
the development of good neighbor State Implementation Plans (SIPs), 
which are one component of larger SIP submittals typically required 
three years after EPA promulgates a new or revised NAAQS. These larger 
SIPs are often referred to as ``infrastructure'' SIPs or iSIPs. See CAA 
section 110(a)(1) and (2). EPA supports state efforts to submit good 
neighbor SIPs for the 2008 ozone NAAQS and has shared information with 
states to facilitate such SIP submittals. However, the CAA also 
requires EPA to fill a backstop role by issuing Federal Implementation 
Plans (FIPs) where states fail to submit good neighbor SIPs or EPA 
disapproves a submitted good neighbor SIP. See generally CAA section 
110(k) and 110(c).
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    \7\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
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    On October 26, 2016, EPA published the CSAPR Update, which 
finalized FIPs for 22 states that EPA found failed to submit a complete 
good neighbor SIP (15 states) \8\ or for which EPA issued a final rule 
disapproving their good neighbor SIP (7 states).\9\ The FIPs 
promulgated for these states included new electric generating units 
(EGUs) NOX ozone season emission budgets to reduce 
interstate transport for the 2008 ozone NAAQS. These emission budgets 
took effect in 2017 in order to assist downwind states with attainment 
of the 2008 ozone NAAQS by the 2018 Moderate area attainment date. EPA 
acknowledged at the time that the FIPs promulgated for 21 of the 22 
states only partially addressed good neighbor obligations under the 
2008 ozone NAAQS.\10\ The 22 states for which EPA promulgated FIPs to 
reduce interstate ozone transport as to the 2008 ozone NAAQS are listed 
in Table I.A-1.
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    \8\ Alabama, Arkansas, Illinois, Iowa, Kansas, Maryland, 
Michigan, Mississippi, Missouri, New Jersey, Oklahoma, Pennsylvania, 
Tennessee, Virginia, and West Virginia.
    \9\ Indiana, Kentucky, Louisiana, New York, Ohio, Texas, and 
Wisconsin.
    \10\ In the CSAPR Update, EPA found that the finalized Tennessee 
emission budget fully addressed Tennessee's good neighbor obligation 
with respect to the 2008 ozone NAAQS.

 Table I.A--1 List of 22 Covered States for the 2008 8-Hour Ozone NAAQS
                           in the CSAPR Update
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                                  State
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Alabama
Arkansas
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maryland
Michigan
Mississippi
Missouri
New Jersey

[[Page 68967]]

 
New York
Ohio
Oklahoma
Pennsylvania
Tennessee
Texas
Virginia
West Virginia
Wisconsin
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    In response to the D.C. Circuit's remand of the CSAPR Update in 
Wisconsin v. EPA and the court's vacatur of the CSAPR Close-Out in New 
York v. EPA, this rule proposes to find that 12 of the 22 states listed 
in Table I.A-1 require further ozone season NOX emission 
reductions to address the good neighbor provision as to the 2008 ozone 
NAAQS. As such, EPA proposes to promulgate new or revised FIPs for 
these states that include new EGU NOX ozone season emission 
budgets, with implementation of these emission budgets beginning with 
the 2021 ozone season.\11\ The 12 states for which EPA is proposing to 
promulgate new or revised FIPs to reduce interstate ozone transport as 
to the 2008 ozone NAAQS in this rulemaking are listed in Table I.A-2.
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    \11\ As discussed in section V.C.2.c., in 2018 EPA approved a 
SIP revision for Indiana replacing the state's CSAPR Update FIP with 
equivalent state regulations. This SIP revision, like the CSAPR 
Update FIP it replaced, was partial in nature. EPA is therefore 
proposing in this action to issue a new FIP rather than a revised 
FIP for Indiana.

   Table I.A--2 Proposed List of 12 Covered States for the 2008 8-Hour
                               Ozone NAAQS
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                                  State
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Illinois
Indiana
Kentucky
Louisiana
Maryland
Michigan
New Jersey
New York
Ohio
Pennsylvania
Virginia
West Virginia
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    EPA also proposes to adjust these states' emission budgets for each 
ozone season thereafter to incentivize ongoing operation of identified 
emission controls to address significant contribution, until such time 
that our air quality projections demonstrate resolution of the downwind 
nonattainment and/or maintenance problems for the 2008 ozone NAAQS. No 
further budget adjustments would be made after that time (i.e., after 
the 2024 ozone season in EPA's proposed analysis). EPA proposes to 
implement the new state-level ozone season emission budgets through a 
new CSAPR NOX Ozone Season Group 3 Trading Program. Based on 
EPA's assessment of remaining air quality issues and additional 
emission control strategies, EPA further proposes to find that these 
NOX emission reductions fully eliminate these states' 
significant contributions to downwind air quality problems for the 2008 
ozone NAAQS.
    As discussed in more detail in Section V.C.2.b below, for one 
state, Kentucky, EPA is proposing to make an error correction under CAA 
section 110(k)(6) of its June 2018 approval of that state's SIP, which 
had concluded that the CSAPR Update was a complete remedy based on 
modeling of the 2023 analytic year. EPA proposes to determine that the 
basis for that conclusion has been invalidated by the decisions in 
Wisconsin and New York, and that Kentucky's good neighbor obligations 
are outstanding. In light of the Wisconsin remand of Kentucky's FIP and 
our proposed error correction, EPA has the necessary authority to amend 
the CSAPR Update FIP for Kentucky.
    For the nine remaining states with FIPs promulgated under the CSAPR 
Update that EPA previously found partially addressed good neighbor 
obligations for the 2008 ozone NAAQS (Alabama, Arkansas, Iowa, Kansas, 
Mississippi, Missouri, Oklahoma, Texas, and Wisconsin), EPA's updated 
air quality and contributions analysis shows that these states are not 
linked to any downwind air quality problems in 2021.\12\ Therefore, EPA 
proposes to find that the existing CSAPR Update FIPs (or the SIP 
revisions later approved to replace the CSAPR Update FIPs) for these 
states satisfy their good neighbor obligations for the 2008 ozone 
NAAQS.\13\ Consequently, EPA is not proposing to require additional 
emission reductions from sources in these states in this proposed 
rulemaking.
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    \12\ EPA's use of a contribution threshold to determine, without 
further analysis of potential emissions reduction opportunities, 
that certain states have no remaining good neighbor obligations with 
respect to a given NAAQS is part of the analytic approach that was 
followed in the CSAPR rulemaking and upheld by the Supreme Court. 
See EPA v. EME Homer City Generation, L.P., 572 U.S. 489, 521-22 
(2014).
    \13\ As discussed in section V.C.2.c., in 2017 and 2019 EPA 
approved SIP revisions for Alabama and Missouri replacing the 
states' CSAPR Update FIPs with equivalent state regulations. These 
SIP revisions, like the CSAPR Update FIPs they replaced, were 
partial in nature. EPA is therefore proposing to determine in this 
action that the states' existing SIP provisions satisfy these 
states' good neighbor obligations for the 2008 ozone NAAQS.
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B. Summary of the Major Provisions of the Regulatory Action

    To reduce interstate ozone transport under the authority provided 
in CAA section 110(a)(2)(D)(i)(I), this rule proposes to further limit 
ozone season (May 1 through September 30) NOX emissions from 
EGUs in 12 states using the same framework used by EPA in developing 
the CSAPR and other good neighbor rules (the 4-step good neighbor 
framework or 4-step framework). The 4-step good neighbor framework 
provides a process to address the requirements of the good neighbor 
provision for ground-level ozone NAAQS: (1) Identifying downwind 
receptors that are expected to have problems attaining or maintaining 
the NAAQS; (2) determining which upwind states contribute to these 
identified problems in amounts sufficient to ``link'' them to the 
downwind air quality problems (i.e., here, a 1 percent contribution 
threshold); (3) for states linked to downwind air quality problems, 
identifying upwind emissions that significantly contribute to downwind 
nonattainment or interfere with downwind maintenance of the NAAQS; and 
(4) for states that are found to have emissions that significantly 
contribute to nonattainment or interfere with maintenance of the NAAQS 
downwind, implementing the necessary emissions reductions through 
enforceable measures. In this proposed rule, EPA applies this 4-step 
framework to respond to the D.C. Circuit's remand and to revise the 
CSAPR Update with respect to the 2008 ozone NAAQS.
    In order to apply the first step of the 4-step framework to the 
2008 ozone NAAQS, EPA performed air quality modeling coupled with 
ambient measurements in an interpolation technique to project ozone 
concentrations at air quality monitoring sites in 2021.\14\ EPA 
evaluated 2021 projected ozone concentrations at individual monitoring 
sites and considered current ozone monitoring data at these sites to 
identify receptors that are anticipated to have problems attaining or 
maintaining the 2008 ozone NAAQS.
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    \14\ The next relevant attainment date for the 2008 ozone NAAQS 
is July 20, 2021, for Serious nonattainment areas. 80 FR 12264, 
12268; 40 CFR 51.1103.

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[[Page 68968]]

    To apply the second step of the framework, EPA used air quality 
modeling and an interpolation technique to quantify the contributions 
from upwind states to ozone concentrations in 2021 at downwind 
receptors. Once quantified, EPA then evaluated these contributions 
relative to a screening threshold of 1 percent of the NAAQS (i.e., 0.75 
ppb). States with contributions that equal or exceed 1 percent of the 
NAAQS were identified as warranting further analysis for significant 
contribution to nonattainment or interference with maintenance. States 
with contributions below 1 percent of the NAAQS were considered to not 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS in downwind states. Based on EPA's updated air quality and 
contribution analysis using 2021 as the analytic year, EPA proposes 
that the following 12 states have contributions that equal or exceed 1 
percent of the 2008 ozone NAAQS, and thereby warrant further analysis 
for significant contribution to nonattainment or interference with 
maintenance: Illinois, Indiana, Kentucky, Louisiana, Maryland, 
Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West 
Virginia.
    At the third step of the 4-step framework, EPA applied the multi-
factor test used in the CSAPR Update, which evaluates cost, available 
emission reductions, and downwind air quality impacts to determine the 
amount of linked upwind states' emissions that ``significantly'' 
contribute to downwind nonattainment or maintenance receptors. In this 
action, EPA applies the multifactor test to both EGU and non-EGU source 
categories and assesses potential emission reductions in all years for 
which there is a potential remaining interstate ozone transport problem 
(i.e., through 2025), in order to ensure a full remedy in compliance 
with the Wisconsin decision.
    EPA identified a control strategy that reflects the optimization of 
existing selective catalytic reduction (SCR) controls and installation 
of state-of-the-art NOX combustion controls at EGUs, with an 
estimated marginal cost of $1,600 per ton. It is at this control 
stringency where incremental EGU NOX reduction potential and 
corresponding downwind ozone air quality improvements are maximized. 
That is, the ratio of emission reductions to marginal cost and the 
ratio of ozone improvements to marginal cost are maximized relative to 
the other control stringency levels evaluated. EPA finds that these 
very cost-effective EGU NOX reductions will make meaningful 
and timely improvements in downwind ozone air quality to address 
interstate ozone transport for the 2008 ozone NAAQS, as discussed in 
section VII.D.1 below. Further, this evaluation shows that emission 
budgets reflecting the $1,600 per ton cost threshold do not over-
control upwind states' emissions relative to either the downwind air 
quality problems to which they are linked at step 1 or the 1 percent 
contribution threshold that triggers further evaluation at step 2 of 
the 4-step framework.
    EPA notes that these proposed EGU control strategies (optimization 
of existing SCR controls and installation of state-of-the-art 
NOX combustion controls) were the same strategies selected 
in the CSAPR Update for the 2017 ozone season, and which at that time 
EPA characterized as only a partial remedy. For this rule, EPA extends 
its evaluation of the reduction potential from these control strategies 
to years beyond 2017 in order to assess a full remedy. EPA's updated 
analysis, as discussed in more detail in Section VII, leads the Agency 
to propose that these control strategies can provide additional cost-
effective emission reductions for the 2021 through 2024 ozone seasons. 
While EPA's analysis indicates that the majority of EGUs implemented 
these control strategies in response to the CSAPR Update, changes in 
the power sector since the 2017 ozone season and updated air quality 
and contribution analysis show that there is a demonstrated need to 
update the emission budgets for these 12 states to fully eliminate 
significant contribution.
    For non-EGU industry sectors and emissions sources, EPA applied the 
step 3 multi-factor test to determine whether any emissions reductions 
should be required from non-EGU sources to address significant 
contribution under the 2008 ozone NAAQS. EPA acknowledges that its 
current datasets with information on emissions, existing controls on 
emissions sources, emission-reduction potential, and air quality 
impacts for these sources are relatively incomplete and uncertain 
compared to the datasets it has for EGUs. Nonetheless, using the best 
information currently available to the Agency, the proposed analysis 
suggests that there are relatively fewer emissions reductions available 
at a cost threshold comparable to the cost threshold selected for EGUs. 
Such reductions are estimated to have a relatively small effect on any 
downwind receptor in the year by which such controls could likely be 
installed. For these reasons, EPA proposes that limits on ozone season 
NOX emissions from non-EGU sources are not required to 
eliminate ``significant'' contribution under the 2008 ozone NAAQS (see 
section VII.D.2).
    To improve the underlying data and assessment of emission reduction 
potential from non-EGU sources for this and future regulatory efforts, 
EPA is soliciting comment on the assessment of emission reduction 
potential from the glass and cement manufacturing sectors discussed in 
Sections VII.B.2, VII.C.2, and VII.D.2. In addition, EPA summarizes the 
available information on all potential control measures for non-EGU 
emissions sources or units with 150 tons per year or more of pre-
control NOX emissions in several industry sectors for the 12 
states in Table I.A-2. This information illustrates that there are many 
potential approaches to assessing emissions reductions from non-EGU 
emissions sources or units. EPA is soliciting comment on the 
completeness and accuracy of this additional information on potential 
control measures for non-EGU emissions sources or units in several 
industry sectors. Specifically, EPA summarized information on the 
application, costs, and installation timing of ultra-low NOX 
burners on industrial, commercial, and institutional (ICI) boilers and 
low emission combustion on reciprocating internal combustion (IC) 
engines.
    Based on EPA's analysis at step 3, the Agency proposes EGU 
NOX ozone season emission budgets developed using uniform 
control stringency represented by $1,600 per ton. EPA proposes to 
determine that with implementation of this control strategy, the 12 
states in Table I.A-2 will have fully addressed significant 
contribution under the good neighbor provision for the 2008 ozone 
NAAQS. EPA is proposing to align implementation of emission budgets 
with relevant attainment dates for the 2008 ozone NAAQS, as required by 
the D.C. Circuit's decision in Wisconsin v. EPA.\15\ As EPA's final 
2008 Ozone NAAQS SIP Requirements Rule \16\ established the attainment 
deadline of July 20, 2021, for ozone nonattainment

[[Page 68969]]

areas currently designated as Serious, EPA proposes to establish 
emission budgets and implementation of these emission budgets starting 
with the 2021 ozone season as shown in Table I.B-1.
---------------------------------------------------------------------------

    \15\ 938 F.3d 303, 320 (D.C. Cir. 2019) (holding that EPA must 
align interstate transport compliance deadlines with downwind 
attainment deadlines unless EPA can demonstrate an impossibility or 
other necessity).
    \16\ 80 FR 12264, 12268; 40 CFR 51.1103.

                      Table I.B--1 Proposed EGU NOX Ozone Season Emission Budgets Emissions
                                            [Ozone season NOX tons] *
----------------------------------------------------------------------------------------------------------------
                      State                         2021 Budget     2022 Budget     2023 Budget     2024 Budget
----------------------------------------------------------------------------------------------------------------
Illinois........................................           9,444           9,415           8,397           8,397
Indiana.........................................          12,500          11,998          11,998           9,447
Kentucky........................................          14,384          11,936          11,936          11,936
Louisiana.......................................          15,402          14,871          14,871          14,871
Maryland........................................           1,522           1,498           1,498           1,498
Michigan........................................          12,727          11,767           9,803           9,614
New Jersey......................................           1,253           1,253           1,253           1,253
New York........................................           3,137           3,137           3,137           3,119
Ohio............................................           9,605           9,676           9,676           9,676
Pennsylvania....................................           8,076           8,076           8,076           8,076
Virginia........................................           4,544           3,656           3,656           3,395
West Virginia...................................          13,686          12,813          11,810          11,810
                                                 ---------------------------------------------------------------
    Total.......................................         106,280         100,096          96,111          93,092
----------------------------------------------------------------------------------------------------------------
* Note--the 2022 and beyond budgets incorporate the installation of state-of-the-art NOX combustion controls;
  whereas the 2021 budgets do not. Additionally, the 2024 emissions budget applies to 2024 and each year
  thereafter.

    As noted in Section I, EPA further determined which emission 
reductions are impossible to achieve by the 2021 attainment date--and 
whether any such additional emission reductions should be required 
beyond that date.\17\ See Wisconsin, 938 F.3d at 320. EPA estimates 
that one part of the selected control strategy--installation of state-
of-the-art NOX combustion controls--can occur between 
approximately one to six months at any particular unit. As the final 
rule will likely become effective either immediately prior to or 
slightly after the start of the 2021 ozone season, EPA determined it is 
not possible to install state-of-the-art NOX combustion 
controls on a regional scale by the beginning of the 2021 ozone 
season.\18\ EPA proposes to conclude that an emission reduction 
strategy is impossible if it cannot be implemented statewide by the 
relevant attainment date because statewide budgets are based on 
fleetwide averages. Therefore, the proposed 2021 ozone season emission 
budgets reflect only the control strategy of optimizing existing SCR 
controls at the affected EGUs, but the proposed emission budgets for 
the 2022 ozone season and beyond reflect both the continued 
optimization of existing SCR controls and installation of state-of-the-
art NOX combustion controls. Detailed installation-timing 
information for this technology is available in Section VII.B and the 
EGU NOX Mitigation Strategies TSD.
---------------------------------------------------------------------------

    \17\ As described in detail in Sections VII.B and VII.C, some 
mitigation efforts that require the installation of significant new 
plant hardware (e.g., combustion control upgrade, selective 
catalytic reduction, and non-selective catalytic reduction) are not 
possible by the start of the 2021 ozone season. However, EPA 
proposes some of these measures (i.e., combustion controls) be 
factored into its quantification of significant contribution 
starting at the later date of the start of the 2022 ozone season.
    \18\ On July 28, 2020, the U.S. District Court for the Southern 
District of New York issued a decision establishing a deadline of 
March 15, 2021, for EPA to issue a final rule fully resolving good 
neighbor obligations under the 2008 ozone NAAQS for seven upwind 
states. New Jersey v. Wheeler, No. 1:20-cv-01425 (S.D.N.Y. July 28, 
2020).
---------------------------------------------------------------------------

    As discussed in section VII.D.1, EPA's air quality projections 
anticipate that with the implementation of the identified control 
stringency for EGUs represented by $1,600 per ton, downwind 
nonattainment and maintenance problems for the 2008 ozone NAAQS will 
persist through the 2024 ozone season. Therefore, EPA is proposing to 
adjust emission budgets for upwind states that remain linked to 
downwind nonattainment and maintenance problems through the 2024 ozone 
season to incentivize the continued optimization of existing SCR 
controls and installation of state-of-the-art NOX combustion 
controls. The 2024 emission budgets would then continue to apply in 
each year thereafter.
    As discussed below, EPA notes that emissions budgets are 
implemented through the market-based mechanism of a trading program for 
emission allowances. Under such a trading program, sources have the 
compliance flexibility to make emissions reductions themselves or to 
purchase allowances from other sources (either directly from those 
sources or indirectly through a third party) that do not need those 
allowances to cover their remaining emissions. Given this compliance 
flexibility, EPA is taking comment on whether delaying the 
incorporation of emission reduction potential from the installation of 
state-of-the-art NOX combustion controls into state emission 
budgets until 2022 is necessary (Comment C-1).
    To apply the fourth step of the 4-step framework (i.e., 
implementation), EPA proposes to include enforceable measures in the 
promulgated FIPs to achieve the required emission reductions in each of 
the 12 states. Specifically, the FIPs would require power plants in the 
12 states to participate in a new CSAPR NOX Ozone Season 
Group 3 Trading Program that largely replicates the existing CSAPR 
NOX Ozone Season Group 2 Trading Program; with the main 
differences being the geography and budget stringency. Aside from the 
removal of the 12 covered states from the current CSAPR NOX 
Ozone Season Group 2 Trading Program, this proposal leaves unchanged 
the budget stringency and geography of the existing CSAPR 
NOX Ozone Season Group 1 and Group 2 trading programs.
    For this rulemaking, EPA is proposing to authorize a one-time 
conversion of allowances banked in 2017-2020 under the CSAPR Update 
NOX Ozone Season Group 2 Trading Program into a limited 
number of allowances that can be used for compliance in the CSAPR 
NOX Ozone Season Group 3 Trading Program. Similar to the 
approach taken in the CSAPR Update, EPA is proposing to base the 
conversion on a formula that ensures emissions in the CSAPR 
NOX Ozone Season Group 3 Trading Program region do not 
exceed a specified level (defined as emissions up to the sum of

[[Page 68970]]

the states' ozone season emissions budgets and variability limits) as a 
result of the use of banked allowances from the Group 2 trading 
program. EPA also proposes to provide a process through which holders 
of Group 2 allowances in non-facility accounts (``general'' 
accountholders) could designate any Group 2 allowances that they do not 
wish to have converted to Group 3 allowances.
    The remainder of this preamble is organized as follows: Section IV 
describes EPA's legal authority for this proposed action; section V 
describes the human health and environmental context, as well as EPA's 
proposed approach for addressing interstate transport for the 2008 
ozone NAAQS; section VI describes its assessment of downwind receptors 
of concern and upwind state ozone contributions to those receptors, 
including the air quality modeling platform and emission inventories 
that EPA used; section VII describes EPA's approach to quantify upwind 
state obligations in the form of final EGU NOX emission 
budgets; section VIII details the implementation requirements including 
key elements of the CSAPR trading program and deadlines for compliance; 
section IX describes the expected costs, benefits, and other impacts of 
this proposed rule; section X discusses changes to the existing 
regulatory text; and section XI discusses the statutes and executive 
orders affecting this proposed rulemaking.

C. Costs and Benefits

    A summary of the key results of the cost-benefit analysis that was 
prepared for this proposed rule is presented in Table I.C-1. Table I.C-
1 presents estimates of the present values (PV) and equivalent 
annualized values (EAV), calculated using discount rates of 3 and 7 
percent as directed by OMB's Circular A-4, of the compliance costs, 
climate benefits, and net benefits of the proposed rule, in 2016 
dollars, discounted to 2021. The estimated net benefits are the 
estimated benefits minus the estimated costs of the proposed rule. The 
table represents the present value of non-monetized benefits from 
ozone, PM2.5 and NO2 reductions as a [beta], 
while b represents the equivalent annualized value of these non-
monetized benefits. These values will differ across the discount rates 
and depend on the B's in Tables IX.4 and IX.5 presented in Section IX.

    Table I.C--1 Estimated Compliance Costs, Climate Benfits and Net
            Benefits of the Proposed Rule, 2021 Through 2025
                  [Millions 2016$, discounted to 2021]
------------------------------------------------------------------------
                                          3%  Discount     7%  Discount
                                              rate             rate
------------------------------------------------------------------------
Present Value:
Benefits c d..........................       101+[beta]        15+[beta]
Climate Benefits c....................              101               15
Compliance Costs e....................               87               83
Net Benefits..........................        14+[beta]       -68+[beta]
Equivalent Annualized Value:
Benefits..............................             22+b              4+b
Climate Benefits......................               22                4
Compliance Costs......................               19               20
Net Benefits..........................              3+b            -17+b
------------------------------------------------------------------------
a All estimates in this table are rounded to two significant figures, so
  numbers may not sum due to independent rounding.
b The annualized present value of costs and benefits are calculated over
  a 5 year period from 2021 to 2025.
c Benefits ranges represent discounting of climate benefits at a real
  discount rate of 3 percent and 7 percent. Climate benefits are based
  on changes (reductions) in CO2 emissions.
d [beta] and b is the sum of all unquantified ozone, PM2.5, and NO2
  benefits. The annual values of [beta] and b will differ across
  discount rates. While EPA did not estimate these benefits in the RIA,
  Appendix 5B in the RIA presents PM2.5 and ozone estimates quantified
  using methods consistent with the previously published ISAs \19\ \20\
  to provide information regarding the potential magnitude of the
  benefits of this proposed rule.
e The costs presented in this table reflect annualized present value
  compliance costs calculated over a 5 year period from 2021 to 2025.

    Table 1.C-1 does not  include quantified and monetized health 
benefits associated with reduced exposures to concentrations of ground-
level ozone and fine particulates. The Agency intends to update its 
approach for quantifying the benefits of air quality changes by 
considering the evidence reported in recently completed Integrated 
Science Assessments for ground-level ozone and fine particulates and 
accounting for forthcoming recommendations from the Science Advisory 
Board on this issue. This process is still underway and will not be 
completed in time for this proposed rule. See Section IX of this 
preamble for more discussion. However, to provide perspective regarding 
the scope of the estimated benefits, Appendix 5B of the RIA illustrates 
the potential health effects associated with the changes in 
PM2.5 and ozone concentrations as calculated using methods 
developed prior to the 2019 p.m. ISA and 2020 Ozone ISA. That analysis 
provides perspective regarding the scope of the estimated benefits. EPA 
is in the process of recalibrating its benefits estimates for all PM 
and ozone health endpoints. EPA intends to update its quantitative 
methods for estimating the number and economic value of 
PM2.5 and ozone health effects in time for publication as 
part of the final rule.
---------------------------------------------------------------------------

    \19\ U.S. Environmental Protection Agency (U.S. EPA). 2009. 
Integrated Science Assessment for Particulate Matter (Final Report). 
EPA-600-R-08-139F. National Center for Environmental Assessment--RTP 
Division, Research Triangle Park, NC. December. Available at: http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546>.
    \20\ U.S. Environmental Protection Agency (U.S. EPA). 2013. 
Integrated Science Assessment of Ozone and Related Photochemical 
Oxidants (Final Report). EPA/600/R-10/076F. National Center for 
Environmental Assessment--RTP Division, Research Triangle Park. 
Available at: http://cfpub.epa.gov/ncea/isa/recordisplay.cfm?deid=247492#Download>.
---------------------------------------------------------------------------

    As shown in Table I.C-1, the PV of the climate benefits of this 
proposed rule, discounted at a 7-percent rate, is estimated to be about 
$15 million, with an EAV of about $4 million. At a 3-percent discount 
rate, the PV of the climate benefits is estimated to be about $101 
million, with an EAV of $22 million. The PV of the compliance costs, 
discounted at a 7-percent rate, is estimated to be about $83 million, 
with an EAV of about $20 million. At a 3-percent discount rate, the PV 
of the compliance costs is estimated to be about $87 million, with an 
EAV of about

[[Page 68971]]

$19 million. The PV of the net benefits of this proposed rule, 
discounted at a 7-percent rate, is estimated to be about -$68 million, 
with an EAV of about -$17 million. At a 3-percent discount rate, the PV 
of the net benefits is estimated to be about $14 million, with an EAV 
of about $3 million .

II. Public Participation

A. Written Comments

    Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2020-
0272, at https://www.regulations.gov. Once submitted, comments cannot 
be edited or removed from the docket. EPA may publish any comment 
received to its public docket. Do not submit to EPA's docket at https://www.regulations.gov any information you consider to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Multimedia submissions (audio, video, etc.) must 
be accompanied by a written comment. The written comment is considered 
the official comment and should include discussion of all points you 
wish to make. EPA will generally not consider comments or comment 
contents located outside of the primary submission (i.e., on the web, 
cloud, or other file sharing system). For additional submission 
methods, the full EPA public comment policy, information about CBI or 
multimedia submissions, and general guidance on making effective 
comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
    EPA is temporarily suspending its Docket Center and Reading Room 
for public visitors to reduce the risk of transmitting COVID-19. 
Written comments submitted by mail are temporarily suspended and no 
hand deliveries will be accepted. Our Docket Center staff will continue 
to provide remote customer service via email, phone, and webform. We 
encourage the public to submit comments via https://www.regulations.gov. For further information and updates on EPA Docket 
Center services, please visit us online at https://www.epa.gov/dockets.
    EPA continues to carefully and continuously monitor information 
from the Centers for Disease Control and Prevention (CDC), local area 
health departments, and our Federal partners so that we can respond 
rapidly as conditions change regarding COVID-19.

B. Participation in Virtual Public Hearing

    Please note that EPA is deviating from its typical approach because 
the President has declared a national emergency. Because of current CDC 
recommendations, as well as state and local orders for social 
distancing to limit the spread of COVID-19, EPA cannot hold in-person 
public meetings at this time.
    EPA will begin pre-registering speakers for the hearing upon 
publication of this document in the Federal Register. To register to 
speak at the virtual hearing, please use the online registration form 
available at https://www.epa.gov/csapr/revised-cross-state-air-pollution-update or contact Ms. Kimberly Liu at [email protected] or 
202-564-6586 to register to speak at the virtual hearing. The last day 
to pre-register to speak at the hearing will be November 6, 2020. On 
November 10, 2020, EPA will post a general agenda for the hearing that 
will list pre-registered speakers in approximate order at: https://www.epa.gov/csapr/revised-cross-state-air-pollution-update.
    EPA will make every effort to follow the schedule as closely as 
possible on the day of the hearing; however, please plan for the 
hearings to run either ahead of schedule or behind schedule.
    Each commenter will have 5 minutes to provide oral testimony. EPA 
encourages commenters to provide EPA with a copy of their oral 
testimony electronically (via email) by emailing it to Ms. Kimberly Liu 
at [email protected]. EPA also recommends submitting the text of 
your oral comments as written comments to the rulemaking docket.
    EPA may ask clarifying questions during the oral presentations but 
will not respond to the presentations at that time. Written statements 
and supporting information submitted during the comment period will be 
considered with the same weight as oral comments and supporting 
information presented at the public hearing.
    Please note that any updates made to any aspect of the hearing will 
be posted online at https://www.epa.gov/csapr/revised-cross-state-air-pollution-update. While EPA expects the hearing to go forward as set 
forth above, please monitor our website or contact Ms. Kimberly Liu at 
[email protected] or 202-564-6586 to determine if there are any 
updates. EPA does not intend to publish a document in the Federal 
Register announcing updates.
    If you require the services of a translator or special 
accommodations such as audio description, please pre-register for the 
hearing with Kimberly Liu at [email protected] or 202-564-6586 and 
describe your needs by November 5, 2020. EPA may not be able to arrange 
accommodations without advanced notice.

III. General Information

A. Does this action apply to me?

    This proposed rule affects EGUs, and regulates the groups 
identified in Table III.A-1:

                     Table III.A-1--Regulated Groups
------------------------------------------------------------------------
                        Industry group                           NAICS *
------------------------------------------------------------------------
Fossil fuel-fired electric power generation...................    221112
------------------------------------------------------------------------
* North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. For example, as 
discussed in Section VII.D.2 below, EPA is requesting comment on 
potential control strategies for emissions sources and industry sectors 
outside of the fossil fuel-fired power sector. Some of these industry 
sectors include cement, glass, chemical, and paper manufacturing, 
pipeline transportation, and oil and gas extraction. To determine 
whether your EGU entity is proposed to be regulated by this action, you 
should carefully examine the applicability criteria found in 40 CFR 
97.804, which EPA is not proposing to alter in this action. If you have 
questions regarding the applicability of this action to a particular 
entity, consult the person listed in the FOR FURTHER INFORMATION 
CONTACT section.

IV. EPA's Legal Authority for the Proposed Rule

A. Statutory Authority

    The statutory authority for this final action is provided by the 
CAA as amended (42 U.S.C. 7401 et seq.). Specifically, sections 110 and 
301 of the CAA provide the primary statutory underpinnings for this 
action. The most relevant portions of CAA section 110 are subsections 
110(a)(1), 110(a)(2) (including 110(a)(2)(D)(i)(I)), 110(c)(1), and 
110(k)(6).
    CAA section 110(a)(1) provides that states must make SIP 
submissions ``within 3 years (or such shorter period as the 
Administrator may prescribe) after the promulgation of a national 
primary ambient air quality standard (or any revision thereof),'' and 
that these SIP submissions are to provide for the ``implementation, 
maintenance, and

[[Page 68972]]

enforcement'' of such NAAQS.\21\ The statute directly imposes on states 
the duty to make these SIP submissions, and the requirement to make the 
submissions is not conditioned upon EPA taking any action other than 
promulgating a new or revised NAAQS.\22\
---------------------------------------------------------------------------

    \21\ 42 U.S.C. 7410(a)(1).
    \22\ See EPA v. EME Homer City Generation, L.P., 572 U.S. 489, 
509-10 (2014).
---------------------------------------------------------------------------

    EPA has historically referred to SIP submissions made for the 
purpose of satisfying the applicable requirements of CAA sections 
110(a)(1) and 110(a)(2) as ``infrastructure SIP'' or ``iSIP'' 
submissions. CAA section 110(a)(1) addresses the timing and general 
requirements for iSIP submissions, and CAA section 110(a)(2) provides 
more details concerning the required content of these submissions.\23\ 
It includes a list of specific elements that ``[e]ach such plan'' 
submission must address.\24\
---------------------------------------------------------------------------

    \23\ 42 U.S.C. 7410(a)(2).
    \24\ EPA's general approach to infrastructure SIP submissions is 
explained in greater detail in individual notices acting or 
proposing to act on state infrastructure SIP submissions and in 
guidance. See, e.g., Memorandum from Stephen D. Page on Guidance on 
Infrastructure State Implementation Plan (SIP) Elements under Clean 
Air Act Sections 110(a)(1) and 110(a)(2) (Sept. 13, 2013).
---------------------------------------------------------------------------

    CAA section 110(c)(1) requires the Administrator to promulgate a 
FIP at any time within two years after the Administrator: (1) Finds 
that a state has failed to make a required SIP submission; (2) finds a 
SIP submission to be incomplete pursuant to CAA section 110(k)(1)(C); 
or (3) disapproves a SIP submission. This obligation applies unless the 
state corrects the deficiency through a SIP revision that the 
Administrator approves before the FIP is promulgated.\25\
---------------------------------------------------------------------------

    \25\ 42 U.S.C. 7410(c)(1).
---------------------------------------------------------------------------

    CAA section 110(a)(2)(D)(i)(I), also known as the ``good neighbor 
provision,'' provides the primary basis for this proposal.\26\ It 
requires that each state SIP include provisions sufficient to 
``prohibit[ ], consistent with the provisions of this subchapter, any 
source or other type of emissions activity within the State from 
emitting any air pollutant in amounts which will--(I) contribute 
significantly to nonattainment in, or interfere with maintenance by, 
any other State with respect to any [NAAQS].'' \27\ EPA often refers to 
the emission reduction requirements under this provision as ``good 
neighbor obligations'' and submissions addressing these requirements as 
``good neighbor SIPs.''
---------------------------------------------------------------------------

    \26\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
    \27\ Id.
---------------------------------------------------------------------------

    Once EPA promulgates a NAAQS, EPA must designate areas as being in 
``attainment'' or ``nonattainment'' of the NAAQS, or 
``unclassifiable.'' CAA section 107(d).\28\ For ozone, nonattainment is 
further split into five classifications based on the severity of the 
violation--Marginal, Moderate, Serious, Severe, or Extreme. Higher 
classifications provide States with progressively more time to attain 
and additional control requirements. See CAA sections 181, 182.\29\ In 
general, states with nonattainment areas classified as Moderate or 
higher must submit plans to EPA to bring these areas into attainment 
according to the statutory schedule. CAA section 182.\30\ If an area 
fails to attain the NAAQS by the attainment date associated with its 
classification, it is ``bumped up'' to the next classification. CAA 
section 181(b).\31\
---------------------------------------------------------------------------

    \28\ 42 U.S.C. 7407(d).
    \29\ 42 U.S.C. 7511, 7511a.
    \30\ 42 U.S.C. 7511a.
    \31\ 42 U.S.C. 7511(b).
---------------------------------------------------------------------------

    Section 301(a)(1) of the CAA also gives the Administrator the 
general authority to prescribe such regulations as are necessary to 
carry out functions under the Act.\32\ Pursuant to this section, EPA 
has authority to clarify the applicability of CAA requirements and 
undertake other rulemaking action as necessary to implement CAA 
requirements. In this proposal, among other things, EPA is clarifying 
the applicability of CAA section 110(a)(2)(D)(i)(I) with respect to the 
2008 ozone NAAQS. In particular, EPA is using its authority under CAA 
sections 110 and 301 to issue new or amended FIPs to revise 
NOX ozone season emission budgets for 12 states to eliminate 
their significant contribution to nonattainment or interference with 
maintenance of the 2008 ozone NAAQS in another state, and EPA is making 
findings as to 9 additional states that the CSAPR Update FIPs (or SIP 
revisions later approved to replace those FIPs) are a complete remedy 
and need no further revision.\33\ In addition, EPA is obligated to 
respond to the D.C. Circuit's remand of the CSAPR Update in Wisconsin 
v. EPA, 938 F.3d 303, with respect to the 21 states for which the FIPs 
created by that rule were found to be only a partial remedy. This 
proposal, if finalized, will wholly resolve the Agency's obligations on 
remand. Finally, CAA section 301\34\ affords the Agency any additional 
authority that may be needed in order to make certain other changes to 
its regulations under 40 CFR parts 52, 78, and 97, as discussed in 
Section VIII of this preamble.
---------------------------------------------------------------------------

    \32\ 42 U.S.C. 7601(a)(1).
    \33\ 42 U.S.C. 7410, 7601.
    \34\ 42 U.S.C. 7601.
---------------------------------------------------------------------------

B. Prior Good Neighbor Rulemakings Addressing Regional Ozone

    EPA has issued several rules interpreting and clarifying the 
requirements of CAA section 110(a)(2)(D)(i)(I) with respect to the 
regional transport of ozone for states in the eastern United States. 
These rules, and the associated court decisions addressing these rules, 
summarized here, provide important direction regarding the requirements 
of CAA section 110(a)(2)(D)(i)(I).
    The NOX SIP Call, promulgated in 1998, addressed the 
good neighbor provision for the 1979 1-hour ozone NAAQS.\35\ The rule 
required 22 states and the District of Columbia to amend their SIPs to 
reduce NOX emissions that contribute to ozone nonattainment 
in downwind states. EPA set ozone season NOX budgets for 
each state, and the states were given the option to participate in a 
regional trading program, known as the NOX Budget Trading 
Program.\36\ The D.C. Circuit largely upheld the NOX SIP 
Call in Michigan v. EPA, 213 F.3d 663 (DC Cir. 2000), cert. denied, 532 
U.S. 904 (2001).
---------------------------------------------------------------------------

    \35\ 63 FR 57356 (Oct. 27, 1998). As originally promulgated, the 
NOX SIP Call also addressed good neighbor obligations 
under the 1997 8-hour ozone NAAQS, but EPA subsequently stayed and 
later rescinded the rule's provisions with respect to that standard. 
See 84 FR 8422 (March 8, 2019).
    \36\ ``Allowance Trading,'' sometimes referred to as ``cap and 
trade,'' is an approach to reducing pollution that has been used 
successfully to protect human health and the environment. Trading 
programs have two key components: Emissions budgets (the sum of 
which provide a cap on emissions), and tradable allowances equal to 
the budgets that authorize allowance holders to emit a specific 
quantity (e.g., one ton) of the pollutant. This approach ensures 
that the environmental goal is met while the tradable allowances 
provide flexibility for individual participants to establish and 
follow their own compliance path. Because allowances can be bought 
and sold in an allowance market, these programs are often referred 
to as ``market-based.''
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    EPA's next rule addressing the good neighbor provision, the Clean 
Air Interstate Rule (CAIR), was promulgated in 2005 and addressed both 
the 1997 fine particulate matter (PM2.5) NAAQS and 1997 
ozone NAAQS.\37\ CAIR required SIP revisions in 28 states and the 
District of Columbia to reduce emissions of sulfur dioxide 
(SO2) and/or NOX--important precursors of 
regionally transported PM2.5 (SO2 and annual 
NOX) and ozone (summer-time NOX). As in the 
NOX SIP Call, states were given the option to participate in 
regional trading programs to achieve the reductions. When EPA 
promulgated the

[[Page 68973]]

final CAIR in 2005, EPA also issued findings that states nationwide had 
failed to submit SIPs to address the requirements of CAA section 
110(a)(2)(D)(i) with respect to the 1997 PM2.5 and 1997 
ozone NAAQS.\38\ On March 15, 2006, EPA promulgated FIPs to implement 
the emission reductions required by CAIR.\39\ CAIR was remanded to EPA 
by the D.C. Circuit in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 
2008), modified on reh'g, 550 F.3d 1176. For more information on the 
legal issues underlying CAIR and the D.C. Circuit's holding in North 
Carolina, refer to the preamble of the CSAPR rule.\40\
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    \37\ 70 FR 25162 (May 12, 2005).
    \38\ 70 FR 21147 (April 25, 2005).
    \39\ 71 FR 25328 (April 28, 2006).
    \40\ 76 FR 48208, 48217 (Aug. 8, 2011).
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    In 2011, EPA promulgated the CSAPR to address the issues raised by 
the remand of CAIR. The CSAPR addressed the two NAAQS at issue in CAIR 
and additionally addressed the good neighbor provision for the 2006 
PM2.5 NAAQS.\41\ The CSAPR required 28 states to reduce 
SO2 emissions, annual NOX emissions, and/or ozone 
season NOX emissions that significantly contribute to other 
states' nonattainment or interfere with other states' abilities to 
maintain these air quality standards.\42\ To align implementation with 
the applicable attainment deadlines, EPA promulgated FIPs for each of 
the 28 states covered by the CSAPR. The FIPs require EGUs in the 
covered states to participate in regional trading programs to achieve 
the necessary emission reductions. Each state can submit a good 
neighbor SIP at any time that, if approved by EPA, would replace the 
CSAPR FIP for that state.
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    \41\ 76 FR 48208.
    \42\ The CSAPR was revised by several rulemakings after its 
initial promulgation in order to revise certain states' budgets and 
to promulgate FIPs for five additional states addressing the good 
neighbor obligation for the 1997 ozone NAAQS. See 76 FR 80760 (Dec. 
27, 2011); 77 FR 10324 (Feb. 21, 2012); 77 FR 34830 (June 12, 2012).
---------------------------------------------------------------------------

    The CSAPR was the subject of an adverse decision by the D.C. 
Circuit in August 2012.\43\ However, this decision was reversed in 
April 2014 by the Supreme Court, which largely upheld the rule, 
including EPA's approach to addressing interstate transport in the 
CSAPR. EPA v. EME Homer City Generation, L.P., 572 U.S. 489 (2014) (EME 
Homer City I). The rule was remanded to the D.C. Circuit to consider 
claims not addressed by the Supreme Court. Id. In July 2015 the D.C. 
Circuit generally affirmed EPA's interpretation of various statutory 
provisions and EPA's technical decisions. EME Homer City Generation, 
L.P. v. EPA, 795 F.3d 118 (2015) (EME Homer City II). However, the 
court remanded the rule without vacatur for reconsideration of EPA's 
emissions budgets for certain states, which the court found may have 
over-controlled those states' emissions with respect to the downwind 
air quality problems to which the states were linked. Id. at 129-30, 
138. For more information on the legal issues associated with the CSAPR 
and the Supreme Court's and D.C. Circuit's decisions in the EME Homer 
City litigation, refer to the preamble of the CSAPR Update.\44\
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    \43\ On August 21, 2012, the D.C. Circuit issued a decision in 
EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012), 
vacating the CSAPR. EPA sought review with the D.C. Circuit en banc 
and the D.C. Circuit declined to consider EPA's appeal en banc. EME 
Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. January 
24, 2013), ECF No. 1417012 (denying EPA's motion for rehearing en 
banc).
    \44\ 81 FR 74504, 74511 (Oct. 26, 2016).
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    In 2016, EPA promulgated the CSAPR Update to address interstate 
transport of ozone pollution with respect to the 2008 ozone NAAQS.\45\ 
The final rule generally updated the CSAPR ozone season NOX 
emissions budgets for 22 states to achieve cost-effective and 
immediately feasible NOX emission reductions from EGUs 
within those states.\46\ EPA aligned the analysis and implementation of 
the CSAPR Update with the 2017 ozone season in order to assist downwind 
states with timely attainment of the 2008 ozone NAAQS.\47\ The CSAPR 
Update implemented the budgets through FIPs requiring sources to 
participate in a revised CSAPR NOX ozone season trading 
program beginning with the 2017 ozone season. As under the CSAPR, each 
state can submit a good neighbor SIP at any time that, if approved by 
EPA, would replace the CSAPR Update FIP for that state. The final CSAPR 
Update also addressed the remand by the D.C. Circuit of certain states' 
CSAPR phase 2 ozone season NOX emissions budgets in EME 
Homer City II. Further details regarding the CSAPR Update are discussed 
in Sections V.C.1.a-b below.
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    \45\ 81 FR 74504.
    \46\ One state, Kansas, was made newly subject to the CSAPR 
ozone season NOX requirement by the CSAPR Update. All 
other CSAPR Update states were already subject to ozone season 
NOX requirements under the CSAPR.
    \47\ 81 FR 74516. EPA's final 2008 Ozone NAAQS SIP Requirements 
Rule, 80 FR 12264, 12268 (Mar. 6, 2015), revised the attainment 
deadline for ozone nonattainment areas designated as Moderate to 
July 20, 2018. See 40 CFR 51.1103. In order to demonstrate 
attainment by this deadline, states were required to rely on design 
values calculated using ozone season data from 2015 through 2017, 
since the July 20, 2018, deadline did not afford enough time for 
measured data of the full 2018 ozone season.
---------------------------------------------------------------------------

    In December 2018, EPA promulgated the CSAPR ``Close-Out,'' which 
determined that no further enforceable reductions in emissions of 
NOX were required with respect to the 2008 ozone NAAQS for 
20 of the 22 eastern states covered by the CSAPR Update, and reflected 
that determination in revisions to the existing state-specific sections 
of the CSAPR Update regulations for those states.\48\ Further details 
on the CSAPR Close-Out are discussed in Section V.C.1.c below.
---------------------------------------------------------------------------

    \48\ 83 FR 65878, 65882 (Dec. 21, 2018). After promulgating the 
CSAPR Update and before promulgating the CSAPR Close-Out, EPA 
approved a SIP from Kentucky resolving that state's good neighbor 
obligations for the 2008 ozone NAAQS. 83 FR 33730 (July 17, 2018). 
In this action, EPA is proposing an error correction under CAA 
section 110(k)(6) to convert this approval to a disapproval, because 
the Kentucky approval relied on the same analysis which the D.C. 
Circuit determined to be unlawful in the CSAPR Close-Out. Our action 
with respect to Kentucky is discussed in Section V.C.2.b. below.
---------------------------------------------------------------------------

    The CSAPR Update and the CSAPR Close-Out were both subject to legal 
challenges in the D.C. Circuit. Wisconsin v. EPA, 938 F.3d 303 (D.C. 
Cir. 2019) (Wisconsin); New York v. EPA, 781 Fed. App'x 4 (D.C. Cir. 
2019) (New York). As discussed in greater detail in Section V.C.1.d 
below, in September 2019, the D.C. Circuit upheld the CSAPR Update in 
virtually all respects, but remanded the rule because it was partial in 
nature and did not fully eliminate upwind states' significant 
contribution to nonattainment or interference with maintenance of the 
2008 ozone NAAQS by ``the relevant downwind attainment deadlines'' in 
the CAA. Wisconsin, 938 F.3d at 313-15. In October 2019, the D.C. 
Circuit vacated the CSAPR Close-Out on the same grounds that it 
remanded the CSAPR Update in Wisconsin, specifically that the Close-Out 
rule did not analyze ``the next applicable attainment date'' of 
downwind states. New York, 781 Fed. App'x at 7.

V. Air Quality Issues Addressed and Overall Approach for the Proposed 
Rule

A. The Interstate Ozone Transport Challenge

    Interstate transport of NOX emissions poses significant 
challenges with respect to the 2008 ozone NAAQS in the eastern U.S. and 
thus presents a threat to public health and welfare.
1. Nature of Ozone and the Ozone NAAQS
    Ground-level ozone is not emitted directly into the air but is 
created by chemical reactions between NOX and volatile 
organic compounds (VOC) in

[[Page 68974]]

the presence of sunlight. Emissions from electric utilities and 
industrial facilities, motor vehicles, gasoline vapors, and chemical 
solvents are some of the major sources of NOX and VOC.
    Because ground-level ozone formation increases with temperature and 
sunlight, ozone levels are generally higher during the summer. 
Increased temperature also increases emissions of volatile man-made and 
biogenic organics and can indirectly increase NOX emissions 
as well (e.g., increased electricity generation for air conditioning).
    The 2008 primary and secondary ozone standards are both 75 ppb as 
an 8-hour level.\49\ Specifically, the standards require that the 3-
year average of the fourth highest 24-hour maximum 8-hour average ozone 
concentration may not exceed 75 ppb as a truncated value (i.e., digits 
to right of decimal removed).\50\ In general, areas that exceed the 
ozone standard are designated as nonattainment areas, pursuant to the 
designations process under CAA section 107 and are subject to 
heightened planning requirements depending on the degree of severity of 
their nonattainment classification, see CAA sections 181, 182.
---------------------------------------------------------------------------

    \49\ 73 FR 16436 (Mar. 27, 2008).
    \50\ 40 CFR part 50, Appendix P to part 50.
---------------------------------------------------------------------------

2. Ozone Transport
    Studies have established that ozone formation, atmospheric 
residence, and transport occur on a regional scale (i.e., thousands of 
kilometers) over much of the eastern U.S.\51\ While substantial 
progress has been made in reducing ozone in many areas, interstate 
ozone transport is still an important component of peak ozone 
concentrations during the summer ozone season.
---------------------------------------------------------------------------

    \51\ Bergin, M.S. et al. (2007) Regional air quality: Local and 
interstate impacts of NOX and SO2 emissions on 
ozone and fine particulate matter in the eastern United States. 
Environmental Sci & Tech. 41: 4677-4689.
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    EPA has previously concluded in the NOX SIP Call, CAIR, 
and the CSAPR that, for reducing regional-scale ozone transport, a 
NOX control strategy would be most effective. NOX 
emissions can be transported downwind as NOX or, after 
transformation in the atmosphere, as ozone. As a result of ozone 
transport, in any given location, ozone pollution levels are impacted 
by a combination of local emissions and emissions from upwind sources. 
The transport of ozone pollution across state borders compounds the 
difficulty for downwind states in meeting health-based air quality 
standards (i.e., NAAQS). Assessments of ozone, for example those 
conducted for the October 2015 Regulatory Impact Analysis of the Final 
Revisions to the National Ambient Air Quality Standards for Ground-
Level Ozone (EPA-452/R-15-007), continue to show the importance of 
NOX emissions for ozone transport. This analysis is in the 
docket for this proposal and can be also found at EPA's website at: 
https://www.epa.gov/ttnecas1/docs/20151001ria.pdf.
    Further, studies have found that EGU NOX emission 
reductions can be effective in reducing individual 8-hour peak ozone 
concentrations and in reducing 8-hour peak ozone concentrations 
averaged across the ozone season. For example, a study that evaluates 
the effectiveness on ozone concentrations of EGU NOX 
reductions achieved under the NOX Budget Trading Program 
(i.e., the NOX SIP Call) shows that regulating 
NOX emissions in that program was highly effective in 
reducing both ozone and dry-NO3 concentrations during the 
ozone season. Further, this study indicates that EGU emissions, which 
are generally released higher in the air column through tall stacks and 
are significant in quantity, may disproportionately contribute to long-
range transport of ozone pollution on a per-ton basis.\52\
---------------------------------------------------------------------------

    \52\ Butler, et al., ``Response of Ozone and Nitrate to 
Stationary Source Reductions in the Eastern USA''. Atmospheric 
Environment, 2011.
---------------------------------------------------------------------------

    Previous regional ozone transport efforts, including the 
NOX SIP Call, CAIR, and the CSAPR, required ozone season 
NOX reductions from EGUs to address interstate transport of 
ozone. EPA took comment on regulating EGU NOX emissions to 
address interstate ozone transport in the notice-and-comment process 
for these rulemakings. EPA received no significant adverse comments in 
any of these proposals regarding the rules' focus on ozone season EGU 
NOX reductions to address interstate ozone transport.
    As described in Section VII, EPA's analysis finds that the power 
sector continues to be capable of making NOX reductions at 
reasonable cost that reduce interstate transport with respect to 
ground-level ozone. EGU NOX emission reductions can be made 
in the near-term under this proposal by fully operating existing EGU 
NOX post-combustion controls (i.e., Selective Catalytic 
Reduction)--including optimizing NOX removal by existing 
operational controls and turning on and optimizing existing idled 
controls; installation of (or upgrading to) state-of-the-art 
NOX combustion controls; and shifting generation to units 
with lower NOX emission rates. Further, additional 
assessment reveals that these available EGU NOX reductions 
would make meaningful and timely improvements in ozone air quality.
    EPA also observes that significant emissions reduction potential 
from EGUs is available through the post-combustion control retrofit 
strategies. These controls reduce emissions and can have a meaningful 
air quality impact, but, in contrast to the controls discussed above, 
they are not available in the near-term, and are only available on a 
longer time frame (reflecting the time required to develop, construct, 
and install the technology) and are estimated to have a higher cost.
3. Health and Environmental Effects
    Exposure to ambient ozone causes a variety of negative effects on 
human health, vegetation, and ecosystems. In humans, acute and chronic 
exposure to ozone is associated with premature mortality and a number 
of morbidity effects, such as asthma exacerbation. In ecosystems, ozone 
exposure causes visible foliar injury, decreases plant growth, and 
affects ecosystem community composition. See EPA's November 2014 
Regulatory Impact Analysis of the Proposed Revisions to the National 
Ambient Air Quality Standards for Ground-Level Ozone (EPA-452/P-14-
006), in the docket for this proposal and available on EPA's website 
at: http://www.epa.gov/ttn/ecas/regdata/RIAs/20141125ria.pdf, for more 
information on the human health and welfare and ecosystem effects 
associated with ambient ozone exposure.

B. Relationship Between This Regulatory Action and the 2015 Ozone NAAQS

    On October 1, 2015, EPA strengthened the ground-level ozone NAAQS 
to 70 ppb on an eight-hour averaging time, based on extensive 
scientific evidence about ozone's effects on public health and 
welfare.\53\ While reductions achieved by this rule may have the effect 
of aiding in attainment and maintenance of the 2015 standard, this 
action is taken solely with respect to EPA's authority to address 
remaining CAA good neighbor obligations under the 2008 ozone NAAQS. EPA 
and states are working outside of this proposed action to address the 
CAA good

[[Page 68975]]

neighbor provision for the 2015 ozone NAAQS.
---------------------------------------------------------------------------

    \53\ 80 FR 65291 (Oct. 26, 2015). On July 13, 2020, based on a 
review of the full body of currently available scientific evidence 
and exposure/risk information, EPA proposed to retain the existing 
ozone NAAQS. See https://www.epa.gov/ground-level-ozone-pollution/ozone-national-ambient-air-quality-standards-naaqs.
---------------------------------------------------------------------------

C. Proposed Approach To Address the Remanded Transport Obligations for 
the 2008 Ozone NAAQS

1. Events Affecting Application of the Good Neighbor Provision for the 
2008 Ozone NAAQS
    EPA is taking this action to address the remand of the CSAPR Update 
in Wisconsin v. EPA, 938 F.3d 303 (D.C. Cir. 2019). This Section will 
discuss the key, relevant aspects of the CSAPR Update, the related 
CSAPR Close-Out, and the D.C. Circuit's decisions in Wisconsin and New 
York v. EPA, 781 Fed. App'x 4 (D.C. Cir. 2019) (the latter of which 
vacated the Close-out Rule based on the same reasoning as the Wisconsin 
decision remanding the Update). The basis for EPA's authority under CAA 
section 110(c) (42 U.S.C. 7410(c)) to promulgate good neighbor FIPs for 
the 21 states subject to this action on remand is discussed in Sections 
IV and V.C.2.
a. The CSAPR Update
    On October 26, 2016, the CSAPR Update was published in the Federal 
Register. 81 FR 74504. The purpose of the CSAPR Update was to address 
the good neighbor provision for the 2008 ozone NAAQS, as well as 
address remanded CSAPR obligations for the 1997 ozone NAAQS. The CSAPR 
Update required EGUs in 22 states to reduce ozone season NOX 
emissions that significantly contribute to other states' nonattainment 
or interfere with other states' abilities to maintain the 2008 ozone 
NAAQS.
    To establish and implement the CSAPR Update emissions budgets, EPA 
followed the same four-step analytic process that it used in the CSAPR, 
an approach which reflects the evolution of the Agency's prior regional 
interstate transport rulemakings related to ozone NAAQS. The 4-step 
framework is described in more detail in Sections V.C.3 and VII.A.
    In the CSAPR Update, to evaluate the scope of the interstate ozone 
transport problem at Step 1, EPA identified downwind areas that were 
expected to have problems attaining and maintaining the 2008 ozone 
NAAQS using modeling that projected air quality to a future compliance 
year. 81 FR 74517. EPA aligned the analysis and implementation of the 
CSAPR Update with the 2017 ozone season (May 1-September 30) in order 
to assist downwind states with attainment of the 2008 ozone NAAQS by 
the 2018 Moderate area attainment date. Id. at 74516. (EPA's final 2008 
Ozone NAAQS SIP Requirements Rule established the attainment deadline 
of July 20, 2018, for ozone nonattainment areas classified as 
Moderate.\54\) Because the attainment date fell during the 2018 ozone 
season, the 2017 ozone season was the last full season from which data 
could be used to determine attainment of the NAAQS by that date.
---------------------------------------------------------------------------

    \54\ 80 FR 12264, 12268 (Mar. 6, 2015); see 40 CFR 51.1103.
---------------------------------------------------------------------------

    At Step 2, EPA identified upwind states that collectively 
contribute to these identified downwind areas. In the CSAPR Update, EPA 
used a screening threshold of 1 percent of the NAAQS to identify states 
``linked'' to downwind ozone problems sufficient for further evaluation 
for significant contribution to nonattainment or interference with 
maintenance of the NAAQS under the good neighbor provision. 81 FR 
74518. This same threshold for analysis was used in the CSAPR as to the 
1997 ozone NAAQS. See 76 FR at 48237-38.
    At Step 3, EPA quantified emissions from upwind states that would 
significantly contribute to nonattainment or interfere with maintenance 
by first evaluating various levels of uniform NOX control 
stringency, each represented by an estimated marginal cost per ton of 
NOX reduced. EPA then applied the same multi-factor test 
that was used in the CSAPR to evaluate cost, available emission 
reductions, and downwind air quality impacts to determine the 
appropriate level of uniform NOX control stringency that 
addressed the impacts of interstate transport on downwind nonattainment 
or maintenance receptors. EPA used this multi-factor assessment to 
gauge the extent to which emission reductions could be implemented in 
the future compliance year (i.e., 2017) and to evaluate the potential 
for over- and under-control of upwind state emissions.
    Within the multi-factor test, EPA identified a ``knee in the 
curve,'' i.e., a point at which the cost-effectiveness of the emission 
reductions was maximized, so named for the discernable turning point 
observable in a multi-factor (i.e., multi-variable) curve. See 81 FR 
74550. EPA concluded that this was at the point where emissions budgets 
reflected a uniform NOX control stringency represented by an 
estimated marginal cost of $1,400 per ton (2011$) of NOX 
reduced. This cost threshold in turn represented a control strategy of 
installing or upgrading combustion controls and optimizing existing SCR 
controls. In light of this multi-factor test, EPA determined this level 
of stringency in emissions budgets represented the level at which 
incremental EGU NOX reduction potential and corresponding 
downwind ozone air quality improvements were maximized--relative to 
other control stringencies evaluated--with respect to marginal cost. 
That is, the ratio of emission reductions to marginal cost and the 
ratio of ozone improvements to marginal cost were maximized relative to 
the other levels of control stringency evaluated. EPA found that 
feasible and cost-effective EGU NOX reductions were 
available to make meaningful and timely improvements in downwind ozone 
air quality to address interstate ozone transport for the 2008 ozone 
NAAQS for the 2017 ozone season. Id. at 74508. Further, the Agency's 
evaluation showed that emissions budgets reflecting the $1,400 per ton 
cost threshold did not over-control upwind states' emissions relative 
to either the downwind air quality problems to which they were linked 
or the one percent contribution threshold in Step 2 that triggered 
their further evaluation in Step 3. Id. at 74551-52.
    At Step 4, EPA finalized EGU ozone season NOX emissions 
budgets developed using uniform control stringency represented by 
$1,400 per ton. These budgets represented emissions remaining in each 
state after elimination of the amounts of emissions that EPA identified 
would significantly contribute to nonattainment or interfere with 
maintenance of the 2008 ozone NAAQS in downwind states. EPA promulgated 
FIPs requiring the covered power plants in the 22 covered states to 
participate in the CSAPR NOX Ozone Season Group 2 Trading 
Program starting in 2017.\55\
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    \55\ The NOX ozone season trading program created 
under the CSAPR was renamed the CSAPR NOX Ozone Season 
Group 1 Trading Program and now applies only to sources in Georgia. 
In the CSAPR Update, EPA found that Georgia did not contribute to 
interstate transport with respect to the 2008 ozone NAAQS, but the 
state has an ongoing ozone season NOX requirement under 
the CSAPR with respect to the 1997 ozone NAAQS.
---------------------------------------------------------------------------

b. Partial Nature of the CSAPR Update
    At the time it promulgated the CSAPR Update, EPA considered the 
FIPs to be ``partial'' and that the rule ``may not be sufficient to 
fully address these states' good neighbor obligations'' for the 2008 
ozone NAAQS for 21 of the 22 states included in that rule. 81 FR 74508, 
74521 (Oct. 26, 2016). Based on information available at the time of 
the rule's promulgation, EPA was unable to conclude that the CSAPR 
Update fully addressed most of the covered states'

[[Page 68976]]

good neighbor obligations for the 2008 ozone NAAQS. Id. at 74521. 
Information available at the time indicated that, even with the CSAPR 
Update implementation, several downwind receptors were expected to 
continue having problems attaining and maintaining this NAAQS and that 
emissions from upwind states were expected to continue to contribute 
greater than or equal to one percent of the NAAQS to these areas during 
the 2017 ozone season. Id. at 74551-52. Further, EPA could not conclude 
at that time whether additional EGU and non-EGU reductions implemented 
on a longer timeframe than 2017 would be necessary, feasible, and cost-
effective to address states' good neighbor obligations for this NAAQS.
    Additionally, EPA determined it was not feasible to complete an 
emissions control analysis that may otherwise have been necessary to 
evaluate full elimination of each state's significant contribution to 
nonattainment or interference with maintenance and also ensure that 
emission reductions already quantified in the rule would be achieved by 
2017. Id. at 74522. EPA was unable to fully consider both non-EGU ozone 
season NOX reductions and further EGU reductions that may 
have been achievable after 2017. Id. at 74521. See Section V.D.3 below.
    Thus, EPA also could not make an emissions reduction-based 
conclusion that the CSAPR Update would fully resolve states' good 
neighbor obligations with respect to the 2008 ozone NAAQS because the 
reductions evaluated and required by the CSAPR Update were limited in 
scope (both by technology and sector). As a result of the remaining air 
quality problems and the limitations on EPA's analysis, for all but one 
of the 22 affected states, EPA did not determine in the CSAPR Update 
that the rule fully addressed those states' downwind air quality 
impacts under the good neighbor provision for the 2008 ozone NAAQS. Id. 
at 74521. For one state, Tennessee, EPA determined in the final CSAPR 
Update that Tennessee's emissions budget fully eliminated the state's 
significant contribution to downwind nonattainment and interference 
with maintenance of the 2008 ozone NAAQS because the downwind air 
quality problems to which the state was linked were projected to be 
resolved with implementation of the CSAPR Update. Id. at 74552.
c. The CSAPR Close-Out
    Following implementation of the CSAPR Update and the approval of 
Kentucky's SIP (under a court-ordered deadline),\56\ on December 21, 
2018, EPA issued the CSAPR ``Close-Out'' to address any good neighbor 
obligations that remained for the 2008 ozone NAAQS for the 20 remaining 
states in the CSAPR Update region. See 83 FR 65878 (Dec. 21, 2018). The 
CSAPR Close-Out made a determination that, based on additional 
information and analysis, the CSAPR Update fully addressed the 
remaining 20 affected states' good neighbor obligations for the 2008 
ozone NAAQS. In particular, EPA determined that 2023 was an appropriate 
future analytic year considering relevant attainment dates and the time 
EPA estimated to be necessary to implement new NOX control 
technologies at EGUs. Based on EPA's analysis of projected air quality 
in that year, EPA determined that, for the purposes of addressing good 
neighbor obligations for the 2008 ozone NAAQS, there would be no 
remaining nonattainment or maintenance receptors in the eastern U.S. As 
a result of this determination, EPA found that, with continued 
implementation of the CSAPR Update, these 20 states would no longer 
contribute significantly to nonattainment in, or interfere with 
maintenance by, any other state with respect to the 2008 ozone NAAQS. 
Id.
---------------------------------------------------------------------------

    \56\ 83 FR 33730 (July 17, 2018) (approval of Kentucky's SIP for 
the 2008 ozone NAAQS). See section V.C.2.b. for discussion of our 
proposed action for Kentucky in this notice.
---------------------------------------------------------------------------

d. D.C. Circuit Decisions in Wisconsin v. EPA and New York v. EPA
    The CSAPR Update was subject to petitions for judicial review, and 
the D.C. Circuit issued its opinion in Wisconsin v. EPA on September 
13, 2019. 938 F.3d 303. The D.C. Circuit upheld the CSAPR Update in all 
respects save one: The court concluded that the CSAPR Update was 
inconsistent with the CAA to the extent that it was partial in nature 
and did not fully eliminate upwind states' significant contribution to 
nonattainment or interference with maintenance of the 2008 ozone NAAQS 
by the downwind states' 2018 Moderate attainment date. Id. at 313.
    The court identified three bases for this holding: (1) The D.C. 
Circuit's prior opinion in North Carolina v. EPA, 531 F.3d 896 (2008), 
which held, in the context of CAIR, that the good neighbor provision 
requires states to eliminate significant contribution ``consistent with 
the provisions'' of Title I of the CAA, including the attainment dates 
applicable in downwind areas, 938 F.3d at 314 (citing 531 F.3d at 912); 
(2) the unreasonableness of EPA's interpretation of the phrase 
``consistent with the provisions [of Title I]'' in the good neighbor 
provision as allowing for variation from the attainment schedule in CAA 
section 181 because it would enable significant contribution from 
upwind states to continue beyond that statutory timeframe, 938 F.3d at 
315-18; and (3) the court's finding that the practical obstacles EPA 
identified regarding why it needed more time to implement a full remedy 
did not rise to the level of an ``impossibility,'' id. at 318-20. With 
respect to the third basis, the court also found EPA must make a higher 
showing of uncertainty regarding non-EGU point-source NOX 
mitigation potential before declining to regulate such sources. Id. at 
318-20.
    However, the court identified flexibilities that EPA retains in 
administering the good neighbor provision, acknowledging that EPA has 
latitude in defining which upwind contribution ``amounts'' count as 
significant and thus must be abated, permitting EPA to consider, among 
other things, the magnitude of upwind states' contributions and the 
cost associated with eliminating them. 938 F.3d at 320. The court 
further noted that, in certain circumstances, EPA can grant extensions 
of the attainment deadlines under the Act; for instance, the court 
cited CAA section 181(a)(5), which allows EPA to grant one-year 
extensions from attainment dates under certain circumstances. Id. 
Finally, the court noted that EPA can attempt to show 
``impossibility.'' Id. The court also recognized that the statutory 
command that compliance with the good neighbor provision must be 
achieved consistent with Title I might be read, upon a sufficient 
showing of necessity, to allow some deviation from downwind deadlines, 
so long as it is rooted in Title I's framework and provides a 
sufficient level of protection to downwind States. Id.
    The court in Wisconsin remanded but did not vacate the CSAPR 
Update, finding that vacatur of the rule could cause harm to public 
health and the environment or disrupt the trading program EPA had 
established and that the obligations imposed by the rule may be 
appropriate and sustained on remand. Id. at 336. The court also 
rejected petitioners' request to place EPA on a six-month schedule to 
address the remand, noting the availability of ``mandamus'' relief 
before the D.C. Circuit should EPA fail to ``modify the rule in a 
manner consistent with our opinion.'' Id. at 336-37.
    On October 1, 2019, in a judgment order, the D.C. Circuit vacated 
the CSAPR Close-Out on the same grounds

[[Page 68977]]

that it remanded the Update in Wisconsin. New York v. EPA, 781 Fed. 
App'x 4 (D.C. Cir. 2019). Because the Close-Out analyzed the year 2023 
rather than 2021 (``the next applicable attainment date'') and failed 
to demonstrate that it was impossible to address significant 
contribution by the 2021 attainment date, the court found the rule ran 
afoul of the Wisconsin holding. Id. at 7. ``As the EPA acknowledges, 
the Close-Out Rule `relied upon the same statutory interpretation of 
the Good Neighbor Provision' that we rejected in Wisconsin. Thus, the 
Agency's defense of the Close-Out Rule in these cases is foreclosed.'' 
Id. at 6-7 (internal citation omitted). The court left open the 
possibility that the flexibilities identified in Wisconsin, 938 F.3d at 
320, and outlined above, may be available to EPA on remand. Id.
    Following Wisconsin and New York, EPA on remand must address good 
neighbor obligations for the 21 states within the CSAPR Update region 
for which the Update was only a partial remedy. As explained in the 
following section, EPA already retains FIP authority as to 20 of these 
states. In addition, EPA is proposing action pursuant to CAA section 
110(k)(6) (42 U.S.C. 7410(k)(6)) to find that Kentucky's SIP was 
approved in error and is thus proposing a FIP for Kentucky consistent 
with the obligations proposed for the other remaining CSAPR Update 
region states.
2. FIP Authority for Each State Covered by the Proposed Rule
    On March 12, 2008, EPA promulgated a revision to the ozone NAAQS, 
lowering both the primary and secondary standards to 75 ppb. See 
National Ambient Air Quality Standards for Ozone, Final Rule, 73 FR 
16436 (March 27, 2008). Specifically, the standards require that an 
area may not exceed 0.075 parts per million (75 ppb) using the 3-year 
average of the fourth highest 24-hour maximum 8-hour rolling average 
ozone concentration. These revisions of the NAAQS, in turn, triggered a 
3-year deadline for states to submit SIP revisions addressing 
infrastructure requirements under CAA sections 110(a)(1) and 110(a)(2), 
including the good neighbor provision. Several events affected the 
timely application of the good neighbor provision for the 2008 ozone 
NAAQS, including reconsideration of the 2008 ozone NAAQS and legal 
developments pertaining to the CSAPR, which created uncertainty 
surrounding EPA's statutory interpretation and implementation of the 
good neighbor provision.\57\ Notwithstanding these events, EPA 
ultimately affirmed that states' good neighbor SIPs were due on March 
12, 2011.
---------------------------------------------------------------------------

    \57\ These events are described in detail in section IV.A.2 of 
the CSAPR Update. See 81 FR 74515.
---------------------------------------------------------------------------

a. FIP Authority for CSAPR Update States
    EPA subsequently took several actions that triggered EPA's 
obligation under CAA section 110(c) to promulgate FIPs addressing the 
good neighbor provision for several states.\58\ First, on July 13, 
2015, EPA published a rule finding that 24 states failed to make 
complete submissions that address the requirements of section 
110(a)(2)(D)(i)(I) related to the interstate transport of pollution as 
to the 2008 ozone NAAQS. See 80 FR 39961 (effective August 12, 2015). 
This finding triggered a two-year deadline for EPA to issue FIPs to 
address the good neighbor provision for these states by August 12, 
2017. The CSAPR Update finalized FIPs for 13 of these states (Alabama, 
Arkansas, Illinois, Iowa, Kansas, Michigan, Mississippi, Missouri, 
Oklahoma, Pennsylvania, Tennessee, Virginia, and West Virginia), 
requiring their participation in a NOX trading program. EPA 
also determined in the CSAPR Update that the Agency had no further FIP 
obligation as to nine additional states identified in the finding of 
failure to submit because these states did not contribute significantly 
to nonattainment in, or interfere with maintenance by, any other state 
with respect to the 2008 ozone NAAQS. See 81 FR 74506.59 60 
On June 15, 2016, and July 20, 2016, EPA published additional rules 
finding that Maryland and New Jersey, respectively, also failed to 
submit transport SIPs for the 2008 ozone NAAQS. See 81 FR 38963 (June 
15, 2016) (New Jersey, effective July 15, 2016); 81 FR 47040 (July 20, 
2016) (Maryland, effective August 19, 2016). The finding actions 
triggered two-year deadlines for EPA to issue FIPs to address the good 
neighbor provision for Maryland by August 19, 2018, and for New Jersey 
by July 15, 2018. The CSAPR Update also finalized FIPs for these two 
states.
---------------------------------------------------------------------------

    \58\ This section of the preamble focuses on SIP and FIP actions 
for those states addressed in the CSAPR Update. EPA has also acted 
on SIPs for other states not mentioned in this action. The 
memorandum, ``Proposed Action, Status of 110(a)(2)(D)(i)(I) SIPs for 
the 2008 Ozone NAAQS,'' more fully describes the good neighbor SIP 
status for the 2008 ozone NAAQS and is available in the docket for 
this proposal.
    \59\ The nine states were Florida, Georgia, Maine, 
Massachusetts, Minnesota, New Hampshire, North Carolina, South 
Carolina, and Vermont. These determinations were not challenged in 
Wisconsin, and EPA is not reopening these determinations in this 
proposal.
    \60\ The two remaining states addressed in the findings of 
failure to submit (California and New Mexico) were not part of the 
CSAPR Update or the CSAPR Close-Out analysis and are not addressed 
in this proposal.
---------------------------------------------------------------------------

    In addition to these findings, EPA finalized disapproval or partial 
disapproval actions for good neighbor SIPs submitted by Indiana, 
Kentucky, Louisiana, New York, Ohio, Texas, and Wisconsin.\61\ These 
disapprovals triggered EPA's obligation to promulgate FIPs to implement 
the requirements of the good neighbor provision for those states within 
two years of the effective date of each disapproval or, in the case of 
Kentucky, within two years of the issuance of the judgment in a 
subsequent Supreme Court decision.\62\ EPA promulgated FIPs in the 
CSAPR Update for each of these states.
---------------------------------------------------------------------------

    \61\ See the following actions: Indiana (81 FR 38957, June 15, 
2016); Kentucky (78 FR 14681, March 7, 2013); Louisiana (81 FR 
53308, August 12, 2016); New York (81 FR 58849, August 26, 2016); 
Ohio (81 FR 38957, June 15, 2016); Texas (81 FR 53284, August 12, 
2016); and Wisconsin (81 FR 53309, August 12, 2016).
    \62\ In the 2013 disapproval action for Kentucky, EPA stated 
that it had no mandatory duty to issue a FIP because of the D.C. 
Circuit's holding in EME Homer City Generation, L.P. v. EPA, 696 
F.3d 7 (D.C. Cir. 2012), that EPA cannot impose good neighbor FIPs 
without first quantifying states' obligations. See 78 FR 14681. In 
2014, the Supreme Court reversed the D.C. Circuit's holding. EPA v. 
EME Homer City Generation, L.P., 572 U.S. 489, 509-10 (2014). In 
light of the Supreme Court's decision, on review of our 2013 
disapproval action for Kentucky in the Sixth Circuit, EPA requested, 
and the court granted, a vacatur and remand of the portion of EPA's 
final action that determined that a FIP obligation was not 
triggered. See Order, Sierra Club v. EPA, No. 13-3546, ECF No. 74-1 
(6th Cir. Mar. 13, 2015). On remand, EPA determined that its FIP 
obligation as to Kentucky was triggered as of June 2, 2014, the date 
of issuance of the Supreme Court's judgment. See 81 FR 74513.
---------------------------------------------------------------------------

    As discussed in more detail above in section V.C.1, in issuing the 
CSAPR Update, EPA did not determine that it had entirely addressed 
EPA's outstanding CAA obligations to implement the good neighbor 
provision with respect to the 2008 ozone NAAQS for 21 of 22 states 
covered by that rule. Accordingly, the CSAPR Update did not fully 
satisfy EPA's obligation under CAA section 110(c) to address the good 
neighbor provision requirements for those states by approving SIPs, 
issuing FIPs, or some combination of those two actions. EPA found that 
the CSAPR Update FIPs fully addressed the good neighbor provision for 
the 2008 ozone NAAQS only with respect to Tennessee.

[[Page 68978]]

b. Correction of EPA's Determination Regarding Kentucky's SIP Revision 
and Its Impact on EPA's FIP Authority for Kentucky
    After promulgating the CSAPR Update and before promulgating the 
CSAPR Close-Out, EPA approved a SIP from Kentucky resolving that 
state's good neighbor obligations for the 2008 ozone NAAQS. 83 FR 33730 
(July 17, 2018). The action was separate from the CSAPR Close-Out 
because it was taken in response to a May 23, 2017 order from the U.S. 
District Court for the Northern District of California requiring EPA to 
take a final action fully addressing the good neighbor obligation for 
the 2008 ozone NAAQS for Kentucky by June 30, 2018.\63\ EPA was 
obligated to address the outstanding obligation by either approving a 
SIP submitted by Kentucky or promulgating a FIP to address any 
remaining obligation.\64\
---------------------------------------------------------------------------

    \63\ See Order, Sierra Club v. Pruitt, No. 3:15-cv-04328 (N.D. 
Cal. May 23, 2017).
    \64\ The obligation ultimately derives from EPA's 2013 action 
disapproving Kentucky's SIP addressing the 2008 ozone NAAQS on the 
basis that Kentucky relied on the CAIR program for the 2008 ozone 
NAAQS good neighbor obligation. However, as previously discussed, 
the trigger for the timing of the obligation was the 2014 issuance 
of the Supreme Court's judgment in EPA v. EME Homer City Generation, 
L.P., 572 U.S. 489 (2014). See supra note 62.
---------------------------------------------------------------------------

    On May 10, 2018, Kentucky submitted a final SIP to EPA, on which 
the Agency finalized approval consistent with the court-ordered 
deadline. See 83 FR 33730. The Kentucky SIP revision that EPA approved 
relied on the reductions from the CSAPR Update FIP for Kentucky and 
provided a technical analysis, including emission projections and air 
quality modeling for 2023, showing that with the CSAPR Update level of 
reductions, the receptors to which Kentucky was linked were attaining 
and maintaining the 2008 ozone NAAQS in 2023. This allowed EPA to 
conclude that Kentucky did not have any further obligation for the 2008 
ozone NAAQS, and EPA approved the SIP revision. Thus, the approval 
relied on the same rationale and technical analysis that was eventually 
used for the other CSAPR Update FIP states in the CSAPR Close-Out. 
EPA's approval stated:

``no additional emission reductions are necessary to address the 
good neighbor provision for the 2008 ozone NAAQS beyond those 
required by the Cross-State Air Pollution Rule Update (CSAPR Update) 
federal implementation plan (FIP). Accordingly, EPA is approving 
Kentucky's submission because it partially addresses the 
requirements of the good neighbor provision for the 2008 ozone 
NAAQS, and it resolves any obligation remaining under the good 
neighbor provision after promulgation of the CSAPR Update FIP. The 
approval of Kentucky's SIP submission and the CSAPR Update FIP, 
together, fully address the requirements of the good neighbor 
provision for the 2008 ozone NAAQS for Kentucky.''

83 FR 33730.
    Subsequent to EPA's approval of the Kentucky SIP, EPA issued the 
CSAPR Close-Out, which concluded that, based on essentially the same 
analysis used for Kentucky, none of the other 20 CSAPR Update states 
had further good neighbor obligations to address the 2008 8-hour ozone 
NAAQS. In the Fall of 2019, the D.C. Circuit issued the Wisconsin and 
New York decisions remanding the CSAPR Update Rule and vacating the 
CSAPR Close-Out (see Section V.C.1.d.).
    Kentucky's CSAPR Update FIP, which Kentucky relied on in its SIP 
revision, is part of the CSAPR Update remand, and EPA must address it 
in this action. Further, the D.C. Circuit's review of the CSAPR Close-
Out found fault with, and vacated, the same rationale that EPA had used 
to approve Kentucky's SIP in June 2018.
    Therefore, in light of the remand of Kentucky's CSAPR Update FIP in 
Wisconsin and vacatur of the CSAPR Close-Out in New York, EPA is 
proposing to determine in this action that its approval of Kentucky's 
SIP as fully resolving the state's 2008 ozone NAAQS good neighbor 
obligations was in error. Section 110(k)(6) of the CAA (42 U.S.C. 
7410(k)(6)) gives the Administrator authority, without any further 
submission from a state, to revise certain prior actions, including 
actions to approve SIPs, upon determining that those actions were in 
error. The court's remand of the partial FIP for Kentucky in Wisconsin 
and the vacatur of EPA's conclusions for states identically situated to 
Kentucky in the CSAPR Close-Out means that EPA's approval of Kentucky's 
SIP was in error. EPA is compelled on remand to act consistently with 
the court's opinion and has reassessed Kentucky's good neighbor 
obligations under the 2008 ozone NAAQS here. In doing so, EPA's 
proposed analysis identifies an additional emission reduction 
obligation for Kentucky. Therefore, EPA is proposing to correct the 
error in Kentucky's SIP approval through this notice and comment 
rulemaking, as allowed by the CAA when a prior SIP approval was in 
error. The proposed error correction under CAA section 110(k)(6) would 
revise the approval of Kentucky's SIP to a disapproval and rescind any 
statements that the SIP submission fully addresses the requirements of 
the good neighbor provision for the 2008 ozone NAAQS for Kentucky. The 
Kentucky approval relied on the same analysis which the D.C. Circuit 
determined to be unlawful in the CSAPR Close-Out, because it only 
addressed conditions in 2023 without a showing of impossibility 
regarding the next attainment date in 2021. Kentucky's remanded partial 
FIP has been reassessed in this action, consistent with EPA's 
methodology to address the other 20 states with remanded CSAPR Update 
FIPs, and consistent with the D.C. Circuit's direction in Wisconsin and 
New York. As discussed in greater detail in the sections that follow, 
EPA proposes to determine that there are additional emission reductions 
that are required for Kentucky to fully satisfy its good neighbor 
obligation for the 2008 ozone NAAQS. The analysis on which EPA proposes 
this conclusion for Kentucky is the same, regionally consistent 
analytical framework on which the Agency proposes action for all of the 
other CSAPR Update states with remanded FIPs. The Agency recognizes 
that it is possible, based on updated information for the final rule--
as applied within a regionally consistent analytical framework--that 
Kentucky (or other states for which EPA proposes revised FIPs in this 
action) may be found to have no further interstate transport obligation 
for the 2008 ozone NAAQS. If such a circumstance were to occur, EPA 
anticipates that it would not finalize this proposed error correction 
or may modify the error correction such that our July 2018 approval of 
Kentucky's SIP may be affirmed.
c. CSAPR Update SIP Revisions That Do Not Affect FIP Authority
    Subsequent to the promulgation of the CSAPR Update, EPA approved 
SIPs fully replacing the CSAPR Update FIPs for Alabama, Indiana, and 
Missouri.\65\ In those SIP approvals and consistent with the 
conclusions of the CSAPR Update, EPA found that the SIPs partially 
satisfy Alabama's, Indiana's, and Missouri's good neighbor obligations 
for the 2008 ozone NAAQS. Thus, EPA continues to have an obligation to 
fully address good neighbor requirements for the 2008 ozone NAAQS with 
respect to Alabama and Missouri, stemming from the July 13, 2015, 
findings of failure to submit, and Indiana, due to the June 15, 2016, 
disapproval of the state's good neighbor SIP. See 80 FR 39961; 81 FR 
38957. Other states have also submitted 2008 ozone NAAQS good neighbor 
SIPs or

[[Page 68979]]

SIPs to replace their CSAPR FIPs, some of which EPA has approved and 
some of which still remain pending. Because these circumstances do not 
affect the scope or basis for this rulemaking, these actions are not 
described in detail in this section.
---------------------------------------------------------------------------

    \65\ 82 FR 46674 (Oct. 6, 2017) (Alabama); 83 FR 64472 (Dec. 17, 
2018) (Indiana); 84 FR 66316 (Dec. 4, 2019) (Missouri).
---------------------------------------------------------------------------

d. Summary of Authority for FIPs for This Action
    Table V.C-1 summarizes the statutory deadline for EPA to address 
its FIP obligation under CAA section 110(c) and the event that 
activated EPA's obligation for each of the 21 CSAPR Update states that 
are the subject of this final action. For more information regarding 
the actions triggering EPA's FIP obligation and EPA's action on SIPs 
addressing the good neighbor provision for the 2008 ozone NAAQS, see 
the memorandum, ``Proposed Action, Status of 110(a)(2)(D)(i)(I) SIPs 
for the 2008 Ozone NAAQS,'' in the docket for this action.

    Table V.C-1--Actions That Activated EPA's Statutory FIP Deadlines
------------------------------------------------------------------------
                                     Type of action
                                    (Federal Register     Statutory FIP
             State                citation, publication      deadline
                                          date)              [dagger]
------------------------------------------------------------------------
Alabama........................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Arkansas.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Illinois.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Indiana........................  SIP disapproval (81 FR        7/15/2018
                                  38957, 6/15/2016).
Iowa...........................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Kansas.........................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Kentucky.......................  SIP disapproval (78 FR         6/2/2016
                                  14681, 3/7/2013).
Louisiana......................  SIP disapproval (81 FR        9/12/2018
                                  53308, 8/12/2016).
Maryland.......................  Finding of Failure to         8/19/2018
                                  Submit (81 FR 47040,
                                  7/20/2016).
Michigan.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Mississippi....................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Missouri.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
New Jersey.....................  Finding of Failure to         7/15/2018
                                  Submit (81 FR 38963,
                                  6/15/2016).
New York.......................  SIP disapproval (81 FR        9/26/2018
                                  58849, 8/26/2016).
Ohio...........................  SIP disapproval (81 FR        7/15/2018
                                  38957, 6/15/2016).
Oklahoma.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Pennsylvania...................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Texas..........................  SIP disapproval (81 FR        9/12/2018
                                  53284, 8/12/2016).
Virginia.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
West Virginia..................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Wisconsin......................  Partial SIP                   9/12/2018
                                  disapproval as to
                                  prong 2 (81 FR 53309,
                                  8/12/2016).
------------------------------------------------------------------------
[dagger] For states other than Kentucky, the FIP deadline is two years
  from the effective date of the SIP disapproval or Finding of Failure
  to Submit, which generally trails the publication date by 30 days. For
  Kentucky, the FIP deadline is two years after the issuance of the
  Supreme Court's judgment in EPA v. EME Homer City Generation, L.P.,
  572 U.S. 489 (2014). See supra note 62.

3. The 4-Step Good Neighbor Framework
    The CSAPR and the subsequent CSAPR Update, building on EPA's prior 
methodologies in the NOX SIP Call and CAIR, established a 4-
step process to address the requirements of the good neighbor 
provision.\66\ In this proposed action to address the remand of the 
CSAPR Update, EPA follows the same steps. These steps are: (1) 
Identifying downwind receptors that are expected to have problems 
attaining or maintaining the NAAQS; (2) determining which upwind states 
contribute to these identified problems in amounts sufficient to 
``link'' them to the downwind air quality problems; (3) for states 
linked to downwind air quality problems, identifying upwind emissions 
that significantly contribute to downwind nonattainment or interfere 
with downwind maintenance of the NAAQS; and (4) for states that are 
found to have emissions that significantly contribute to nonattainment 
or interfere with maintenance of the NAAQS downwind, implementing the 
necessary emissions reductions through enforceable measures.
---------------------------------------------------------------------------

    \66\ See CSAPR, Final Rule, 76 FR 48208, 48248-48249 (Aug. 8, 
2011); CSAPR Update, Final Rule, 81 FR 74504, 74517-74521 (Oct. 26, 
2016).
---------------------------------------------------------------------------

    Step 1--In the CSAPR, downwind air quality problems were assessed 
using modeled future air quality concentrations for a year aligned with 
attainment deadlines for the NAAQS considered in that rulemaking. The 
assessment of future air quality conditions generally accounts for on-
the-books emission reductions and the most up-to-date forecast of 
future emissions in the absence of the transport policy being evaluated 
(i.e., base case conditions). The locations of downwind air quality 
problems are identified as those with receptors that are projected to 
be unable to attain (i.e., nonattainment receptor) or maintain (i.e., 
maintenance receptor) the NAAQS. In the CSAPR Update, EPA also 
considered current monitored air quality data to further inform the 
projected identification of downwind air quality problems. These same 
considerations are included for this proposal. EPA is not reopening the 
definition of nonattainment and maintenance receptors promulgated in 
the CSAPR Update. Further details and application of Step 1 for this 
proposal are described in section VI.
    Step 2--The CSAPR and the CSAPR Update used a screening threshold 
of 1 percent of the NAAQS to identify upwind states that were 
``linked'' to downwind air pollution problems. States with 
contributions greater than or equal to the threshold for at least one 
downwind problem receptor (i.e., nonattainment or maintenance receptor 
identified in Step 1) were identified as needing further evaluation for 
actions to address transport if their air quality was impacted.\67\ EPA 
evaluated a given state's contribution based on the average relative 
downwind impact calculated over multiple days.\68\ States whose air

[[Page 68980]]

quality impacts to all downwind problem receptors were below this 
threshold did not require further evaluation for actions to address 
transport--that is, these states were determined to not contribute to 
downwind air quality problems and therefore had no emission reduction 
obligations under the good neighbor provision. EPA has used this 
threshold because a notable portion of the transport problem in the 
eastern half of the United States can result from relatively small 
contributions from a number of upwind states. Use of the 1 percent 
threshold for the CSAPR is discussed in the preambles to the proposed 
and final CSAPR rules. See 75 FR 45237 (Aug. 2, 2010); 76 FR 48238 
(Aug. 8, 2011). The same metric is discussed in the CSAPR Update Rule. 
See 81 FR 74538. While EPA has updated its air quality data for 
determining contributions, the Agency is not reopening the use of the 1 
percent threshold in this action to address the remand of the CSAPR 
Update. Application of Step 2 for this proposal is described in section 
VI.
---------------------------------------------------------------------------

    \67\ For ozone the impacts would include those from (VOC) and 
NOX, and from all sectors.
    \68\ The number of days used in calculating the average 
contribution metric has historically been determined in a manner 
that is generally consistent with EPA's recommendations for 
projecting future year ozone design values. Our ozone attainment 
demonstration modeling guidance at the time of CSAPR recommended 
using all model-predicted days above the NAAQS to calculate future 
year design values (https://www3.epa.gov/ttn/scram/guidance/guide/final-03-pm-rh-guidance.pdf). In 2014 EPA issued draft revised 
guidance that changed the recommended number of days to the top-10 
model predicted days (https://www3.epa.gov/ttn/scram/guidance/guide/Draft-O3-PM-RH-Modeling_Guidance-2014.pdf). For CSAPR Update we 
transitioned to calculating design values based on this draft 
revised approach. The revised modeling guidance was finalized in 
2019 and, in this regard, we are calculating both the ozone design 
values and the contributions based on a top-10 day approach (https://www3.epa.gov/ttn/scram/guidance/guide/O3-PM-RH-Modeling_Guidance-2018.pdf).
---------------------------------------------------------------------------

    Step 3--For states that are linked in Step 2 to downwind air 
quality problems, the CSAPR and the CSAPR Update evaluated 
NOX reductions that were available in upwind states by 
applying a uniform control technology (represented by a marginal cost 
of NOX emissions) to entities in these states. EPA evaluated 
NOX reduction potential, cost, and downwind air quality 
improvements available at several cost thresholds in the multi-factor 
test. In both the CSAPR and the CSAPR Update, EPA selected the cost-
threshold that maximized cost-effectiveness (of the cost thresholds 
examined), that is, the level of stringency in emission budgets at 
which incremental NOX reduction potential and corresponding 
downwind ozone air quality improvements are maximized with respect to 
marginal cost relative to the other emission budget levels evaluated. 
See, e.g., 81 FR 74550. This evaluation quantified the magnitude of 
emissions that significantly contribute to nonattainment or interfere 
with maintenance of a NAAQS downwind and apportioned upwind 
responsibility among linked states, an approach upheld by the U.S. 
Supreme Court in EPA v. EME Homer City.\69\ In general, EPA proposes in 
this action to apply this approach to identify NOX emission 
reductions necessary to address significant contribution for the 2008 
ozone NAAQS.
---------------------------------------------------------------------------

    \69\ EPA v. EME Homer City Generation, L.P., 572 U.S. 489 
(2014).
---------------------------------------------------------------------------

    In EME Homer City, the Supreme Court held that ``EPA cannot require 
a State to reduce its output of pollution by more than is necessary to 
achieve attainment in every downwind State or at odds with the one-
percent threshold the Agency has set.'' 572 U.S. at 521. The Court 
acknowledged that ``instances of `over-control' in particular downwind 
locations may be incidental to reductions necessary to ensure 
attainment elsewhere.'' Id. at 492.

``Because individual upwind States often `contribute significantly' 
to nonattainment in multiple downwind locations, the emissions 
reductions required to bring one linked downwind State into 
attainment may well be large enough to push other linked downwind 
States over the attainment line. As the Good Neighbor Provision 
seeks attainment in every downwind State, however, exceeding 
attainment in one State cannot rank as `over-control' unless 
unnecessary to achieving attainment in any downwind State. Only 
reductions unnecessary to downwind attainment anywhere fall outside 
the Agency's statutory authority.''

Id. at 522 (footnotes excluded).
    The Court further explained that ``while EPA has a statutory duty 
to avoid over-control, the Agency also has a statutory obligation to 
avoid `under-control,' i.e., to maximize achievement of attainment 
downwind.'' Id. at 523. Therefore, in the CSAPR Update, EPA evaluated 
possible over-control by considering whether an upwind state is linked 
solely to downwind air quality problems that can be resolved at a lower 
cost threshold, or if upwind states would reduce their emissions at a 
lower cost threshold to the extent that they would no longer meet or 
exceed the 1 percent air quality contribution threshold. See 81 FR at 
74551-52. This evaluation of cost, NOX reductions, and air 
quality improvements, including consideration of potential over-
control, results in EPA's determination of upwind emissions that 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS downwind and should therefore be eliminated. This allows 
EPA to then determine an enforceable emissions limit (often embodied in 
the form of an emissions budget) for the covered sources. Emissions 
budgets are the remaining allowable emissions after the elimination of 
emissions identified as significantly contributing to nonattainment or 
interfering with maintenance of the standard downwind.
    In both the CSAPR and the CSAPR Update, EPA focused its Step 3 
analysis on EGUs. In the CSAPR Update, EPA did not quantify non-EGU 
stationary source emissions reductions to address interstate ozone 
transport for the 2008 ozone NAAQS for two reasons. First, EPA 
explained that there was greater uncertainty in EPA's assessment of 
non-EGU NOX mitigation potential, and that more time would 
be required for states and EPA to improve non-EGU point source data and 
pollution control assumptions before it could develop emission 
reduction obligations based on that data. See 81 FR 74542. Second, EPA 
explained that it did not believe that significant, certain, and 
meaningful non-EGU NOX reduction was in fact feasible for 
the 2017 ozone season. Id. In Wisconsin, the D.C. Circuit found that 
the practical obstacles EPA identified with respect to its evaluation 
of non-EGUs did not rise to the level of an ``impossibility,'' 938 F.3d 
at 318-20. The court also found that EPA must make a higher showing of 
uncertainty regarding non-EGU point-source NOX mitigation 
potential before declining to regulate such sources on such a basis, 
id. Therefore, as discussed in more detail in Section VII, in this 
proposed action on remand from Wisconsin, EPA has included all major 
stationary source sectors in the linked upwind states in its 
``significant contribution'' analysis at Step 3 of the 4-step 
framework.
    Step 4--CSAPR and the CSAPR Update established interstate trading 
programs to implement the necessary emission reductions. Each state 
subject to the program is assigned an emissions budget for the covered 
sources. Emissions allowances are allocated to units covered by the 
trading program, and the covered units then surrender allowances after 
the close of each control period in an amount equal to their ozone 
season EGU NOX emissions.
    EPA's trading programs under the good neighbor provision allow for 
interstate trading. However, in order to ensure that each state 
achieves reductions proportional to the level of their significant 
contribution, beginning with the CSAPR, EPA established ``assurance 
levels'' set as percentage of each state's budget (e.g., 121 percent) 
above which emissions from sources in that state become subject to a 
higher ``penalty'' surrender ratio. These assurance levels are designed 
to allow for a certain level of year-to-year

[[Page 68981]]

variability within power sector emissions to account for fluctuations 
in demand and EGU operations. The levels are therefore set by 
determining a ``variability limit,'' calculated based on an analysis of 
the historical level of variability in EGU operations.
    Thus, both the CSAPR and the CSAPR Update set assurance levels 
equal to the sum of each state's emissions budget plus its variability 
limit. The CSAPR and the CSAPR Update included assurance provisions to 
limit state emissions to levels below 121 percent of the state's budget 
by requiring additional allowance surrenders in the instance that 
emissions in the state exceed this level. This limit on the degree to 
which a state's emissions can exceed its budget is responsive to 
previous court decisions (see discussion in section VIII.C.2 of this 
preamble) and was not part of the CSAPR Update aspects remanded to EPA 
in Wisconsin. EPA proposes to apply the same variability limits and 
assurance provisions in this rulemaking.\70\ Implementation using a 
CSAPR trading program is further described in section VIII of this 
notice.
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    \70\ Historical heat input and NOX emissions in 
states covered by the CSAPR programs may be found in the 
``Historical CSAPR Update Emissions and Heat Input 2000 to 
2019.xlsx'' file.
---------------------------------------------------------------------------

VI. Analyzing Downwind Air Quality and Upwind-State Contributions

    In this section, EPA describes the air quality modeling and 
analyses performed to identify nonattainment and/or maintenance 
receptors and evaluate interstate contributions to these receptors from 
individual upwind states for the 2021 analytic year. Although the air 
quality modeling was performed using an air quality modeling platform 
that covers the contiguous 48 states, the analysis to identify 
receptors and evaluate contributions focuses on the 21 upwind states 
that are the subject of this rule.
    The year 2021 was selected as the appropriate future analytic year 
for this rule because it coincides with the July 20, 2021, Serious area 
attainment date under the 2008 ozone NAAQS. In the CSAPR Update, EPA 
had aligned its analysis and implementation of emission reductions with 
the 2017 ozone season (ozone seasons run each year from May 1-September 
30) in order to assist downwind states with timely attainment of the 
2008 ozone NAAQS by the Moderate area attainment date of July 20, 2018. 
See 81 FR 74516. In order to demonstrate attainment by this deadline, 
states were required to rely on design values calculated using ozone 
season data from 2015 through 2017, since the July 20, 2018, deadline 
did not afford enough time for measured data of the full 2018 ozone 
season. Similarly, for the Serious area attainment date in 2021, states 
will rely on design values calculated using ozone season data from 2018 
through 2020. However, it is not possible to impose emission reductions 
on upwind states in the 2020 ozone season, which has already passed. 
Reductions in the 2021 ozone season will nonetheless occur in time for 
the 2021 attainment date and therefore assist downwind states in 
achieving attainment by the July 20, 2021 attainment date, in 
compliance with the Wisconsin holding. See Wisconsin, 938 F.3d at 309 
(the CSAPR Update is unlawful to the extent it allowed upwind states to 
``continue their significant contributions to downwind air quality 
problems beyond the statutory deadlines by which downwind States must 
demonstrate their attainment of air quality standards'') (emphasis 
added). Further, EPA continues to interpret the good neighbor provision 
as forward-looking, based on Congress's use of the future-tense 
``will'' in section 110(a)(2)(D)(i), an interpretation upheld in 
Wisconsin, 938 F.3d at 322. It would be ``anomalous,'' id., for EPA to 
impose good neighbor obligations in 2021 and future years based solely 
on finding that ``significant contribution'' had existed at some time 
in the past.
    EPA has also conducted additional analysis of remaining air quality 
receptors and contribution in years beyond 2021, in order to ensure a 
complete Step 3 analysis. EPA has analyzed these later years to 
determine whether any additional emission reductions that are 
impossible to obtain by the 2021 attainment date may yet be necessary 
in order to fully address significant contribution. This comports with 
the D.C. Circuit's direction in Wisconsin that implementing good 
neighbor obligations beyond the dates established for attainment may be 
justified on a proper showing of impossibility and/or necessity. See 
938 F.3d at 320. However, for purposes of EPA's initial analysis of air 
quality at Step 1 of the 4-step framework, in accordance with 
Wisconsin, EPA has selected the 2021 ozone season, corresponding with 
the 2021 Serious area attainment date.
    The remainder of this section includes information on (1) the air 
quality modeling platform used in support of the proposed rule with a 
focus on the base year and future year base case emission inventories, 
(2) the method for projecting design values in 2021, and (3) the 
approach for calculating ozone contributions from upwind states.\71\ 
The Agency also provides the design values for nonattainment and 
maintenance receptors and the predicted interstate contributions that 
are at or above the one percent of the NAAQS screening threshold. The 
2016 base period and 2021, 2023, and 2028 future design values and 
contributions for all ozone monitoring sites are provided in the docket 
for this proposed rule. The Air Quality Modeling Technical Support 
Document (AQM TSD) in the docket for this proposed rule contains more 
detailed information on the air quality modeling aspects of this rule.
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    \71\ For the 2023 and 2028 modeling used in the Step 3 analysis, 
EPA followed the same method for projecting design values and 
approach for calculating contributions as described for the 2021 
analytic year.
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A. Overview of Air Quality Modeling Platform

    EPA used the 2016-based modeling platform for the air quality 
modeling for this proposed rule. This modeling platform includes 2016 
base year emissions from anthropogenic and natural sources and 2016 
meteorology. The platform also includes anthropogenic emission 
projections for 2023 and 2028. The emissions data contained in this 
platform were developed by EPA, Multi-Jurisdictional Organizations 
(MJOs), and state and local air agencies as part of the Emissions 
Inventory Collaborative Process. This process resulted in a common-use 
set of emissions data for a 2016 base year and 2023 and 2028 that can 
be leveraged by EPA and states for regulatory air quality modeling.\72\ 
The air quality modeling was performed for a modeling region (i.e., 
modeling domain) that covers the contiguous 48 states using a 
horizontal resolution of 12 x 12 km. EPA used the CAMx version 7beta6 
for air quality modeling since this was the most recent version of CAMx 
available at the time the air quality modeling was performed.\73\ 
Additional information on the 2016-based air quality modeling platform 
can be found in the AQM TSD.
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    \72\ http://views.cira.colostate.edu/wiki/wiki/9169.
    \73\ Ramboll Environment and Health, May 2020, www.camx.com. 
Note that CAMx v7beta6 is a pre-lease of version 7 that EPA used 
because the official release of version 7 did not occur until May 
2020, which was too late for use in the air quality modeling for 
this proposal.
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B. Emissions Inventories

    EPA developed emission inventories for this proposal, including 
emission estimates for EGUs, non-EGU point sources, stationary nonpoint 
sources,

[[Page 68982]]

onroad mobile sources, nonroad mobile sources, wildfires, prescribed 
fires, and biogenic emissions that are not the result of human 
activities. EPA's air quality modeling relies on this comprehensive set 
of emission inventories because emissions from multiple source 
categories are needed to model ambient air quality and to facilitate 
comparison of model outputs with ambient measurements.
    To prepare the emission inventories for air quality modeling, EPA 
processed the emission inventories using the Sparse Matrix Operator 
Kernel Emissions (SMOKE) Modeling System version 4.7 to produce the 
gridded, hourly, speciated, model-ready emissions for input to the air 
quality model. Additional information on the development of the 
emission inventories and on data sets used during the emissions 
modeling process are provided in the Technical Support Document (TSD) 
``Preparation of Emissions Inventories for the 2016v1 North American 
Emissions Modeling Platform,'' hereafter known as the ``Emissions 
Modeling TSD.'' This TSD is available in the docket for this rule and 
at https://www.epa.gov/air-emissions-modeling/2016v1-platform.
1. Foundation Emission Inventory Data Sets
    Emissions data were developed that represented the year 2016 to 
support air quality modeling of a base year from which future air 
quality could be forecasted. As noted above, EPA used the Inventory 
Collaborative 2016 version 1 (2016v1) Emissions Modeling Platform, 
released in October 2019, as the primary basis for the inventories 
supporting the air quality modeling. This platform was developed 
through a national collaborative effort between EPA and state and local 
agencies along with MJOs. The original starting point for the U.S. 
portions of the 2016 inventory was the 2014 National Emissions 
Inventory (NEI), version 2 (2014NEIv2), although all of the inventory 
sectors were updated to better represent the year 2016 through the 
incorporation of 2016-specific state and local data along with 
nationally applied adjustment methods. The future base case inventories 
developed for 2023 and 2028 represent projected changes in activity 
data and predicted emission reductions from on-the-books actions, 
planned emission control installations, and promulgated federal 
measures that affect anthropogenic emissions.\74\
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    \74\ Biogenic emissions and emissions from wildfires and 
prescribed fires were held constant between 2016 and the future 
years because (1) these emissions are tied to the 2016 
meteorological conditions and (2) the focus of this rule is on the 
contribution from anthropogenic emissions to projected ozone 
nonattainment and maintenance.
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2. Development of Emission Inventories for EGUs
    Annual NOX and SO2 emissions for EGUs in the 
2016 base year inventory are based primarily on data from continuous 
emission monitoring systems (CEMS) and other monitoring systems allowed 
for use by qualifying units under 40 CFR part 75, with other EGU 
pollutants estimated using emission factors and annual heat input data 
reported to EPA. For EGUs not reporting under part 75, EPA used the 
most recent data submitted to the NEI by the states. Emissions data for 
sources that did not have data provided for the year 2016 were pulled 
forward from data submitted for 2014. The Air Emissions Reporting Rule, 
(80 FR 8787; February 19, 2015), requires that Type A point sources 
large enough to meet or exceed specific thresholds for emissions be 
reported to EPA every year, while the smaller Type B point sources must 
only be reported to EPA every three years. For more information on how 
the 2016 EGU emissions data were developed and prepared for air quality 
modeling, see the Emissions Modeling TSD.
    EPA projected future 2023 and 2028 baseline EGU emissions using the 
version 6--January 2020 reference case of the Integrated Planning Model 
(IPM).75 76 IPM, developed by ICF Consulting, is a state-of-
the-art, peer-reviewed, multi-regional, dynamic, deterministic linear 
programming model of the contiguous U.S. electric power sector. It 
provides forecasts of least cost capacity expansion, electricity 
dispatch, and emission control strategies while meeting energy demand 
and environmental, transmission, dispatch, and reliability constraints. 
EPA has used IPM for over two decades to better understand power sector 
behavior under future business-as-usual conditions and to evaluate the 
economic and emission impacts of prospective environmental policies. 
The model is designed to reflect electricity markets as accurately as 
possible. EPA uses the best available information from utilities, 
industry experts, gas and coal market experts, financial institutions, 
and government statistics as the basis for the detailed power sector 
modeling in IPM. The model documentation provides additional 
information on the assumptions discussed here as well as all other 
model assumptions and inputs.\77\
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    \75\ https://www.epa.gov/powersectormodeling.
    \76\ The 2016v1 platform released in October 2019 used the May 
2019 reference case. The January 2020 IPM reference case is a later 
version than what was released with 2016v1.
    \77\ Detailed information and documentation of EPA's Base Case, 
including all the underlying assumptions, data sources, and 
architecture parameters can be found on EPA's website at: 
www.epa.gov/airmarkets/powersectormodeling.
---------------------------------------------------------------------------

    The IPM version 6--January 2020 reference base case accounts for 
updated federal and state environmental regulations, committed EGU 
retirements and new builds, and technology cost and performance 
assumptions as of late 2019. This projected base case accounts for the 
effects of the finalized Mercury and Air Toxics Standards rule, the 
CSAPR and the CSAPR Update, New Source Review settlements, and other 
on-the-books federal and state rules through 2019 \78\ impacting 
SO2, NOX, directly emitted particulate matter, 
and CO2, and final actions EPA has taken to implement the 
Regional Haze Rule.
---------------------------------------------------------------------------

    \78\ For any specific version of IPM there is a cutoff date 
after which it is no longer possible to incorporate updates into the 
input databases. For version 6--January reference case, that cutoff 
date was November 2019.
---------------------------------------------------------------------------

    Additional 2021 EGU emissions baseline levels were developed 
through engineering analytics as an alternative approach that did not 
involve IPM. EPA developed this inventory for use in Step 3 of this 
proposed rulemaking, where it determines emission reduction potential 
and corresponding emission budgets. IPM includes optimization and 
perfect foresight in solving for least cost dispatch. Given that the 
final rule will likely become effective either immediately prior to or 
slightly after the start of the 2021 ozone season, EPA adopted a 
similar approach to the CSAPR Update where it relied on IPM in a 
relative way in Step 3 to avoid overstating optimization and dispatch 
decisions that were not possible in the short time frame. EPA does this 
by using the difference in emission rate observed between IPM runs with 
and without the cost threshold applied, rather than using absolute 
values. In both the CSAPR Update and in this rule at Step 3, EPA 
complemented that projected IPM EGU outlook with historical (e.g., 
engineering analytics) perspective based on historical data that only 
factors in known changes to the fleet. This 2021 engineering analytics 
data set is described in more detail in the Ozone Transport Policy 
Analysis TSD.
3. Development of Emission Inventories for non-EGU Point Sources
    The non-EGU point source emissions in the 2016 base case inventory 
match those in the 2016v1 platform. Some non-EGU point source emissions 
were based on data submitted for 2016, others were projected from 2014 
to 2016, and

[[Page 68983]]

the emissions for remaining small sources were kept at 2014 levels. 
Prior to air quality modeling, the emission inventories were processed 
into a format that is appropriate for the air quality model to use. 
Projection factors and percent reductions in this proposal reflect 
comments received as a result of the Inventory Collaborative 
development process, along with emission reductions due to national and 
local rules, control programs, plant closures, consent decrees, and 
settlements. Reductions from several Maximum Achievable Control 
Technology and National Emission Standards for Hazardous Air Pollutants 
(NESHAP) standards are included. Projection approaches for corn ethanol 
and biodiesel plants, refineries and upstream impacts represent 
requirements pursuant to the Energy Independence and Security Act of 
2007 (EISA). Details on the development and processing of the non-EGU 
emissions inventories for 2016, 2023, and 2028 are available in the 
Emissions Modeling TSD.
    For aircraft emissions at airports, the emissions used were based 
on adjustments to emissions in the 2017 NEI (see https://www.epa.gov/air-emissions-inventories/2017-national-emissions-inventory-nei-data 
for data and a TSD). EPA developed and applied factors to adjust the 
2017 emissions to 2016, 2023, and 2028 based on activity growth 
projected by the Federal Aviation Administration Terminal Area Forecast 
system, published in 2018.
    Emissions at rail yards were represented as non-EGU point sources. 
The 2016 rail yard emissions are largely consistent with the 2017 NEI 
rail yard emissions. The 2016, 2023, and 2028 rail yard emissions were 
developed through the Inventory Collaborative process. The rail yard 
emissions were interpolated from the 2016 and 2023 emissions. Class I 
rail yard emissions were projected using the Energy Information 
Administration's 2019 AEO freight rail energy use growth rate 
projections for 2016, 2023, and 2028 with the fleet mix assumed to be 
constant throughout the period.
    Point source oil and gas emissions for 2016 were based on the 
2016v1 point inventory, while nonpoint oil and gas emissions were 
primarily based on a run of EPA Oil and Gas Tool for the year 2016. The 
2016 oil and gas inventories were projected to 2023 and 2028 using 
regional projection factors by product type based on Annual Energy 
Outlook (AEO) 2018 projections. NOX and VOC reductions that 
are co-benefits to the NESHAP and New Source Performance Standards 
(NSPS) for Stationary Reciprocating Internal Combustion Engines (RICE) 
are reflected for select source categories. In addition, Natural Gas 
Turbines and Process Heaters NSPS NOX controls and NSPS Oil 
and Gas VOC controls are reflected for select source categories. 
Additional information on the development and modeling of the oil and 
gas emission inventories can be found in the Emissions Modeling TSD.
4. Development of Emission Inventories for Onroad Mobile Sources
    Onroad mobile sources include exhaust, evaporative, and brake and 
tire wear emissions from vehicles that drive on roads, parked vehicles, 
and vehicle refueling. Emissions from vehicles using regular gasoline, 
high ethanol gasoline, diesel fuel, and electric vehicles were 
represented, along with buses that used compressed natural gas. EPA 
developed the onroad mobile source emissions for states other than 
California using EPA's Motor Vehicle Emissions Simulator (MOVES) 2014b. 
MOVES2014b was used with inputs provided by state and local agencies, 
where available, in combination with nationally available data sets. 
Onroad emissions for the platform were developed based on emissions 
factors output from MOVES2014b run for the year 2016, coupled with 
activity data (e.g., vehicle miles traveled and vehicle populations) 
representing the year 2016. The 2016 activity data were provided by 
some state and local agencies, and the remaining activity data were 
derived from the 2014NEIv2. The onroad emissions were computed within 
SMOKE by multiplying emission factors developed using MOVES with the 
appropriate activity data. Onroad mobile source emissions for 
California were consistent with the emissions provided by the state.
    The future-year emissions for onroad mobile sources represent all 
national control programs known at the time of modeling except for the 
Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and 
Heavy-Duty Engines and Vehicles--Phase 2 \79\ and the Safer Affordable 
Fuel-Efficient (SAFE) Vehicles Rule.\80\ Finalized rules incorporated 
into the onroad mobile source emissions include: Tier 3 Standards 
(March 2014), the Light-Duty Greenhouse Gas Rule (March 2013), Heavy 
(and Medium)-Duty Greenhouse Gas Rule (August 2011), the Renewable Fuel 
Standard (February 2010), the Light Duty Greenhouse Gas Rule (April 
2010), the Corporate-Average Fuel Economy standards for 2008-2011 
(April 2010), the 2007 Onroad Heavy-Duty Rule (February 2009), and the 
Final Mobile Source Air Toxics Rule (MSAT2) (February 2007). Estimates 
of the impacts of rules that were in effect in 2016 are included in the 
2016 base year emissions at a level that corresponds to the extent to 
which each rule had penetrated into the fleet and fuel supply by the 
year 2016. Local control programs such as the California LEV III 
program are included in the onroad mobile source emissions. The future 
year onroad emissions reflect projected changes to fuel properties and 
usage. MOVES was run for the years 2023 and 2028 to generate the 
emissions factors relevant to those years. Future year activity data 
for onroad mobile sources were provided by some state and local 
agencies, and otherwise were projected to 2023 and 2028 using AEO 2019-
based factors. The future year emissions were computed within SMOKE by 
multiplying the future year emission factors developed using MOVES with 
the year-specific activity data. Additional information on the approach 
for generating the onroad mobile source emissions is available in the 
Emissions Modeling TSD.
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    \79\ The effect of the HDGHG Phase 2 rule on criteria pollutants 
is estimated in Table 5-48 of the Regulatory Impact Analysis, 
available from https://nepis.epa.gov/Exe/ZyPDF.cgi/P100P7NS.PDF?Dockey=P100P7NS.PDF.
    \80\ Information on the SAFE vehicles rule is available from 
https://www.epa.gov/regulations-emissions-vehicles-and-engines/safer-affordable-fuel-efficient-safe-vehicles-final-rule. 
Preliminary analysis by the Office of Transportation and Air Quality 
of the impact of this rule on criteria pollutants show impacts of 
less than 1 percent for VOC and no impact for NOX.
---------------------------------------------------------------------------

5. Development of Emission Inventories for Commercial Marine Vessels
    The commercial marine vessel (CMV) emissions in the 2016 base case 
emission inventory for this rule were based on those in the 2017 NEI. 
Factors were then applied to adjust the 2017 NEI emissions backward to 
represent emissions for the year 2016. The CMV emissions reflect 
reductions associated with the Emissions Control Area proposal to the 
International Maritime Organization control strategy (EPA-420-F-10-041, 
August 2010); reductions of NOX, VOC, and CO emissions for 
new C3 engines that went into effect in 2011; and fuel sulfur limits 
that went into effect prior to 2016. The cumulative impacts of these 
rules through 2023 and 2028 were incorporated into the projected 
emissions for CMV sources. The CMV emissions were split into emissions 
inventories from the larger category 3 (C3) engines, and those from the 
smaller category 1 and 2 (C1C2) engines. Some minor adjustments to the 
CMV

[[Page 68984]]

emissions were implemented following the October 2019 2016v1 release. 
These updated CMV inventories were released publicly by February, 
2020.\81\
---------------------------------------------------------------------------

    \81\ See 2016 emissions, 2023 emissions, and 2028 emissions 
under ftp://newftp.epa.gov/air/emismod/2016/v1/.
---------------------------------------------------------------------------

6. Development of Emission Inventories for Other Nonroad Mobile Sources
    Nonroad mobile source emission inventories (other than CMV, 
locomotive, and aircraft emissions) were developed from monthly, 
county, and process level emissions output from MOVES2014b. MOVES2014b 
included important updates to nonroad engine population growth rates. 
Types of nonroad equipment include recreational vehicles, pleasure 
craft, and construction, agricultural, mining, and lawn and garden 
equipment. State-submitted emissions data for nonroad sources were used 
for California.
    EPA also ran MOVES2014b for 2023 and 2028 to prepare nonroad mobile 
emissions inventories for future years. The nonroad mobile emission 
control programs include reductions to locomotives, diesel engines, and 
recreational marine engines, along with standards for fuel sulfur 
content and evaporative emissions. A comprehensive list of control 
programs included for mobile sources is available in the Emissions 
Modeling TSD.
    Line haul locomotives are also considered a type of nonroad mobile 
source but the emissions inventories for locomotives were not developed 
using MOVES2014b. Year 2016 locomotive emissions were developed through 
the Inventory Collaborative and are mostly consistent with those in the 
2017 NEI. The projected locomotive emissions for 2023 and 2028 were 
developed by applying factors to the base year emissions using activity 
data based on 2018 AEO freight rail energy use growth rate projections 
and emission rates adjusted to account for recent historic trends.
7. Development of Emission Inventories for Nonpoint Sources
    The emissions for stationary nonpoint sources in our 2016 base case 
emission inventory are largely consistent with those in the 2014NEIv2, 
although some were adjusted to more closely reflect year 2016 using 
factors based on changes to human population from 2014 to 2016. 
Stationary nonpoint sources include evaporative sources, consumer 
products, fuel combustion that is not captured by point sources, 
agricultural livestock, agricultural fertilizer, residential wood 
combustion, fugitive dust, and oil and gas sources. For more 
information on the nonpoint sources in the 2016 base case inventory, 
see the Emissions Modeling TSD and the 2014NEIv2 TSD.
    Where states provided the Inventory Collaborative information about 
projected control measures or changes in nonpoint source emissions, 
those inputs were incorporated into the projected inventories for 2023 
and 2028. Adjustments for state fuel sulfur content rules for fuel oil 
in the Northeast were included. Projected emissions for portable fuel 
containers reflect the impact of projection factors required by the 
final MSAT2 rule and the EISA, including updates to cellulosic ethanol 
plants, ethanol transport working losses, and ethanol distribution 
vapor losses.
    For 2016, nonpoint oil and gas emissions inventories were developed 
based on a run of EPA Oil and Gas Tool for 2016. To develop the future 
year inventories, regional projection factors for nonpoint oil and gas 
sources were developed by product type based on AEO 2018 projections to 
2023 and 2028. Estimates of criteria air pollutant (CAP) co-benefit 
reductions resulting from the NESHAP for RICE and NSPS rules and Oil 
and Gas NSPS VOC controls for select source categories were included. 
Additional details on the application of these rules and projections 
for nonpoint sources are available in the Emissions Modeling TSD.

C. Air Quality Modeling and Analyses To Identify Nonattainment and 
Maintenance Receptors

    In this section the Agency describes the air quality modeling and 
analyses performed in Step 1 to identify locations where the Agency 
expects there to be nonattainment or maintenance receptors for the 2008 
8-hour ozone NAAQS in the 2021 analytic future year. Where EPA's 
analysis shows that an area or site does not fall under the definition 
of a nonattainment or maintenance receptor in 2021, that site is 
excluded from further analysis under EPA's good neighbor framework.
    In this proposed rule, EPA is not reopening the approach used in 
the CSAPR Update to identify nonattainment and maintenance receptors. 
However, as an aid to understanding EPA's approach to identifying 
receptors, a summary of this approach follows.
    EPA's approach gives independent effect to both the ``contribute 
significantly to nonattainment'' and the ``interfere with maintenance'' 
prongs of section 110(a)(2)(D)(i)(I), consistent with the D.C. 
Circuit's direction in North Carolina.\82\ Further, in its decision on 
the remand of the CSAPR from the Supreme Court in the EME Homer City 
case, the D.C. Circuit confirmed that EPA's approach to identifying 
maintenance receptors in the CSAPR comported with the court's prior 
instruction to give independent meaning to the ``interfere with 
maintenance'' prong in the good neighbor provision. EME Homer City II, 
795 F.3d at 136.
---------------------------------------------------------------------------

    \82\ 531 F.3d at 910-911 (holding that EPA must give 
``independent significance'' to each prong of CAA section 
110(a)(2)(D)(i)(I)).
---------------------------------------------------------------------------

    In the CSAPR Update, EPA identified nonattainment receptors as 
those monitoring sites that are projected to have average design values 
that exceed the NAAQS and that are also measuring nonattainment based 
on the most recent monitored design values. This approach is consistent 
with prior transport rulemakings, such as the NOX SIP Call 
and CAIR, where EPA defined nonattainment receptors as those areas that 
both currently monitor nonattainment and that EPA projects will be in 
nonattainment in the future compliance year.\83\
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    \83\ See 63 FR 57375, 57377 (October 27, 1998); 70 FR 25241 
(January 14, 2005). See also North Carolina, 531 F.3d at 913-914 
(affirming as reasonable EPA's approach to defining nonattainment in 
CAIR).
---------------------------------------------------------------------------

    The Agency explained in the NOX SIP Call and CAIR and 
then reaffirmed in the CSAPR Update that EPA has the most confidence in 
our projections of nonattainment for those counties that also measure 
nonattainment for the most recent period of available ambient data. EPA 
separately identified maintenance receptors as those receptors that 
would have difficulty maintaining the relevant NAAQS in a scenario that 
takes into account historical variability in air quality at that 
receptor. The variability in air quality was determined by evaluating 
the ``maximum'' future design value at each receptor based on a 
projection of the maximum measured design value over the relevant 
period. EPA interprets the projected maximum future design value to be 
a potential future air quality outcome consistent with the meteorology 
that yielded maximum measured concentrations in the ambient data set 
analyzed for that receptor (i.e., ozone conducive meteorology). EPA 
also recognizes that previously experienced meteorological conditions 
(e.g., dominant wind direction, temperatures, air mass patterns) 
promoting ozone formation that led to maximum concentrations in the 
measured data may reoccur in the future. The maximum design value

[[Page 68985]]

gives a reasonable projection of future air quality at the receptor 
under a scenario in which such conditions do, in fact, reoccur. The 
projected maximum design value is used to identify upwind emissions 
that, under those circumstances, could interfere with the downwind 
area's ability to maintain the NAAQS.
    Therefore, applying this methodology in this proposed rule, EPA 
assessed the magnitude of the maximum projected design value for 2021 
at each receptor in relation to the 2008 ozone NAAQS and, where such a 
value exceeds the NAAQS, EPA determined that receptor to be a 
``maintenance'' receptor for purposes of defining interference with 
maintenance, consistent with the method used in the CSAPR and upheld by 
the D.C. Circuit in EME Homer City II.\84\ That is, monitoring sites 
with a maximum design value that exceeds the NAAQS are projected to 
have a maintenance problem in 2021.
---------------------------------------------------------------------------

    \84\ See 795 F.3d at 136.
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    Recognizing that nonattainment receptors are also, by definition, 
maintenance receptors, EPA often uses the term ``maintenance-only'' to 
refer to receptors that are not also nonattainment receptors. 
Consistent with the methodology described above, monitoring sites with 
a projected maximum design value that exceeds the NAAQS, but with a 
projected average design value that is below the NAAQS, are identified 
as maintenance-only receptors. In addition, those sites that are 
currently measuring ozone concentrations below the level of the 
applicable NAAQS, but are projected to be nonattainment based on the 
average design value and that, by definition, are projected to have a 
maximum design value above the standard are also identified as 
maintenance-only receptors.
    As described above in section VI.B., EPA is using the 2016 and 2023 
base case emissions developed under the EPA/MJO/state collaborative 
project as the primary source for base year and 2023 future year 
emissions data for this proposed rule. Because this platform does not 
include emissions for 2021, EPA developed an interpolation technique 
based on modeling for 2023 and measured ozone data to determine ozone 
concentrations for 2021. To estimate average and maximum design values 
for 2021, EPA first performed air quality modeling for 2016 and 2023 to 
obtain design values in 2023. The 2023 design values were then coupled 
with the corresponding 2016 measured design values to estimate design 
values in 2021 using the interpolation technique described below.
    Consistent with EPA's modeling guidance,\85\ the 2016 and 2023 air 
quality modeling results were used in a ``relative'' sense to project 
design values for 2023. That is, the ratios of future year model 
predictions to base year model predictions are used to adjust ambient 
ozone design values \86\ up or down depending on the relative (percent) 
change in model predictions for each location. The modeling guidance 
recommends using measured ozone concentrations for the 5-year period 
centered on the base year as the air quality data starting point for 
future year projections. This average design value is used to dampen 
the effects of inter-annual variability in meteorology on ozone 
concentrations and to provide a reasonable projection of future air 
quality at the receptor under ``average'' conditions. In addition, the 
Agency calculated maximum design values from within the 5-year base 
period to represent conditions when meteorology is more favorable than 
average for ozone formation. Because the base year for the air quality 
modeling used in this proposed rule is 2016, the base period 2014-2018 
ambient ozone design value data was used in order to project average 
and maximum design values in 2023.
---------------------------------------------------------------------------

    \85\ U.S. Environmental Protection Agency, 2018. Modeling 
Guidance for Demonstrating Attainment of Air Quality Goals for 
Ozone, PM2.5, and Regional Haze, Research Triangle Park, 
NC. https://www.epa.gov/scram/state-implementation-plan-sip-attainment-demonstration-guidance.
    \86\ The ozone design value at a particular monitoring site is 
the 3-year average of the annual 4th highest daily maximum 8-hour 
ozone concentration at that site.
---------------------------------------------------------------------------

    The ozone predictions from the 2016 and 2023 air quality model 
simulations were used to project 2014-2018 average and maximum ozone 
design values to 2023 using an approach similar to the approach in 
EPA's guidance for attainment demonstration modeling. This guidance 
recommends using model predictions from the ``3 x 3'' array of grid 
cells \87\ surrounding the location of the monitoring site to calculate 
a Relative Response Factor (RRF) for that site.\88\ The 2014-2018 
average and maximum design values were multiplied by the RRF to project 
each of these design values to 2023. In this manner, the projected 
design values are grounded in monitored data, and not the absolute 
model-predicted 2023 concentrations. In light of comments on the Notice 
of Data Availability (82 FR 1733; January 6, 2017) and other analyses, 
EPA also projected 2023 design values based on a modified version of 
the ``3 x 3'' approach for those monitoring sites located in coastal 
areas. In this alternative approach, EPA eliminated from the RRF 
calculations the modeling data in those grid cells that are dominated 
by water (i.e., more than 50 percent of the area in the grid cell is 
water) and that do not contain a monitoring site (i.e., if a grid cell 
is more than 50 percent water but contains an air quality monitor, that 
cell would remain in the calculation). The choice of more than 50 
percent of the grid cell area as water as the criteria for identifying 
overwater grid cells is based on the treatment of land use in the 
Weather Research and Forecasting model (WRF).\89\ Specifically, in the 
WRF meteorological model those grid cells that are greater than 50 
percent overwater are treated as being 100 percent overwater. In such 
cases the meteorological conditions in the entire grid cell reflect the 
vertical mixing and winds over water, even if part of the grid cell 
also happens to be over land with land-based emissions, as can often be 
the case for coastal areas. Overlaying land-based emissions with 
overwater meteorology may be representative of conditions at coastal 
monitors during times of on-shore flow associated with synoptic 
conditions and/or sea-breeze or lake-breeze wind flows. But there may 
be other times, particularly with off-shore wind flow when vertical 
mixing of land-based emissions may be too limited due to the presence 
of overwater meteorology. Thus, for our modeling EPA calculated 2023 
projected average and maximum design values at individual monitoring 
sites based on both the ``3 x 3'' approach as well as the alternative 
approach that eliminates overwater cells in the RRF calculation for 
near-coastal areas (i.e., ``no water'' approach).
---------------------------------------------------------------------------

    \87\ As noted above, each model grid cell is 12 x 12 km.
    \88\ The relative response factor represents the change in ozone 
based on emission changes at a given site. In order to calculate the 
RRF, EPA's modeling guidance recommends selecting the 10 highest 
ozone days in an ozone season at any given monitor in the base year, 
noting which of the grid cells in the 3x3 array experienced the 
highest ozone concentrations in the base year, and averaging those 
ten highest concentrations. The model is then run using the 
projected year emissions, in this case 2023, with all other model 
variables held constant. Ozone concentrations from the same ten 
days, in the same ten grid cells, are then averaged. The fractional 
change between the base year (2011 model run) averaged ozone 
concentrations and the future year (2023 model run) averaged ozone 
concentrations represents the relative response factor.
    \89\ https://www.mmm.ucar.edu/weather-research-and-forecasting-model.
---------------------------------------------------------------------------

    The 2023 average and maximum design values for both the ``3 x 3'' 
and ``no water'' approaches were then paired

[[Page 68986]]

with the corresponding base period measured design values at each ozone 
monitoring site. Design values for 2021 for both approaches were 
calculated by linearly interpolating between the 2016 base period and 
2023 projected values.\90\ The steps in the interpolation process for 
estimating 2021 average and maximum design values are as follows:
---------------------------------------------------------------------------

    \90\ EPA examined the 2019 design values as a way to support the 
set of monitoring sites that were identified as receptors based on 
the 2021 interpolated design values. The outcome of this analysis 
was that each of the five receptors in 2021 had 2019 measured design 
values that exceeded the 2008 NAAQS. In addition, there are four 
other monitoring sites in the eastern U.S. that are not projected to 
be receptors in 2021, but that have 2019 design values that exceeded 
the NAAQS. Because the measured design values at these sites are 
only 1 or 2 ppb above the NAAQS, it is reasonable to assume that 
these four sites will be clean by 2021--which is consistent with the 
projections for these monitoring sites. Thus, the analysis of 2019 
measured data and 2021 projections provides confidence in the 
approach for identifying nonattainment/maintenance receptors in 
2021.
---------------------------------------------------------------------------

    (1) Calculate the ppb change in design values between the 2016 base 
period and 2023;
    (2) Divide the ppb change by 7 to calculate the ppb change per year 
over the 7-year period between 2016 and 2023;
    (3) Multiply the ppb per year value by 5 to calculate the ppb 
change in design values over the 5-year period between 2016 and 2021;
    (4) Subtract the ppb change between 2016 to 2021 from the 2016 
design values to produce the design values for 2021.
    The projected 2021 and 2023 design values using both the ``3 x 3'' 
and ``no-water'' approaches are provided in the AQM TSD.\91\ EPA is 
soliciting public comment on the use of the ``3 x 3'' and ``no water'' 
approaches for this rulemaking (Comment C-2). For this proposed rule, 
EPA is relying upon design values based on the ``no water'' approach 
for identifying nonattainment and maintenance receptors.
---------------------------------------------------------------------------

    \91\ Based on the 2021 design values, there are 129 monitoring 
sites that have different design values based on the ``3 x 3'' 
approach vs the ``no-water'' approach. For these 129 monitoring 
sites, the average difference is 0.41 ppb and the median difference 
is 0.28 ppb. The average and median percent differences between the 
``3 x 3'' and ``no-water'' design values at these 129 monitoring 
sites are 0.65 percent and 0.52 percent, respectively. Thus, there 
is not much difference in the design values between these two 
approaches.
---------------------------------------------------------------------------

    Consistent with the truncation and rounding procedures for the 8-
hour ozone NAAQS, the projected design values are truncated to integers 
in units of ppb.\92\ Therefore, projected design values that are 
greater than or equal to 76 ppb are considered to be violating the 2008 
ozone NAAQS. For those sites that are projected to be violating the 
NAAQS based on the average design values in 2021, the Agency examined 
the preliminary measured design values for 2019, which are the most 
recent available measured design values at the time of this proposal. 
As noted above, the Agency is proposing to identify nonattainment 
receptors in this rulemaking as those sites that are violating the 
NAAQS based on current measured air quality and also have projected 
average design values of 76 ppb or greater. Maintenance-only receptors 
include both (1) those sites with projected average design values above 
the NAAQS that are currently measuring clean data and (2) those sites 
with projected average design values below the level of the NAAQS, but 
with projected maximum design values of 76 ppb or greater. In addition 
to the maintenance-only receptors, the 2021 ozone nonattainment 
receptors are also maintenance receptors because the maximum design 
values for each of these sites is always greater than or equal to the 
average design value. The monitoring sites that the Agency projects to 
be nonattainment and maintenance receptors for the ozone NAAQS in the 
2021 base case are used for assessing the contribution of emissions in 
upwind states to downwind nonattainment and maintenance of ozone NAAQS 
as part of this proposal.
---------------------------------------------------------------------------

    \92\ 40 CFR part 50, Appendix P to part 50--Interpretation of 
the Primary and Secondary National Ambient Air Quality Standards for 
Ozone.
---------------------------------------------------------------------------

    Table VI.C-1 contains the 2014-2018 base period average and maximum 
8-hour ozone design values, the 2021 base case average and maximum 
design values,\93\ and the 2019 preliminary design values for the two 
sites that are projected to be nonattainment receptors in 2021 and the 
two sites that are projected to be maintenance-only receptors in 
2021.\94\ The design values for all monitoring sites in the U.S. are 
provided in the docket for this rule. Additional details on the 
approach for projecting average and maximum design values are provided 
in the AQM TSD.
---------------------------------------------------------------------------

    \93\ The design values for 2021 in this table are based on the 
``no water'' approach.
    \94\ Using design values from the ``3 x 3'' approach does not 
change the total number of receptors in 2021. However, with the ``3 
x 3'' approach the maintenance-only receptor in New Haven County, CT 
has a projected maximum design value of 75.5 ppb and would, 
therefore, not be a receptor using this approach. In contrast, 
monitoring site 090010017 in Fairfield County, CT has projected 
average and maximum design value of 75.7 and 76.3 ppb, respectively, 
with the ``3 x 3'' approach and would, therefore, be a maintenance-
only receptor with this approach.

     Table VI.C-1--Average and Maximum 2014-2018 and 2021 Base Case 8-Hour Ozone Design Values and 2019 Preliminary Design Values (ppb) at Projected
                                                        Nonattainment and Maintenance-Only Sites
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Average design  Maximum design
            Monitor ID                    State              Site           value 2014-     value 2014-   Average design  Maximum design    2019 Design
                                                                               2018            2018         value 2021      value 2021         value
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Nonattainment Receptors
--------------------------------------------------------------------------------------------------------------------------------------------------------
090013007.........................  CT                Stratford.........            83.0              83            76.5            77.4              82
090019003.........................  CT                Westport..........            82.7              83            78.5            78.9              82
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Maintenance-Only Receptors
--------------------------------------------------------------------------------------------------------------------------------------------------------
090099002.........................  CT                Madison...........            79.7              82            74.0            76.1              82
482010024.........................  TX                Houston...........            79.3              81            75.5            77.1              81
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 68987]]

D. Pollutant Transport From Upwind States

1. Air Quality Modeling To Quantify Upwind State Contributions
    This section documents the procedures EPA used to quantify the 
impact of emissions from specific upwind states on 2021 8-hour design 
values for the identified downwind nonattainment and maintenance 
receptors. EPA used CAMx photochemical source apportionment modeling to 
quantify the impact of emissions in specific upwind states on downwind 
nonattainment and maintenance receptors for 8-hour ozone. CAMx employs 
enhanced source apportionment techniques that track the formation and 
transport of ozone from specific emissions sources and calculates the 
contribution of sources and precursors to ozone for individual receptor 
locations. The strength of the photochemical model source apportionment 
technique is that all modeled ozone at a given receptor location in the 
modeling domain is tracked back to specific sources of emissions and 
boundary conditions to fully characterize culpable sources.
    EPA performed nationwide, state-level ozone source apportionment 
modeling using the CAMx Ozone Source Apportionment Technology/
Anthropogenic Precursor Culpability Analysis (OSAT/APCA) technique \95\ 
to quantify the contribution of 2023 base case NOX and VOC 
emissions from all sources in each state to projected 2023 ozone design 
values at air quality monitoring sites. The CAMx OSAT/APCA model run 
was performed for the period May 1 through September 30 using the 
projected 2023 base case emissions and 2016 meteorology for this time 
period. As described below, in the source apportionment modeling the 
Agency tracked (i.e., tagged) the amount of ozone formed from 
anthropogenic emissions in each state individually as well as the 
contributions from other sources (e.g., natural emissions).
---------------------------------------------------------------------------

    \95\ As part of this technique, ozone formed from reactions 
between biogenic VOC and anthropogenic NOX or biogenic 
NOX and anthropogenic VOC are assigned to the 
anthropogenic emissions. This approach is designed to fully capture 
as part of the anthropogenic contribution the total amount of ozone 
formed from photochemical reactions that involve emissions from all 
anthropogenic sources. In this manner, ozone is assigned to the 
controllable (i.e., anthropogenic) precursors that react with non-
controllable (i.e., biogenic) precursors.
---------------------------------------------------------------------------

    To determine upwind contributions in 2021 the Agency applied the 
contributions from the 2023 modeling in a relative manner to the 2021 
ozone design values. The analytic steps in the process are as follows:
    (1) Calculate the 8-hour average contribution from each source tag 
to each monitoring site for the time period of the 8-hour daily maximum 
modeled concentrations in 2023;
    (2) Average the contributions and concentrations for each of the 
top 10 modeled ozone concentration days in 2023 \96\ and then divide 
the average contribution by the corresponding concentration to obtain a 
Relative Contribution Factor (RCF) for each monitoring site; and
---------------------------------------------------------------------------

    \96\ The number of days used in calculating the average 
contribution metric has historically been determined in a manner 
that is generally consistent with EPA's recommendations for 
projecting future year ozone design values. Our ozone attainment 
demonstration modeling guidance at the time of CSAPR recommended 
using all model-predicted days above the NAAQS to calculate future 
year design values (https://www3.epa.gov/ttn/scram/guidance/guide/final-03-pm-rh-guidance.pdf). In 2014 EPA issued draft revised 
guidance that changed the recommended number of days to the top-10 
model predicted days (https://www3.epa.gov/ttn/scram/guidance/guide/Draft-O3-PM-RH-Modeling_Guidance-2014.pdf). For CSAPR Update we 
transitioned to calculating design values based on this draft 
revised approach. The revised modeling guidance was finalized in 
2019 and, in this regard, we are calculating both the ozone design 
values and the contributions based on a top-10 day approach (https://www3.epa.gov/ttn/scram/guidance/guide/O3-PM-RH-Modeling_Guidance-2018.pdf).
---------------------------------------------------------------------------

    (3) Multiply the 2021 design values by the 2023 RCF at each site to 
produce the average contribution metric values in 2021.\97\ The 
resulting 2021 contributions from each tag to each monitoring site in 
the U.S. along with additional details on the source apportionment 
modeling and the procedures for calculating contributions can be found 
in the AQM TSD.
---------------------------------------------------------------------------

    \97\ The method for calculating the average contribution metric 
values in 2021 was also applied to 2023 and 2028 based on the 
projected design values and contribution modeling for each of those 
years, respectively.
---------------------------------------------------------------------------

    In the source apportionment model run, EPA tracked the ozone formed 
from each of the following tags:
     States--anthropogenic NOX and VOC emissions 
from each state tracked individually (emissions from all anthropogenic 
sectors in a given state were combined);
     Biogenics--biogenic NOX and VOC emissions 
domain-wide (i.e., not by state);
     Boundary Concentrations--concentrations transported into 
the modeling domain;
     Tribes--the emissions from those tribal lands for which 
the Agency has point source inventory data in the 2016v1 emissions 
modeling platform (EPA did not model the contributions from individual 
tribes);
     Canada and Mexico--anthropogenic emissions from sources in 
the portions of Canada and Mexico included in the modeling domain (EPA 
did not model the contributions from Canada and Mexico separately);
     Fires--combined emissions from wild and prescribed fires 
domain-wide (i.e., not by state); and
     Offshore--combined emissions from offshore marine vessels 
and offshore drilling platforms.
    The contribution modeling provided contributions to ozone from 
anthropogenic NOX and VOC emissions in each state, 
individually. The contributions to ozone from chemical reactions 
between biogenic NOX and VOC emissions were modeled and 
assigned to the ``biogenic'' category. The contributions from wildfire 
and prescribed fire NOX and VOC emissions were modeled and 
assigned to the ``fires'' category. That is, the contributions from the 
``biogenic'' and ``fires'' categories are not assigned to individual 
states nor are they included in the state contributions.
    The average contribution metric is intended to provide a reasonable 
representation of the contribution from individual states to the 
projected 2021 design value, based on modeled transport patterns and 
other meteorological conditions generally associated with modeled high 
ozone concentrations at the receptor. An average contribution metric 
constructed in this manner is beneficial since the magnitude of the 
contributions is directly related to the magnitude of the design value 
at each site.
    The largest contribution from each state that is the subject of 
this rule to 8-hour ozone nonattainment and maintenance receptors in 
downwind states in 2021 is provided in Table VI.D-1.

[[Page 68988]]



  Table VI.D-1.--Largest Contribution to Downwind 8-Hour Ozone Nonattainment and Maintenance Receptors in 2021.
----------------------------------------------------------------------------------------------------------------
                                                                            Largest downwind   Largest downwind
                                                                            contribution to     contribution to
                               Upwind state                                  nonattainment     maintenance-only
                                                                             receptors for       receptors for
                                                                              ozone (ppb)         ozone (ppb)
----------------------------------------------------------------------------------------------------------------
Alabama..................................................................               0.11                0.27
Arkansas.................................................................               0.18                0.15
Illinois.................................................................               0.81                0.80
Indiana..................................................................               1.26                1.08
Iowa.....................................................................               0.17                0.22
Kansas...................................................................               0.13                0.11
Kentucky.................................................................               0.87                0.79
Louisiana................................................................               0.27                4.68
Maryland.................................................................               1.21                1.56
Michigan.................................................................               1.71                1.62
Mississippi..............................................................               0.10                0.37
Missouri.................................................................               0.36                0.33
New Jersey...............................................................               8.62                5.71
New York.................................................................              14.44               12.54
Ohio.....................................................................               2.55                2.35
Oklahoma.................................................................               0.20                0.14
Pennsylvania.............................................................               6.86                5.64
Texas....................................................................               0.59                0.36
Virginia.................................................................               1.30                1.69
West Virginia............................................................               1.49                1.55
Wisconsin................................................................               0.23                0.23
----------------------------------------------------------------------------------------------------------------

2. Application of Screening Threshold
    EPA evaluated the magnitude of the contributions from each upwind 
state to downwind nonattainment and maintenance receptors. In Step 2 of 
the good neighbor framework, EPA uses an air quality screening 
threshold to identify upwind states that contribute to downwind ozone 
concentrations in amounts sufficient to ``link'' them to these to 
downwind nonattainment and maintenance receptors. The contributions 
from each of the CSAPR Update states to each downwind nonattainment 
and/or maintenance receptor that were used for the Step 2 evaluation 
can be found in the AQM TSD.
    As discussed above in section V, EPA is not reopening the air 
quality screening threshold of 1 percent of the NAAQS used in the CSAPR 
Update. Therefore, as in the CSAPR Update, EPA uses an 8-hour ozone 
value for this air quality threshold of 0.75 ppb as the quantification 
of 1 percent of the 2008 ozone NAAQS.
a. States That Contribute Below the Screening Threshold
    Of the 21 states that are the subject of this proposed rule, EPA 
has determined that the contributions from each of the following states 
to nonattainment and/or maintenance-only receptors in the 2021 analytic 
year are below the threshold: Alabama, Arkansas, Iowa, Kansas, 
Mississippi, Missouri, Oklahoma, Texas, and Wisconsin. Because these 
states are considered not to contribute to projected downwind air 
quality problems, EPA proposes to determine that the CSAPR Update FIPs 
for these states (or, in the case of Alabama and Missouri, the SIP 
revisions later approved to replace the states' CSAPR Update FIPs) are 
a complete remedy to address their significant contribution under the 
good neighbor provision for the 2008 ozone NAAQS. These states remain 
subject to the ozone season NOX emission budgets established 
in the CSAPR Update, and EPA is not reopening the determinations in the 
CSAPR Update regarding these states.\98\
---------------------------------------------------------------------------

    \98\ EPA notes that the updated modeling establishing that these 
states no longer contribute as of 2021 assumes in its baseline the 
continued implementation of the CSAPR Update budgets in these 
states.
---------------------------------------------------------------------------

    However, for each of these states, EPA notes that updates to the 
air quality and contributions analysis for the final rule could change 
the analysis as to which states have contributions to downwind 
receptors that meet or exceed the contribution screening threshold. In 
the event that such analysis conducted for the final rule demonstrates 
that any of those states that contribute amounts below the threshold in 
the proposal are projected to contribute amounts greater than or equal 
to the threshold in the final rule analysis, EPA proposes to apply the 
same Step 3 analysis applied to the linked states in this proposal and 
may finalize revised emissions budgets or other requirements (as 
presented for comment in this proposal) for such states. In order to 
ensure adequate notice of the potential for this change in our analysis 
between proposal and final and any resulting emission reduction 
obligations, EPA has calculated emissions budgets for EGUs in each of 
these nine states applying the same methodology and determinations used 
for the linked states in the Step 3 analysis described below. In 
addition, EPA would anticipate extending its proposed assessment of 
non-EGU sources (and associated requests for comment) for linked states 
to these states. Any adjustments in the implementation of the emissions 
budgets at Step 4 for linked states would also apply in these states. 
EPA is proposing to extend and apply any such analysis and/or 
emissions-reduction budgets to these states if, and only if, the final 
rule air quality modeling and other air quality and contribution 
analysis identifies a linkage as just described. The updated ozone 
season NOX emission budgets that may be applied in these 
states are available in the Ozone Transport Policy Analysis TSD.

[[Page 68989]]

b. States That Contribute at or Above the Screening Threshold

    In this proposed rule, states with remanded emission budgets under 
the CSAPR Update that contribute to a specific receptor in an amount at 
or above the screening threshold in 2021 are considered linked to that 
receptor. The ozone contributions and emissions (and available emission 
reductions) for these states are analyzed further at Step 3, as 
described in section VII, to determine whether and to what extent 
emissions reductions might be required from each state.
    Based on the maximum downwind contributions in Table VI.D-1, the 
Step 2 analysis identifies that the following 11 states contribute at 
or above the 0.75 ppb threshold to downwind nonattainment receptors: 
Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, New York, 
Ohio, Pennsylvania, Virginia, and West Virginia. Based on the maximum 
downwind contributions in Table VI.D-1, the following 12 states 
contribute at or above the 0.75 ppb threshold to downwind maintenance-
only receptors: Illinois, Indiana, Kentucky, Louisiana, Maryland, 
Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West 
Virginia. The levels of contribution between each of these linked 
upwind state and downwind nonattainment receptors and maintenance-only 
receptors are provided in Table VI.D-2 and Table VI.D-3, respectively.

    Table VI.D-2--Contribution (ppb) From Each Linked Upwind State to
                Downwind Nonattainment Receptors in 2021
------------------------------------------------------------------------
                                              Nonattainment receptors
              Upwind state               -------------------------------
                                           Stratford, CT   Westport, CT
------------------------------------------------------------------------
Illinois................................            0.69            0.81
Indiana.................................            0.99            1.26
Kentucky................................            0.78            0.87
Louisiana...............................            0.27            0.27
Maryland................................            1.21            1.20
Michigan................................            1.16            1.71
New Jersey..............................            7.70            8.62
New York................................           14.42           14.44
Ohio....................................            2.34            2.55
Pennsylvania............................            6.72            6.86
Virginia................................            1.29            1.30
West Virginia...........................            1.45            1.49
------------------------------------------------------------------------


    Table VI.D-3--Contribution (ppb) From Each Linked Upwind State to
               Downwind Maintenance-Only Receptors in 2021
------------------------------------------------------------------------
                                            Maintenance-only receptors
              Upwind state               -------------------------------
                                            Madison, CT     Houston, TX
------------------------------------------------------------------------
Illinois................................            0.80            0.02
Indiana.................................            1.08            0.02
Kentucky................................            0.79            0.02
Louisiana...............................            0.15            4.68
Maryland................................            1.56            0.00
Michigan................................            1.62            0.00
New Jersey..............................            5.71            0.00
New York................................           12.54            0.00
Ohio....................................            2.35            0.00
Pennsylvania............................            5.64            0.00
Virginia................................            1.69            0.00
West Virginia...........................            1.55            0.00
------------------------------------------------------------------------

    In conclusion, as described above, states with contributions that 
equal or exceed 1 percent of the NAAQS to either nonattainment or 
maintenance receptors are identified as ``linked'' at Step 2 of the 
good neighbor framework and warrant further analysis for significant 
contribution to nonattainment or interference with maintenance under 
Step 3. EPA proposes that the following 12 States are linked at Step 2: 
Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, 
New York, Ohio, Pennsylvania, Virginia, and West Virginia.

VII. Quantifying Upwind-State NOX Reduction Potential To 
Reduce Interstate Ozone Transport for the 2008 Ozone NAAQS

A. The Multi-Factor Test

    This section describes EPA's methodology at step 3 of the 4-step 
framework for identifying upwind emissions that constitute 
``significant'' contribution for the states subject to this proposed 
rule. This analysis focuses on the 12 states linked at steps 1 and 2 of 
the framework, as identified in the sections above. Following the 
existing framework as applied in the CSAPR Update, EPA's assessment of 
linked upwind state emissions reflects analysis of uniform 
NOX emission control stringency. The analysis has been 
extended to include assessment of non-EGU sources in addition to EGU 
sources in the linked upwind states.
    Each level of uniform NOX control stringency is 
represented by an estimated cost per ton of NOX reduced and 
is characterized by a set of pollution control measures. EPA applies a 
multi-factor test--the same multi-factor test that was used in the 
CSAPR and the CSAPR Update \99\--to evaluate increasing levels of 
uniform NOX control stringency. The multi-factor test, which 
is central to EPA's step 3 quantification of significant contribution, 
considers cost, available emission reductions, and downwind air quality 
impacts to determine the appropriate level of uniform NOX 
control stringency that addresses the impacts of interstate transport 
on downwind nonattainment or maintenance receptors. The uniform 
NOX emission control stringency, represented by marginal 
cost (or a weighted average cost in the case of EPA's non-EGU 
analysis), also serves to apportion the reduction responsibility among 
collectively contributing upwind states. This approach to quantifying 
upwind state emission-reduction obligations using uniform cost was 
reviewed by the Supreme Court in EPA v. EME Homer City Generation, 
which held that using such an approach to apportion emission reduction 
responsibilities among upwind states that are collectively responsible 
for downwind air quality impacts ``is an efficient and equitable 
solution to the allocation problem the Good Neighbor Provision requires 
the Agency to address.'' 572 U.S. at 519. There are four stages in 
developing the multi-factor test: (1) Identify levels of uniform 
NOX control stringency, represented by an estimated cost-
per-ton of control that is applied across linked upwind states; (2) 
evaluate potential NOX emission reductions associated with 
each identified level of uniform control stringency; (3) assess air 
quality improvements at downwind receptors for each level of uniform 
control stringency; and (4) select a level of control stringency 
considering the identified cost, available NOX emission 
reductions, and downwind air quality impacts, while also ensuring that 
emission reductions do not unnecessarily over-control relative to the 
contribution threshold or downwind air quality.
---------------------------------------------------------------------------

    \99\ See CSAPR, Final Rule, 76 FR 48208 (Aug. 8, 2011).
---------------------------------------------------------------------------

    For both EGUs and non-EGUs, section VII.B describes the available 
mitigation technologies considered and their associated cost levels. 
Section VII.C discusses EPA's application of that information to assess 
emission reduction potential of the identified control strategies. 
Finally, section VII.D describes EPA's assessment of associated air 
quality impacts and EPA's subsequent identification of appropriate 
control stringencies considering the relevant factors (cost, available 
emission reductions, and downwind air quality impacts). As discussed in 
greater detail in section VII.D, EPA's multi-factor test informed EPA's 
determination of

[[Page 68990]]

appropriate EGU NOX ozone season emission budgets necessary 
to reduce emissions that significantly contribute to nonattainment or 
interfere with maintenance of the 2008 ozone NAAQS for the 2021 ozone 
season and subsequent control periods. Application of the multi-factor 
test to non-EGU sources has led EPA to propose to conclude that 
emissions reductions from non-EGU sources are not necessary to address 
significant contribution under the 2008 ozone NAAQS. In light of 
uncertainty in its current information on emissions, existing controls 
on emissions sources, and emission-reduction potential for non-EGU 
sources, however, EPA requests comment on its analysis, and whether, 
based on updated or more complete information, there may be grounds to 
find non-EGU emissions reductions are necessary to address significant 
contribution for the 2008 ozone NAAQS (Comment C-3).
    This multi-factor approach is consistent with EPA's approach in the 
prior CSAPR and CSAPR Update actions. In addition, as was done in the 
CSAPR Update, EPA evaluated possible over-control by determining if an 
upwind state is linked solely to downwind air quality problems that 
could have been resolved at a lower cost threshold, or if upwind states 
could reduce their emissions below the 1 percent air quality 
contribution threshold at a lower cost threshold. This analysis is 
described in section VII.D below.

B. Identifying Levels of Control Stringency

1. EGU NOX Mitigation Strategies
    In identifying levels of uniform control stringency for EGUs, EPA 
reassessed the same NOX control strategies that it had 
analyzed in the CSAPR Update, all of which are considered to be widely 
available in this sector: (1) Fully operating existing SCR, including 
both optimizing NOX removal by existing operational SCRs and 
turning on and optimizing existing idled SCRs; (2) installing state-of-
the-art NOX combustion controls; (3) turning on existing 
idled Selective Non-Catalytic Reduction (SNCRs); (4) installing new 
SNCRs; and (5) installing new SCRs. For the reasons explained in the 
EGU NOX Mitigation Strategies TSD included in the docket for 
this proposed action, EPA determined that for the regional, multi-state 
scale of this rulemaking, only EGU NOX control strategies 1 
and 3 are possible for the 2021 ozone season (fully operating existing 
SCRs, including both optimizing NOX removal by existing 
operational SCRs and turning on and optimizing existing idled SCRs; and 
turning on existing idled SNCRs). As discussed in section VII.B.1.b, 
EPA notes that it is not possible to install state-of-the-art 
NOX combustion controls by the beginning of the 2021 ozone 
season on a regional scale. EPA considers state-of-the-art 
NOX combustion controls at EGUs to be available by the 
beginning of the 2022 ozone season.
    The following subsections describe EPA's identification of uniform 
levels of NOX emission control stringencies, each 
represented by an estimated marginal cost per ton of NOX 
reduced (in 2016$) and characterized by a set of EGU mitigation 
technologies.
a. $1,600 per Ton, Representing Optimizing Existing SCRs
    Optimizing (i.e., turning on idled or improving operation of 
partially operating) existing SCRs can substantially reduce EGU 
NOX emissions quickly using investments that have already 
been made in pollution control technologies. With the promulgation of 
the CSAPR Update, most operators improved their SCR performance and 
have continued to maintain that level of improved operation. However, 
this SCR performance is not universal and some drop has been observed 
as the CSAPR Update ozone-season allowance price has declined steadily 
since 2017. For example, recent power sector data from 2019 reveal 
that, in some cases, operating units have SCR controls that have been 
idled or are operating partially, and therefore suggest that there 
remains reduction potential through optimization.\100\ EPA finds that 
optimizing all of these remaining SCRs in the 12 linked states is a 
readily available approach for EGUs to reduce NOX emissions.
---------------------------------------------------------------------------

    \100\ See ``Ozone Season Data 2018 vs. 2019'' and ``Coal-fired 
Characteristics and Controls'' at https://www.epa.gov/airmarkets/power-plant-data-highlights#OzoneSeason.
---------------------------------------------------------------------------

    EPA identifies $1,600 per ton as a level of uniform control 
stringency that represents optimizing SCR controls. EPA's analysis of 
this level of uniform control stringency is informed by comment on the 
CSAPR Update proposal and updated information on operation and 
industrial-input costs that have become available since the CSAPR 
Update.\101\ While the costs of optimizing existing, operational SCRs 
include only variable costs, the cost of optimizing SCR units that are 
currently idled back into service considers both variable and fixed 
costs. Variable and fixed costs include labor, maintenance and repair, 
parasitic load, and ammonia or urea for use as a NOX 
reduction reagent in SCR systems. EPA performed an in-depth cost 
assessment for all coal-fired units with SCRs. More information about 
this analysis is available in the EGU NOX Mitigation 
Strategies Proposed Rule TSD, which is found in the docket for this 
proposed rule. The TSD notes that, for the subset of SCRs that are 
already partially operating, the cost of optimizing is often much lower 
than the $1,600 per ton marginal cost and often under $800 per ton.
---------------------------------------------------------------------------

    \101\ The CSAPR Update found $1,400 per ton was a level of 
uniform control stringency that represented turning on idled SCR 
controls. EPA uses the same costing methodology, but updating for 
input cost increases (e.g., urea reagent) to arrive at $1,600 per 
ton in this proposal (while also updated from 2011 dollars to 2016 
dollars).
---------------------------------------------------------------------------

    EPA is using the same methodology to identify SCR performance as it 
did in the CSAPR Update rule. To estimate EGU NOX reduction 
potential from optimizing, EPA considers the difference between the 
non-optimized NOX emission rates and an achievable operating 
and optimized SCR NOX emission rate. To determine this rate 
in the CSAPR Update, EPA evaluated nationwide coal-fired EGU 
NOX ozone season emissions data from 2009 through 2015 and 
calculated an average NOX ozone season emission rate across 
the fleet of coal-fired EGUs with SCR for each of these seven years. 
EPA found it prudent to not consider the lowest or second-lowest ozone 
season NOX emission rates, which may reflect new SCR systems 
that have all new components (e.g., new layers of catalyst). Data from 
these new systems are not representative of ongoing achievable 
NOX emission rates considering broken-in components and 
routine maintenance schedules. To identify the potential reductions 
from SCR optimization in this proposed action, EPA followed the same 
methodology and incorporated the latest reported coal-fired EGU 
NOX ozone season emissions data. EPA updated the timeframe 
to include the most recent and best available operational data (i.e., 
2009 up through 2019). Considering the emissions data over the full 
time period of available data results in a third-best rate of 0.08 
Pounds per Million British Thermal Units (lb/mmBtu). EPA notes that 
over half of the SCR-controlled EGUs achieved a NOX emission 
rate of 0.068 lbs/mmBtu or less over their third-best entire ozone 
season. Moreover, for the SCR-controlled coal units that EPA identified 
as having a 2019 emission rate greater than 0.08 lb/mmBtu, EPA verified 
that in prior years, the majority (over 90 percent) of these

[[Page 68991]]

same units had demonstrated and achieved a NOX emission rate 
of 0.08 lb/mmBtu or less on a seasonal and/or monthly basis. This 
further supports EPA's determination that 0.08 lb/mmBtu reflects a 
reasonable emission rate for representing SCR optimization in 
quantifying state emission budgets as discussed in section VIII.B. This 
fleet-level emission rate assumption of 0.08 lb/mmBtu for non-optimized 
units reflects, on average, what those units would achieve when 
optimized. Some of these units may achieve rates that are lower than 
0.08 lb/mmBtu, and some units may operate above that rate based on 
unit-specific configuration and dispatch patterns. EPA evaluated the 
feasibility of optimizing idled SCRs for the 2021 ozone season. Based 
on past practice, EPA finds that idled controls can be restored to 
operation quickly (less than two months). This timeframe is informed by 
many electric utilities' previous long-standing practice of utilizing 
SCRs to reduce EGU NOX emission during the ozone season 
while putting the systems into protective lay-up during the non-ozone 
season months. For example, this was the long-standing practice of many 
EGUs that used SCR systems for compliance with the NOX 
Budget Trading Program. It was quite typical for SCRs to be turned off 
following the September 30 end of the ozone season control period. 
These controls would then be put into protective lay-up for several 
months of non-use before being returned to operation by May 1 of the 
following ozone season.\102\ Therefore, EPA believes that SCR 
optimization mitigation strategies are available for the 2021 ozone 
season.
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    \102\ In the 22 state CSAPR Update region, 2005 EGU 
NOX emissions data suggest that 125 EGUs operated SCR 
systems in the summer ozone season while idling these controls for 
the remaining 7 non-ozone season months of the year. Units with SCR 
were identified as those with 2005 ozone season average 
NOX rates that were less than 0.12 lbs/mmBtu and 2005 
average non-ozone season NOX emission rates that exceeded 
0.12 lbs/mmBtu and where the average non-ozone season NOX 
rate was more than double the ozone season rate.
---------------------------------------------------------------------------

    The vast majority of SCR controlled units (nationwide and in the 12 
linked states) are already partially operating these controls during 
the ozone season based on historical 2019 emissions rates. EPA believes 
that this widely demonstrated seasonal behavior of turning on idled 
SCRs also supports the Agency's finding that optimizing existing SCR 
systems currently being operated to some degree within the ozone 
season, which would necessitate fewer changes to SCR operation relative 
to restarting idled systems, is also feasible for the 2021 ozone 
season. Full operation of existing SCRs that are already operating to 
some extent involves increasing reagent (i.e., ammonia or urea) flow 
rate, and maintaining and replacing catalyst to sustain higher 
NOX removal rate operations. Increasing NOX 
removal by SCR controls that are already operating can be implemented 
by procuring more reagent and catalyst. EGUs with SCR routinely procure 
reagent and catalyst as part of ongoing operation and maintenance of 
the SCR system. In many cases, where EPA has identified EGUs that are 
operating their SCR at non-optimized NOX removal 
efficiencies, EGU data indicate that these units historically have 
achieved more efficient NOX removal rates. Therefore, EPA 
finds that optimizing existing SCRs currently being operated could 
generally be done by reverting back to previous operation and 
maintenance plans. Regarding full operation activities, existing SCRs 
that are only operating at partial capacity still provide functioning, 
maintained systems that may only require increased chemical reagent 
feed rate up to their design potential and catalyst maintenance for 
mitigating NOX emissions. Units must have adequate inventory 
of chemical reagent and catalyst deliveries to sustain operations. 
Considering that units have procurement programs in place for operating 
SCRs, this may only require updating the frequency of deliveries. This 
may be accomplished within a few weeks.
b. $1,600 per Ton, Representing Installing State-of-the-Art 
NOX Combustion Controls
    EPA also includes installing state-of-the-art combustion controls 
in the level of uniform control stringency represented by $1,600 per 
ton. State-of-the-art combustion controls such as low-NOX 
burners (LNB) and over-fire air (OFA) can be installed and/or updated 
quickly and can substantially reduce EGU NOX emissions. In 
the 12 states linked to downwind receptors under this proposed rule, 
approximately 99 percent of coal-fired EGU capacity is equipped with 
some form of combustion control; however, the control configuration 
and/or corresponding emission rates at some units indicate they may not 
currently have state-of-the-art combustion control technology. 
Upgrading existing combustion controls to state-of-the-art combustion 
control alone can achieve NOX emission rates of 0.139 to 
0.155 lbs/mmBtu,\103\ and, once installed, reduce NOX 
emissions at all times of EGU operation. EPA proposes that the 
installation of state-of-the-art combustion controls is a readily 
available approach for EGUs to reduce NOX emissions by the 
start of the 2022 ozone season.
---------------------------------------------------------------------------

    \103\ Details of EPA's assessment of state-of-the-art 
NOX combustion controls are provided in the EGU 
NOX Mitigation Strategies Proposed Rule TSD.
---------------------------------------------------------------------------

    EPA also finds that, generally, state-of-the-art combustion control 
upgrades require a short installation time--as little as four weeks to 
install with a scheduled outage (with permitting, design, order 
placement, fabrication, and delivery occurring beforehand). Feasibility 
of installing combustion controls was examined by EPA in CSAPR where 
industry demonstrated the ability to install state-of-the-art LNB 
controls on a large unit (800 MW) in under six months. EPA received 
comments in the CSAPR Update on installation of combustion controls 
from the Institute of Clean Air Companies.\104\ Commenters provided 
information on the equipment and typical installation time frame for 
new combustion controls, accounting for all steps, and noted it 
generally takes between 6-8 months on a typical boiler--covering the 
time through bid evaluation through start-up of the technology. The 
deployment schedule was described as:
---------------------------------------------------------------------------

    \104\ EPA-HQ-OAR-2015-0500-0093
---------------------------------------------------------------------------

     4-8 weeks--bid evaluation
     4-6 weeks--engineering and completion of engineering 
drawings
     2 weeks--drawing review and approval from user
     10-12 weeks--fabrication of equipment and shipping to end 
user site
     2-3 weeks--installation at end user site.
     1 week--commissioning and start-up of technology
    Given previous comments and EPA observations on past installations, 
EPA does not believe that it is possible to obtain installation of 
these controls between rule finalization and the start of the 2021 
ozone season. However, EPA does believe the technology could be 
installed by the start of the 2022 ozone season. More details on these 
analyses can be found in the EGU NOX Mitigation Strategies 
Proposed Rule TSD.
    The cost of installing state-of-the-art combustion controls per ton 
of NOX reduced is dependent on the combustion control type 
and unit type. EPA estimates the cost per ton of state-of-the-art 
combustion controls to be $400 per ton to $1,200 per ton of 
NOX removed using a representative capacity

[[Page 68992]]

factor of 70 percent. See the NOX Mitigation Strategies 
Proposed Rule TSD for additional details. In specifying a 
representative marginal cost at which state-of-the-art combustion 
controls are widely available, EPA considered all of these estimated 
costs and finds that the cost is typically comparable to the EGU 
NOX control stringency of $1,600 per ton, and hence EPA 
includes installing state-of-the-art NOX combustion controls 
in the uniform control stringency level represented by $1,600 per ton 
of NOX removed.
c. $3,900 per ton, Representing Turning on Idled Existing SNCRs
    Turning on idled existing SNCRs can also reduce EGU NOX 
emissions quickly, using investments in pollution control technologies 
that have already been made. Compared to no post combustion controls on 
a unit, SNCRs can achieve a 25 percent reduction on average in EGU 
NOX emissions (with sufficient reagent). These controls are 
in use to some degree across the U.S. power sector. In the 12 states 
identified in this proposed rule, approximately 14 percent of coal-
fired EGU capacity is equipped with SNCR. Recent power sector data 
suggest that, in some cases, SNCR controls have been idled or operating 
less in 2019 relative to performance in prior years.\105\ EPA finds 
that turning on idled SNCRs is an available approach for EGUs to reduce 
NOX emissions, and similar to restarting idled SCR controls, 
could be done in time for the 2021 ozone season.
---------------------------------------------------------------------------

    \105\ See ``Ozone Season Data 2018 vs. 2019'' and ``Coal-fired 
Characteristics and Controls'' at https://www.epa.gov/airmarkets/power-plant-data-highlights#OzoneSeason
---------------------------------------------------------------------------

    EPA identifies $3,900 per ton as a level of uniform control 
stringency that represents turning on and fully operating idled SNCRs. 
For existing SNCRs that have been idled, unit operators may need to 
restart payment of some fixed and variable costs associated with these 
controls. Fixed and variable costs include labor, maintenance and 
repair, parasitic load, and ammonia or urea. The majority of the total 
fixed and variable operating costs for SNCR is related to the cost of 
the reagent used (e.g., ammonia or urea) and the resulting cost per ton 
of NOX reduction is sensitive to the NOX rate of 
the unit prior to SNCR operation. For more details on this assessment, 
refer to the EGU NOX Mitigation Strategies Proposed Rule TSD 
in the docket for this proposed rule.
d. $5,800 per ton, Representing Installing New SNCRs.
    The amount of time needed to retrofit an EGU with new SNCR extends 
beyond the 2021 Serious area attainment date. However, similar to SCR 
retrofits discussed in section VII.B.1.e, and consistent with the 
Wisconsin decision, EPA evaluated potential emission reductions and 
associated costs from this control technology, and assessed the impacts 
and need for this emissions control strategy at the earliest point in 
time when post combustion control installation could be achieved. SNCR 
installations, while generally having shorter project timeframes (i.e., 
as little as 16 months for an individual power plant installing 
controls on more than one boiler), share similar implementation steps 
with and also need to account for the same regional factors as SCR 
installations.\106\ For example, SNCR installation at the Jeffrey power 
plant (Kansas) was in the planning phase in 2013 but not in service 
until 2015.\107\ Therefore, EPA finds that more than 16 months would be 
needed to complete all necessary steps of SNCR development at EGUs on a 
regional scale. EPA discusses the timing of SNCR and SCR post-
combustion retrofits together and in more detail in section VII.C.1.
---------------------------------------------------------------------------

    \106\ A month-by-month evaluation of SNCR installation is 
discussed in EPA's ``Engineering and Economic Factors Affecting the 
Installation of Control Technologies for Multipollutant Strategies'' 
at Exhibit A-6 and in EPA's NOX Mitigation Strategies 
TSD. As noted at proposal, the analysis in this exhibit estimates 
the installation period from contract award as within a 10-13-month 
timeframe. The exhibit also indicates a 16-month timeframe from 
start to finish, inclusive of pre-contract award steps of the 
engineering assessment of technologies and bid request development. 
The timeframe cited for installation of SNCR at an individual source 
in this final action is consistent with this more complete timeframe 
estimated by the analysis in the exhibit.
    \107\ 2013 EIA Form 860, Schedule 6, Environmental Control 
Equipment.
---------------------------------------------------------------------------

    SNCR technology provides owners a relatively less capital-intensive 
option for reducing NOX emissions compared to SCR 
technology, albeit at the expense of higher operating costs on a per-
ton basis and less total emission reduction potential. EPA examined the 
remaining nationwide coal-fired fleet that lack SNCR or other 
NOX post-combustion control to estimate a representative 
cost of SNCR installation (on a $ per ton basis). Costs were estimated 
using the operating and unit characteristics specific to this fleet. As 
described in the NOX Mitigation Strategies Proposed Rule 
TSD, EPA proposes that $5,800 per ton is the representative cost of 
these controls reflecting a cost level at which they are available for 
a majority of the uncontrolled fleet.
e. $9,600 per ton, Representing Installing New SCRs.
    The amount of time needed to retrofit an EGU with new SCR extends 
beyond the 2021 Serious area attainment date. However, similar to SNCR 
retrofits discussed above, and consistent with the Wisconsin decision, 
EPA evaluated potential emission reductions and associated costs from 
this control technology, as well as assessed the impacts and need for 
this emissions control strategy at the earliest point in time when 
their installation could be achieved. The amount of time to retrofit 
EGUs with new SCR varies between approximately 2 and 4 years depending 
on site-specific engineering considerations and on the number of 
installations being considered. In prior actions, EPA has noted 39-48 
months as appropriate for regionwide actions when EPA is evaluating 
multiple installations at multiple locations.\108\
---------------------------------------------------------------------------

    \108\ Final Report: Engineering and Economic Factors Affecting 
the Installation of Control Technologies for Multipollutant 
Strategies, EPA- 600/R-02/073 (Oct. 2002), available at https://nepis.epa.gov/Adobe/PDF/P1001G0O.pdf.
---------------------------------------------------------------------------

    The Agency examined the cost for retrofitting a unit with new SCR 
technology, which typically attains controlled NOX rates of 
0.07 lbs/mmBtu or less. Based on the characteristics of the remaining 
nationwide coal fleet that does not have a post-combustion control 
retrofit, EPA determined that for unit and performance characteristics 
representative of that subgroup, $9,600 per ton was the cost level that 
represents the point at which the SCR retrofit technology was typically 
available for the majority of these sources. For more details on this 
assessment, refer to the EGU NOX Mitigation Strategies 
Proposed Rule TSD in the docket for this proposed rule.
    Generation shifting - Finally, for each of the technologies 
considered above, EPA evaluates emission reduction potential from 
generation shifting at that representative dollar per ton level. 
Shifting generation to lower NOX-emitting or zero-emitting 
EGUs occurs in response to economic factors. As the cost of emitting 
NOX increases, it becomes increasingly cost-effective for 
units with lower NOX rates to increase generation, while 
units with higher NOX rates reduce generation. Because the 
cost of generation is unit-specific, this generation shifting occurs 
incrementally on a continuum. Consequently, there is more generation 
shifting at higher cost NOX-control levels. Because the 
Agency

[[Page 68993]]

has identified discrete cost thresholds resulting from the full 
implementation of particular types of emission controls, it is 
reasonable to simultaneously quantify and include the reduction 
potential from generation shifting at each cost level up to levels that 
are consistent with control operation. Including these reductions is 
important, ensuring that other cost-effective reductions (e.g., fully 
operating controls) at each cost level can be expected to occur. 
Generation shifting treatment and results are discussed in greater 
detail in the NOX Mitigation Strategies Proposed Rule TSD.
    In general, when EPA estimates emission reduction potential from 
generation shifting, EPA finds small amounts of generation shifting to 
existing lower NOX- emitting or zero-emitting units could 
occur consistent with the near-term implementation timing for this 
proposed rule. As a proxy for limiting the amount of generation 
shifting that is feasible for the near-term ozone seasons, EPA limits 
its assessment to shifting generation to other EGUs within the same 
state. EPA believes that limiting its evaluation of shifting generation 
(which EPA sometimes refers to as re-dispatch) to the amount that could 
occur within the state represents a conservatively small amount of 
generation-shifting because it does not capture further potential 
emission reductions that would occur if generation was shifted more 
broadly among units in different states within the interconnected 
electricity grid. EPA seeks comment on the extent to which generation 
shifting towards lower-emitting resources should be incorporated into 
the overall EGU emission reductions reflected in the state emission 
budgets (Comment C-4).
    Finally, EPA seeks comment on whether other ozone-season 
NOX mitigation technologies should be considered (Comment C-
5). EPA invites comments on the cost and performance of the above 
listed technologies and any other potential mitigation technologies. 
For example, in January of 2020 the New York Department of 
Environmental Conservation adopted a rule to limit emissions from 
combustion turbines that operate as peaking units. EPA has not 
historically considered NOX mitigation technologies for 
these sources in its rulemakings, such as the CSAPR and the CSAPR 
Update, but invites comment on their appropriateness for this 
rulemaking. Separately, location and high emission rates of grid-
connected municipal solid waste combustors, generally not covered under 
EPA's transport rules given their small size and differing purpose, 
have also led some stakeholders to suggest mitigation measures be 
considered for those sources. EPA similarly invites comment on 
mitigation opportunities for all of these mitigation technologies 
discussed in this section and, in particular, requests comment on its 
discussion of these additional strategies in the NOX 
Mitigation Strategies Proposed Rule TSD.
2. Non-EGU NOX Mitigation Strategies
    EPA has not regulated emissions from non-EGU sources as part of its 
regional transport rulemakings since the 1998 NOX SIP Call. 
In Wisconsin, the D.C. Circuit held that EPA must on remand implement a 
full remedy by the next attainment date (2021 for this proposed rule), 
or as soon as possible thereafter on a showing of impossibility, to 
achieve necessary reductions by that date. 938 F.3d at 320. The court 
also directed the Agency to address non-EGU sources, unless ``the 
scientific uncertainty is so profound that it precludes EPA from making 
a reasoned judgment.'' Id. at 318-20 (quoting Massachusetts v. EPA, 549 
U.S. 497, 534 (2007)). The D.C. Circuit found that the practical 
obstacles EPA identified with respect to its evaluation of non-EGUs in 
the CSAPR Update did not rise to the level of an ``impossibility,'' id. 
The court also found that EPA must make a higher showing of uncertainty 
regarding non-EGU point-source NOX mitigation potential 
before declining to regulate such sources on the basis of 
``uncertainty.'' Id. In this proposed rule, EPA has extended its 
analysis to include all major stationary source sectors in the linked 
upwind states, including non-EGU emissions sources in various industry 
sectors. As discussed in section VI, of the 22 states originally 
included in the CSAPR Update, EPA proposes in this action that 12 
states warrant analysis at step 3 for significant contribution to 
downwind nonattainment and/or maintenance receptors for the 2008 ozone 
NAAQS. Therefore, the Agency focused its Step 3 assessment on non-EGU 
sources in these 12 states. For these sources, EPA retained its focus 
on NOX as the most effective precursor pollutant for 
addressing interstate ozone transport at a regional scale. See 82 FR 
51238, 51248 (Nov. 3, 2017) (citing 76 FR 48222) and 63 FR 57381.
    For non-EGU sources, there are many types of emissions sources or 
units that emit NOX and many control technologies or 
combinations of control technologies for these sources or units. As 
such, there are many approaches to assessing emission reduction 
potential from non-EGU emissions sources or units. In this assessment, 
EPA attempted to apply the multi-factor test used for EGUs to determine 
an appropriate stringency level for non-EGU sources in linked upwind 
states. EPA identified available control technologies and estimated 
their costs and potential emissions reductions. The information the 
Agency currently has regarding implementation timeframes to determine 
potential air quality impacts in relevant future years was also 
considered.
    To identify levels of control for non-EGU sources, EPA used the 
Control Strategy Tool (CoST),\109\ the Control Measures Database 
(CMDb), and the projected 2023 inventory from the 2016v1 modeling 
platform. EPA assessed potential emissions reductions associated with 
applying controls to emissions units with 150 tons per year (tpy) or 
more of pre-control NOX emissions in 2023, which is an 
emissions threshold comparable to 25 MW for EGUs used in prior 
interstate transport rulemakings. To derive this emissions threshold, 
EPA used emissions expected from an average 25 MW EGU unit operating at 
a median heat rate, emission rate, and capacity factor for a coal-fired 
unit.\110\ In CoST, the Agency used the maximum emission reduction 
strategy \111\ to estimate the largest quantity of potential emissions 
reductions from each emissions source or unit located in the 12 upwind 
states linked to downwind receptors in this proposed rule. 11 of the 12 
upwind states had sources with 150 tpy or more of pre-control 
NOX emissions in 2023; the projected 2023 emissions 
inventory did not include non-EGU point sources in New Jersey with pre-
control NOx emissions greater than 150 tpy for which CoST had 
applicable control measures.
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    \109\ Further information on CoST can be found at the following 
link: https://www.epa.gov/economic-and-cost-analysis-air-pollution-regulations/cost-analysis-modelstools-air-pollution.
    \110\ For additional details on calculating the 150 tpy 
emissions threshold, please see the section titled Background for 
Determining Source Size/Threshold for Non-EGU Emissions Sources in 
the memorandum titled Assessing Non-EGU Emission Reduction 
Potential, available in the docket for this proposed rule.
    \111\ The maximum emission reduction algorithm assigns to each 
source the single measure (if a measure is available for the source) 
that provides the maximum reduction to the target pollutant, 
regardless of cost. For more information, see the CoST User's Guide 
available at the following link: https://www.cmascenter.org/cost/
documentation/3.5/CoST%20User's%20Guide/.
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    For the 12 linked states, EPA categorized the CoST results for 
control technologies that comprise approximately 92 percent of the 
total estimated potential emissions

[[Page 68994]]

reductions from the non-EGU sources with 150 tpy or more of 
NOX emissions in these states; \112\ those technologies and 
related emissions sources are summarized in Table VII.B.2-1 below. In 
tranche one before further refinement and verification, the number of 
emissions units CoST applied SCR to was 51 and the number of emissions 
units CoST applied SNCR to was 23. The estimated emissions reductions 
from those control applications were 12,724 ozone season tons. In 
tranche two before further refinement and verification, the number of 
emissions units CoST applied layered combustion to was 49, the number 
of emissions units CoST applied NSCR or layered combustion to was 65, 
and the number of emissions units CoST applied ultra-low NOX 
burner and SCR to was 56. The estimated emissions reductions from those 
control applications were 17,283 ozone season tons. EPA then calculated 
a weighted average cost per ton (in 2016$) for estimated potential 
reductions associated with each control technology and plotted the 
weighted average cost per ton values. From the resulting curve, EPA 
identified a clear break point that defined two tranches of potential 
emissions reductions, as shown in Table VII.B.2-1. For additional 
details on the curve and the potential emissions reductions in tranches 
one and two, please see the memorandum titled Assessing Non-EGU 
Emission Reduction Potential, available in the docket for this proposed 
rule.
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    \112\ CoST applied a few additional controls that are not 
commonly used and did not result in significant additional emissions 
reductions. Ten different control technology applications make up 
the remaining 8 percent of the control technology applications. 
Compared to the five technologies EPA assessed further, these ten 
control technology applications do not, individually or 
collectively, have the potential to result in significant additional 
emissions reductions. For additional details, see the technical 
memorandum titled Assessing Non-EGU Emission Reduction Potential and 
the Excel workbook titled Control Summary--Max Emission Reduction 
$10k 150 tpy cutoff 12 States Updated Modeling--No Replace--05-18-
2020.xlsx in the docket for this proposed rule.
    \113\ For the emissions unit estimated to generate emissions 
reductions at $64 per ton, the emissions and cost estimates were 
incorrect. The 2023 projected emissions for the unit were 
significantly overestimated as a result of a growth factor EPA 
received for these emissions from a multi-jurisdictional partner 
organization. Further, the equation used to estimate the cost was 
mis-specified in CoST, and the true cost is likely on the order of 
$800 per ton. Changes to these underlying factors will likely guide 
an updated assessment for a final rulemaking.

               Table VII.B.2-1--Details on Tranches One and Two of Potential Emissions Reductions
----------------------------------------------------------------------------------------------------------------
                                                                              Weighted average
                 Tranche                    Technologies/industry sectors or   cost (2016$ per     Cost range
                                                     source groups                  ton)         (2016$ per ton)
----------------------------------------------------------------------------------------------------------------
Tranche One..............................  SCR/Glass Manufacturing, IC                   2,000    64 \113\-5,700
                                            Engines.
                                           SNCR/Cement Manufacturing........
Tranche Two..............................  Layered Combustion/Lean Burn IC         5,000-6,600       1,400-9,700
                                            Engines.
                                           NSCR or Layered Combustion/
                                            Industrial Rich Burn Natural Gas
                                            IC Engines *.
                                           Ultra-low NOX Burner and SCR/
                                            Industrial Boilers.
----------------------------------------------------------------------------------------------------------------
Note: * NSCR is non-selective catalytic reduction, a control technology applicable to rich-burn natural gas-
  fired IC engines.

    Given the large number of emissions units in a given industry 
sector that could require control installation, EPA does not have 
detailed information on the time needed to install all of the control 
technologies identified in Table VII.B.2-1. Any installation timing 
estimates would need to reflect the time needed to install controls 
across a potentially large number of sources, the time needed to have 
NOX monitoring installed, and other steps in the permitting 
and construction processes. EPA previously examined the time necessary 
to install some of the controls indicated in Table VII.B.2-1 for 
different industries in the 2016 Final Technical Support Document (TSD) 
for the Final Cross-State Air Pollution Rule for the 2008 Ozone NAAQS, 
Assessment of Non-EGU NOX Emission Controls, Cost of 
Controls, and Time for Compliance Final TSD (``CSAPR Update Non-EGU 
TSD''), which is discussed in Section VII.C.2. EPA expects that the 
controls for glass furnaces and cement kilns would take at least 2 
years to install on a sector-wide basis across the 12-state region 
affected by this proposed rule. Therefore, based on the information 
available to us at this time, EPA proposes that the 2023 ozone season 
is the earliest ozone season by which these non-EGU controls could 
likely be installed. EPA thus concludes that no NOX controls 
for non-EGUs included in this cost analysis can be installed by the 
2021 ozone season. Additional information on installation times for 
non-EGU NOX controls can be found in Section VII.C.
3. Mobile Source NOX Mitigation Strategies
    Under a variety of CAA programs, EPA has established federal 
emissions and fuel quality standards that reduce emissions from cars, 
trucks, buses, nonroad engines and equipment, locomotives, marine 
vessels, and aircraft (i.e., ``mobile sources''). Because states are 
generally preempted from regulating new vehicles and engines with 
certain exceptions (see generally CAA sections 209, 177), mobile source 
emissions are primarily controlled through EPA's federal programs. EPA 
has been regulating mobile source emissions since it was established as 
a federal agency in 1970, and all mobile source sectors are currently 
subject to NOX emissions standards. EPA factors these 
standards and associated emission reductions into its baseline air 
quality assessment in good neighbor rulemaking, including in this 
action. Such reductions are an important reason for the historical and 
long-running trend of improving air quality in the United States. These 
trends help explain why the overall number of receptors and severity of 
ozone nonattainment problems under the 2008 ozone NAAQS continues to 
decline. Such data are factored into EPA's analysis at steps 1 and 2 of 
the 4-step framework. As a result of this long history, NOX 
emissions from onroad and nonroad mobile sources have substantially 
decreased (73 percent and 57 percent since 2002, for onroad and 
nonroad, respectively) \114\ and are predicted to continue to decrease 
into the future as newer vehicles and engines that are subject to the 
most recent, stringent standards replace older vehicles and 
engines.\115\
---------------------------------------------------------------------------

    \114\ US EPA. Our Nation's Air: Status and Trends Through 2019. 
https://gispub.epa.gov/air/trendsreport/2020/#home.
    \115\ National Emissions Inventory Collaborative (2019). 2016v1 
Emissions Modeling Platform. Retrieved from http://views.cira.colostate.edu/wiki/wiki/10202.
---------------------------------------------------------------------------

    For example, in 2014 EPA promulgated new, more stringent emissions 
and fuel standards for light-

[[Page 68995]]

duty passenger cars and trucks.\116\ The fuel standards took effect in 
2017, and the vehicle standards are phasing in between 2017 and 2025. 
Other EPA actions that are continuing to reduce NOX 
emissions include the Heavy-Duty Engine and Vehicle Standards and 
Highway Diesel Fuel Sulfur Control Requirements (66 FR 5002; January 
18, 2001); the Clean Air Nonroad Diesel Rule (69 FR 38957; June 29, 
2004); the Locomotive and Marine Rule (73 FR 25098; May 6, 2008); the 
Marine Spark-Ignition and Small Spark-Ignition Engine Rule (73 FR 
59034; October 8, 2008); the New Marine Compression-Ignition Engines at 
or Above 30 Liters per Cylinder Rule (75 FR 22895; April 30, 2010); and 
the Aircraft and Aircraft Engine Emissions Standards (77 FR 36342; June 
18, 2012).
---------------------------------------------------------------------------

    \116\ Control of Air Pollution from Motor Vehicles: Tier 3 Motor 
Vehicle Emission and Fuel Standards, 79 FR 23414 (April 28, 2014).
---------------------------------------------------------------------------

    EPA is currently developing a new regulatory effort to reduce 
NOX and other pollution from heavy-duty trucks (known as the 
Cleaner Trucks Initiative), as described in the January 21, 2020, 
Advance Notice of Proposed Rulemaking (85 FR 3306). Heavy-duty vehicles 
are the largest contributor to mobile source emissions of 
NOX and will be one of the largest mobile source 
contributors to ozone in 2025.\117\ Reducing heavy-duty vehicle 
emissions nationally would improve air quality where the trucks are 
operating as well as downwind. As required by CAA section 202(a)(3)(A) 
of the Act, EPA will be proposing NOX emission standards 
that ``reflect the greatest degree of emission reduction achievable 
through the application of technology which the Administrator 
determines will be available for the model year to which such standards 
apply, giving appropriate consideration to cost, energy, and safety 
factors associated with the application of such technology.'' Section 
202(a)(3)(C) requires that standards apply for no less than 3 model 
years and apply no earlier than 4 years after promulgation.
---------------------------------------------------------------------------

    \117\ Zawacki et al, 2018. Mobile source contributions to 
ambient ozone and particulate matter in 2025. Atmospheric 
Environment. Vol 188, pg 129-141. Available online: https://doi.org/10.1016/j.atmosenv.2018.04.057.
---------------------------------------------------------------------------

    Given these requirements, EPA is considering implementation of new 
heavy-duty NOX emission standards beginning in model year 
2027. In addition, any new rulemaking process for other mobile source 
sectors would not achieve actual NOX emissions reductions 
before 2025, given the lead time necessary for EPA and for 
manufacturers.
    However, EPA's existing regulatory program will continue to reduce 
NOX emissions into the future, and EPA is currently taking 
active steps to ensure that these NOX reductions occur. The 
CAA prohibits tampering with emissions controls, as well as 
manufacturing, selling, and installing aftermarket devices intended to 
defeat those controls. EPA currently has a National Compliance 
Initiative called ``Stopping Aftermarket Defeat Devices for Vehicles 
and Engines,'' which focuses on stopping the manufacture, sale, and 
installation of hardware and software specifically designed to defeat 
required emissions controls on onroad and nonroad vehicles and engines.

C. Control Stringencies Represented by Cost Threshold ($ per ton) and 
Corresponding Emission Reduction Potential

1. EGU Emissions Reduction Potential by Cost Threshold
    For EGUs, as discussed in section VII.A, the multi-factor test 
considers increasing levels of uniform control stringency, where each 
level is represented by cost per ton of emissions reduced, in 
combination with consideration of total NOX reduction 
potential and corresponding air quality improvements. To determine 
which cost thresholds to use to assess upwind state NOX 
mitigation potential, EPA evaluated EGU NOX control costs 
that represent the thresholds at which various control technologies are 
widely available (described previously in section VII.B.1), the use of 
certain cost thresholds in previous rules to address ozone transport, 
and cost thresholds incorporated into state requirements to address 
ozone nonattainment.
    EPA began by determining the appropriate range of costs to 
evaluate. In the CSAPR Update, $1,400 per ton in 2011$ was the EGU 
NOX cost threshold relied upon to partially address 
obligations in time for the 2017 ozone season. This figure represented 
the lowest marginal cost where EPA expects SCR optimization at all 
existing SCR controls (including fully idled controls \118\) to be 
cost-effective. Based on our assessment of EGU NOX 
mitigation strategies, this same technology would now have a cost of 
$1,600 per ton in 2016$.\119\ Specifically, the cost of this approach 
to NOX reduction is the marginal cost of optimizing existing 
SCRs at higher levels of NOX removal than they are currently 
achieving if their current rate is greater than 0.08 lb/mmBtu. Given 
that EPA has already determined this technology is cost-effective and 
reasonable to consider for significant contribution determination in 
the CSAPR Update (and those determination were not remanded), EPA has 
not included a representation of mitigation technologies with any lower 
cost levels in this proposal's analyses in Step 3. (Further, as 
explained below, such analysis is not necessary for purposes of 
checking for overcontrol at the selected cost threshold.)
---------------------------------------------------------------------------

    \118\ EPA had estimated an $800 threshold representing 
optimizing SCRs for existing SCRs currently in some level of 
operation. See 81 FR 7540-41. In this action, EPA has combined this 
level of control into the $1600 control strategy for EGUs.
    \119\ Note, a portion of the cost increase from $1400 to $1600 
is simply adjusting from 2011$ to 2016$, but some is also due to 
change in material costs.
---------------------------------------------------------------------------

    EPA then evaluated EGU NOX cost thresholds to determine 
an appropriate upper bound for our assessment. EPA identified $9,600 
per ton as an upper bound as it represented the most stringent 
mitigation technology (SCR retrofit) that EPA identified in its 
assessment. EPA seeks comment on whether $1,600 per ton is an 
appropriate minimum and $9,600 per ton is an appropriate maximum 
uniform cost threshold to evaluate for the purpose of quantifying EGU 
NOX reductions to reduce interstate ozone transport for the 
2008 ozone NAAQS (Comment C-6).
    EPA then determined appropriate EGU NOX cost thresholds 
to evaluate within the range of $1,600 per ton to $9,600 per ton and 
identified two additional thresholds. Table VII.C.1-1 lists the EGU 
NOX cost thresholds evaluated and the NOX 
reduction strategy or policy used to identify each cost threshold. As 
described above in Section VII.B, these cost thresholds are informed by 
our assessment of the costs at which EGU NOX control 
strategies are widely available. Evaluating additional cost thresholds 
in between the four thresholds EPA identifies here would not yield 
meaningful insights as to NOX reduction potential. EPA-
selected cost thresholds represent the points at which specific control 
technologies become widely available and thereby where the most 
significant incremental emission reduction potential is expected. 
Analyzing costs between these cost thresholds is not expected to reveal 
significant incremental emission reduction potential that isn't already 
anticipated at the analyzed cost thresholds.

[[Page 68996]]



  Table VII.C.1-1--EGU NOX Cost Thresholds and NOX Reduction Strategies
------------------------------------------------------------------------
  EGU NOX cost threshold (2016$)
               \120\                             Technology
------------------------------------------------------------------------
$1,600 per ton....................  Fully operating all existing post-
                                     combustion SCR controls and
                                     combustion control installation or
                                     upgrade.
$3,900 per ton....................  Widespread availability of
                                     restarting idled SNCRs.
$5,800 per ton....................  Widespread availability of new
                                     SNCRs.
$9,600 per ton....................  Widespread availability of new SCRs.
------------------------------------------------------------------------

    EPA proposes that this range and selection of uniform cost 
thresholds are appropriate to evaluate potential EGU NOX 
reduction obligations to address interstate ozone transport for the 
2008 ozone NAAQS. Because these cost thresholds are linked to costs at 
which EGU NOX mitigation strategies become widely available 
in each state, the cost thresholds represent the break points in a 
marginal cost curve at which the most significant step-changes in EGU 
NOX mitigation are expected. EPA seeks comment on these 
uniform technologies and their representative cost thresholds for the 
purpose of quantifying EGU NOX reductions to reduce 
interstate ozone transport for the 2008 ozone NAAQS (Comment C-7).
---------------------------------------------------------------------------

    \120\ The cost assessment for new SNCR is available in the EGU 
NOX Mitigation Strategies TSD.
---------------------------------------------------------------------------

    The tables below summarize the emission reduction potentials (in 
absolute ozone season tonnages) from these technologies across the 12-
state region. Table VII.C.1-2 focuses on near-term mitigation 
technologies while Table VII.C.1-3 includes mitigation technologies 
with extended time frames for implementation.

                      Table VII.C.1-2--EGU Ozone-Season Emission Reduction Potential--2021
----------------------------------------------------------------------------------------------------------------
                                                                       Reduction potential (tons) at various
                                                                          representative marginal cost *
                                                                 -----------------------------------------------
                                                   Baseline 2021                        SCR          SCR/SNCR
                      State                           OS NOX            SCR       optimization +  optimization +
                                                                   optimization     LNB upgrade     LNB upgrade
                                                                    ($1600 per      ($1600 per      ($3900 per
                                                                       ton)            ton)            ton)
----------------------------------------------------------------------------------------------------------------
Illinois........................................           9,688             243             243             602
Indiana.........................................          15,856           3,356           3,388           3,821
Kentucky........................................          15,588           1,204           3,652           3,762
Louisiana.......................................          15,488              86             617           1,255
Maryland........................................           1,565              43              68             225
Michigan........................................          13,893           1,166           2,126           2,351
New Jersey......................................           1,346              92              92              89
New York........................................           3,187              50              50             149
Ohio............................................          15,832           6,227           6,227           6,350
Pennsylvania....................................          11,570           3,494           3,494           3,779
Virginia........................................           4,592              48             520             663
West Virginia...................................          15,165           1,479           2,352           2,719
                                                 ---------------------------------------------------------------
    Total.......................................         123,770          17,489          22,829          25,765
----------------------------------------------------------------------------------------------------------------
* EPA shows reduction potential from state-of-the-art LNB upgrade as a near-term reduction technology but
  explains in section VII.B and VII.D that this reduction potential would not be implemented until 2022. Sum of
  state values may vary slightly from total due to rounding.


                      Table VII.C.1-3--EGU Ozone-Season Emission Reduction Potential--2025
----------------------------------------------------------------------------------------------------------------
                                                  Reduction Potential (tons) at various  representative marginal
                                                                           cost levels *
                                                 ---------------------------------------------------------------
                                                                                     SCR/SNCR        SCR/SNCR
                                   Baseline 2025        SCR          SCR/SNCR     optimization +  optimization +
              State                   OS NOX      optimization +  optimization +   LNB upgrade +   LNB upgrade +
                                                    LNB upgrade     LNB upgrade       * SNCR           * SCR
                                                    ($1600 per      ($3,900 per      retrofit        retrofit
                                                       ton)            ton)         ($5,800 per     ($9,600 per
                                                                                       ton)            ton)
----------------------------------------------------------------------------------------------------------------
Illinois........................           8,478             201             540           1,104           1,452
Indiana.........................          12,755           3,308           3,665           3,973           4,490
Kentucky........................          15,588           3,652           3,762           5,088           6,736
Louisiana.......................          15,488             617           1,255           1,494           2,852
Maryland........................           1,565              68             225             225             326
Michigan........................          10,841           1,228           1,439           2,300           3,527
New Jersey......................           1,346              92              89              89              89
New York........................           3,169              50             149             149             149
Ohio............................          15,917           6,240           6,369           6,369           6,791
Pennsylvania....................          11,570           3,494           3,779           3,922           3,992

[[Page 68997]]

 
Virginia........................           3,912             517             658             658             890
West Virginia...................          13,407           1,596           1,960           1,960           3,838
                                 -------------------------------------------------------------------------------
    Total.......................         114,035          21,064          23,891          27,332          35,133
----------------------------------------------------------------------------------------------------------------
* Both tables C.1-2 and C.1-3 include limited generation shifting (reflecting that which would occur at the
  price level consistent with control operation). It does not factor in generation shifting reduction potential
  that may be attributable to incremental new builds or incremental retirements. Sum of state values may vary
  slightly from total due to rounding.

    As discussed in section VII.B.1.e, in prior actions, EPA has noted 
39-48 months as an appropriate implementation timeframe for regionwide 
actions when EPA is evaluating multiple installations at multiple 
locations. The start of the 2024 ozone-season would only allow 
approximately 36 months from the effective date of this rule for post 
combustion controls to be regionally installed and operating. The 2025 
ozone season represents a period approximately 48 months after EPA 
anticipates taking final action on this proposal and reflects a more 
demonstrably possible window for making retrofits on a regional scale. 
Therefore, EPA proposes that 2025 is the earliest ozone season by which 
new SNCR or SCR may be installed across multiple EGUs on a regional 
basis.
    Installing new SCR or SNCR controls for EGUs generally involves the 
following steps: Conducting an engineering review of the facility to 
determine suitability and project scope; advertising and awarding a 
procurement contract; obtaining a construction permit; installing the 
control technology; testing the control technology; and obtaining or 
modifying an operating permit. These timeframes are intended to 
accommodate a plant's need to conduct an engineering assessment of the 
possible NOX mitigation technologies necessary to then 
develop and send a bid request to potential suppliers. Control 
specifications are variable based on individual plant configuration and 
operating details (e.g., operating temperatures, location restrictions, 
and ash loads). Before making potential large capital investments, 
plants need to complete these careful reviews of their system to inform 
and develop the control design they request. They then need to solicit 
bids, review bid submissions, and award a procurement contract--all 
before construction can begin.
    Scheduled curtailment, or planned outage, for pollution control 
installation would also be necessary to complete SCR or SNCR projects 
on a regional scale. Given that peak demand and rule compliance would 
both fall in the ozone season, sources would likely need to schedule 
installation projects for the ``shoulder'' seasons (i.e., the spring 
and/or fall seasons), when electricity demand is lower than in the 
summer, reserves are higher, and ozone season compliance requirements 
are not in effect. If multiple units were under the same timeline to 
complete the retrofit projects as soon as feasible from an engineering 
perspective, this could lead to bottlenecks of scheduled outages as 
each unit attempts to start and finish its installation in roughly the 
same compressed time period. Thus, any compliance timeframe that would 
assume installation of new SCR or SNCR controls should be developed to 
reasonably encompass multiple shoulder seasons to accommodate 
scheduling of curtailment for control installation purposes and better 
accommodate the regional nature of the program.\121\
---------------------------------------------------------------------------

    \121\ The workforce disruption experienced at the onset of the 
COVID-19 pandemic has resulted in a backlog of scheduled outages for 
power plant maintenance. According to Genscape, PJM (a regional 
transmission organization covering a substantial portion of the EGUs 
affected by this rule) observed a shortfall of more than a quarter 
of planned outages for power plant maintenance in the spring 2020 
shoulder season. Finn, Pat; Szumloz, Zach; Gordon, Elliot. Impacts 
of the Coronavirus on the PJM Power Market, Taking a Closer Look at 
Demand, Supply, Energy Prices, and Congestion. Genscape, A Wood 
Mackenzie Business. April 2020.
---------------------------------------------------------------------------

    Finally, the time lag observed between the planning phase and in-
service date of SCR operations in certain cases also illustrates that 
site-specific conditions can lead to installation times of four years 
or longer--even for individual power plants. For instance, SCR projects 
for units at the Ottumwa power plant (Iowa), Columbia power plant 
(Wisconsin), and Oakley power plant (California) were all in the 
planning phase in 2014. By 2016, these projects were under construction 
with estimated in-service dates of 2018.\122\ Further, large-scale 
projects also illustrate that timelines can extend beyond the general 
estimate for a single power plant when the project is part of a larger, 
multifaceted air pollution reduction goal. For instance, the Big Bend 
power plant in Florida completed a multifaceted project that involved 
adding SCRs to all four units as well as converting furnaces, over-fire 
air changes, and making windbox modifications, during which a decade 
elapsed between the initial planning stages and completion.\123\
---------------------------------------------------------------------------

    \122\ 2014 EIA Form 860. Schedule 6. Environmental Control 
Equipment.
    \123\ Big Bend's Multi-Unit SCR Retrofit. Power Magazine. March 
1, 2010. Available at http://www.powermag.com/big-bends-multi-unit-scr-retrofit/.
---------------------------------------------------------------------------

    EPA notes that differences between these control technologies exist 
with respect to the potential viability of achieving cost-effective, 
regional NOX reductions from EGUs. SCR controls generally 
achieve greater EGU NOX reduction efficiency (up to 90 
percent) than SNCR controls (25 percent). EPA observes that for the 
remaining uncontrolled coal fleet in the 12 states, SCRs are, on 
average, more expensive on a cost per ton basis. However, the analysis 
in the NOX Mitigation Strategies Proposed Rule TSD notes 
that the cost range varies widely for units depending on inlet 
NOX rate and capacity factor. Therefore, for some units, it 
is possible that SCR retrofit costs are lower than SNCR costs on a cost 
per ton basis. Moreover, there are a host of other market and policy 
drivers that may lead a specific unit to prefer a

[[Page 68998]]

SCR retrofit over a SNCR retrofit. As a result, EPA believes it is 
reasonable to allow sufficient time for EGU operators to assess whether 
either an SNCR or an SCR would be an appropriate post-combustion 
control technology choice in response to a multi-state emission control 
program with the flexibility of interstate allowance trading. To allow 
for that potential determination, EPA is using an SCR-inclusive 
planning and installation schedule to represent new post-combustion 
retrofit potential on a regional basis (be it SNCR or SCR as determined 
by individual EGU owners under our flexible market-based emission 
trading program).
    Furthermore, SNCR installation at an individual source would render 
later installation of an SCR less cost-effective, because such a unit 
would have already expended some unrecoverable capital on the less-
effective pollution control technology. As a result, it would be 
counterproductive to assume EGUs should install the less effective SNCR 
technology to address a short-run air quality concern under an older 
and less stringent NAAQS when it may later prove necessary to require 
the more effective SCR technology to address longer-run air quality 
concerns under a more stringent NAAQS for the same pollutant. 
Considering these factors, EPA believes it is appropriate to give 
particular weight to the timeframe required for implementation of SCR 
across the region as compared to SNCR to allow sources the flexibility 
to make the most efficient post-combustion control investment. 
Historically, units have chosen to retrofit with higher performing SCR 
at a much greater rate than they have chosen SNCR. For SCR, the total 
time associated with project development is estimated to be up to 39 
months for an individual power plant installing controls on more than 
one boiler. However, more time is needed when considering installation 
timing for new SCR controls regionally. EPA has previously determined 
that a minimum of 48 months (four years) is a reasonable time period to 
allow to complete all necessary steps of SCR projects at EGUs on a 
regional scale. This timeframe would allow for regional implementation 
of these controls (i.e., at multiple power plants with multiple 
boilers) considering the necessary stages of post-combustion control 
project planning, shepherding of labor and material supply, 
installation, coordination of outages, testing, and operation.\124\
---------------------------------------------------------------------------

    \124\ Final Report: Engineering and Economic Factors Affecting 
the Installation of Control Technologies for Multipollutant 
Strategies, EPA- 600/R-02/073 (Oct. 2002), available at https://nepis.epa.gov/Adobe/PDF/P1001G0O.pd.
---------------------------------------------------------------------------

    In addition to its engineering assessment, EPA looked at historical 
data to validate this 39-48 month installation timeframe. EPA observed 
over 12 GW of uncontrolled coal capacity in the linked states covered 
in this rule. For comparison, EPA looked at the last 15 years of data 
to see if a similar amount of capacity had come online in a shorter 
time frame. It observed that it had not. Most notably, the CAIR was 
finalized in March of 2005 covering much of the Eastern U.S. and drove 
significant SCR retrofit activity, with incentives for early 
installation and reductions. From this date, 39-48 months would have 
placed the SCRs online in the mid 2008 to 2009 time frame. The graphic 
below illustrates an uptick in coal-fired capacity retrofitted with 
SCRs in response to the rule (Figure VII.D.2). Most of this capacity 
comes online in 2009 and 2010. Although EPA data on when sources 
started planning these controls and whether it was driven purely by 
CAIR or other factors is not perfect, it finds the chart below 
consistent with its determination that a 39-48 month time frame is 
reasonable for SCR retrofit possibility on a regional level.
[GRAPHIC] [TIFF OMITTED] TP30OC20.000

2. Non-EGU Emission Reduction Potential by Cost Threshold
    EPA performed a similar analysis of reduction potential for the 
non-EGU mitigation technologies identified, as discussed in section 
VII.B.2 of this notice. EPA identified two tranches of controls for 
non-EGU emissions sources associated with two levels of weighted 
average cost per ton. EPA's assessment of emission reduction potential 
from the controls in these tranches reflects significant uncertainty 
resulting from the current information available to the Agency. Because 
information for existing controls on non-EGU emissions sources is 
missing in the 2016 base year

[[Page 68999]]

inventory for some states and incomplete for some sources, EPA went 
through a process to further verify existing control information and 
refine the NOX emission reduction potential estimated by 
CoST, the CMDb, and the 2023 projected inventory. Because of the data- 
and research-intensive nature of the process, this verification process 
focused on a subset of the 12 linked states, where the control measures 
applied resulted in the greatest potential air quality impact. The 
steps EPA took, discussed in more detail below, include:
     Considered the air quality impacts by state and focused on 
upwind states with the largest estimated potential air quality impacts 
from potential non-EGU emission reductions;
     Assumed that the potential reductions in tranche one were 
potentially cost-effective because tranche one's weighted average cost 
of $2,000 per ton is similar to the proposed control stringency for 
EGUs represented by $1,600 per ton (see section VII.D.1);
     Looked at potential emissions reductions in tranche one 
that were estimated to cost less than $2,000 per ton; and
     For those potential reductions in tranche one that were 
estimated to cost less than $2,000 per ton, reviewed online facility 
permits and industrial trade literature to verify and determine if the 
estimated emissions reductions may be actual, achievable emissions 
reductions.
    First, to narrow the number of states for which the Agency verified 
existing control information and refined the NOX emission 
reduction estimates the Agency considered the potential air quality 
impacts by state and focused the assessment on the upwind states with 
the largest estimated potential air quality impacts: Indiana, New York, 
Ohio, Pennsylvania, and West Virginia.\125\ EPA identified these states 
using an estimate of 0.02 ppb as a threshold for air quality 
improvement that may be obtained from reductions from non-EGUs in each 
state. The Agency is not applying a 0.02 ppb impact threshold as a step 
in the step 3 multi-factor test. Rather, this threshold value allowed 
the Agency to better target its efforts toward the potentially 
effective states for non-EGU NOX emissions reductions. For 
additional discussion on the air quality impacts by state, see the 
section titled Air Quality Impacts from Potential Non-EGU Emissions 
Reductions in the technical memorandum titled Assessing Non-EGU 
Emission Reduction Potential in the docket for this proposed rule.
---------------------------------------------------------------------------

    \125\ There were no potential NOX emissions 
reductions from New Jersey because the projected 2023 emissions 
inventory did not include non-EGU point sources in New Jersey with 
pre-control NOX emissions greater than 150 tpy for which 
the Agency had applicable control measures.
    \126\ In the memorandum titled Assessing Non-EGU Emission 
Reduction Potential, the section titled Conclusions of Verification 
and Review of Controls on Non-EGU Sources in Four States and 
Potential Emissions Reductions includes a discussion related to the 
underlying uncertainty in these estimates of emissions reductions. 
The sources of uncertainty are related to future emissions 
estimates, a possible June 2020 unit shut down, and a unit that may 
already be controlled.
---------------------------------------------------------------------------

    Next, to narrow the set of emissions sources in those states for 
which EPA would verify existing control information and refine the 
NOX emission reduction estimates, the Agency assumed that 
the potential reductions in tranche one were potentially relatively 
cost-effective because tranche one's weighted average cost of $2,000 
per ton is similar to the proposed control stringency for EGUs 
represented by $1,600 per ton (see section VII.D.1).
    Next, EPA looked at potential emissions reductions in tranche one 
that were estimated to cost less than $2,000 per ton. Before refining 
the emission reduction estimates in tranche one, the total estimated 
emissions reductions for the non-EGU sources in Indiana, New York, 
Pennsylvania, and Ohio are 7,556 ozone season tons. The estimated 
emissions reductions in tranche one in those states that cost less than 
$2,000 per ton are 6,346 ozone season tons, or 84 percent of the total. 
Note that no potential emissions reductions at a cost of less than 
$2,000 per ton were identified in West Virginia because CoST originally 
estimated control costs for two IC engines in West Virginia 
inappropriately, and CoST did not identify likely cost-effective 
controls for any other non-EGU emissions units in the state. EPA 
removed the two IC engines in West Virginia from further consideration 
because the corrected potential cost was greater than $2,000 per ton. 
In reviewing the potential controls in tranche one that were estimated 
to cost less than $2,000 per ton for Indiana, New York, Pennsylvania, 
and Ohio, EPA found that these reductions were from SCR applied to 
glass furnaces and SNCR applied to cement kilns.
    Next, to verify the information on the application of these 
controls and estimated emissions reductions, EPA reviewed facilities' 
online title V permits and industrial trade literature for the likely 
cost-effective emissions reductions associated with SCR applied to 
glass furnaces and SNCR applied to cement kilns. Of the 20 emissions 
units in Indiana, New York, Pennsylvania, and Ohio included in the cost 
analysis, source permits identified that 10 units (i) already have 
controls and monitors (primarily CEMS), (ii) are installing controls 
and CEMS or consolidating operations in the next few years as a result 
of recent consent decrees issued as part of EPA's New Source Review Air 
Enforcement Initiative, (iii) have shut down, or (iv) are planning to 
shut down by 2023. The results of the online permit review and review 
of industrial trade literature, summarized in Table VII.C.2-1 below, 
suggest that approximately 14 percent of the CoST-estimated potential 
emissions reductions in these four states may be possible to achieve. 
EPA expects that the controls for glass furnaces and cement kilns would 
take at least 2 years to install on a sector-wide basis across the 12-
state region affected by this proposed rule. Therefore, based on the 
information available to us at this time, EPA believes that the 2023 
ozone season is the earliest ozone season by which these non-EGU 
controls could likely be installed. For additional details on the 
review of online permits and industrial trade literature, please see 
the memorandum titled Assessing Non-EGU Emission Reduction Potential, 
available in the docket for this proposed rule.

                            Table VII.C.2-1--Status of Potential Emissions Reductions
----------------------------------------------------------------------------------------------------------------
                                                                     Number of
                                                                     emissions        OS tons       (Percent of
                                                                       units                          total)
----------------------------------------------------------------------------------------------------------------
Shutdowns.......................................................               4             824              13
Lehigh Cement--Kiln Replacements................................               3             366               6
NEI Discrepancy/Uncertain \126\.................................               1           3,286              51
Already Controlled/Uncertain....................................               5             967              15

[[Page 69000]]

 
Possible Emissions Reductions...................................               7             903              14
                                                                 -----------------------------------------------
    TOTAL.......................................................              20           6,346  ..............
----------------------------------------------------------------------------------------------------------------

    EPA has also previously examined the time necessary to install the 
controls indicated in the table above (with details on the technology 
tranches) for different industries. The 2016 CSAPR Update Non-EGU TSD 
provided preliminary estimates of installation times for a variety of 
NOX control technologies applied to a large number of 
sources in non-EGU industry sectors.\127\ For virtually all 
NOX controls applied to cement manufacturing and glass 
manufacturing, information on installation times was not available to 
provide an estimate, and that the installation time for these controls 
was ``uncertain.'' There was an exception for SNCR applied to cement 
kilns; however, the installation time estimate of 42-51 weeks listed in 
the CSAPR Update Non-EGU TSD does not account for implementation across 
multiple sources, the time needed to have NOX monitoring 
installed, and other steps in the permitting and construction 
processes.
---------------------------------------------------------------------------

    \127\ The CSAPR Update Non-EGU TSD is available on EPA's website 
at the following link: https://www.epa.gov/airmarkets/assessment-non-egu-NOx-emission-controls-cost-controls-and-time-compliance-final-tsd.
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    To improve upon information from the CSAPR Update Non-EGU TSD on 
installation times for SCR on glass furnaces and SNCR on cement kilns, 
EPA reviewed information from permitting actions and a consent decree. 
For two glass manufacturing facilities that installed SCR on glass 
furnaces, from the time of permit application to the time of SCR 
operation was approximately 19 months for one facility and is currently 
at least 20 months for another facility.\128\ These installation times 
do not reflect time needed for pre-construction design and engineering, 
financing, and factors associated with scaling up construction services 
for multiple installations at several emissions units. With respect to 
cement kilns, an April 2013 consent decree between EPA and CEMEX, Inc. 
required installation of SNCR at a kiln within 450 days, or 
approximately 15 months, of the effective date of the consent decree. 
Similarly, this installation time does not reflect time associated with 
scaling up construction services for multiple control installations at 
several emissions units.
---------------------------------------------------------------------------

    \128\ Cardinal FG Company submitted a permit application to the 
Wisconsin Department of Natural Resources (WIDNR) to construct an 
SCR in December 2017 at a facility in Portage, Wisconsin. The SCR 
was expected to be ready for testing in mid-July 2019. In addition, 
Cardinal FG Company submitted a permit application to the WIDNR to 
construct an SCR in January 2019 at a facility in Menomonie, 
Wisconsin. The SCR is currently not operational.
---------------------------------------------------------------------------

    This information and EPA's general experience indicate that a two-
year installation timeframe for a rule requiring installation of new 
control technologies across a variety of emissions sources in several 
industry sectors on a regional basis is a relatively fast installation 
timeframe. A shorter installation timeframe of approximately one year 
(i.e., in time for the 2022 ozone season) would raise significant 
challenges for sources, suppliers, contractors, and other economic 
actors, potentially including customers relying on the products or 
services supplied by the regulated sources.\129\
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    \129\ We note that in several places, the CAA itself indicates a 
general congressional expectation that the retrofit of emissions 
controls onto existing sources across diverse industry sectors and 
at a regional or national scale may take at least several years. For 
instance, under CAA section 112(i)(3), Congress allowed for up to 
three years for compliance with control requirements in national 
rules for hazardous air pollutants for existing sources. And under 
CAA section 169A(g)(4), Congress established up to five years for 
the installation of best available retrofit technology (BART) for 
over two-dozen source categories. While these provisions also call 
for installation ``as expeditiously as practicable,'' we note that 
both of these timeframes are longer than the two-year estimate EPA 
proposes to use in this rulemaking.
---------------------------------------------------------------------------

    Thus, for purposes of this proposed rule, EPA estimates that these 
controls for glass furnaces and cement kilns would take at least 2 
years to install on a sector-wide basis across the 12-state region; 
therefore, based on the information available, EPA proposes that the 
2023 ozone season is the earliest ozone season by which these non-EGU 
controls could likely be installed.

D. Assessing Cost, EGU and Non-EGU NOX Reductions, and Air 
Quality

    To determine the emissions that are significantly contributing to 
nonattainment or interfering with maintenance, EPA applied the multi-
factor test to EGUs and non-EGUs separately, considering for each the 
relationship of cost, available emission reductions, and downwind air 
quality impacts. Specifically, EPA determined the appropriate level of 
uniform NOX control stringency that addresses the impacts of 
interstate transport on downwind nonattainment or maintenance 
receptors. EPA also evaluated possible over-control by determining if 
an upwind state is linked solely to downwind air quality problems that 
could have been resolved at a lower cost threshold, or if an upwind 
state could have reduced its emissions below the 1 percent air quality 
contribution threshold at a lower cost threshold.
1. EGU Assessment
    For EGUs, EPA examined the impacts of each EGU cost threshold 
identified in section VII.C.1 on the air quality at downwind receptors. 
Specifically, EPA identified the projected air quality improvement 
relative to the base case, as well as whether the air quality 
improvements are sufficient to shift the status of receptors from 
nonattainment to maintenance or from maintenance to clean. Combining 
these air quality factors, cost, and emission reductions, EPA 
identified a control strategy for EGUs at a stringency level that 
maximizes cost-effective emission reductions. This control strategy 
reflects the optimization of existing SCR controls and installation of 
state-of-the-art NOX combustion controls, with an estimated 
marginal cost of $1,600 per ton. EPA's evaluation also shows that 
emission budgets reflecting the $1,600 per ton cost threshold do not 
over-control upwind states' emissions relative to either the downwind 
air quality problems to which they are linked at step 1 or the 1 
percent contribution threshold that triggers further evaluation at step 
2 of the 4-step framework for the 2008 ozone NAAQS. To assess downwind 
air quality impacts for each nonattainment and maintenance receptor 
identified in section VI.C, EPA evaluated the air quality change at 
that receptor expected from the progressively more stringent upwind EGU 
control stringencies that

[[Page 69001]]

were available for that time period. This assessment provides the 
downwind ozone improvements for consideration and provides air quality 
data that is used to evaluate potential over-control.
    To assess the air quality impacts of the various control 
stringencies, EPA evaluated changes resulting from the application of 
the emissions reductions at the cost thresholds to states that are 
linked to each receptor as well as the state containing the receptor. 
By applying the cost threshold to the state containing the receptor, 
EPA assumes that the downwind state will implement (if it has not 
already) an emissions control strategy for their sources that is of the 
same stringency as the upwind control strategy identified here. 
Consequently, EPA explicitly ensures that it is accounting for the 
downwind state's fair share (which is a part of the overcontrol 
evaluation).\130\
---------------------------------------------------------------------------

    \130\ This step is irrelevant in the analysis for the 
Connecticut receptors because that state shows no EGU reduction 
potential from the EGU control optimization or retrofit technologies 
identified given its already low-emitting fleet.
---------------------------------------------------------------------------

    For states that were not linked to that receptor, the air quality 
change at that receptor was evaluated assuming emissions equal to the 
engineering analytics base case emission level. This method holds each 
upwind state responsible for its fair share of the specific downwind 
problems to which it is linked. For states that are not linked to that 
receptor (even if they are linked to a different receptor), EPA assumes 
that they are not making emission reductions beyond those in the base 
case to that receptor. In practice, because these states, by 
definition, do not impact such receptors above the contribution 
threshold, the changes in emissions have little to no effect on the 
non-linked receptor. Furthermore, if EPA were to explicitly consider 
these reductions within the framework, it would introduce 
interdependency into the solution for significant contribution. The 
state-and-receptor-specific definition of significant contribution 
would devolve into a simultaneous regional action, where particular 
states would have to either ``go first'' or where non-linked states 
would shoulder burdens to receptors to which they are not linked while 
other linked states would do less. In any case, EPA has verified that 
even if it were to account for non-linked state reductions under the 
selected control stringency, the changes in concentrations at the 
receptors are so small that they do not affect the attainment or 
maintenance status of any receptor.
    For this assessment, EPA used an ozone air quality assessment tool 
(ozone AQAT) to estimate downwind changes in ozone concentrations 
related to upwind changes in emission levels. EPA used this tool to 
analyze the years for which downwind nonattainment and maintenance 
problems persist for the 2008 ozone NAAQS. Under the base case, EPA 
projects that such air quality problems persist through 2025. 
Therefore, EPA focused its assessment on the years 2021 through 2025.
    This tool is similar to the AQAT tool used in the CSAPR Update to 
evaluate changes in ozone concentrations. The ozone AQAT uses 
simplifying assumptions regarding the relationship between each state's 
change in NOX emissions and the corresponding change in 
ozone concentrations at nonattainment and maintenance receptors to 
which that state is linked. This method is calibrated using two CAMx 
air quality modeling scenarios that fully account for the non-linear 
relationship between emissions and air quality associated with 
atmospheric chemistry. The two CAMx modeling scenarios are the 2016 
base year and the 2023 fh1 future year scenarios for the 2021 time 
period. For the 2024 and 2025 AQAT simulations, the two CAMx modeling 
scenarios are the 2023 fh1 future year and the 2028 fh1 scenario. See 
the Ozone Transport Policy Analysis Proposed Rule TSD for additional 
details.
    For each EGU cost threshold, EPA first evaluated the magnitude of 
the change in ozone concentrations at the nonattainment and maintenance 
receptors for each relevant year. EPA next evaluated whether the 
estimated change in concentration would resolve the receptor's 
nonattainment or maintenance concern by lowering the average or maximum 
design values below 76 ppb, respectively. For a complete set of 
estimates, see the Ozone Transport Policy Analysis Proposed Rule TSD or 
the ozone AQAT excel file.
    In 2021, there are two nonattainment receptors and two maintenance 
receptors (see section VI.C for details). EPA evaluated the air quality 
improvements at the four receptors at the two EGU cost threshold levels 
that are available in the near-term (i.e., $1,600 per ton and $3,900 
per ton).\131\ EPA found that the average air quality improvement at 
the four receptors relative to the engineering analytics base case was 
0.19 ppb at $1,600 per ton and 0.23 ppb at $3,900 per ton (see Table 
VII.D.1-2). EPA found that the Westport receptor (090019003) remains 
nonattainment at all cost levels, the Stratford receptor (090013007) 
switches from nonattainment to maintenance at $1,600 per ton (i.e., its 
average DV becomes clean but its maximum DV remains above the NAAQS), 
while the Houston receptor (482010024) remains maintenance at all 
levels. Lastly, the New Haven receptor has all nonattainment and 
maintenance resolved in the engineering analytics base case. For more 
information about how this assessment was performed and the results of 
the analysis for each receptor, refer to the Ozone Transport Policy 
Analysis Proposed Rule TSD and to the Ozone AQAT included in the 
docket.
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    \131\ The $1,600 per ton cost threshold level includes full 
implementation of mitigation technologies available at that level 
(SCR optimization and state-of-the-art combustion controls).

                                                      Table VII.D.1-1--Air Quality at the Four Receptors in 2021 at Various Cost Thresholds
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Baseline       $1,600/ton      $3,900/ton       Baseline       $1,600/ton      $3,900/ton
                                                                                                 -----------------------------------------------------------------------------------------------
             Monitor ID No.                          State                      County              Average DV      Average DV      Average DV
                                                                                                       (ppb)           (ppb)           (ppb)       Max DV (ppb)    Max DV (ppb)    Max DV (ppb)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
90013007................................  Connecticut...............  Fairfield.................           76.10           75.88           75.86           77.02           76.80           76.78
90019003................................  Connecticut...............  Fairfield.................           78.26           78.08           78.06           78.56           78.39           78.37
90099002................................  Connecticut...............  New Haven.................           73.56           73.32           73.29           75.72           75.47           75.44
482010024...............................  Texas.....................  Harris....................           75.61           75.49           75.39           77.25           77.12           77.02
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Average AQ Improvement Relative to Base (ppb)...............................................            0.00            0.19            0.23
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 69002]]

    Figure 1 illustrates the air quality improvement relative to the 
marginal cost per control technology for the controls associated with 
the near-term cost thresholds of $1,600 per ton and $3,900 per ton. EPA 
combines costs, EGU NOX reductions, and corresponding 
improvements in downwind ozone concentrations, which results in a 
``knee-in-the-curve'' graph, with the ``knee'' at a point where 
emission budgets reflect a control stringency with an estimated 
marginal cost of $1,600 per ton. This level of stringency in emission 
budgets represents the level at which incremental EGU NOX 
reduction potential and corresponding downwind ozone air quality 
improvements are maximized with respect to marginal cost. That is, the 
ratio of emission reductions to marginal cost and the ratio of ozone 
improvements to marginal cost are maximized relative to the other 
emission budget levels evaluated. The more stringent emission budget 
levels (e.g., emission budgets reflecting $3,900 per ton or greater) 
yield fewer additional emission reductions and fewer air quality 
improvements relative to the increase in control costs. This evaluation 
shows that EGU NOX reductions are available at reasonable 
cost and that these reductions can provide improvements in downwind 
ozone concentrations at the identified nonattainment and maintenance 
receptors.
[GRAPHIC] [TIFF OMITTED] TP30OC20.002

    EPA proposes that the $1,600 per ton level control strategy, 
associated with optimizing existing SCRs and ensuring that state of the 
art combustion controls have been fully installed or upgraded, is a 
relatively highly cost-effective level of control (reflected as being 
the ``knee-in-the-curve''), and should therefore be required to address 
significant contribution in the 12 linked states. EPA observes this 
$1,600 per ton level of stringency results in a substantial number of 
emissions reductions totaling nearly 23,000 tons (19 percent of the 
baseline level), resulting in all downwind air quality problems for the 
2008 ozone NAAQS being resolved after 2024 (one year earlier than the 
base case). There are also projected changes in receptor status (from 
projected nonattainment to maintenance-only) for the Stratford and 
Westport receptors (the first in 2021, the second in 2024). In 
addition, the Houston receptor changes from maintenance to attainment 
in 2023. In 2021, the average level of improvement in ozone 
concentrations at all four of the receptors is 0.19 ppb.
    By comparison, the next, more stringent mitigation technology 
available in 2021 (i.e., SNCR optimization at $3,900 per ton) yields 
incremental emission reductions of approximately only 3,000 tons. This 
has a much smaller average air quality improvement of just 0.04 ppb in 
2021. Further, this smaller benefit comes at a substantial increase in 
marginal costs. Moreover, analysis using the AQAT tool suggests this 
strategy had no further impact on receptors' status. EPA examined the 
total number of SNCR-controlled coal units in the 12 linked states. A 
small portion of the coal fleet had this technology in place (14 
percent), and of that small portion, the majority of the units with 
these SNCR controls had emission rates of 0.13 lb/mmBtu or less (many 
operating less than 0.1 lb/mmBtu), suggesting they were already 
optimizing their SNCRs. Given the small portion of the coal fleet 
covered by this technology in the 12 linked states, combined with the

[[Page 69003]]

relatively low emission rate on average suggesting ongoing control 
operation, EPA observed few additional reductions. Given the cost, 
available reductions, and corresponding air quality improvement, EPA 
proposes to determine that the potential emission reductions associated 
with a control strategy of optimizing existing SNCR are not required to 
eliminate significant contribution from the 12 linked states under the 
2008 ozone NAAQS.
    Controls associated with the above strategies are implementable by 
the 2021 ozone season (or in the case of upgraded or new combustion 
controls, by the 2022 ozone season; see the discussion in section VII.C 
and in the NOX Mitigation Strategies TSD for details). Thus, 
as to the 2021 and 2022 ozone seasons these are the only control 
strategies for EGUs that EPA is assessing for this timeframe because 
they are the only ones that are possible. See Wisconsin, 938 F.3d at 
320.
    As discussed above in Section VII.C, EPA estimates that the time 
necessary to install new SNCR or new SCR controls (represented by 
$5,800 per ton and $9,600 per ton) on a regional basis across multiple 
EGUs is approximately 39 to 48 months. While a single new SNCR may be 
installed within 16 months, for the reasons explained in Section VII.C, 
a time frame that encompasses the ability for a unit to make a unit-
specific choice of what post-combustion control (SCR or SNCR) is best 
for its configuration and future operating plans is appropriate. 
Therefore, the timing estimate for SNCR and SCR is considered together 
and the 39-48 month time frame for SCR installation is the most 
appropriate time period to use for assessing post-combustion controls. 
Assuming a final rule in the spring of 2021, this means that these 
controls could not be operational prior to the 2024 ozone-season, and 
therefore the reduction potential is not available until the 2025 ozone 
season. According to EPA's air quality assessment, there are no 
remaining air quality receptors in 2025 assuming a $1,600 per ton 
control strategy for EGUs is already in place in the 12 linked states. 
Therefore, it is not necessary to require emission controls that can 
only be operational at a point in time when EPA's projections 
demonstrate there is no remaining interstate transport problem.
    EPA is requesting comment on this proposal's determination that new 
post-combustion controls (SCR or SNCR) are not possible to implement on 
a regional basis by the start of the 2024 ozone season (Comment C-8). 
In the event that updated analysis, either via public comments or other 
information, shows that post-combustion controls may be possible across 
multiple EGUs on a regional basis before the 2024 ozone season, EPA 
requests comment on whether the emission reduction potential of new 
post-combustion controls (SCR or SNCR) at EGUs, on a regional basis, 
may constitute significant contribution to nonattainment and/or 
interference with maintenance (Comment C-9). EPA anticipates that such 
analysis would be applied to the foreseeable circumstances of downwind 
receptors under the 2008 ozone NAAQS and would require assessment under 
the multi-factor test set forth in this section (as applied to other 
emission control strategies). This includes an analysis of cost, 
emission reduction potential, and downwind air quality impacts. EPA 
also believes that the degree of nonattainment or maintenance problem 
anticipated at downwind receptors at the time such controls are 
purported possible would be a relevant consideration.
2. Non-EGU Assessment
    The Agency used CoST and the 2023 projected inventory to identify 
uncontrolled emissions sources or units and applied controls to 
emissions units with 150 tpy or more of pre-control NOX 
emissions, which is an emissions threshold comparable to 25 MW for 
EGUs. EPA categorized the CoST results by the control technologies, 
calculated a weighted average cost per ton (in 2016$) for emissions 
reductions associated with each technology, and identified two tranches 
of potential reductions based on estimated cost effectiveness (for 
details see Section VII.B.2). EPA took a series of steps to further 
verify and refine the NOX emission reduction potential 
estimated by CoST, the CMDb, and the 2023 projected inventory and found 
that the cost-effective emissions reductions in tranche one were from 
SCR applied to glass furnaces and SNCR applied to cement kilns. These 
controls could likely take 2-4 years to install; therefore, at the time 
of this proposal, EPA does not believe these non-EGU controls can be 
installed prior to the 2023 ozone season (for details see Section 
VII.C.2).
    Using 2023 as the potential earliest date by which controls for 
glass furnaces and cement kilns can be installed, EPA assessed whether 
these emission reduction strategies should be required at Step 3 under 
its multi-factor test. First, the Agency extended the findings for 
glass furnaces and cement kilns from the five states for which the 
Agency refined the data--Pennsylvania, New York, Ohio, Indiana, and 
West Virginia--to the five other states linked to an air quality 
receptor in 2023--Michigan, Illinois, Kentucky, Virginia, and 
Maryland.\132\ For the other five states, because the Agency was not 
able to verify the existing control information or refine the emission 
reduction potential through the online permit and trade literature 
review in the time available, the Agency conservatively assumed that 
all of the CoST-estimated emissions reductions were real emissions 
reductions. Combining the results from the refined assessment for five 
states with the assumption that all of the reductions from the other 
five states are real emissions reductions, EPA estimated that across 
the 11 states linked to the remaining receptor in Connecticut in 2023 
(Westport), the available emissions reductions from tranche one at less 
than $2,000 per ton are 1,567 ozone season tons.\133\ Using AQAT, EPA 
assessed whether this level of emissions reductions would have a 
meaningful effect on the Connecticut receptor. EPA found that the total 
improvement in air quality from these emissions reductions is 0.03 ppb. 
This potential air quality improvement is an order of magnitude less 
than the air quality improvement EPA expects to obtain from the 
comparable $1,600 per ton control strategy for EGUs in 2023, which is 
estimated to improve air quality at the remaining Connecticut receptor 
by 0.30 ppb. Based on this assessment, then the Agency proposes under 
the multi-factor test that even the potentially most cost-effective 
reductions from non-EGU sources (i.e., those below $2,000 per ton in 
tranche one) do not rise to the level of ``significance'' that would 
justify mandating them under the good neighbor provision for the 2008 
ozone NAAQS. As discussed in more detail in its request for comments 
below, because of EPA's relatively incomplete and

[[Page 69004]]

uncertain datasets on which it based this proposed analysis, EPA 
encourages stakeholder comments on the analysis and proposed conclusion 
with respect to the tranche one non-EGU control strategies (Comment C-
10).
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    \132\ Louisiana is excluded from this analysis because the 
Houston, Texas receptor to which it is linked is projected to be 
neither a nonattainment nor a maintenance receptor by the 2023 ozone 
season based on the CAMx modeling with IPM emissions. In addition, 
New Jersey is not included because there were no potential 
NOX emissions reductions from New Jersey because the 
projected 2023 emissions inventory did not include non-EGU point 
sources in New Jersey with pre-control NOX emissions 
greater than 150 tpy for which the Agency had applicable control 
measures.
    \133\ The 1,567 ozone season tons is a total of 903 tons from 
Table VII.C.2.1 and 664 ozone season tons from the 5 states 
(Michigan, Illinois, Kentucky, Virginia, and Maryland) for which we 
did not conduct an online permit review and verify the estimated 
emissions reductions. The estimated 664 tons can be found in the 
Excel workbook titled CoST Control Strategy--Max Reduction $10k 150 
tpy cutoff 12 States updated Modeling--No Replace--07-23-2020.xlsx 
in the SCR and SNCR Summary worksheet.
---------------------------------------------------------------------------

    Turning to tranche two, EPA believes the amount of time needed to 
install controls or retrofit the 111 non-EGU emissions units identified 
in tranche two likely extends beyond the 2021 Serious area attainment 
date; therefore, similar to tranche one, EPA assumes the installation 
times are no earlier than the 2023 ozone season. In tranche two, the 
weighted average cost of the estimated emissions reductions from non-
EGU emissions sources ranges from $5,000 to $6,600 per ton. In the 11 
linked states, the Agency identified approximately 11,100 tons of 
potential ozone season emissions reductions by applying layered 
combustion, NSCR (non-selective catalytic reduction) or layered 
combustion, and ultra-low NOX burners in combination with 
SCR to 111 emissions units in the oil and gas industry and several 
manufacturing industries. EPA did not further verify and refine these 
estimated emissions reductions and believes the estimate of available 
emission reductions could be lower because the inventory can be missing 
information on controls on existing emissions sources and CoST may be 
applying controls to already controlled sources. In Section VII.D.2.a 
below, EPA seeks comment on the feasibility of further controlling 
NOX from IC engines and large ICI boilers, including 
optimizing combustion and installing ultra-low NOX burners.
    EPA's assessment is that, with the proposed control strategy for 
EGUs in place (see section VII.D.1.), there will no longer be any 
downwind receptors in 2025 with respect to the 2008 ozone NAAQS. 
Focusing then on whether there are any non-EGU NOX emissions 
reductions available to address significant contribution under the Step 
3 multi-factor test in either the 2023 or 2024 ozone seasons, based on 
its assessment EPA proposes to conclude that any such potentially 
available reductions would not be justified. EPA's proposed assessment 
is that there is a relatively smaller quantity of NOX 
reductions that may be available from the non-EGU control strategies in 
tranches one and two in these years, across the 11 states linked to the 
remaining receptor. These control strategies are estimated to have a 
limited impact on further improving air quality at this receptor. As 
shown in the Ozone Policy Analysis TSD, the incremental effects of 
emission reductions from non-EGUs do not affect the status of any of 
the four receptors in any of the relevant years compared with the 
$1,600 per ton EGU policy scenario. For more information, refer to the 
Ozone Transport Policy Analysis Proposed Rule TSD. EPA therefore 
proposes to conclude that no emission reductions from non-EGU sources 
are necessary to eliminate significant contribution under the good 
neighbor provision for the 2008 ozone NAAQS.
a. Request for Comment on Non-EGU Control Strategies and Measures
    Recognizing the limitations and uncertainties in the existing data 
on which EPA bases this proposal, EPA is requesting comment to assist 
in substantiating whether this assessment is fully supportable based on 
additional information and analyses not currently available to the 
Agency (Comment C-11). To develop a more complete record, EPA requests 
comment on a number of questions related to specific control strategies 
the Agency evaluated, and in particular seeks feedback and data from 
stakeholders with relevant expertise or knowledge. Should such 
additional information and analyses show that emissions reductions from 
non-EGU sources in the linked upwind states would be more cost-
effective than what is included in EPA's current assessment, available 
for installation earlier than EPA estimates, or more impactful on 
downwind air quality than EPA's current information suggests, then the 
Agency remains open to the possibility of finalizing a rule requiring 
such controls as may be justified under the Step 3 multi-factor test.
    EPA understands that the methodology employed was one approach to 
assessing emission reduction potential from non-EGU emissions sources 
or units and to determining an appropriate stringency level for non-EGU 
sources. In the time available, the Agency was not able to employ 
another methodology or conduct another assessment of other potential 
non-EGU control strategies or measures and verify the estimated 
emissions reductions in the same manner as it did for some of the 
tranche one states.
    As indicated in Section VII.C.2 above, information about existing 
controls on non-EGU emissions sources in the inventory was missing for 
some states and incomplete for some sources. The approach EPA used in 
this proposal was to assess emission reduction potential using CoST and 
the projected 2023 inventory to identify emissions units that were 
uncontrolled. Given that EPA's assessment of any other NOX 
control strategies would also rely on CoST, the CMDb, and the inventory 
to identify emissions units that were uncontrolled and to assess 
emission reduction potential from non-EGU sources, the Agency believes 
such an assessment would likely lead to a similar conclusion that 
estimated emission reduction potential is uncertain.
    As such, for this and future regulatory efforts, to improve the 
underlying data used in an assessment of emission reduction potential 
from non-EGU sources, EPA requests comments on: (i) The existing 
assessment of emission reduction potential from glass furnaces and 
cement kilns (Comment C-12); (ii) emission reduction potential from 
other control strategies or measures on a variety of emissions sources 
in several industry sectors (Comment C-13); and (iii) the feasibility 
of further controlling NOX from IC engines and large ICI 
boilers, including optimizing combustion and installing ultra-low 
NOX burners (Comment C-14). The three sections below 
introduce the areas for comment and describe workbooks generated by 
CoST, the CMDb, and the 2023 projected inventory with the underlying 
data to review for comment.
    First, EPA requests comment on the aspects of the assessment 
presented above of emission reduction potential from the glass and 
cement manufacturing sectors (Comment C-15). To help inform review and 
comments, please see the following Excel workbooks available in the 
docket and referenced in the memorandum titled Assessing Non-EGU 
Emission Reduction Potential: (i) For a summary of the CoST run results 
CoST Control Strategy--Max Reduction $10k 150 tpy cutoff 12 States 
Updated Modeling--No Replace--07-23-2020, and (ii) for summaries of 
emissions reductions by control technologies, Control Summary--Max 
Reduction $10k 150 tpy cutoff 12 States Updated Modeling--No Replace--
05-18-2020. Note that the CoST Control Strategy--Max Reduction $10k 150 
tpy cutoff 12 States Updated Modeling--No Replace--07-23-2020 Excel 
workbook includes a READ ME worksheet that provides details on the 
parameters used for the CoST run.
    Specifically, EPA is soliciting comment on the following:
     Are applying SCR to uncontrolled or under-controlled glass 
furnaces and SNCR to uncontrolled or under-controlled cement kilns in 
the linked states feasible approaches to achieve cost-effective 
emissions reductions? If not, what types of cost-effective controls can 
be applied to these sources?
     Does EPA have the right and most up to date information on 
emissions and

[[Page 69005]]

existing control technologies for the units included in this 
assessment? If not, what is the correct and more up to date 
information?
     After looking at the underlying CoST run results, are the 
cost estimates accurate and reasonable? If not, what are more accurate 
cost estimates?
     What is the earliest possible installation time for SCR on 
glass furnaces?
     What is the earliest possible installation time for SNCR 
on cement kilns?
     For the non-EGU facilities without any emissions monitors, 
what would CEMS cost to install and operate? How long would CEMS take 
to program and install?
    In addition to the assessment of emission reduction potential from 
the glass and cement manufacturing sectors, for the 12 linked states 
EPA attempted to summarize all potential control measures for emissions 
units with 150 tpy or more pre-control NOX emissions in 2023 
in several industry sectors. This information illustrates that there 
are many potential approaches to assessing emissions reductions from 
non-EGU emissions sources or units. EPA used the Least Cost Control 
Measure worksheet from a CoST run.\134\ By state for the 12 linked 
states and then by facility, this information is summarized in the 
Excel workbook titled CoST Control Possibilities $10k 150 tpy cutoff 12 
States Updated Modeling--06-30-2020, also available in the docket and 
referenced in the memorandum titled Assessing Non-EGU Emission 
Reduction Potential.
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    \134\ The Least Cost Control Measure worksheet is a table of all 
possible emissions source-control measure pairings (for sources and 
measures that meet the respective criteria specified for a control 
strategy), each of which contains information about the cost and 
emissions reductions achieved if the control measure were to be 
applied to the emissions source.
---------------------------------------------------------------------------

    Second, specifically EPA requests comment (Comment C-16) on the 
following:
     Other than glass and cement manufacturing, are there other 
sectors or sources that could achieve potentially cost-effective 
emissions reductions? What are those sectors or sources? What control 
technologies achieve the reductions? What are cost estimates and 
installation times for those control technologies?
     Are there other sectors where cost effective emission 
reductions could be obtained by, in lieu of installing controls, 
replacing older, higher emitting equipment with newer equipment?
     Are there sectors or sources where cost effective emission 
reductions could be obtained by switching from coal-fired units to 
natural gas-fired units?
     For non-EGU sources without emissions monitors, what would 
CEMS cost to install and operate? How long would CEMS take to program 
and install? Are monitoring techniques other than CEMS, such as 
predictive emissions monitoring systems (PEMS), sufficient for certain 
non-EGU facilities that would not be brought into a trading program? If 
so, for what types of non-EGU facilities, and under what circumstances, 
would PEMS be sufficient? What would be the cost to install and operate 
monitoring techniques other than CEMS?
    Third, in the workbook titled CoST Control Possibilities $10k 150 
tpy cutoff 12 States Updated Modeling--06-30-2020 EPA included two 
worksheets with information on controls for ICI boilers and IC engines: 
(i) Boilers--ULNB and (ii) IC Engines--LEC. For the 12 linked states, 
EPA summarized CoST's application of ultra-low NOX burners 
(ULNB) on ICI boilers and low emission combustion (LEC) on IC engines. 
Assuming that the estimated emissions reductions from the application 
of these controls are real and cost-effective, there could be 
approximately 5,000 ozone season tons of emissions reductions from 52 
ICI boilers and 8,000 ozone season tons of emissions reductions from 69 
IC engines. This information is summarized in Table VII.D.2-1 below.

 Table VII.D.2-1--Summary of Potential Emissions Reductions From ULNB on
                    ICI Boilers and LEC on IC Engines
------------------------------------------------------------------------
                                            ICI boilers     IC engines
------------------------------------------------------------------------
Number of Emissions Units in the 12                   52              69
 Linked States..........................
2023 Projected Total NOX Emissions in              6,779           9,260
 the 12 Linked States (ozone season
 tons, reflects any existing control
 before ULNB or LEC were applied).......
2023 Projected Total NOX Emissions in              1,695  ..............
 the 12 Linked States after Applying
 ULNB to Boilers (ozone season tons)....
2023 Projected Total NOX Emissions in     ..............           1,231
 the 12 Linked States after Applying LEC
 to IC Engines (ozone season tons)......
Number of Units with No Known Existing                51              57
 Control................................
------------------------------------------------------------------------

    EPA is requesting comments on the feasibility of further 
controlling NOX from large ICI boilers and IC engines, 
including optimizing combustion and installing low NOX 
burners (Comment C-17). As mentioned in the discussion above on 
emissions reductions from the EGU sector, EPA understands that it is 
generally possible to install LNB on EGU boilers fairly quickly and 
that these burners can significantly reduce NOX emissions. 
EPA notes that in the original interstate transport rule, the 
NOX SIP call, the Agency concluded that controls on large, 
non-EGU boilers and turbines were cost effective and allowed states to 
include those emissions sources in their budgets as a means of 
providing additional opportunities to reduce state-wide NOX 
emissions in a cost-effective manner.\135\ Therefore, the Agency 
solicits comment on whether EPA should require that large non-EGU 
boilers and turbines--as defined in the NOX SIP call as 
boilers and turbines with heat inputs greater than 250 Million British 
Thermal Units (mmBtu) per hour or with NOX emissions greater 
than 1 ton per ozone season day \136\--within the 12 states employ 
controls that achieve emissions reductions greater than or equal to 
what can be achieved through the installation of low NOX 
burners (Comment C-18).
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    \135\ See 63 FR 57402 (October 27, 1998).
    \136\ Note that the 250 mmBTU/hr for ICI boilers and turbines is 
equivalent to 25 MW heat input for an EGU. The tonnage per source 
was 1 ton per ozone season day, and because controls on non-EGUs 
operate year-round, the emissions would be 365 tons per year.
---------------------------------------------------------------------------

    Also, five of the 12 states that are subject to this rulemaking are 
also within the Ozone Transport Region (OTR)--Maryland, New Jersey, New 
York, Pennsylvania, and Virginia. As member states of the OTR, these 
five states are required to implement reasonably available control 
technology

[[Page 69006]]

(RACT) state-wide on major sources of emissions.\137\ It is likely that 
NOX controls, such as low NOX burners, are 
already in wide-spread use within these five states. However, such 
controls may not be as widely used in states outside of the OTR. 
Therefore, the Agency also solicits comment on (i) the magnitude of the 
emissions reductions that could be achieved by requiring that large 
non-EGU boilers and turbines install controls that achieve emissions 
reductions greater than or equal to what could be achieved through the 
installation of low NOX burners, (ii) the prevalence of 
these or better NOX controls already in place on this 
equipment in these 12 states, and (iii) the time it typically takes to 
install such controls (Comment C-19).
---------------------------------------------------------------------------

    \137\ One exception to the requirement of state-wide RACT within 
the OTR is for Virginia. Only the Northeast portion of the state is 
included within the OTR and only facilities within that portion of 
the state are subject to RACT.
---------------------------------------------------------------------------

    In addition to the above, EPA is requesting comments on the 
following:
     How effective are ultra-low NOX burners or low 
NOX burners in controlling NOX emissions from ICI 
boilers?
     Are they generally considered part of the process or add-
on controls? If they are part of a process, how could EPA estimate the 
cost associated with changing the process to accommodate ultra-low 
NOX burners and low NOX burners?
     What are the costs (capital and annual) for these as add-
on control technologies on ICI boilers?
     What are the earliest possible installation times for 
these control technologies on ICI boilers? EPA believes it is generally 
possible to install low NOX burners on EGU boilers 
relatively quickly and that low NOX burners can 
significantly reduce NOX emissions. EPA solicits comment on 
whether this is also true for large non-EGU ICI boilers.
     Do some of the emissions units included in the summary 
already have either add-on controls or controls that are part of a 
process? If so, what control is on the unit and what is the control 
device (or removal) efficiency?
     Natural gas compressor stations are the largest 
NOX-emitting non-EGU sector \138\ affecting the 12 states 
that are the subject of this proposal, and many of these facilities are 
powered by decades-old, uncontrolled IC engines. Should emissions 
reductions be sought from the IC engines at these stations, either 
through installing controls, upgrading equipment, or other means?
---------------------------------------------------------------------------

    \138\ Based on data from the 2017 NEI database.
---------------------------------------------------------------------------

     How effective is low emission combustion in controlling 
NOX from IC engines?
     What is the cost (capital and annual) for low emission 
combustion on IC engines?
     What is the earliest possible installation time for low 
emission combustion on IC engines? In lieu of installing controls, is 
replacing older, higher emitting equipment with newer equipment a cost-
effective way to reduce emissions from IC engines?
     Do some of the emissions units included in the summary 
already have either add-on controls or controls that are part of a 
process? If so, what control is on the unit and what is the control 
device (or removal) efficiency?

EPA welcomes comments providing data and information on all of the 
above requests (Comment C-20). The Agency encourages stakeholders with 
particular expertise, such as source owners and operators, state 
agencies, trade associations, and knowledgeable non-governmental 
organizations, to evaluate the information available in the docket and 
presented above and provide updates, corrections, and other information 
as may assist in improving EPA's ability to more accurately assess non-
EGU emission control strategies relevant to addressing interstate ozone 
transport.
3. Overcontrol Analysis
    As part of the air quality analysis using the Ozone AQAT, EPA 
evaluated potential over-control with respect to whether (1) the 
expected ozone improvements would be greater than necessary to resolve 
the downwind ozone pollution problem (i.e., beyond what is necessary to 
resolve all nonattainment and maintenance problems to which an upwind 
state is linked) or (2) the expected ozone improvements would reduce 
the upwind state's ozone contributions below the screening threshold 
(i.e., 1 percent of the NAAQS; 0.75 ppb).
    In EME Homer City, the Supreme Court held that EPA cannot 
``require[] an upwind State to reduce emissions by more than the amount 
necessary to achieve attainment in every downwind State to which it is 
linked.'' 572 U.S. at 521. On remand from the Supreme Court, the D.C. 
Circuit held that this means that EPA might overstep its authority 
``when those downwind locations would achieve attainment even if less 
stringent emissions limits were imposed on the upwind States linked to 
those locations.'' EME Homer City II, 795 F.3d at 127. The D.C. Circuit 
qualified this statement by noting that this ``does not mean that every 
such upwind State would then be entitled to less stringent emission 
limits. Some of those upwind States may still be subject to the more 
stringent emissions limits so as not to cause other downwind locations 
to which those States are linked to fall into nonattainment.'' Id. at 
14-15. As the Supreme Court explained, ``while EPA has a statutory duty 
to avoid over-control, the Agency also has a statutory obligation to 
avoid `under-control,' i.e., to maximize achievement of attainment 
downwind.'' 572 U.S. at 523. The Court noted that ``a degree of 
imprecision is inevitable in tackling the problem of interstate air 
pollution'' and that incidental over-control may be unavoidable. Id. 
``Required to balance the possibilities of under-control and over-
control, EPA must have leeway in fulfilling its statutory mandate.'' 
Id.\139\
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    \139\ Although the Court described over-control as going beyond 
what is needed to address ``nonattainment'' problems, EPA interprets 
this holding as not impacting its approach to defining and 
addressing both nonattainment and maintenance receptors. In 
particular, EPA continues to interpret the Good Neighbor provision 
as requiring it to give independent effect to the ``interfere with 
maintenance'' prong. Accord Wisconsin, 938 F.3d at 325-27.
---------------------------------------------------------------------------

    Consistent with these instructions from the Supreme Court and the 
D.C. Circuit, EPA first evaluated whether reductions resulting from the 
proposed $1,600 per ton emission budgets for EGUs in 2021 and 2022 can 
be anticipated to resolve any downwind nonattainment or maintenance 
problems. This assessment shows that the emission budgets reflecting 
$1,600 per ton would change the status of one of the two nonattainment 
receptors (first shifting the Stratford monitor to a maintenance-only 
receptor in 2021 and then shifting that monitor to attainment in 2022). 
However, no other nonattainment or maintenance problems would be 
resolved in 2021 or 2022. EPA's assessment shows that none of the 11 
states are solely linked to the Stratford receptor that is resolved at 
the $1,600 per ton level of control stringency in 2022.
    Reductions resulting from the $1,600 per ton emission budgets for 
EGUs would shift the Houston receptor in Harris County, Texas, from 
maintenance to attainment in 2023. These emission reductions would also 
shift the last remaining nonattainment receptor (the Westport receptor 
in Fairfield, Connecticut) to a maintenance-only receptor in 2024. No 
nonattainment or maintenance receptors would remain after 2024.
    Next, EPA evaluated the potential for over-control with respect to 
the 1 percent of the NAAQS threshold applied in this proposed 
rulemaking at

[[Page 69007]]

step 2 of the good neighbor framework for the $1,600 per ton cost 
threshold level for each year downwind nonattainment and maintenance 
problems persist (i.e., 2021 through 2024). Specifically, EPA evaluated 
whether the emission levels would reduce upwind EGU emissions to a 
level where the contribution from any of the 12 upwind states would be 
below the 1 percent threshold that linked the upwind state to the 
downwind receptors. EPA finds that under the $1,600 per ton EGU cost 
threshold level for 2021 to 2024 emission levels, all 12 states that 
contributed greater than or equal to the 1 percent threshold in the 
base case continued to contribute greater than or equal to 1 percent of 
the NAAQS to at least one remaining downwind nonattainment or 
maintenance receptor for as long as that receptor remained in 
nonattainment or maintenance. For more information about this 
assessment, refer to the Ozone Transport Policy Analysis Proposed Rule 
TSD and the Ozone AQAT.
    Since emission reductions resulting from the proposed $1,600 per 
ton emission budgets for EGUs are not projected to result in the 
expected ozone improvements (1) being greater than necessary to resolve 
the downwind ozone pollution problem (i.e., beyond what is necessary to 
resolve all nonattainment and maintenance problems to which an upwind 
state is linked) or (2) reducing the upwind state's ozone contributions 
below the screening threshold (i.e., 1 percent of the NAAQS; 0.75 ppb), 
EPA concludes that the $1,600 control strategy does not result in 
overcontrol.
    Based on the multi-factor test applied to both EGU and non-EGU 
sources and subsequent assessment of overcontrol, EPA proposes to 
determine that the emission reductions associated with the $1,600 per 
ton control stringency for EGUs constitute elimination of significant 
contribution from the 12 linked upwind states. Therefore, as discussed 
in section VIII, EPA proposes to establish emission budgets for EGUs in 
the 12 linked states that reflect the remaining allowable emissions 
after the emissions reductions associated with the $1,600 per ton 
control stringency have been achieved.

VIII. Implementation of Emissions Reductions

A. Regulatory Requirements for EGUs

    The CSAPR established a NOX ozone season trading program 
for states determined in that rulemaking to have good neighbor 
obligations with respect to the 1997 ozone NAAQS. The CSAPR Update 
established a new NOX ozone season trading program for 22 
states determined to have good neighbor obligations with respect to the 
2008 ozone NAAQS--the CSAPR NOX Ozone Season Group 2 Trading 
Program--and renamed the NOX ozone season trading program 
established in the CSAPR, which now covers only Georgia, the CSAPR 
NOX Ozone Season Group 1 Trading Program.\140\ Each of these 
NOX ozone season trading programs established state-level 
budgets for EGUs and allowed affected sources within each state to use, 
trade, or bank allowances within the same trading group for compliance. 
In the CSAPR NOX Ozone Season Group 1 and Group 2 trading 
programs, sources are required to retire one Group 1 or Group 2 
allowance, respectively, for each ton of NOX emitted during 
a given ozone season. EPA is proposing to use the same regional trading 
approach, with modifications to reflect updated budgets, trading 
groups, and certain additional revisions, as the compliance remedy 
implemented through the FIPs to address interstate transport for the 
states having further good neighbor obligations with respect to the 
2008 ozone NAAQS in this rule.
---------------------------------------------------------------------------

    \140\ For states that were determined in the CSAPR Update to 
still have good neighbor obligations with respect to the 1997 ozone 
NAAQS in addition to the 2008 ozone NAAQS, participation in the 
Group 2 trading program replaced participation in the Group 1 
program as the FIP remedy for such states' obligations with respect 
to the 1997 NAAQS. See 81 FR 74509.
---------------------------------------------------------------------------

    Of the 22 states currently covered by the CSAPR NOX 
Ozone Season Group 2 Trading Program, EPA is proposing to establish 
revised budgets for 12 states, as explained below. Therefore, EPA is 
proposing the creation of an additional geographic group and trading 
program comprised of these 12 upwind states with remaining linkages to 
downwind air quality problems in 2021. This new group, Group 3, will be 
covered by a new CSAPR NOx Ozone Season Group 3 Trading Program. Aside 
from the removal of the 12 covered states from the current Group 2 
program, this proposal leaves unchanged the budget stringency and 
geography of the existing CSAPR NOX Ozone Season Group 1 and 
Group 2 trading programs.
    EPA is proposing to use the existing CSAPR NOX ozone 
season allowance trading system framework, established in the CSAPR for 
Group 1 and used again in the CSAPR Update for Group 2, to implement 
the emission reductions identified and quantified in the FIPs for this 
proposal. The new Group 3 trading program is proposed to be codified at 
40 CFR part 97, subpart GGGGG. As with the existing CSAPR trading 
programs, emissions monitoring and reporting would be performed 
according to the provisions of 40 CFR part 75, and decisions of the 
Administrator under the program would be subject to the administrative 
appeal procedures in 40 CFR part 78.

B. Quantifying State Emissions Budgets

    EPA is proposing to quantify state emission budgets consistent with 
the approach used in the CSAPR Update. However, given Wisconsin's 
direction to implement a full remedy, EPA must now address upwind 
emission reduction potential beyond the initial year for which it is 
establishing emission budgets. Whereas in the partial-remedy context of 
the CSAPR Update, EPA only established budgets based on its assessment 
of the 2017 analytic year and noted it would revisit future years at a 
later date, in this action EPA is simultaneously looking at budgets for 
all relevant future years to comply with the full-remedy directive. 
Consequently, for the Group 3 states EPA is proposing to quantify 
specific budgets in each year to ensure that EGUs continue to be 
incentivized to implement the full extent of EPA's selected control 
strategy while nonattainment and maintenance concerns at the linked 
downwind receptors remain unresolved. In effect, by doing this, EPA 
will be accounting for scheduled fleet turnover after the first-year 
budget. For instance, if State X's budget was 100 tons in 2021, but 
there are 10 tons of emissions from a unit scheduled to retire at the 
end of the year and 5 tons expected from a new unit coming online, then 
the state emission budget for 2022 would reflect these scheduled 
changes by establishing a budget of 100 tons--(10 tons -5 tons) = 95 
tons for the subsequent year. This adjustment in methodology reflects 
the need to anticipate and respond to scheduled fleet turnover in the 
power sector in ensuring that the control strategy selected to 
eliminate significant contribution remains incentivized. Based on the 
Agency's experience implementing prior good neighbor trading programs, 
emissions budgets that do not account for planned retirements in 
subsequent years lead to an erosion in the allowance price signal and 
hence a reduced incentive to take the mitigation measures identified in 
EPA's significant contribution determination (e.g., optimize SCRs). 
EPA's air quality projections demonstrate that even with a $1,600 per 
ton EGU strategy, the Group 3 states continue to contribute above the 1

[[Page 69008]]

percent of the NAAQS threshold to at least one receptor whose 
nonattainment and maintenance concerns persist through the 2024 ozone 
season (with the exception of Louisiana, as discussed in more detail 
below). As such, and in order to implement a full remedy as required 
under the Wisconsin decision, EPA proposes that it is necessary to 
design a Step 4 implementation framework that will effectively ensure 
the continued optimization of existing SCR and the incentive to install 
or upgrade combustion controls for so long as downwind nonattainment 
and maintenance concerns persist. Therefore, for all Group 3 states 
except Louisiana, the emission budget setting process described below 
applies to each year from 2021 through 2024, with the budgets held 
constant from 2024 onwards. For Louisiana, the emission budget setting 
process applies to 2021 and 2022 only, with the budget held constant 
from 2022 onwards, as the Houston receptor is resolved in 2023.
    EPA is not proposing to increase the stringency of the program over 
these years in the sense of requiring any further emissions reductions 
than the control strategy represented by $1600 per ton achieves. 
Rather, these budget adjustments account for pre-existing, on-going 
changes in the EGU sector, which if not accounted for, could 
significantly weaken the incentive to optimize existing SCR and install 
or upgrade combustion controls. By determining emissions budgets for a 
given mitigation technology across a range of years (e.g., 2021-2024), 
EPA is able to best reflect the realization of that mitigation strategy 
in any given year. For instance, a unit may be scheduled to retire 
(independent of any environmental regulation) in 2023. Therefore, the 
same $1,600 per ton uniform technology scenario (i.e., SCR optimization 
and combustion control installation or upgrade) will produce a 
different state emissions level (i.e., budget) in 2021 and 2024 due to 
this change in fleet composition. Having the emissions estimated for 
each year allows EPA to best ensure the reductions available from the 
identified control strategy continue to be achieved to eliminate that 
state's significant contribution. This type of phased implementation 
preserves the intended control stringency of the rule and is consistent 
with the direction under the Wisconsin decision to promulgate a full-
remedy rule. In prior trading programs, stakeholders have observed that 
the program's static emission budgets quickly fell behind the rapid 
pace of change in the power sector fleet. As this occurs, a large 
allowance bank builds and the price of allowances falls below the price 
in the initial years. For example, CSAPR Update Group 2 allowances 
started out at levels near $800 per ton in 2017 and provided a strong 
signal for the mitigation technology identified in the significant 
contribution determination. However, in subsequent years as the fleet 
of covered EGUs changed, the price of those allowances declined to less 
than $70 per ton in July 2020.\141\ Stakeholders have pointed out that 
these low prices could allow for some backsliding of the mitigation 
technologies (e.g., reduced incentive to operate a SCR) that were 
initially determined to be cost-effective and required to eliminate 
significant contribution. At the same time that the incentive for EPA's 
selected control strategy weakens, EPA's data shows that downwind air 
quality receptors continue to persist at Step 1, and the overall level 
of anthropogenic emissions from an upwind state continues to contribute 
to those receptors above the contribution threshold at Step 2. Under 
these conditions, a legal basis exists within EPA's 4-step framework to 
undertake measures that ensure EGUs continue to implement EPA's 
selected control strategy. Stated differently, EPA is confident that it 
is well within its statutory authority under CAA section 
110(a)(2)(D)(i)(I) to impose on each covered EGU in a linked Upwind 
state an emission limit that is enforceable and permanent, reflective 
of the control strategy EPA has determined is needed to eliminate 
significant contribution from that state. EPA is proposing an approach 
that better incentivizes the selected control strategy while retaining 
the flexible compliance benefits of an interstate-trading approach to 
implementation.\142\
---------------------------------------------------------------------------

    \141\ Data from S&P Global Market Intelligence.
    \142\ EPA continues to believe in the value of an interstate 
trading program for implementation of good neighbor obligations for 
EGUs. Through trading, the ultimate choice of compliance strategy is 
left to EGU owners and operators. EPA is not imposing an enforceable 
mandate that each EGU with an existing SCR or ability to install or 
upgrade combustion controls undertake the strategies represented by 
the $1600 per ton threshold. Sources have maximum flexibility to 
undertake compliance strategies that meet their specific operational 
and planning needs.
---------------------------------------------------------------------------

    In summary, in response to the Wisconsin court's direction to 
implement a full remedy, EPA is proposing to implement ozone season 
budgets for each year that reflect ongoing incentivization of the 
emission reduction measures identified in this rule, with a final 
budget being implemented in 2024 (the last year EPA projects downwind 
receptors to remain unresolved) and then held constant for each year 
thereafter. EPA requests comment on this approach (Comment C-21).
    EPA's proposed emissions budget methodology and formula for 
establishing Group 3 budgets are described in detail in the Ozone 
Transport Policy Analysis Proposed Rule TSD and summarized below.
    For determining emission budgets, EPA proposes to use historical 
ozone season data from the most recent year reported (that is, 2019 
ozone season data for this proposed rulemaking). This is similar to its 
approach in the CSAPR Update where EPA began with 2015 data (the most 
recent year at the time). Like the CSAPR Update methodology, EPA is 
proposing to combine historical data with IPM data to determine 
emission budgets. The budget setting process has three primary steps:
    (1) Determine a future year baseline--Start with the latest 
reported historical unit-level data (e.g., 2019), and adjust any unit 
data where a retirement or new build is known to occur by the baseline 
year. This results in a future year (e.g., 2021) baseline for emissions 
budget purposes.\143\
---------------------------------------------------------------------------

    \143\ EPA is using 2019 historical data at proposal because that 
was the latest available at that time. As 2020 data becomes 
available, EPA will evaluate it for potential use at the time of 
final rulemaking.
---------------------------------------------------------------------------

    (2) Factor in additional mitigation controls for the selected cost 
threshold (e.g., $1600 per ton). For the unit-level mitigation 
technologies identified at this cost level, adjust the baseline unit-
level emissions and emission rates. For example, if a SCR-controlled 
unit had a baseline greater than 0.08 lb/mmBtu, its rate and 
corresponding emissions would be adjusted down to levels reflecting its 
operation at 0.08 lb/mmBtu.
    (3) Incorporate generation shifting--Use IPM in relative way to 
capture the reductions expected from generation shifting at a given $ 
per ton level that reflects control optimization (constrained to 
within-state shifting).
    By using historical unit and state-level NOX emission 
rates, heat input, and emissions data at step 1 of the budget setting 
process, EPA is grounding its budgets in the most recent historical 
operation for the covered units.\144\ This data is a reasonable 
starting point for the budget setting process as it reflects the latest 
data reported by affected facilities under 40 CFR part 75. The 
reporting requirements

[[Page 69009]]

include quality control measures, verification measures, and 
instrumentation to best record and report the data. In addition, the 
designated representatives of EGU sources are required to attest to the 
accuracy and completeness of the data. In step 1 of the budget setting 
process, EPA first adjusted the 2019 ozone-season data to reflect 
committed fleet changes under a baseline scenario (i.e., announced and 
confirmed retirements, new builds, and retrofits that will, or have 
already occurred by 2021). For example, if a unit emitted in 2019, but 
retired in 2020, its 2019 emissions would not be included in the 2021 
estimate. For units that had no known changes, the 2021 emissions 
assumption was the actual reported data from 2019 at this first step of 
adjusting the baseline. EPA also included known new units and scheduled 
retrofits in this manner. Using this method, EPA arrived at a baseline 
emission, heat input, and emission rate estimate for each unit for a 
future year (e.g., 2021), and then was able to aggregate those unit-
level estimates to state-level totals. These state-level totals 
constituted the state's baseline from an engineering analytics 
perspective. The ozone-season state-level emissions, heat input, and 
emissions rates for covered sources under a baseline scenario were 
determined for each future year examined (2021 through 2024). Because 
2024 is the last ozone season that EPA projects continued contribution 
to any downwind receptors, 2024 is the last year EPA proposes to make 
an adjustment to emission budgets.
---------------------------------------------------------------------------

    \144\ EPA notes that historical state-level ozone season EGU 
NOX emission rates are publicly available and quality 
assured data. They are monitored using CEMs or other methodologies 
allowed for use by qualifying units under 40 CFR part 75 and are 
reported to EPA directly by power sector sources.
---------------------------------------------------------------------------

    For step two of the emissions budget setting process, EPA examined 
how the baseline emissions and emission rates would change under 
different mitigation cost threshold scenarios for EGUs. For instance, 
under the $1,600 per ton scenario, if a unit was not operating its SCR 
at 0.08 lb/mmBtu or lower in the baseline, EPA lowered that unit's 
assumed emission rate to 0.08 lb/mmBtu and calculated the impact on the 
unit's and state's emission rate and emissions. Note, the heat input is 
held constant for the unit in the process, reflecting the same level of 
unit operation compared to historical 2019 data. An improved emission 
rate is then applied to this heat input, reflecting control 
optimization. In this manner, the state-level baseline totals from step 
one reflecting known baseline changes were adjusted to reflect the 
additional application of the assumed control technology at a given 
cost threshold.
    Finally, at step three of the emissions budget setting process, EPA 
used IPM to capture any generation shifting at a given cost threshold 
(e.g., $1,600 per ton) necessary for the respective mitigation 
technology to operate. EPA explains how it accounts for generation 
shifting in more detail in in Section VII.B and in the Ozone Transport 
Policy Analysis TSD. In this rule, as a proxy for the near-term 
reductions required by 2021, EPA has constrained generation shifting to 
occur only within-state. As explained in the Ozone Transport Policy 
Analysis TSD, the degree to which generation shifting affects the 
budgets is small, accounting for approximately 2 percent of baseline 
emissions for each year.
    EPA requests comment on the proposed approaches described above, as 
well as alternatives discussed in the budget-setting TSD (Comment C-
22). Specifically, EPA requests comment on its consideration of using 
2020 data in place of 2019 data as the most recent historical data set 
to inform final rule budgets. Although the reduction potential 
associated with the selected control strategy described in section VII 
would likely not change substantially with that data set, the baseline 
values calculated in step one of the emissions budget setting process 
may change significantly and possibly result in lower or higher state-
level emission budgets.

C. Elements of Proposed Trading Program

    To implement the updated emissions budgets developed according to 
the process described in section VIII.B., EPA is proposing to require 
EGUs in each of the 12 covered states to participate in a new CSAPR 
NOX Ozone Season Group 3 Trading Program. The provisions of 
the new Group 3 trading program would be largely identical to the 
provisions of the Group 2 trading program in which all of the covered 
EGUs currently participate, except for the differences in state budgets 
and geography established in this rule to address the covered states' 
remaining obligations under CAA section 110(a)(2)(D)(i)(I) with respect 
to the 2008 ozone NAAQS. The only other differences between the new 
Group 3 trading program regulations and the current Group 2 trading 
program regulations are a small number of proposed corrections and 
administrative simplifications that have no effect on program 
stringency; EPA proposes to eliminate these differences by making the 
same corrections and simplifications to the regulations for the Group 2 
trading program and the other existing CSAPR trading programs.\145\ In 
this section, the Agency discusses major elements of the proposed 
trading program, with emphasis on the elements that differ from the 
existing provisions of the Group 2 trading program as well as several 
provisions specifically designed to address the transition from the 
Group 2 trading program to the Group 3 trading program. EPA requests 
comment on use of the proposed trading program to implement the 
emissions reductions that are proposed to be required under this action 
(Comment C-23).
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    \145\ The proposed corrections and simplifications generally 
would apply to each of the five existing CSAPR trading programs at 
subparts AAAAA through EEEEE of 40 CFR part 97, and a subset would 
also apply to the Texas SO2 Trading Program at subpart 
FFFFF of 40 CFR part 97. The specific proposed corrections and 
simplifications are described as applied to the new Group 3 trading 
program in sections VIII.C.1. through VIII.C.7. The same changes as 
applied to the existing programs are discussed in section VIII.C.8.
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1. Applicability
    In this rule, EPA proposes to use the same EGU applicability 
provisions in the new Group 3 trading program as it used in the 
existing Group 2 trading program and the other CSAPR trading programs, 
without change. Under the general CSAPR applicability provisions, a 
covered unit is any stationary fossil-fuel-fired boiler or combustion 
turbine serving at any time on or after January 1, 2005, a generator 
with nameplate capacity exceeding 25 MW, which is producing electricity 
for sale, with the exception of certain cogeneration units and solid 
waste incineration units.
2. State Budgets, Variability Limits, Assurance Levels, and Penalties
    EPA is proposing to establish revised state budgets for EGU 
emissions of ozone season NOX for the 12 ``Group 3'' states 
subject to new or amended FIPs in this proposed rule in order to fully 
address these states' significant contribution with respect to the 2008 
ozone NAAQS. The budgets would be established according to the process 
described in section VIII.B. As discussed in that section, for each of 
the covered states, separate budgets are proposed for the three 
individual years 2021, 2022, and 2023, and then for 2024 and 
beyond.\146\ Portions of the updated NOX ozone season 
emission budgets would be reserved as updated new unit set-asides and 
Indian country new unit set-asides for the same control periods, as 
further described in sections VIII.C.3.b. and VIII.C.3.c. The amounts

[[Page 69010]]

of the proposed state emissions budgets for 2021, 2022, 2023, and 2024 
and beyond are shown in tables VIII.C.2-1, VIII.C.2-2, VIII.C.2-3, and 
VIII.C.2-4.
---------------------------------------------------------------------------

    \146\ See section VIII.C.4.a. for a discussion of transitional 
provisions that would apply in the event that the effective date for 
a final action in this rulemaking is after May 1, 2021.
---------------------------------------------------------------------------

    The proposed requirement for EGU sources in these states to comply 
with the budgets established in this rulemaking will replace the 
existing requirements in these states under the CSAPR NOX 
Ozone Season Group 2 Trading Program established in the CSAPR Update. 
For Group 3 states that were found in the CSAPR Update to still have 
good neighbor obligations with respect to the 1997 ozone NAAQS, EPA 
proposes that participation in the more stringent Group 3 trading 
program would satisfy those obligations.\147\
---------------------------------------------------------------------------

    \147\ Out of the 12 states proposed for inclusion in the Group 3 
trading program, Illinois, Indiana, Kentucky, and Louisiana were 
found in the CSAPR Update to still have good neighbor obligations 
with respect to the 1997 ozone NAAQS. See 81 FR 74509 n.21 (November 
21, 2016).
---------------------------------------------------------------------------

    In the CSAPR and the CSAPR Update, EPA developed assurance 
provisions, including variability limits and assurance levels (with 
associated compliance penalties), to ensure that each state will meet 
its pollution control and emission reduction obligations and to 
accommodate inherent year-to-year variability in state-level EGU 
operations. Establishing assurance levels with compliance penalties 
responds to the D.C. Circuit's holding in North Carolina requiring EPA 
to ensure within the context of an interstate trading program that 
sources in each state are required to eliminate emissions that 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS in another state.\148\
---------------------------------------------------------------------------

    \148\ 531 F.3d at 908.
---------------------------------------------------------------------------

    The CSAPR Update budgets, and the updated CSAPR emission budgets 
proposed in this document, reflect EGU operations in an ``average 
year.'' However, year-to-year variability in EGU operations occurs due 
to the interconnected nature of the power sector, changing weather 
patterns, changes in electricity demand, or disruptions in electricity 
supply from other units or from the transmission grid. Recognizing 
this, the trading program provisions finalized in the CSAPR and the 
CSAPR Update rulemakings include variability limits, which define the 
amount by which an individual state's emissions may exceed the level of 
its budget in a given year to account for variability in EGU 
operations. A state's budget plus its variability limit equals a 
state's assurance level, which acts as a cap on a state's 
NOX emissions during a given control period (in this 
rulemaking, the relevant control period is the May-September ozone 
season). The new CSAPR NOX Ozone Season Group 3 Trading 
Program provisions established for affected sources in the 12 states 
subject to the new trading program under this proposed rule contain 
equivalent assurance provisions to the prior CSAPR trading programs.
    The variability limits ensure that the trading program can 
accommodate the inherent variability in the power sector while ensuring 
that each state eliminates the amount of emissions within the state, in 
a given control period, that must be eliminated to meet the statutory 
mandate of CAA section 110(a)(2)(D)(i)(I). Moreover, the structure of 
the trading program, which achieves required emission reductions 
through limits on the total numbers of allowances allocated, assurance 
provisions, and penalty mechanisms, ensures that the variability limits 
only allow the amount of temporal and geographic shifting of emissions 
that is likely to result from the inherent variability in power 
generation, and not from decisions to avoid or delay the optimization 
or installation of necessary controls.
    To establish the variability limits in the CSAPR, EPA analyzed 
historical state-level heat input variability as a proxy for emissions 
variability, assuming constant emission rates. See 76 FR 48265. The 
variability limits for ozone season NOX in both the CSAPR 
and the CSAPR Update were calculated as 21 percent of each state's 
budget, and these variability limits for the NOX ozone 
season trading programs were then codified in 40 CFR 97.510 and 40 CFR 
97.810, along with the respective state budgets. For this proposed 
rulemaking, EPA is proposing to retain variability limits for the 12 
Group 3 states covered by this rule calculated as 21 percent of each 
state's revised budget.\149\
---------------------------------------------------------------------------

    \149\ See section VIII.C.4.a. for a discussion of transitional 
provisions that would apply in the event that the effective date for 
a final action in this rulemaking is after May 1, 2021.
    \150\ The state-level emission budget calculations pertaining to 
Tables VIII.C.2-1 through VIII.C.2-4 are described in section 
VIII.B, and in greater detail in the Ozone Transport Policy Analysis 
TSD. Budget calculations and underlying data are also available in 
Appendix A of that TSD.

  Table VIII.C.2-1--CSAPR NOX Ozone Season Group 3 State Budgets, Variability Limits, and Assurance Levels for
                                                   2021 \150\
----------------------------------------------------------------------------------------------------------------
                                                                     Emission       Variability      Assurance
                              State                               budget  (tons)   limit  (tons)   level  (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................................................           9,444           1,983          11,427
Indiana.........................................................          12,500           2,625          15,125
Kentucky........................................................          14,384           3,021          17,405
Louisiana.......................................................          15,402           3,234          18,636
Maryland........................................................           1,522             320           1,842
Michigan........................................................          12,727           2,673          15,400
New Jersey......................................................           1,253             263           1,516
New York........................................................           3,137             659           3,796
Ohio............................................................           9,605           2,017          11,622
Pennsylvania....................................................           8,076           1,696           9,772
Virginia........................................................           4,544             954           5,498
West Virginia...................................................          13,686           2,874          16,560
----------------------------------------------------------------------------------------------------------------


[[Page 69011]]


  Table VIII.C.2-2--CSAPR NOX Ozone Season Group 3 State Budgets, Variability Limits, and Assurance Levels for
                                                      2022
----------------------------------------------------------------------------------------------------------------
                                                                     Emission       Variability      Assurance
                              State                               budget  (tons)   limit  (tons)   level  (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................................................           9,415           1,977          11,392
Indiana.........................................................          11,998           2,520          14,518
Kentucky........................................................          11,936           2,507          14,443
Louisiana.......................................................          14,871           3,123          17,994
Maryland........................................................           1,498             315           1,813
Michigan........................................................          11,767           2,471          14,238
New Jersey......................................................           1,253             263           1,516
New York........................................................           3,137             659           3,796
Ohio............................................................           9,676           2,032          11,708
Pennsylvania....................................................           8,076           1,696           9,772
Virginia........................................................           3,656             768           4,424
West Virginia...................................................          12,813           2,691          15,504
----------------------------------------------------------------------------------------------------------------


  Table VIII.C.2-3--CSAPR NOX Ozone Season Group 3 State Budgets, Variability Limits, and Assurance Levels for
                                                      2023
----------------------------------------------------------------------------------------------------------------
                                                                     Emission       Variability      Assurance
                              State                               budget  (tons)   limit  (tons)   level  (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................................................           8,397           1,763          10,160
Indiana.........................................................          11,998           2,520          14,518
Kentucky........................................................          11,936           2,507          14,443
Louisiana.......................................................          14,871           3,123          17,994
Maryland........................................................           1,498             315           1,813
Michigan........................................................           9,803           2,059          11,862
New Jersey......................................................           1,253             263           1,516
New York........................................................           3,137             659           3,796
Ohio............................................................           9,676           2,032          11,708
Pennsylvania....................................................           8,076           1,696           9,772
Virginia........................................................           3,656             768           4,424
West Virginia...................................................          11,810           2,480          14,290
----------------------------------------------------------------------------------------------------------------


  Table VIII.C.2-4--CSAPR NOX Ozone Season Group 3 State Budgets, Variability Limits, and Assurance Levels for
                                                 2024 and Beyond
----------------------------------------------------------------------------------------------------------------
                                                                     Emission       Variability      Assurance
                              State                               budget  (tons)   limit  (tons)   level  (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................................................           8,397           1,763          10,160
Indiana.........................................................           9,447           1,984          11,431
Kentucky........................................................          11,936           2,507          14,443
Louisiana.......................................................          14,871           3,123          17,994
Maryland........................................................           1,498             315           1,813
Michigan........................................................           9,614           2,019          11,633
New Jersey......................................................           1,253             263           1,516
New York........................................................           3,119             655           3,774
Ohio............................................................           9,676           2,032          11,708
Pennsylvania....................................................           8,076           1,696           9,772
Virginia........................................................           3,395             713           4,108
West Virginia...................................................          11,810           2,480          14,290
----------------------------------------------------------------------------------------------------------------

    The assurance provisions include penalties that are triggered in 
the event that the covered sources' emissions in a given state, as a 
whole, exceed the state's assurance level. The CSAPR and the CSAPR 
Update provided that, when the emissions from EGUs in a state exceed 
that state's assurance level in a given year, particular sources within 
that state will be assessed a 3-to-1 allowance surrender on the 
exceedance of the assurance level. Specifically, each excess ton above 
a given state's assurance level must be met with one allowance, per 
standard compliance, and two additional allowances to satisfy the 
penalty. The penalty was designed to deter state-level emissions from 
exceeding assurance levels. In both the CSAPR and the CSAPR Update, the 
assurance provisions were designed to account for variability in the 
electricity sector while ensuring that the necessary emission 
reductions occur within each covered state, consistent with the court's 
holding in North Carolina, 531 F.3d at 908. If EGU emissions in a given 
state do not exceed that state's assurance level, no penalties are 
incurred by any source.
    To assess the penalty under the assurance provisions, EPA is 
proposing to follow the same methodology

[[Page 69012]]

finalized in the CSAPR Update. See 81 FR 74567. In that methodology, 
EPA evaluates whether any state's total EGU emissions in a control 
period exceeded the state's assurance level, and if so, EPA then 
determines which groups of units in the state represented by a ``common 
designated representative'' emitted in excess of the common designated 
representative's share of the state assurance level and, therefore, 
will be subject to the allowance surrender requirement described above. 
Penalties under the assurance provisions are triggered for the group of 
sources represented by a common designated representative when two 
conditions are met: (1) The group of sources and units with a common 
designated representative are located in a state where the total state 
EGU emissions for a control period exceed the state assurance level; 
and (2) that group with the common designated representative had 
emissions exceeding the respective common designated representative's 
share of the state assurance level. EPA is proposing assurance 
provisions for the CSAPR NOX Ozone Season Group 3 Trading 
Program that are equivalent to the assurance provisions in the CSAPR 
NOx Ozone Season Group 2 Trading Program.
    In this action, EPA is proposing minor revisions to the procedures 
for administering the assurance provisions starting with the 2023 
control period \151\ for consistency with proposed revisions to the 
process for allocating allowances from the new unit set-asides that are 
discussed in section VIII.C.3.b. The same minor revisions are proposed 
to be implemented in the existing CSAPR trading programs, as discussed 
in section VIII.C.8. The proposed revisions concern the procedures for 
determining the portion of the state's assurance level to be assigned 
to each common designated representative. Specifically, certain 
provisions of these procedures are designed to address circumstances 
where a new unit operates but has no allowance allocation determined 
for it. Administration of these provisions requires EPA to issue a 
notice to collect information needed solely for this purpose that is 
not otherwise required to be reported to EPA. Because the revised new 
unit set-aside (``NUSA'') allocation procedures would eliminate the 
possibility that a new unit would not have an allowance allocation 
determined for it, EPA proposes to eliminate the provisions for 
issuance of the related extra notice starting with the 2023 control 
period. EPA also proposes to extend the date as of which a common 
designated representative is determined under both the new Group 3 
program and the existing CSAPR programs from April 1 of the year 
following the control period to July 1 so as to preserve the 
relationship of those dates to the allowance transfer deadline, which 
is proposed to be extended from March 1 of the year following the 
control period to June 1.\152\ Further discussion of these changes from 
the current provisions in the existing trading programs is provided in 
section VIII.C.8.
---------------------------------------------------------------------------

    \151\ As discussed in section VIII.C.8.b., EPA is also 
requesting comment on implementing the revised procedures starting 
with the 2021 control periods.
    \152\ As discussed in section VIII.C.8., in order to minimize 
unnecessary differences between the CSAPR trading programs and the 
similarly structured Texas SO2 Trading Program, EPA is 
also proposing to revise the date for determination of a common 
designated representative under the Texas SO2 Trading 
Program as of the 2023 control period.
---------------------------------------------------------------------------

    EPA requests comment on the proposed state budgets, variability 
limits, assurance levels, and assurance provisions (Comment C-24).
3. Unit-Level Allocations of Emissions Allowances
    For states participating in the CSAPR Group 3 trading program, EPA 
proposes to issue CSAPR NOX Ozone Season Group 3 allowances 
to be used for compliance beginning with the 2021 ozone season. This 
section explains the process by which EPA proposes to allocate these 
allowances to existing units and new units in each state up to that 
state's budget. For existing units, EPA is proposing to apply the same 
allocation methodology finalized in the CSAPR Update but using updated 
data. This methodology considers both a unit's historical heat input 
and its maximum historical emissions. See 81 FR 74564-65. For new 
units, EPA is proposing to apply the same two-round allocation 
methodology finalized in the CSAPR Update for the 2021 and 2022 control 
periods and a similar, but less complex, one-round methodology starting 
with the 2023 control period. This section also describes allocation to 
the new unit set-asides (NUSA) and Indian Country new unit set-asides 
in each state; allocation to units that are not operating; and the 
recordation of allowance allocations in facility compliance accounts.
a. Allocations to Existing Units
    EPA in this action proposes to allocate allowances to existing 
units in the Group 3 states following the same methodology for 
allowance allocation that was used in the CSAPR Update, except that the 
historical heat input and other data used within this methodology to 
establish unit-level allocations would be updated to the most recent 
period for which EPA has data. The portion of a state budget allocated 
to existing units in that state would be the state budget minus the 
state's new unit set-aside and minus the state's Indian country new 
unit set-aside. The new unit set-asides are portions of each budget 
reserved for new units that might locate in each state or in Indian 
country in the future. For the proposed existing source level 
allocations, see the Proposed Rule TSD ``Unit Level Allocations and 
Underlying Data for the CSAPR for the 2008 Ozone NAAQS,'' in the docket 
for this rulemaking. The only allowance allocations that would be 
updated in this final rule are allocations of CSAPR NOX 
Ozone Season Group 3 allowances issued under and used for compliance in 
the Group 3 trading program. EPA is not proposing to change allocations 
of allowances used in the CSAPR NOX Ozone Season Group 1 or 
Group 2, NOX Annual, or SO2 Group 1 or Group 2 
trading programs and is not reopening the previously established 
allocations under these programs.
    For the purpose of allocations, the CSAPR considered an ``existing 
unit'' to be a unit that commenced commercial operation prior to 
January 1, 2010, and the CSAPR Update considered an ``existing unit'' 
to be a unit that commenced commercial operation prior to January 1, 
2015. For the 12 states subject to new or amended FIPs in this 
rulemaking, EPA proposes to consider an ``existing unit'' for purposes 
of the Group 3 program to be a unit that commenced commercial operation 
prior to January 1, 2019, and that does not cease operation before 
January 1, 2021. This change will allow units commencing commercial 
operation between 2015 and 2019 to be directly allocated allowances 
from each state's budget as existing units and will allow the new unit 
set-asides to be fully reserved for any future new units locating in 
covered states or Indian country. Using data available at the time of 
proposal development, EPA has identified which units in the proposed 
Group 3 states that currently submit quarterly emissions reports to EPA 
appear to be eligible or ineligible to receive allowance allocations as 
existing units; \153\ for the final rule, EPA anticipates that the 
lists of units will be updated with the most recent data. EPA is not 
proposing to reconsider which units are ``existing units'' for purposes 
of any other CSAPR trading program.

[[Page 69013]]

Sources in most of the proposed Group 3 states also participate in the 
CSAPR NOX Annual and SO2 Group 1 trading 
programs, for which an ``existing unit'' is a unit that commenced 
commercial operation before January 1, 2010. Thus, a unit that is 
located in one of these states and that commenced commercial operation 
between January 1, 2010, and January 1, 2019, would be considered an 
``existing unit'' for purposes of the Group 3 trading program but would 
continue to be considered a ``new unit'' for purposes of the CSAPR 
NOX Annual and SO2 Group 1 trading programs.
---------------------------------------------------------------------------

    \153\ See ``CSAPR NOX OS Group 3--Unit Level 
Allocations and Underlying Data.xls'', available in the docket.
---------------------------------------------------------------------------

    EPA proposes to apply the methodology finalized in the CSAPR Update 
for allocating emission allowances to existing units, updated to the 
most recent years of relevant data by the respective publication dates 
of this proposed and final action. This methodology allocates 
allowances to each unit based on the unit's share of the state's heat 
input, limited by the unit's maximum historical emissions. As discussed 
in the CSAPR Update, see 81 FR 74563-65, EPA finds this allowance 
allocation approach to be fuel-neutral, control-neutral, transparent, 
based on reliable data, and similar to allocation methodologies 
previously used in the CSAPR, the NOX SIP Call, and the Acid 
Rain Program.\154\ EPA is therefore proposing the continued application 
of this methodology for allocating allowances to existing sources in 
this proposed rule. Under the CSAPR Update, if, at the time the rule 
was finalized, a state had already submitted a SIP revision addressing 
the allocation of the CSAPR NOX ozone season allowances 
among the units in the state, and if the SIP submission's allocation 
provisions could be applied to an updated budget, the state's preferred 
allocation methodology would govern the allocation of allowances among 
that state's units under the final CSAPR Update. Two of the proposed 
Group 3 states (Indiana and New York) have such methodologies for 
allocating the CSAPR NOX Ozone Season Group 2 allowances 
among their units. EPA is proposing to carry out the intent of these 
SIPs by establishing initial allowance allocations to existing units 
under the FIPs for these two states using the allocation methodologies 
already adopted by the states.
---------------------------------------------------------------------------

    \154\ See 40 CFR parts 72-78.
---------------------------------------------------------------------------

    This proposed rule uses the average of the three highest years of 
heat input data out of the most recent five-year period to establish 
the heat input baseline for each unit.\155\ These heat input data are 
used to calculate each unit's proportion of state-level heat input (the 
average of the unit's three highest non-zero years of heat input 
divided by the total of such averages within the given state). In 
general, EPA applies this proportion to the total amount of existing 
unit allowances to be allocated to quantify unit-level allocations. 
However, EPA constrains the unit-level allocations so as not to exceed 
each unit's maximum historical baseline emissions, calculated as the 
highest year of emissions out of the most recent eight-year 
period.\156\ This proposal evaluates 2015-2019 heat input data and 
2012-2019 emissions data, which are the most recent data available as 
of proposal publication. EPA proposes to recalculate unit level 
allocations with the most recent five years of heat input and the most 
recent eight years of emissions data along with the most recent 
supporting data in the final rule.
---------------------------------------------------------------------------

    \155\ As described in the Unit Level Allowance Allocations TSD 
and done in prior CSAPR actions, the allocation method uses a five-
year baseline in order to improve representation of a unit's normal 
operating conditions. Using the three highest, non-zero ozone season 
heat input values within the five-year baseline reduces the 
likelihood that any particular single year's operations (which might 
not be representative due to outages or other unusual events) 
determine a unit's allocation.
    \156\ EPA's allocation methodology also considers whether unit-
level allocations should be limited because they would otherwise 
exceed emission levels that are permissible under the terms of 
consent decrees. However, in this instance EPA's analysis indicates 
that consideration of consent decree limits does not alter the unit-
level allocations.
---------------------------------------------------------------------------

    As under both the CSAPR and the CSAPR Update, states would have 
several options under this proposed rulemaking to submit SIP revisions 
which, if approved, may result in the replacement of EPA's default 
allocations with state-determined allocations for the 2022 control 
period and beyond. The provisions described above will not preclude any 
state from submitting an alternative allocation methodology for later 
control periods through a SIP submission. See section VIII.D. for 
details on the development of approvable SIP submissions.
    EPA requests comment on the proposed approach for allocating 
allowances to existing units (Comment C-25).
b. Allocations to New Units
    Consistent with the updates to which units are considered to be 
``existing units'' described above, for purposes of this proposed rule 
a ``new unit'' that is eligible to receive allocations from the new 
unit set-aside (NUSA) for a state includes any covered unit that 
commences commercial operation on or after January 1, 2019, as well as 
a unit that becomes covered by meeting applicability criteria 
subsequent to January 1, 2019; a unit that relocates to a different 
state covered by a FIP promulgated by this rule; and an ``existing'' 
covered unit that ceases operation for two consecutive years following 
the start of program implementation (thereby losing its previous 
allowance allocation as an ``existing'' unit) but that resumes 
operation at some point thereafter. EPA is also proposing allocations 
to a NUSA for each state equal to a minimum of 2 percent of the total 
state budget, plus the projected amount of emissions from planned units 
in that state. For instance, if planned units in a state are projected 
to emit 3 percent of the state's NOX ozone season emission 
budget, then the new unit set-aside for the state would be set at 5 
percent, which is the sum of the minimum 2 percent set-aside plus an 
additional 3 percent for planned units. This is the same approach 
currently used to implement the NUSA for all the CSAPR trading 
programs. See 76 FR 48292 (August 8, 2011). Note that New York has set 
its NUSA percentage within its approved SIP to 5 percent without 
consideration of planned units; therefore, this NUSA percentage is 
proposed to be used for New York. Pursuant to the CSAPR regulations, 
new units may receive allocations starting with the first year they are 
subject to the allowance-holding requirements of the rule. If the 
allowances in the NUSA remain unallocated to new units, the allowances 
from the set-asides are redistributed to existing units before each 
compliance deadline.

[[Page 69014]]



           Table VIII.C.3-1--CSAPR NOX Ozone Season Group 3 New Unit Set-Aside (NUSA) Amounts for 2021
----------------------------------------------------------------------------------------------------------------
                                                                                   New unit set-
                                                                  Total new unit   aside amount   Indian country
                                     Emission      New unit set-     set-aside     for new units   new unit set-
              State                   budgets      aside amount   amount for new   not in Indian   aside amount
                                      (tons)         (percent)     units  (tons)      country         (tons)
                                                                                      (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................           9,444               2             181             181  ..............
Indiana.........................          12,500               2             253             253  ..............
Kentucky........................          14,384               2             289             289  ..............
Louisiana.......................          15,402               3             459             444              15
Maryland........................           1,522               2              31              31  ..............
Michigan........................          12,727               3             384             371              13
New Jersey......................           1,253               2              27              27  ..............
New York........................           3,137               5             157             154               3
Ohio............................           9,605               3             285             285  ..............
Pennsylvania....................           8,076               4             326             326  ..............
Virginia........................           4,544               2              91              91  ..............
West Virginia...................          13,686               2             273             273  ..............
----------------------------------------------------------------------------------------------------------------


           Table VIII.C.3-2--CSAPR NOX Ozone Season Group 3 New Unit Set-Aside (NUSA) Amounts for 2022
----------------------------------------------------------------------------------------------------------------
                                                                                   New unit set-
                                                                  Total new unit   aside amount   Indian country
                                     Emission      New unit set-     set-aside     for new units   new unit set-
              State                   budgets      aside amount   amount for new   not in Indian   aside amount
                                      (tons)         (percent)     units  (tons)      country         (tons)
                                                                                      (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................           9,415               2             181             181  ..............
Indiana.........................          11,998               2             238             238  ..............
Kentucky........................          11,936               2             240             240  ..............
Louisiana.......................          14,871               3             445             430              15
Maryland........................           1,498               2              33              33  ..............
Michigan........................          11,767               3             352             340              12
New Jersey......................           1,253               2              27              27  ..............
New York........................           3,137               5             157             154               3
Ohio............................           9,676               3             291             291  ..............
Pennsylvania....................           8,076               4             326             326  ..............
Virginia........................           3,656               2              76              76  ..............
West Virginia...................          12,813               2             261             261  ..............
----------------------------------------------------------------------------------------------------------------


           Table VIII.C.3-3--CSAPR NOX Ozone Season Group 3 New Unit Set-Aside (NUSA) Amounts for 2023
----------------------------------------------------------------------------------------------------------------
                                                                                   New unit set-
                                                                  Total new unit   aside amount   Indian country
                                     Emission      New unit set-     set-aside     for new units   new unit set-
              State                   budgets      aside amount   amount for new   not in Indian   aside amount
                                      (tons)         (percent)     units  (tons)      country         (tons)
                                                                                      (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................           8,397               2             173             173  ..............
Indiana.........................          11,998               2             238             238  ..............
Kentucky........................          11,936               2             240             240  ..............
Louisiana.......................          14,871               3             445             430              15
Maryland........................           1,498               2              33              33  ..............
Michigan........................           9,803               3             296             286              10
New Jersey......................           1,253               2              27              27  ..............
New York........................           3,137               5             157             154               3
Ohio............................           9,676               3             291             291  ..............
Pennsylvania....................           8,076               4             326             326  ..............
Virginia........................           3,656               2              76              76  ..............
West Virginia...................          11,810               2             236             236  ..............
----------------------------------------------------------------------------------------------------------------


[[Page 69015]]


     Table VIII.C.3-4--CSAPR NOX Ozone Season Group 3 New Unit Set-Aside (NUSA) Amounts for 2024 and Beyond
----------------------------------------------------------------------------------------------------------------
                                                                                   New unit set-
                                                                  Total new unit   aside amount   Indian country
                                     Emission      New unit set-     set-aside     for new units   new unit set-
              State                   budgets      aside amount   amount for new   not in Indian   aside amount
                                      (tons)         (percent)     units  (tons)      country         (tons)
                                                                                      (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................           8,397               2             173             173  ..............
Indiana.........................           9,447               2             188             188  ..............
Kentucky........................          11,936               2             240             240  ..............
Louisiana.......................          14,871               3             445             430              15
Maryland........................           1,498               2              33              33  ..............
Michigan........................           9,614               3             287             277              10
New Jersey......................           1,253               2              27              27  ..............
New York........................           3,119               5             156             153               3
Ohio............................           9,676               3             291             291  ..............
Pennsylvania....................           8,076               4             326             326  ..............
Virginia........................           3,395               2              68              68  ..............
West Virginia...................          11,810               2             236             236  ..............
----------------------------------------------------------------------------------------------------------------

    For the control periods in 2021 and 2022, EPA proposes to apply the 
same two-round approach for allocating allowances from each state's 
NUSA to eligible units as EPA has historically used in all the previous 
CSAPR trading programs. Under this approach, in the first round, which 
is carried out during the control period at issue, any eligible units 
in the state that operated during the preceding control period are 
allocated allowances in proportion to their respective emissions during 
that preceding control period, up to the amounts of those emissions if 
the NUSA contains sufficient allowances. In the second round, which is 
carried out after the end of the control period at issue, if the first-
round allocations did not exhaust the NUSA, any eligible units in the 
state that commenced operation in the control period or the preceding 
control period are allocated additional allowances in proportion to the 
positive differences (if any) between their emissions during the 
control period and their first-round allocations, up to the amounts of 
those differences if the NUSA contains sufficient allowances. Any 
allowances remaining in the NUSA after the second round are reallocated 
to the existing units in the state.
    For control periods in 2023 and thereafter,\157\ EPA proposes to 
replace the two-round approach described above--for purposes of both 
the new Group 3 trading program and the existing CSAPR trading 
programs--with a one-round approach that would be carried out after the 
end of the control period at issue. Under the proposed one-round 
approach, any eligible units in the state that operated during the 
control period will be allocated allowances in proportion to their 
respective emissions during the control period, up to the amounts of 
those emissions if the NUSA contains sufficient allowances. EPA 
believes this one-round approach would be both less complex than the 
two-round approach and more equitable, because it would avoid potential 
situations under the two-round approach where the newest units may not 
receive any NUSA allocations. In order to provide sufficient time to 
carry out the one-round approach after the end of the control period, 
several deadlines would be extended (again, for purposes of both the 
new Group 3 trading program and the existing trading programs) starting 
with the control periods in 2023. Specifically, the deadline for EPA to 
promulgate a notice regarding preliminary calculations of NUSA 
allocations would be set at March 1 after the control period; the 
deadline for EPA to promulgate a notice regarding the final 
calculations and to record the NUSA allocations would be set at May 1 
after the control period; the ``allowance transfer deadline'' by which 
sources must hold sufficient allowances to cover their emissions during 
the control period would be set at June 1 after the control period; and 
the date as of which each source's ``common designated representative'' 
is determined for purposes of the assurance provisions would be set at 
July 1 after the control period. The proposed changes and EPA's 
rationale are discussed further in section VIII.C.8.
---------------------------------------------------------------------------

    \157\ As discussed in section VIII.C.8.b., EPA is also 
requesting comment on implementing the revised procedures starting 
with the 2021 control periods.
---------------------------------------------------------------------------

    EPA requests comment on the proposed approach for reserving 
portions of the budgets as new unit set-asides and allocating 
allowances to new units (Comment C-26).
c. Allocations to New Units in Indian Country
    Clean Air Act programs on Indian reservations and other areas of 
Indian country over which a tribe or EPA has demonstrated that a tribe 
has jurisdiction generally may be implemented either by a tribe through 
an EPA-approved tribal implementation plan (TIP) or EPA through a FIP. 
Tribes may, but are not required to, submit TIPs. Under EPA's Tribal 
Authority Rule (TAR), 40 CFR 49.1-49.11, EPA is authorized to 
promulgate FIPs for Indian country as necessary or appropriate to 
protect air quality if a tribe does not submit and receive EPA approval 
of a TIP. See 40 CFR 49.11(a); see also 42 U.S.C. 7601(d)(4). To date, 
no tribes have sought approval of a TIP implementing the good neighbor 
provision at CAA section 110(a)(2)(D)(i)(I) with respect to the 2008 
ozone NAAQS. EPA has therefore determined that it is necessary and 
appropriate for EPA to implement the FIPs in any affected Indian 
reservations or other areas of Indian country over which a tribe has 
jurisdiction. However, there are no existing units that would qualify 
as ``covered units'' in Indian country located in the proposed Group 3 
states under this proposal.
    EPA is proposing to generally apply the CSAPR Update approach for 
allocating allowances to any new units located in Indian country, with 
parallel modifications to those described above with respect to unit-
level allocations from the new unit set-asides for units not in Indian 
country. Under this approach, allowances to possible future new units 
located in Indian Country would be allocated by EPA from an Indian 
country new unit set-aside established for each state with Indian

[[Page 69016]]

country. EPA proposes to reserve 0.1 percent of the total state budget 
for new units in Indian Country within that state (5 percent of the 
minimum 2 percent new unit set-aside,\158\ without considering any 
increase in a state's new unit set-aside amount for planned units). 
Because states generally have no SIP authority in these areas, EPA 
would continue to handle the allocation of allowances to any sources 
that locate in such areas of Indian country within a state over which a 
tribe or EPA has demonstrated that a tribe has jurisdiction, even if 
the state submits a SIP to replace the applicable FIP. Unallocated 
allowances from a state's Indian country new unit set-aside would be 
returned to the state's new unit set-aside and allocated according to 
the methodology for that new unit set-aside.
---------------------------------------------------------------------------

    \158\ In the CSAPR rulemaking, based on analysis of a set of 
states that includes all the proposed Group 3 states in this action, 
EPA determined that among the states analyzed, in the state for 
which Indian country represented the largest share of the total area 
within the state's borders, that share was 5 percent. See 76 FR 
48293 (December 27, 2011). EPA adopted the same 5 percent figure in 
the CSAPR Update. See 81 FR 74565-66 (May 27, 2016).
---------------------------------------------------------------------------

    For the control periods in 2021 and 2022, EPA proposes to apply the 
same two-round approach for allocating allowances from each state's 
Indian country NUSA to eligible units as EPA has historically used in 
all the previous CSAPR trading programs, and for control periods in 
2023 and thereafter,\159\ EPA proposes to apply a one-round approach as 
described above for other NUSAs. The proposed change to a one-round 
allocation approach for Indian country NUSAs would involve the same 
deadline extensions as discussed above with respect to other NUSAs and 
would also apply with respect to Indian country NUSAs under the 
existing CSAPR trading programs. Further discussion is provided in 
section VIII.C.8.
---------------------------------------------------------------------------

    \159\ As discussed in section VIII.C.8.b., EPA is also 
requesting comment on implementing the revised procedures starting 
with the 2021 control periods.
---------------------------------------------------------------------------

    EPA requests comment on the proposed approach for reserving 
portions of the budgets as Indian country new unit set-asides and 
allocating allowances to new units in Indian country (Comment C-27).
d. Treatment of Allowances Allocated to Units That Cease Operations
    EPA is proposing to apply the same approach followed in the CSAPR 
Update for reallocating allowances that were previously allocated to 
units that cease operations. Specifically, EPA proposes that a covered 
unit that does not operate for a period of two consecutive years after 
the start of trading program implementation will receive allowance 
allocations for a total of up to five years of non-operation. As in the 
CSAPR Update, this approach mitigates concerns that loss of allowance 
allocations could be an economic consideration that would cause a unit, 
which would otherwise retire, to continue operations in order to retain 
ongoing allowance allocations. Pursuant to this provision, starting in 
the fifth year after the first year of non-operation, EPA proposes that 
allowances previously allocated to such units would instead be 
allocated to the new unit set-aside for the state in which the non-
operating unit is located. This approach allows the balance of 
allowance allocations to shift over time from existing units to new 
units, aligned with transition of the EGU fleet from older generating 
resources to newer ones. Allowances in the new unit set-aside that are 
not used by new units would be reallocated to existing units in the 
state. EPA proposes to retain this same CSAPR Update timeline for 
allowance allocation for non-operating units in this rulemaking. EPA 
requests comment on the proposed approach for addressing allowances 
allocated to units that have ceased operation (Comment C-28).
    In order to accommodate a changing power sector and account for 
units that permanently retire and therefore no longer have emissions, 
EPA is taking comment on whether the NUSA should be modified such that 
allowances from these units that are placed in the NUSA should not be 
reallocated at the end of the year. Ultimately, in the absence of new 
units, these allowances would be redistributed to existing units. EPA 
seeks comment on whether allowances from retired units should remain in 
the NUSA rather than being redistributed to existing units, except in 
the event that those allowances are allocated to new units (Comment C-
29).
    Alternatively, in order to accommodate a changing power sector and 
account for the year-to-year variation in generation and potential 
change in usage of units over time, EPA is seeking comment on an 
allocation alternative (Comment C-30). Noting that budgets are based on 
a constant level of heat input over time and that heat input levels 
have generally decreased over time, EPA asks for comment on the 
possibility of initially distributing the average budget level of 
allowances per control period minus the variability limit (i.e., 79 
percent of budget given a variability limit of 21 percent). Then, if 
the actual observed heat input for a given control period is greater 
than the heat input amount assumed in the original allocation, 
additional supplemental allowances would be provided up to the 
assurance level (i.e. 121 percent of the regional emission budget). In 
this methodology, the actual number of allowances allocated each 
control period would be explicitly tied to the heat input of that same 
control period. As an example, consider an original allowance 
allocation based on 79 percent of the aggregate Group 3 budget. If, 
after the conclusion of the ozone season, heat input is only 3 percent 
below the heat input level assumed in the emission budget, EPA would 
then allocate allowances to cover the remaining percentage of 
allowances withheld from the initial allocation.
4. Transitioning From Existing CSAPR NOX Ozone Season Group 
2 Trading Program
    This section discusses three sets of provisions that EPA proposes 
to implement in order to address the transition of sources from the 
Group 2 trading program to the Group 3 trading program. First, to 
address the possibility that final action on this proposal may not 
become effective until after May 1, 2021, and to ensure that under 
those circumstances the Group 3 trading program could be implemented 
for the full May-September ozone season in 2021 without imposing 
retroactive emission reduction requirements, EPA is proposing to 
allocate additional allowances, and to make corresponding adjustments 
to states' 2021 assurance levels, so as to offset the otherwise 
applicable emission reduction requirements under this rulemaking for 
any portion of the 2021 ozone season that may occur before the final 
rule's effective date. Second, in order to facilitate the continued use 
of market-based trading programs as the compliance mechanism for 
sources covered by this action while ensuring an appropriate level of 
stringency in the Group 3 trading program, EPA is proposing a process 
by which certain banked CSAPR NOX Ozone Season Group 2 
allowances will be converted to CSAPR NOX Ozone Season Group 
3 allowances. Finally, to maintain the previously established levels of 
stringency of the Group 2 trading program for the states and sources 
that remain subject to that program under this action, EPA is also 
proposing that the CSAPR NOX Ozone Season Group 2 allowances 
equivalent in amount and vintage to the previously allocated vintage 
year 2021-2024 CSAPR NOX Ozone Season Group 2 allowances in 
the new Group 3 region will be recalled.

[[Page 69017]]

a. Supplemental Allowance Allocations To Avoid Retroactive Emission 
Reduction Requirements
    EPA expects to take a final action in this rulemaking by March 15, 
2021 and anticipates that the final rule will be published in the 
Federal Register by early April, before the start of the 2021 ozone 
season on May 1, 2021. However, because of the requirements of the 
Congressional Review Act (CRA), 5. U.S.C. 801-808, EPA is unable at 
this time to predict whether the increased trading program stringency 
established in the final rule will take effect as of May 1, 2021. Under 
CRA section 801(a)(3), a ``major rule,'' as defined under the CRA, 
generally may not take effect sooner than 60 days after the date of 
publication in the Federal Register (or, if later, 60 days after the 
date on which Congress receives a report on the final rule from EPA). 
Under CRA section 804(2), a ``major rule'' includes any rule that the 
Office of Management and Budget (OMB) finds is likely to result in an 
annual effect on the economy of $100 million or more. Because the final 
action in this rulemaking is projected to result in annualized benefits 
greater than $100 million per year, as discussed in section IX of the 
preamble, it is possible that OMB could find that the final action on 
this proposal would be a ``major rule'' for CRA purposes, in which case 
the rule's effective date could occur after the start of the 2021 ozone 
season.
    EPA proposes to find that, notwithstanding that the final rule's 
requirements may not be able to take effect until after May 1, 2021, it 
would nevertheless serve the public interest and greatly aid in 
administrative efficiency for most elements of the Group 3 trading 
program--specifically, all elements of the trading program other than 
the elements designed to establish more stringent emissions limitations 
for the sources in Group 3 states--to start on May 1, 2021. This will 
facilitate implementation of the Group 3 trading program in an orderly 
manner for the entire 2021 ozone season and reduce compliance burdens 
and potential confusion. Each of the CSAPR trading programs for ozone 
season NOX is designed to be implemented over an entire 
ozone season. Implementing the transition from the Group 2 trading 
program to the Group 3 trading program in a manner that required the 
covered sources to participate in the Group 2 trading program for part 
of the 2021 ozone season and the Group 3 trading program for the 
remainder of that ozone season would be complex and burdensome for 
sources. Attempting to address the issue by splitting the Group 2 and 
Group 3 requirements into separate years is not a viable approach, 
because EPA would have no legal basis for releasing the Group 3 sources 
from the emission reduction requirements found to be necessary in the 
CSAPR Update for a portion of the 2021 ozone season, and EPA similarly 
would have no legal basis for deferring implementation of the 2021 
emissions reduction requirements found to be necessary under this rule 
until 2022. Moreover, the requirements of the Group 2 trading program 
and the Group 3 trading program are substantively identical as to 
almost all provisions, such that with respect to those provisions, a 
source would not need to alter its operations in any manner or face 
different compliance obligations as a consequence of a transition from 
the Group 2 trading program to the Group 3 trading program. Thus, EPA 
believes that no substantive concerns regarding retroactivity would 
arise from implementing the Group 3 trading program starting on May 1, 
2021, so long as those aspects of the Group 3 trading program that do 
meaningfully differ from the analogous aspects of the Group 2 trading 
program--that is, the relative stringencies of the two trading 
programs, as reflected in the emissions budgets and associated 
assurance levels--are applied only as of the effective date of the 
final rule.
    Thus, with respect to two aspects of the proposed rule, EPA 
proposes the following adjustments in 2021 ozone season obligations in 
order to ensure no new requirements are imposed on any regulated 
parties prior to the effective date of the final rule.
    To cause the more stringent budgets of the Group 3 trading program 
to apply only after the effective date of the final rule, EPA proposes 
to make supplemental allocations of Group 3 allowances to Group 3 
sources for the portion of the 2021 ozone season occurring before the 
effective date of the final rule. The total amount of the supplemental 
allowances available for allocation to the sources in each state would 
be calculated by multiplying the difference between the state's Group 2 
and Group 3 budgets by the fraction of the 2021 ozone season, measured 
in days, occurring before the final rule's effective date. The state's 
total amount of supplemental allowances would then be allocated among 
the state's existing units as if the supplemental allowances had been 
included in the state's 2021 emissions budget for the Group 3 trading 
program. The allocations of supplemental allowances would be recorded 
at the same time as the allocations from the budget.
    To cause the more stringent assurance levels of the Group 3 trading 
program to apply only after the effective date of the final rule, EPA 
proposes to include an increment in each state's assurance level for 
2021 in addition to the state's emissions budget and variability limit 
for 2021. The amount of the increment would be computed as 1.21 times 
the total amount of supplemental allowances determined for the state as 
described above, where 1.21 is the ratio of the Group 2 state assurance 
levels to the Group 2 state budgets and is also the ratio of the 
proposed Group 3 state assurance levels to the proposed Group 3 state 
budgets. In the event of an exceedance of a state's assurance level, 
the allocations of supplemental allowances and the increment to the 
state's variability limit would also be taken into account for purposes 
of the calculations used to apportion responsibility for any exceedance 
of a state's assurance level among the owners and operators of the 
state's sources.
    In all respects other than the allocation of supplemental Group 3 
allowances and the addition of an increment to the states' assurance 
levels, EPA proposes to implement the Group 3 trading program for the 
2021 control period exactly as the program would be implemented for any 
other control period. Thus, allocations of Group 3 allowances from each 
state's emissions budget to existing and new units would be made for 
the entire 2021 ozone season (i.e., May 1, 2021 through September 30, 
2021), emissions would be monitored and reported for the entire 2021 
ozone season, and as of the allowance transfer deadline for the 2021 
control period (i.e., March 1, 2022) each source would be required to 
hold in its compliance account vintage-year 2021 Group 3 allowances not 
less than the source's emissions of NOX during the entire 
2021 ozone season. Because of the supplemental allowances allocated for 
the portion of the 2021 ozone season before the rule's effective date, 
EPA proposes to find that implementing the program in this manner would 
substantively apply the final rule's emissions reduction requirements 
only from the rule's effective date. Similarly, because of the 
increment to the states' assurance levels for 2021, EPA proposes to 
find that implementing the trading program in this manner would 
substantively apply the final rule's more stringent assurance levels 
only from the rule's effective date. Moreover, any efforts undertaken 
by a source to reduce its emissions during the portion of the

[[Page 69018]]

2021 ozone season before the effective date of the rule would aid the 
source's compliance by reducing the amount of Group 3 allowances that 
the source would need to hold in its compliance account as of the 
allowance transfer deadline, increasing the range of options available 
to the source for meeting its compliance obligations under the Group 3 
trading program.
    EPA requests comment on the proposed approach for implementing the 
Group 3 trading program in a manner that would apply the substantive 
increases in stringency established under the final rule on and after, 
but not before, the final rule's effective date (Comment C-31).
b. Creation of Initial Group 3 Allowance Bank
    For this rulemaking, EPA is proposing to convert allowances banked 
in 2017-2020 under the CSAPR NOx Ozone Season Group 2 Trading Program 
into a limited number of allowances that can be used for compliance in 
the CSAPR NOx Ozone Season Group 3 Trading Program. Any treatment of 
banked allowances must ensure that implementation of the Group 3 
trading program will result in NOX emission reductions 
sufficient to address significant contribution in the 12 linked Group 3 
states, while also providing industry certainty (and obtaining an 
environmental benefit) through continued recognition of the value of 
saving allowances through early reductions in emissions. EPA's approach 
to balancing these concerns in the CSAPR Update through the use of a 
conversion ratio for banked allowances from the CSAPR ozone season 
trading program was upheld in Wisconsin v. EPA, see 938 F.3d at 321.
    Similar to the approach taken in the CSAPR update, EPA is proposing 
a one-time conversion of banked Group 2 allowances according to a 
formula which ensures that emissions in the Group 3 trading program 
region in the first year of the program do not exceed a specified level 
(defined as emissions up to the sum of the states' seasonal emissions 
budgets and variability limits) as a result of the use of banked 
allowances from the Group 2 trading program. EPA proposes to carry out 
the conversion no later than 180 days after the date of publication of 
the final action in this rulemaking in the Federal Register. The 
conversion would occur after the surrenders of allowances for 
compliance for the 2020 control period are completed by March 1, 2021, 
which is the allowance transfer deadline. The proposed conversion ratio 
would be calculated by a formula, the numerator of which would be the 
total number of banked Group 2 allowances held as of the deadline by 
owners or operators of facilities in Group 3 states plus banked 
allowances held in ``general'' accounts (i.e., accounts not associated 
with a source), and the denominator of which would be the sum of the 
Group 3 states' 2022 control period variability limits proposed in this 
rule multiplied by the fraction of the 2021 ozone season, measured in 
days, occurring after the final rule's effective date. The quotient, or 
ratio (or a factor of 1.0000, if the quotient is less than 1.0000), 
would then be applied to the banked vintage year 2017-2020 Group 2 
allowances in each such account to yield the number of banked 
allowances that would be made available to the holder of each such 
account for compliance under the Group 3 trading program for the 2021 
control period. As discussed in section VIII.C.2, the proposed 
variability limits differ by year. EPA proposes to use the variability 
limits for the 2022 control period in the formula because 2022 is the 
first year in which the proposed budgets, and therefore the proposed 
variability limits, would reflect the full set of control technologies 
represented by the $1600 per ton cost level proposed to be consistent 
with addressing the Group 3 states' obligations under CAA section 
110(a)(2)(D)(i)(I). Thus, the proposed conversion ratio formula would 
yield an effective starting bank of 21 percent of the aggregated 2022 
Group 3 ozone season budgets for all covered states, or 21,022 
allowances, adjusted to reflect any delay in implementation of the 
substantive increases in stringency established under the final rule 
beyond May 1, 2021.
    EPA proposes that before carrying out the conversion of the bank of 
Group 2 allowances to Group 3 allowances, all general accountholders 
would be given an opportunity to temporarily transfer out of their 
general accounts any Group 2 allowances that they would prefer to 
retain for potential subsequent use in the Group 2 trading program. By 
150 days after publication of a final rule in this rulemaking, EPA 
would create a common holding account for Group 2 allowances. General 
accountholders who hold Group 2 allowances could elect to transfer any 
number of their Group 2 allowances to this holding account by a 
deadline of 30 days after the creation of the Group 2 holding account. 
Group 2 allowances held in a facility compliance account could not be 
transferred directly to the holding account but could be transferred to 
a general account and then to the holding account. After the 30-day 
transfer window, EPA would implement a seven-day account freeze to 
execute the conversion. For the duration of the freeze, accountholders 
could not execute any transfers into or out of any general or facility 
compliance account that held Group 2 allowances at the beginning of the 
freeze. During this seven-day freeze, all Group 2 allowances held in 
any general or facility compliance account--but not the Group 2 
allowances held in the common Group 2 holding account--would be 
converted to vintage year 2021 Group 3 allowances, per the conversion 
methodology described above. After the conversion is carried out, EPA 
would transfer all Group 2 allowances held in the common Group 2 
holding account back to the general accounts from which they were 
transferred into the common Group 2 holding account.
    EPA requests comment on the proposed conversion of banked 2017-2020 
Group 2 allowances into a limited initial bank of Group 3 allowances. 
EPA also requests comment on whether the minimum conversion ratio 
should be a number greater than 1.0000, based on a formula that would 
provide an incentive to convert a minimum number of banked Group 2 
allowances to Group 3 allowances, thereby preserving the stringency of 
the Group 2 trading program established in the CSAPR Update. 
Specifically, while the denominator of such a minimum ratio formula 
would be the same sum of the Group 3 states' variability limits under 
the Group 3 trading program that would be used in the primary 
conversion ratio formula, the numerator of the minimum ratio formula 
would be the total quantity of banked 2017-2020 Group 2 allowances 
attributable to sources in the states moving to the new Group 3 trading 
program (i.e., the sum of the differences between the Group 3 states' 
budgets under the Group 2 trading program for the 2017-2020 ozone 
seasons and the total NOX emissions from sources in those 
states in the 2017-2020 ozone seasons, plus the portion of the initial 
bank of allowances created for the Group 2 trading program that was 
attributable to the variability limits of those same states under the 
Group 2 trading program) (Comment C-32).
c. Recall of Group 2 Allowances Allocated for Control Periods After 
2020
    To maintain the previously established levels of stringency of the 
Group 2 trading program for the states and sources that remain subject 
to that program under this action, EPA is also proposing to recall 
CSAPR NOX Ozone Season Group 2 allowances equivalent in 
amount and vintage to all vintage

[[Page 69019]]

year 2021-2024 CSAPR NOX Ozone Season Group 2 allowances 
previously allocated to sources or non-source entities in Group 3 
states. Specifically, 60 days after the date of Federal Register 
publication of the final action in this rulemaking, EPA would establish 
a 30-day window for the owners or operators of sources (or the 
representatives of non-source entities) in Group 3 states to transfer 
into their relevant compliance or general accounts the number of 
vintage year 2021-2024 CSAPR NOX Ozone Season Group 2 
allowances equal to the number that were allocated for each of these 
control periods (i.e., 2021, 2022, 2023, and 2024) to all units at the 
source or to the non-unit entity. EPA intends to issue notifications 
and instructions to each accountholder to ensure the correct numbers of 
allowances of each vintage are returned. As noted in section VIII.C.7., 
EPA proposes not to record any allocations of Group 3 allowances to a 
source or other entity unless that source or entity has complied with 
the requirements to surrender previously allocated 2021-2024 Group 2 
allowances. In addition, failure to comply with the recall provisions 
is proposed to be subject to potential enforcement as a violation of 
the Clean Air Act, in the same way that failure to hold sufficient 
allowances to cover emissions and failure to comply with the allowance 
surrender requirements of the assurance provisions in the regulations 
for all of the existing CSAPR trading programs is subject to such 
potential enforcement, with each allowance and each day of the control 
period constituting a separate violation.
    EPA requests comment on the proposed approach for recalling 2021-
2024 Group 2 allowances previously allocated to sources and other 
entities in Group 3 states (Comment C-33).
5. Compliance Deadlines
    As discussed in section V.C. of this preamble, the proposed rule 
requires sources to comply with the revised respective NOX 
emission budgets for the 2021-2024 ozone seasons (May 1 through 
September 30 of each year) in order to ensure that these necessary 
NOX emission reductions are implemented to assist in 
downwind states' attainment and maintenance of the 2008 ozone NAAQS by 
the 2021 Serious area attainment date. Thus, under the new CSAPR NOx 
Ozone Season Group 3 Trading Program proposed by EPA in this 
rulemaking, the first control period is the 2021 ozone season (i.e. May 
1, 2021, through September 30, 2021). This initial control period is 
coordinated with the attainment deadline for the 2008 standard, and the 
proposed rule includes provisions to ensure that all necessary 
reductions occur at sources within each individual state.
    Under all CSAPR trading programs, compliance at the source level is 
achieved by each source surrendering by a compliance deadline--defined 
in the regulations at 40 CFR 97.802 as the ``allowance transfer 
deadline''--a number of allowances equal to the source's total 
emissions for the preceding ozone-season control period. For the 
control periods in 2021 and 2022, EPA proposes that the deadline by 
which sources must hold Group 3 allowances in their facility compliance 
accounts at least equal to their emissions is March 1 of the year 
following the control period. This deadline is the same as the current 
deadline for holding allowances under all the existing CSAPR trading 
programs. Under this coordinated deadline, March 1, 2022 is the 
proposed date by which Group 3 sources will be required to hold Group 3 
allowances for compliance purposes of the 2021 ozone season control 
period. Likewise, the proposed date for purposes of the 2022 ozone 
season is March 1, 2023.
    For control periods in 2023 and thereafter,\160\ EPA proposes that 
the allowance transfer deadline for the Group 3 trading program--and 
for all the other CSAPR trading programs \161\--be moved from March 1 
to June 1 of the year after the control period. The reason for the 
proposed change is to accommodate a proposed change in the methodology 
and schedule for allocating allowances to units from the new unit set-
asides that would start with the 2023 control periods. Under that 
revised methodology, allowances from the new unit set-asides would be 
recorded in units' compliance accounts by May 1 of the year following 
the control period, and some additional period after that date is 
needed to allow for allowance purchases in case a source receives fewer 
allowances from the new unit set-aside than anticipated. Under the 
current regulations at 40 CFR 97.812, the deadline for recording 
second-round allocations from the new unit set-asides is February 15, 
two weeks before the March 1 allowance transfer deadline. EPA believes 
sources would have greater trading flexibility if this interval were 
extended to a full month, resulting in the proposed allowance transfer 
deadline of June 1. Extension of the allowance transfer deadline is not 
expected to have any impact on the achievement of the CSAPR trading 
programs' environmental objectives because it would not affect the 
quantities of allowances that sources will be required to hold as of 
the deadline or the total quantities of allowances that will be made 
available for compliance in advance of the deadline. Further discussion 
is provided in sections VIII.C.3.b. and VIII.C.8.
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    \160\ As discussed in section VIII.C.8.b., EPA is also 
requesting comment on implementing the revised deadline starting 
with the 2021 control periods.
    \161\ As discussed in section VIII.C.8.b., in order to minimize 
unnecessary differences between the CSAPR trading programs and the 
similarly structured Texas SO2 Trading Program, EPA is 
also proposing to revise the allowance transfer deadline under the 
Texas SO2 Trading Program as of the 2023 control period. 
However, EPA is not proposing to revise the allowance transfer 
deadline under the Acid Rain Program for SO2 emissions 
(which is February 29 in leap years and March 1 in other years).
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    EPA requests comment on the proposed compliance deadlines (Comment 
C-34).
6. Monitoring and Reporting
    Monitoring and reporting in accordance with the provisions of 40 
CFR part 75 are required for all units subject to all the CSAPR trading 
programs, which includes all units covered under this proposed rule. 
Consistent with these existing requirements, EPA proposes that the 
monitoring system certification deadline by which monitors are 
installed and certified for compliance use under the CSAPR NOx Ozone 
Season Group 3 Trading Program generally will be May 1, 2021, the 
beginning of the first control period in this proposed rule, with 
potentially later deadlines for units that commence commercial 
operation less than 180 days before that date. Units already in 
compliance with monitoring system certification requirements for the 
Group 2 trading program would not have to undertake any additional 
activities to certify their monitoring systems for the Group 3 trading 
program. Similarly, EPA proposes that the first period in which 
emission reporting is required would be the quarter that includes May 
1, 2021, (i.e., the second quarter of the year that covers April, May, 
and June). These monitoring and reporting requirements and deadlines 
are analogous to the current deadlines under the CSAPR NOx Ozone Season 
Group 2 Trading Program.
    Under 40 CFR part 75, a unit has several options for monitoring and 
reporting, including the use of a CEMS; an excepted monitoring 
methodology based in part on fuel-flow metering for certain gas- or 
oil-fired peaking units; low-mass emissions monitoring for certain non-
coal-fired, low emitting

[[Page 69020]]

units; or an alternative monitoring system approved by the 
Administrator through a petition process. In addition, sources can 
submit petitions to the Administrator for alternatives to individual 
monitoring, recordkeeping, and reporting requirements specified in 40 
CFR part 75. Each CEMS must undergo rigorous initial certification 
testing and periodic quality assurance testing thereafter, including 
the use of relative accuracy test audits and 24-hour calibrations. In 
addition, when a monitoring system is not operating properly, standard 
substitute data procedures are applied and result in a conservative 
estimate of emissions for the period involved.
    Further, 40 CFR part 75 requires electronic submission of quarterly 
emissions reports to the Administrator, in a format prescribed by the 
Administrator. The reports will contain all of the data required 
concerning ozone season NOX emissions.
    Units currently subject to the CSAPR NOx Ozone Season Group 2 
Trading Program are required to monitor and report NOX 
emissions in accordance with 40 CFR part 75, so covered sources in the 
Group 3 trading program will simply continue the same monitoring and 
reporting practices as required by 40 CFR part 75 under the Group 2 
trading program.
7. Recordation of Allowances
    EPA is proposing to establish a schedule for recording allocations 
of vintage-year 2021 CSAPR NOX Ozone Season Group 3 
allowances to ensure that affected sources are allocated vintage year 
2021 allowances as soon as practicable and well before the 2021 ozone 
season compliance deadline (March 1, 2022). EPA is also proposing a 
schedule for recording allocations of vintage-year 2022 CSAPR 
NOX Ozone Season Group 3 allowances that accommodates 
sources' expectation to receive these allowance allocations soon after 
the publication of this final rule while also ensuring that states have 
the opportunity to develop and submit to EPA SIP revisions concerning 
allocations of allowances for vintage year 2022 and later.
    Specifically, allocations to existing units for the first control 
period outlined in this proposal (i.e. the 2021 ozone season) will be 
recorded no later than 120 days after the publication of the final rule 
in the Federal Register. EPA will also record allocation of vintage 
year 2022 allowances by this deadline for all units except those in 
states that provided to EPA, by 90 days after the publication of the 
final rule, a letter indicating an intent to submit a SIP revision 
that, if approved, would substitute state-determined allocations for 
the default allocations determined by EPA for the 2022 control period. 
EPA proposes that the deadline for states to submit to EPA such SIP 
revisions will be 180 days after publication of the final rule. If 
states that notified EPA of their intent to submit a SIP revision fail 
to submit such a SIP by the SIP submission deadline, EPA will record 
vintage year 2022 FIP allocations to those states no later than 210 
days after the publication of the final rule. No later than one year 
after the publication of the final rule, EPA will record the SIP 
allocations of vintage year 2022 Group 3 allowances for states with 
approved SIP revisions. By this same one-year deadline, EPA will record 
the FIP allocations of vintage year 2022 Group 3 allowances for states 
whose SIP revisions are not approved by EPA.
    The recordation deadline for vintage year 2021 allowances to 
existing units is anticipated to be approximately 7 months before the 
date by which sources are required to hold allowances sufficient to 
cover their emissions for that first control period (March 1, 2022, as 
discussed above). This schedule allows sources ample time to engage in 
allowance trading activities consistent with their preferred compliance 
strategies. EPA proposes to record vintage year 2023 and 2024 Group 3 
allowance allocations to existing units by July 1, 2022, and vintage 
year 2025 and 2026 Group 3 allowance allocations by July 1, 2023. By 
July 1 of each year after 2023, EPA proposes to record Group 3 
allowance allocations to existing units for the control period in the 
third year after the year of recordation. The proposed recordation 
deadlines would apply to recordation of both allocations based on the 
default proposed allocation provisions and allocations provided by 
states pursuant to approved SIP revisions.
    As an exception to all of the recordation deadlines that would 
otherwise apply, EPA proposes not to record any allocations of Group 3 
allowances to a source or other entity unless that source or entity has 
complied with the requirements to surrender previously allocated 2021-
2024 Group 2 allowances. The surrender requirements are necessary to 
maintain the previously established levels of stringency of the Group 2 
trading program for the states and sources that remain subject to that 
program under this proposal. EPA believes that conditioning the 
recordation of Group 3 allowances on compliance with the surrender 
requirements would spur compliance and would not impose an 
inappropriate burden on sources.
    EPA notes that the proposal to generally record allocations to 
existing units three years in advance under the new Group 3 trading 
program represents a change from the historical recordation schedules 
for allocations to existing units under the other CSAPR trading 
programs, which have generally provided for such allocations to be 
recorded four years in advance. In this action, EPA is proposing to 
revise the recordation schedules under the other CSAPR trading 
programs, as well as the similarly structured Texas SO2 
Trading Program, so as to generally record allocations to existing 
units three years in advance. The proposed change would take effect 
with allocations for the 2025 control periods, which would be recorded 
by July 1, 2022, instead of by July 1, 2021. The reason for the 
proposed change is the discovery of a timing conflict in all the CSAPR 
trading programs between the requirement to record four years in 
advance and the separate provisions governing allocations to existing 
units that have ceased operations. Under those separate provisions, EPA 
is unable to determine whether some existing units are entitled to 
continue to receive their allowance allocations more than three years 
in advance, and thus EPA does not have the information necessary to 
record all the allocations four years in advance. Further discussion of 
this proposed revision to the schedule for recording allocations to 
existing units is provided in section VIII.C.8.a.
    With respect to allocations of allowances from the new unit set-
asides and Indian country new unit set-asides, for the 2021 and 2022 
control periods, EPA proposes to record these allocations under the 
Group 3 trading program in two rounds, by August 1 of the control 
period (or 120 days after publication of the final rule in this action, 
if later) and by February 15 of the year following the control period. 
This schedule generally matches the recordation schedule for 
allocations of allowances from the analogous set-asides under the Group 
2 trading program and the other CSAPR trading programs. Starting with 
the 2023 control period,\162\ EPA proposes to adopt a new one-round 
process for determining allocations from the new unit set-asides and 
Indian country new unit set-asides, and consistent with that revised 
allocation process EPA proposes to

[[Page 69021]]

record all allocations from these set-asides as of May 1 in the year 
following the control period, in both the Group 3 trading program and 
the existing CSAPR trading programs, and both where the allocations are 
determined by EPA and where the allocations are provided by states 
pursuant to approved SIP revisions. Further discussion is provided in 
sections VIII.C.3.b. and VIII.C.8.b.
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    \162\ As discussed in section VIII.C.8.b., EPA is also 
requesting comment on implementing the revised NUSA allocation 
process and deadlines starting with the 2021 control periods.
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    EPA requests comment on the proposed recordation deadlines (Comment 
C-35).
8. Proposed Conforming Revisions to Regulations for Existing Trading 
Programs
    As discussed elsewhere in this preamble, in most respects, but not 
in every respect, the provisions of the proposed the CSAPR 
NOX Ozone Season Group 3 Trading Program at 40 CFR part 97, 
subpart GGGGG, parallel the current provisions of the other CSAPR 
trading programs \163\ at subparts AAAAA through EEEEE established in 
the CSAPR rulemaking and the CSAPR Update and, to a somewhat lesser 
extent, the provisions of the similarly structured Texas SO2 
Trading Program established at subpart FFFFF. This section discusses 
the proposed provisions of the new trading program that differ from the 
current provisions of the existing trading programs, beyond the 
provisions discussed in section VIII.C.4. addressing the transition to 
the new trading program. This section also discusses various minor 
proposed corrections and clarifications to the existing regulations.
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    \163\ The existing CSAPR trading programs and their respective 
subparts of 40 CFR part 97 are: CSAPR NOX Annual Trading 
Program (subpart AAAAA), CSAPR NOX Ozone Season Group 1 
Trading Program (subpart BBBBB), CSAPR SO2 Group 1 
Trading Program (subpart CCCCC), CSAPR SO2 Group 2 
Trading Program (subpart DDDDD), and CSAPR NOX Ozone 
Season Group 2 Trading Program (subpart EEEEE).
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    To clarify and facilitate administration of the regulations for all 
of EPA's trading programs in 40 CFR part 97, and to maintain their 
parallel nature to the extent possible, EPA is proposing in this action 
to amend the regulations for the existing trading programs to reflect 
certain revisions as noted in the sections of this preamble describing 
the proposed new Group 3 trading program. Section VIII.C.8.a. addresses 
the proposed revisions discussed in section VIII.C.7. to address a 
timing conflict in the current regulations for all of the existing 
programs. Section VIII.C.8.b. addresses the proposed revisions 
discussed in sections VIII.C.3.b. and VIII.C.3.c. to simplify and 
improve the process for allocating allowances from the new unit set-
asides under the existing CSAPR programs. Section VIII.C.8.c. addresses 
an additional minor revision to facilitate the reallocation of any 
incorrectly allocated allowances and also discusses proposed small 
corrections to the previously published amounts of certain new unit 
set-asides. It is EPA's intent for the regulations for all the trading 
programs in 40 CFR part 97 to continue to be as consistent in design as 
possible. For this reason, if the existing trading programs are not 
amended to include the revised provisions discussed in this section, 
EPA requests comment on instead maintaining the parallel nature of the 
various trading programs by finalizing the new trading program in 
subpart GGGGG not as proposed, but as modified to reflect the 
comparable current provisions of the existing CSAPR trading programs in 
subparts AAAAA through EEEEE without the revised provisions that are 
discussed in this section and reflected in the currently proposed 
regulatory text for new subpart GGGGG and discussed in this section 
(Comment C-36).
    In this action, EPA is not reopening or requesting comment on the 
regulations for any of the existing trading programs in 40 CFR part 97, 
subparts AAAAA through FFFFF, except with respect to specific revisions 
to these subparts proposed in this section, as well as the revisions to 
the regulations for the Group 2 trading program discussed in section 
VIII.C.4. that address the transition from the Group 2 trading program 
to the Group 3 trading program.
a. Resolution of Timing Conflict Between Certain Existing Provisions
    Consistent with the provisions of the new CSAPR trading program 
proposed in this action, EPA proposes to amend the regulations for the 
existing CSAPR trading programs and the Texas SO2 Trading 
Program to resolve a timing conflict between the provisions that set 
deadlines for recordation of allowances allocated to existing units and 
the provisions that govern allocations of allowances to units that have 
ceased operation for the control periods in at least two consecutive 
years. The current recordation provisions in all of the trading 
programs generally require EPA to record allocations of allowances to 
existing units four years in advance of the control periods for which 
the allowances are being allocated. For example, on July 1, 2020, EPA 
recorded allocations to most existing units of allowances for use in 
the 2024 control periods for all the existing trading programs. 
However, other provisions of all the trading programs require EPA not 
to record allocations to existing units that do not operate for two 
consecutive control periods, starting with the fifth control period 
after the first control period in which the unit did not operate. For 
example, if a unit that would otherwise receive allocations as an 
existing unit does not operate in the 2019 and 2020 control periods, 
the unit will continue to receive allocations for the control periods 
in 2019 through 2023 but will no longer be entitled to receive 
allocations for control periods in 2024 and thereafter. These two sets 
of timing requirements are in conflict, as demonstrated by the examples 
just presented: as of the July 1, 2020 deadline to record allocations 
for the 2024 control periods, EPA could not yet know whether all units 
that did not operate in 2019 would resume operation later in 2020, and 
EPA therefore could not yet know whether all such units would be 
entitled to receive allocations for the 2024 control periods or 
not.\164\
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    \164\ Because the 4-years-in-advance recordation schedule was 
phased in, the conflict with the provision addressing units that 
have ceased operation did not affect recordation activities under 
any CSAPR program until 2018. To date, EPA has addressed the 
conflict by deferring recordation of allocations to certain units 
past the applicable recordation deadlines until all information 
needed to determine whether the units are entitled to receive the 
allocations becomes available.
---------------------------------------------------------------------------

    To address the timing conflict described above, EPA is proposing to 
amend the regulations for each of the CSAPR trading programs and the 
Texas SO2 Trading Program to generally require recordation 
of allowances allocated to existing units to take place three years 
rather than four years in advance of the control period for which 
allowances are being allocated. Returning to the examples above, if 
these proposed amendments had been in effect with respect to 
allocations for the control periods in 2024, EPA would not have been 
required to record allocations for the 2024 control period until July 
1, 2021, by which time complete information on all units' operations in 
2019 and 2020 will be available. Relatedly, for states that determine 
allocations of allowances to their sources under approved SIP 
revisions, EPA is proposing to amend the deadlines by which the states 
must submit the allocations to EPA for recordation to make the 
submissions due three years instead of four years before the applicable 
control period.\165\
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    \165\ Because states' deadlines for submission of SIP revisions 
under the CSAPR regulations are based on the deadlines by which they 
must submit their subsequent state-determined allowance allocations, 
in some circumstances the proposed revision to the deadline for 
submitting allowance allocations would also effectively extend the 
deadline for such a SIP revision. See, e.g., 40 CFR 52.38(a)(4)(ii), 
(a)(5)(vi).

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[[Page 69022]]

    The amended recordation and submission schedules are proposed to be 
effective beginning with recordation of allocations for control periods 
in 2025 and would apply to EPA's schedule for recording not only the 
allocations determined by EPA under the federal CSAPR trading programs 
but also the allocations determined by states or EPA under state CSAPR 
trading programs that are similarly recorded by EPA. EPA believes these 
proposed amendments address the timing conflict in the existing trading 
program regulations in a manner that is as consistent as possible with 
the other provisions of the regulations, because while the amendments 
would alter the point in time at which trading program participants 
receive allowances, the amendments would not alter the quantities of 
allowances received by any participant in any of the existing trading 
programs. In contrast, the only simple alternatives for resolving the 
timing conflict--either shortening the period of non-operation that 
would cause a unit to lose its allocation from two years to one year or 
lengthening the period for which non-operating units would retain their 
allowance allocations from five years to six years--would cause changes 
in the amounts of allowances received by some trading program 
participants, and some stakeholders might view those changes as 
inequitable or undesirable for other policy reasons.
    EPA requests comment on the proposed amendments to the deadlines 
for EPA to record allowance allocations and for states with approved 
CSAPR SIP revisions to submit their state-determined allowance 
allocations to EPA (Comment C-37). Further details on the specific 
regulatory provisions that would be affected by the proposed revisions 
are provided in section X.D. of the preamble.
b. Modifications to NUSA Provisions
    Consistent with the provisions of the new CSAPR trading program 
proposed in this action for ozone season emissions of NOX 
from sources in Group 3 states, EPA proposes to amend the regulations 
for the existing CSAPR trading programs governing allocations of 
allowances to units from NUSAs and Indian country NUSAs to reduce the 
potential for inequitable outcomes and to clarify and simplify the 
regulations.
    The current regulations provide for a two-round allocation process. 
For purposes of the first round, a unit is generally eligible to 
receive allocations from the NUSA for its state regardless of when it 
commenced commercial operation, as long as either no allocation of 
allowances to the unit as an existing unit was previously determined 
\166\ or the unit is no longer entitled to receive its previously 
determined allocation as an existing unit. The first-round allocations 
are calculated during the control period at issue and are proportional 
to the eligible units' emissions during the preceding control period, 
up to the amount of allowances available in the NUSA. EPA performs 
preliminary calculations and publishes a notice by June 1, provides an 
opportunity for objections, and then adjusts the calculations as 
necessary, issues a final notice, and records the allocations by August 
1 of the control period.
---------------------------------------------------------------------------

    \166\ A determination that a unit should be allocated zero 
allowances is considered an allocation. See, e.g., 40 CFR 97.402 
(definition of ``allocate or allocation'').
---------------------------------------------------------------------------

    If any allowances remain in the NUSA after the first round, EPA 
carries out a second round, for which eligibility is limited to units 
that commenced commercial operation in the year of the control period 
at issue or the preceding year. The second-round allocations are 
calculated early in the year after the year of the control period at 
issue (very shortly after the January 30 deadline for submission of 
emissions data for October through December) and are proportional to 
the positive differences, if any, between the eligible units' emissions 
during the control period at issue and the amounts of any allocations 
the units received in the first round, up to the remaining amount of 
allowances available in the NUSA. Any allowances remaining after the 
second round are allocated to existing units in the state in proportion 
to their previous allocations. EPA makes a preliminary identification 
of eligible units and publishes a notice by December 15, provides an 
opportunity for objections, and then performs the calculations, issues 
a final notice, and records the allocations by February 15 following 
the year of the control period, two weeks before the current March 1 
allowance transfer deadline.
    As indicated in the description above, the current procedures have 
the potential to produce inequitable results, where some units may 
receive allowances in the first round (based on their emissions in the 
preceding control period) that exceed the amounts needed to cover their 
emissions during the control period at issue, while other units that 
commenced operation more recently may not receive any allowances in 
either the first round (because the units had no covered emissions in 
the preceding control period) or the second round (because the NUSA may 
have been exhausted in the first round). Further, based on the 
experience of administering the two-round NUSA allocation process since 
2015, EPA believes the current procedures are unnecessarily complex and 
cause confusion for some market participants.
    To simplify the NUSA allocation process and eliminate the potential 
inequities noted, EPA proposes to amend the regulations for the 
existing CSAPR programs to replace the current two-round NUSA 
allocation process with a one-round process that would allocate 
allowances to all eligible units in proportion to their emissions in 
the control period at issue. The amended provisions are proposed to be 
effective beginning with NUSA allocations for the control periods in 
2023. Under the proposed procedures, which would apply to both NUSAs 
and Indian country NUSAs, EPA would perform preliminary calculations 
and issue a notice by March 1 of the year after the control period at 
issue, one month after the January 30 deadline for submission of the 
required emission data. After providing an opportunity for objections, 
EPA would make any necessary adjustments, issue a final notice, and 
record the allowances by May 1. To accommodate this process, the 
proposed amendments would also revise the allowance transfer deadline 
(i.e., the date by which all covered sources must hold allowances in 
their compliance accounts sufficient to cover their emissions during 
the preceding control period) from March 1 of the year following the 
control period to June 1. In coordination with the revised recordation 
deadlines, EPA also proposes to extend the deadline for states to 
submit to EPA their state-determined allocations for new units from 
July 1 in the year of the control period to April 1 in the year 
following the control period. Finally, although the Texas 
SO2 Trading Program does not have NUSA provisions, in order 
to minimize unnecessary differences between the deadlines for analogous 
provisions in that program and the CSAPR programs, EPA also proposes to 
revise the Supplemental Allowance Pool recordation deadline and the 
allowance transfer deadline under the Texas SO2 Trading 
Program to May 1 and June 1, respectively, of the year after the 
control period.
    The proposed revisions to the NUSA allocation procedures would also 
allow for related simplification of the CSAPR trading programs' 
assurance provisions.

[[Page 69023]]

Under the current assurance provisions, when emissions in a state for a 
given control period exceed the state's assurance level, if there are 
any units in the state that operated during the control period but that 
did not receive an actual allowance allocation either as an existing 
unit or from the NUSA, the regulations require EPA to publish a notice 
calling for the owners and operators of such units to submit certain 
information which EPA uses to determine imputed allowance allocations 
for the units. EPA then uses the imputed allowance allocations for 
these units, together with the actual allowance allocations for other 
units, to apportion responsibility for the assurance level exceedance 
among the owners and operators of all the state's units. If the 
proposed amendments to the NUSA allocation process are adopted, all 
units that have covered emissions during any control period would 
receive allocations either as an existing unit or from the NUSA, making 
the procedures for determining imputed allocations unnecessary. 
Accordingly, EPA proposes to simplify the assurance provisions for all 
of the existing CSAPR trading programs by removing the requirement for 
EPA to issue the additional notice just discussed, starting with the 
2023 control periods.\167\ EPA also proposes to revise the date as of 
which the ``common designated representative'' for a group of sources 
is determined for purposes of the assurance provisions from April 1 to 
July 1 of the year following the control period, preserving that date's 
current position of being one month after the allowance transfer 
deadline. This revision would maintain the existing coordination 
between these two regulatory deadlines and would apply to all the 
existing CSAPR trading programs as well as the Texas SO2 
Trading Program.
---------------------------------------------------------------------------

    \167\ There are currently no analogous provisions in the Texas 
SO2 Trading Program.
---------------------------------------------------------------------------

    EPA is proposing to make the changes to the NUSA allocation 
provisions, assurance provisions, and related deadlines effective as of 
the 2023 control period. The 2023 control period is the first control 
period by which it will be possible for states to fully replace the FIP 
requirements that are proposed in this action with a SIP revision. In 
the event that any states prefer the existing two-round NUSA allocation 
process, they would be able to include such a process in their state 
rules for determining allowance allocations and submit those state 
rules to EPA for approval in a SIP revision. However, EPA believes it 
is essential that the same deadlines apply to all participants in a 
given CSAPR trading program, and that it is very desirable for the 
deadlines to be the same across all the CSAPR trading programs. EPA 
therefore proposes to apply all of the amended deadlines described 
above to all states and all sources participating in all of the CSAPR 
trading programs under both FIPs and SIPs as of the 2023 control 
periods.
    EPA requests comment on the proposed revisions discussed above 
regarding the NUSA provisions and the associated revisions to the 
assurance provisions, the allowance transfer deadline, the deadline for 
EPA to record NUSA allocations and/or Supplemental Allowance Pool 
allocations, the deadline for states to submit state-determined 
allocations of allowances to new units, and the date for determination 
of a common designated representative for purposes of the assurance 
provisions. In addition to requesting comment on applying these 
revisions as of the 2023 control periods as proposed, EPA also 
specifically requests comment on whether it would be preferable to 
apply the revisions as of the 2021 control periods, in the new Group 3 
trading program as well as the existing CSAPR trading programs and, to 
the extent applicable, the Texas SO2 Trading Program 
(Comment C-38). Further details on the specific regulatory provisions 
that would be affected by the proposed revisions are provided in 
section X.D. of the preamble.
c. Minor Corrections and Clarifications to Existing Regulations
    EPA is proposing two additional minor corrections and 
clarifications to the NUSA provisions in the existing CSAPR trading 
programs. The first minor revision addresses circumstances where 
allowances that are determined to have been allocated incorrectly are 
recalled and added to the NUSA for reallocation. The current 
regulations provide for the recalled allowances to be reallocated 
through the NUSA allocation process for the same control period for 
which the allowances were originally allocated incorrectly. Because 
some corrections may occur after the NUSA allocation process for a 
control period has already have been completed, EPA proposes to revise 
these provisions to also allow the recalled allowances to be 
reallocated as part of the NUSA allocation process for a subsequent 
control period.
    The second minor proposed revision to the NUSA provisions concerns 
the specific numbers of allowances identified as the NUSA amounts for 
several states under the existing CSAPR programs established in the 
CSAPR rulemaking.\168\ Following the promulgation of the CSAPR 
regulations in August 2011, EPA issued two rules revising the amounts 
of the emissions budgets, NUSAs, and Indian country NUSAs for several 
states.\169\ Subsequent to these rule revisions, EPA recalculated the 
allocations to individual existing units and published a notice of data 
availability establishing the new allocations.\170\ However, because of 
rounding differences, in certain instances the sum of the recalculated 
allocations to the individual units in a state plus the amounts 
identified in the regulations for the NUSA and Indian country NUSA for 
the state does not exactly equal the state budget.\171\ In this action, 
EPA is proposing to adjust the amounts of the NUSAs identified in the 
regulations for control periods in future years up or down by the 
amount needed to eliminate the rounding differences. The sizes of the 
proposed NUSA adjustments range from 1 to 17 allowances. These 
revisions would not affect the amounts of any state emissions budgets.
---------------------------------------------------------------------------

    \168\ This proposed revision affects the CSAPR NOX 
Annual, NOX Ozone Season Group 1, SO2 Group 1, 
and SO2 Group 2 trading programs established in the CSAPR 
rulemaking but does not affect the CSAPR NOX Ozone Season 
Group 2 program established in the CSAPR Update rulemaking.
    \169\ See 77 FR 10324 (February 21, 2012); 77 FR 34830 (June 12, 
2012).
    \170\ See 79 FR 71674 (December 3, 2014).
    \171\ To date, EPA has addressed the rounding differences 
through the NUSA administration process by allocating whatever 
amounts of allowances remain in the states' budgets after 
allocations to existing units instead of allocating the specific 
amounts of allowances stated as the amounts of the states' NUSAs in 
the regulations. Thus, the proposed amendments would simply clarify 
the regulations and bring them into conformance with current 
practice.
---------------------------------------------------------------------------

    EPA requests comment on the proposed corrections and clarifications 
described above. Further details on the specific regulatory provisions 
that would be affected by the proposed revisions are provided in 
section X.D. of the preamble (Comment C-39).

D. Submitting a SIP

    States may replace a FIP with a SIP under the Clean Air Act at any 
time if the SIP is approved by EPA, see CAA section 110(c)(1)(B). EPA 
has established certain specialized provisions for replacing FIPs with 
SIPs within all of the CSAPR trading programs, including the use of so-
called ``abbreviated SIPs'' and ``full SIPs,'' see 40 CFR 52.38(a)(4)-
(5) and (b)(4), (5), (8), and (9); 40 CFR 52.39(e), (f), (h), and (i). 
Under the proposed new or amended FIPs for the 12 states whose sources

[[Page 69024]]

would participate in the new CSAPR NOx Ozone Season Group 3 Trading 
Program, ``abbreviated'' and ``full'' SIP options continue to be 
available. An ``abbreviated SIP'' allows a state to submit a SIP 
revision that would modify allocation provisions in the ozone season 
NOX trading program that is then incorporated into the FIP 
to allow the state to substitute its own allocation provisions. A 
``full SIP'' allows a state to adopt a trading program meeting certain 
requirements that would allow sources in the state to continue to use 
the EPA-administered trading program through an approved SIP revision, 
rather than a FIP. In addition, as under the CSAPR and the CSAPR 
Update, EPA proposes to provide states with an opportunity to adopt 
state-determined allowance allocations for existing units for the 
second control period under this rule--in this case, the 2022 control 
period--through streamlined SIP revisions. See 76 FR 48326-48332 for 
additional discussion on full and abbreviated SIP options and 40 CFR 
52.38(b).
1. SIP Option To Modify 2022 Allocations
    As under the CSAPR and the CSAPR Update, EPA proposes to allow a 
state to submit a SIP revision establishing allowance allocations for 
existing units in the state for the second control period of the new 
requirements, 2022, to replace the EPA-determined default allocations. 
The process would be the same process used at the start of other CSAPR 
trading programs but with slightly longer deadlines, i.e., a state 
would submit a letter to EPA within 90 days after publication of the 
final rule indicating its intent to submit a complete SIP revision 
within 180 days after publication of the final rule. The SIP would 
provide in an EPA-prescribed format a list of existing units and their 
allocations for the 2022 control period. If a state does not submit a 
letter of intent to submit a SIP revision, the EPA-determined default 
allocations would be recorded by 120 days after publication of the 
final rule. If a state submits a timely letter of intent but fails to 
submit a SIP revision, the EPA-determined default allocations would be 
recorded by 30 days after the SIP submittal deadline. If a state 
submits a timely letter of intent followed by a timely SIP revision 
that is approved, the approved SIP allocations would be recorded by one 
year after publication of the final rule.
2. SIP Option To Modify Allocations in 2023 and Beyond
    For the 2023 control period and later, EPA proposes that states in 
the CSAPR NOX Ozone Season Group 3 Trading Program can 
modify the EPA-determined default allocations with an approved SIP 
revision. EPA proposes that the SIP submittal deadline be December 1, 
2021. The deadline for states to submit state-determined allocations 
for 2023 and 2024 under an approved SIP would be June 1, 2022, and the 
deadline for EPA to record those allocations would be July 1, 2022. 
Under the proposed new deadlines, a state could submit a SIP revision 
for 2025 and beyond control periods by December 1, 2022, with state 
allocations for the 2025 and 2026 control periods due June 1, 2023, and 
EPA recordation of the allocations by July 1, 2023. For the 2023 
control period and later, SIPs could be full or abbreviated SIPs. As 
discussed in section VIII.F.3. below, states would also have the option 
to expand applicability to include EGUs between 15 MWe and 25 MWe or, 
in the case of states subject to the NOX SIP Call, large 
non-EGU boilers and combustion turbines. Inclusion of the large non-
EGUs would serve as a mechanism to address the state's outstanding 
regulatory obligations under the NOX SIP Call with respect 
to those sources, and the state would be allowed to allocate a defined 
quantity of additional Group 3 allowances because of the expanded set 
of sources. See above and 76 FR 48326-48332 for additional discussion 
on full and abbreviated SIP options and 40 CFR 52.38(b).
3. SIP Revisions that Do Not Use the New Group 3 Trading Program
    States can submit SIP revisions to replace the FIP that achieve the 
necessary emission reductions but do not use the CSAPR NOX 
Ozone Season Group 3 Trading Program. For a transport SIP revision that 
does not use the CSAPR NOX Ozone Season Group 3 Trading 
Program, EPA would evaluate the transport SIP based on the particular 
control strategies selected and whether the strategies as a whole 
provide adequate and enforceable provisions ensuring that the necessary 
emission reductions (i.e., reductions equal to or greater than what the 
Group 3 trading program will achieve) will be achieved. In order to 
best ensure its approvability, the SIP revision should include the 
following general elements: (1) A comprehensive baseline 2021 statewide 
NOX emission inventory (which includes existing control 
requirements), which should be consistent with the 2021 emission 
inventory that EPA would use when finalizing this rulemaking to 
calculate the required state budget (unless the state can explain the 
discrepancy); (2) a list and description of control measures to satisfy 
the state emission reduction obligation and a demonstration showing 
when each measure would be in place to meet the 2021 and successive 
control periods; (3) fully-adopted state rules providing for such 
NOX controls during the ozone season; (4) for EGUs greater 
than 25 MWe, 40 CFR part 75 monitoring, and for other units, monitoring 
and reporting procedures sufficient to demonstrate that sources are 
complying with the SIP (see 40 CFR part 51 subpart K (``source 
surveillance'' requirements)); and (5) a projected inventory 
demonstrating that state measures along with federal measures will 
achieve the necessary emission reductions in time to meet the 2021 
compliance deadline. The SIPs must meet procedural requirements under 
the Act, such as the requirements for public hearing, be adopted by the 
appropriate state board or authority, and establish by a practically 
enforceable regulation or permit a schedule and date for each affected 
source or source category to achieve compliance. Once the state has 
made a SIP submission, EPA will evaluate the submission(s) for 
completeness. EPA's criteria for determining completeness of a SIP 
submission are codified at 40 CFR part 51 appendix V.
    For further information on replacing a FIP with a SIP, see the 
discussion in the final CSAPR rulemaking (76 FR 48326).
4. Submitting a SIP To Participate in the New Group 3 Trading Program 
for States Not Included
    Finally, EPA is also proposing to allow a state whose sources are 
required to participate in the CSAPR NOx Ozone Season Group 1 Trading 
Program (i.e., Georgia) or a state whose sources are required to 
continue to participate in the CSAPR NOx Ozone Season Group 2 Trading 
Program (as proposed, Alabama, Arkansas, Iowa, Kansas, Mississippi, 
Missouri, Oklahoma, Tennessee, Texas, and Wisconsin) to submit a SIP 
revision to require its sources to participate instead in the new Group 
3 trading program. A similar option was made available to Georgia in 
the CSAPR Update (with respect to the Group 2 trading program) to 
address possible concerns expressed by some commenters that if sources 
in Georgia were not allowed to trade with sources in other states, the 
allowances issued to the sources in Georgia would otherwise

[[Page 69025]]

be of limited use. See 40 CFR 52.38(b)(6). The proposed option in this 
rulemaking, similar to the option created in the CSAPR Update, would 
require the state to adopt into its SIP a more stringent budget 
reflecting emission levels at higher dollar per ton emission reduction 
costs comparable to the dollar per ton emission reduction costs used to 
establish the budgets for states whose sources are proposed to be 
subject to the CSAPR NOX Ozone Season Group 3 Trading 
Program described in this proposal.

E. Title V Permitting

    This proposed rule, like the CSAPR and the CSAPR Update, does not 
establish any permitting requirements independent of those under Title 
V of the CAA and the regulations implementing Title V, 40 CFR parts 70 
and 71.\172\ All major stationary sources of air pollution and certain 
other sources are required to apply for title V operating permits that 
include emission limitations and other conditions as necessary to 
assure compliance with the applicable requirements of the CAA, 
including the requirements of the applicable SIP. CAA sections 502(a) 
and 504(a), 42 U.S.C. 7661a(a) and 7661c(a). The ``applicable 
requirements'' that must be addressed in title V permits are defined in 
the title V regulations (40 CFR 70.2 and 71.2 (definition of 
``applicable requirement'')).
---------------------------------------------------------------------------

    \172\ Part 70 addresses requirements for state title V programs, 
and Part 71 governs the federal title V program.
---------------------------------------------------------------------------

    EPA anticipates that, given the nature of the units subject to this 
proposed rule and given that all of the units proposed to be covered 
here are already subject to the CSAPR Update, most if not all of the 
sources at which the units are located are already subject to title V 
permitting requirements. For sources subject to title V, the interstate 
transport requirements for the 2008 ozone NAAQS that are applicable to 
them under the proposed new or amended FIPs would be ``applicable 
requirements'' under title V and therefore must be addressed in the 
title V permits. For example, requirements concerning designated 
representatives, monitoring, reporting, and recordkeeping, the 
requirement to hold allowances covering emissions, the assurance 
provisions, and liability are ``applicable requirements'' that must be 
addressed in the permits.
    Title V of the CAA establishes the basic requirements for state 
title V permitting programs, including, among other things, provisions 
governing permit applications, permit content, and permit revisions 
that address applicable requirements under final FIPs in a manner that 
provides the flexibility necessary to implement market-based programs 
such as the trading programs established by the CSAPR and the CSAPR 
Update and this proposed rule. 42 U.S.C. 7661a(b); 40 CFR 70.6(a)(8) & 
(10); 40 CFR 71.6(a)(8) & (10).
    In the CSAPR and the CSAPR Update, EPA established standard 
requirements governing how sources covered by that rule would comply 
with title V and its regulations.\173\ 40 CFR 97.506(d) and 97.806(d). 
For any new or existing sources under this proposed rule establishing 
the Group 3 program, identical title V compliance provisions would 
apply, just as they would have in the CSAPR NOx Ozone Season Group 2 
Trading Program. For example, the title V regulations provide that a 
permit issued under title V must include ``[a] provision stating that 
no permit revision shall be required under any approved . . . emissions 
trading and other similar programs or processes for changes that are 
provided for in the permit.'' 40 CFR 70.6(a)(8) and 71.6(a)(8). 
Consistent with these provisions in the title V regulations, in the 
CSAPR and the CSAPR Update, EPA included a provision stating that no 
permit revision is necessary for the allocation, holding, deduction, or 
transfer of allowances. 40 CFR 97.506(d)(1) and 97.806(d)(1). This 
provision is also included in each title V permit for an affected 
source. This proposed rule maintains the approach taken under the CSAPR 
and the CSAPR Update that allows allowances to be traded (or allocated, 
held, or deducted) without a revision to the title V permit of any of 
the sources involved.
---------------------------------------------------------------------------

    \173\ EPA has also issued a guidance document and template that 
includes instructions describing how to incorporate the applicable 
requirements into a source's Title V permit. https://www3.epa.gov/airtransport/CSAPR/pdfs/CSAPR_Title_V_Permit_Guidance.pdf.
---------------------------------------------------------------------------

    Similarly, this proposed rule would also continue to support the 
means by which a source in a CSAPR trading program can use the title V 
minor modification procedure to change its approach for monitoring and 
reporting emissions, in certain circumstances. Specifically, sources 
may use the minor modification procedure so long as the new monitoring 
and reporting approach is one of the prior-approved approaches under 
the CSAPR and the CSAPR Update (i.e., approaches using a continuous 
emission monitoring system under subparts B and H of Part 75, an 
excepted monitoring system under appendices D and E to Part 75, a low 
mass emissions excepted monitoring methodology under 40 CFR 75.19, or 
an alternative monitoring system under subpart E of part 75), and the 
permit already includes a description of the new monitoring and 
reporting approach to be used. See 40 CFR 97.506(d)(2) and 
97.806(d)(2); 40 CFR 70.7(e)(2)(i)(B) and 40 CFR 71.7(e)(1)(i)(B). As 
described in EPA's 2015 guidance, the Agency suggests in its template 
that sources may comply with this requirement by including a table of 
all of the approved monitoring and reporting approaches under the CSAPR 
and CSAPR Update trading programs in which the source is required to 
participate, and the applicable requirements governing each of those 
approaches. Inclusion of the table in a source's title V permit 
therefore allows a covered unit that seeks to change or add to its 
chosen monitoring and recordkeeping approach to easily comply with the 
regulations governing the use of the title V minor modification 
procedure.
    Under the CSAPR and the CSAPR Update, in order to employ a 
monitoring or reporting approach different from the prior-approved 
approaches discussed previously, unit owners and operators must submit 
monitoring system certification applications to EPA establishing the 
monitoring and reporting approach actually to be used by the unit, or, 
if the owners and operators choose to employ an alternative monitoring 
system, to submit petitions for that alternative to EPA. These 
applications and petitions are subject to EPA review and approval to 
ensure consistency in monitoring and reporting among all trading 
program participants. EPA's responses to any petitions for alternative 
monitoring systems or for alternatives to specific monitoring or 
reporting requirements are posted on EPA's website.\174\ EPA maintains 
the same approach in this proposed rule.
---------------------------------------------------------------------------

    \174\ https://www.epa.gov/airmarkets/part-75-petition-responses.
---------------------------------------------------------------------------

    Consistent with EPA's approach under the CSAPR and the CSAPR 
Update, the applicable requirements resulting from the proposed new and 
amended FIPs, if finalized, generally would have to be incorporated 
into affected sources' existing title V permits either pursuant to the 
provisions for reopening for cause (40 CFR 70.7(f) and 71.7(f)) or the 
standard permit renewal provisions (40 CFR 70.7(c) and 71.7(c)).\175\ 
For sources newly subject to

[[Page 69026]]

title V that are affected sources under the proposed FIPs, the initial 
title V permit issued pursuant to 40 CFR 70.7(a) should address the 
final FIP requirements.
---------------------------------------------------------------------------

    \175\ A permit is reopened for cause if any new applicable 
requirements (such as those under a FIP) become applicable to an 
affected source with a remaining permit term of 3 or more years. If 
the remaining permit term is less than 3 years, such new applicable 
requirements will be added to the permit during permit renewal. See 
40 CFR 70.7(f)(1)(I) and 71.7(f)(1)(I).
---------------------------------------------------------------------------

    As was the case in the CSAPR and the CSAPR Update, the proposed new 
and amended FIPs impose no independent permitting requirements and the 
title V permitting process will impose no additional burden on sources 
already required to be permitted under title V and on permitting 
authorities.

F. Relationship to Other Emission Trading and Ozone Transport Programs

1. Existing Trading Programs
    This proposed rule if adopted would end the requirements for 
sources in certain states to participate in the existing CSAPR NOx 
Ozone Season Group 2 Trading Program after the 2020 control period and 
require those same sources instead to participate in a new CSAPR NOx 
Ozone Season Group 3 Trading Program with more stringent emissions 
budgets. As discussed in section VIII.C.4. above, the proposal lays out 
certain requirements associated with this transition, including 
provisions to accommodate an effective date sometime after the start of 
the 2021 ozone season, conversion of certain banked 2017-2020 Group 2 
allowances into a limited quantity of Group 3 allowances available for 
use in the new Group 3 trading program, and the recall of 2021-2024 
Group 2 allowances previously allocated to the sources in Group 3 
states. In addition, in section VIII.C.8. of this document, EPA 
describes certain features of the new Group 3 trading program that 
differ from the current features of the other CSAPR trading programs 
and that EPA proposes to adopt as revisions to the other CSAPR trading 
programs as well. A subset of those new features are also proposed to 
be adopted as revisions to the similarly structured Texas 
SO2 Trading Program. Beyond these items, nothing else in 
this rule affects any requirements for any source under the CSAPR 
NOX Annual, SO2 Group 1 or Group 2, or 
NOX Ozone Season Group 1 or Group 2 trading programs or the 
Texas SO2 Trading Program. These trading programs all remain 
in place and will continue to be administered by EPA.
2. Title IV Interactions
    This proposed rule if adopted would not affect any Acid Rain 
Program requirements. Any Title IV sources that are subject to 
provisions of this proposed rule would still need to continue to comply 
with all Acid Rain provisions. Acid Rain Program SO2 and 
NOX requirements are established independently in Title IV 
of the Clean Air Act and will continue to apply independently of this 
proposed rule's provisions. Acid Rain sources will still be required to 
comply with Title IV requirements, including the requirement to hold 
Title IV allowances to cover SO2 emissions at the end of a 
compliance year.
3. NOX SIP Call Interactions
    States affected by both the NOX SIP Call and any final 
CSAPR ozone season requirements for the 2008 NAAQS will be required to 
comply with the requirements of both rules. This proposed rule requires 
NOX ozone season emission reductions from EGUs larger than 
25 MWe in many NOX SIP Call states and at greater stringency 
than required by the NOX SIP Call. Therefore, this proposed 
rule would satisfy the requirements of the NOX SIP Call for 
these large EGUs.
    The NOX SIP Call states used the NOX Budget 
Trading Program to comply with the NOX SIP Call requirements 
for EGUs serving generators with a nameplate capacity greater than 25 
MWe and large non-EGU boilers and combustion turbines with a maximum 
design heat input greater than 250 mmBtu/hr. (In some states, EGUs 
serving a generator with a nameplate capacity equal to or smaller than 
25 MWe were also part of the NOX Budget Trading Program as a 
carryover from the Ozone Transport Commission NOX Budget 
Program.) When EPA promulgated CAIR, it allowed states to modify that 
trading program and include all NOX Budget Trading Program 
units in the CAIR NOX Ozone Season Trading Program as a way 
to continue to meet the requirements of the NOX SIP Call for 
these sources.
    In the CSAPR, however, EPA allowed states to expand applicability 
of the trading program to EGUs serving a generator with a nameplate 
capacity equal to or less than 25 MWe but did not allow the expansion 
of applicability to include large non-EGU sources. The reason for 
excluding large non-EGU sources was largely that emissions from these 
sources were generally much lower than the budget amount and there was 
concern that surplus allowances created as a result of an 
overestimation of baseline emissions and subsequent shutdowns (since 
1999 when the NOX SIP Call was promulgated) would prevent 
needed reductions by the EGUs to address significant contribution to 
downwind air quality impacts.
    Since then, states have had to find appropriate ways to continue to 
show compliance with the NOX SIP Call, particularly for 
large non-EGUs. Some states that included such sources in CAIR are 
still working to find suitable solutions.
    Therefore, as in the CSAPR Update, EPA is proposing to allow any 
NOX SIP Call state affected by this proposed rule to 
voluntarily submit a SIP revision at a budget level that is 
environmentally neutral to address the state's NOX SIP Call 
requirement for ozone season NOX reductions from large non-
EGUs. The SIP revision could include provisions to expand the 
applicability of the CSAPR NOX Ozone Season Group 3 Trading 
Program to include all NOX Budget Trading Program units. 
Analysis shows that these units (mainly large non-EGU boilers, 
combustion turbines, and combined cycle units with a maximum design 
heat input greater than 250 mmBtu/hr) continue to emit well below their 
portion of the NOX SIP Call budget. In order to ensure that 
the necessary amount of EGU emission reductions occur for this proposed 
rule, the corresponding state ozone-season emissions budget amount 
could be increased by the lesser of the highest ozone season 
NOX emissions (in the last 3 years) from those units or the 
relevant non-EGU budget under the NOX SIP Call, and this 
small group of non-EGUs could participate in the CSAPR NOX 
Ozone Season Group 3 Trading Program. The environmental impact would be 
neutral using this approach, and hourly reporting of emissions under 40 
CFR part 75 would continue. This approach would address requests by 
states for help in determining an appropriate way to address the 
continuing NOX SIP Call requirement for large boilers and 
turbines. EPA proposes that if this SIP-based option is finalized, the 
variability limits established for EGUs under the CSAPR NOX 
Ozone Season Group 3 Trading Program would remain unchanged despite the 
inclusion of these non-EGUs. The assurance provisions established for 
the CSAPR NOX Ozone Season Trading Program would apply to 
EGUs, and emissions from non-EGUs would not affect the assurance 
levels.
    The NOX SIP Call generally requires that states choosing 
to rely on large EGUs and large non-EGU boilers and turbines for 
meeting NOX SIP Call emission reduction requirements must 
establish a NOX mass emissions cap on each source and 
require 40 CFR part 75, subpart H monitoring or alternative monitoring. 
As an alternative to source-by-source NOX mass emission 
caps, a state may impose NOX emission rate limits on each 
source and use maximum operating capacity for estimating NOX 
mass emissions or may rely on other requirements that the state 
demonstrates

[[Page 69027]]

to be equivalent to either the NOX mass emission caps or the 
NOX emission rate limits that assume maximum operating 
capacity. Collectively, the caps or their alternatives cannot exceed 
the portion of the state budget for those sources. See 40 CFR 
51.121(f)(2) and (i)(4). If EPA were to allow a state to expand the 
applicability of this proposed rule to include all the NOX 
Budget Trading Program units in the CSAPR NOX Ozone Season 
Group 3 Trading Program, the cap requirement would be met through the 
new budget and the monitoring requirement would be met through the 
trading program provisions, which require part 75 monitoring. Whether 
the option for states to include NOX Budget Trading Program 
units in the CSAPR NOX Ozone Season Group 3 Trading Program 
through SIPs is finalized or not, EPA will work with states to ensure 
that NOX SIP Call obligations continue to be met. EPA 
requests comment on whether to authorize the states' voluntary 
inclusion of NOX SIP Call non-EGUs in the proposed Group 3 
trading program (Comment C-40).

IX. Costs, Benefits, and Other Impacts of the Proposed Rule

    This proposed action is expected to reduce concentrations of both 
ground-level ozone and fine particles (PM2.5) (see 
discussion in Chapter 3 of the Regulatory Impact Analysis (RIA)). EPA 
historically has used conclusions of the most recent Integrated Science 
Assessment (ISA) to inform its approach for quantifying air pollution-
attributable health, welfare, and environmental impacts associated with 
that pollutant. There is a separate ISA for each of the criteria 
pollutants. The ISA synthesizes the epidemiologic, controlled human 
exposure and experimental evidence ``. . . useful in indicating the 
kind and extent of identifiable effects on public health or welfare 
which may be expected from the presence of [a] pollutant in ambient 
air.''
    The ISA uses a weight of evidence approach to assess the extent the 
evidence supports conclusions about the likelihood that a given 
criteria pollutant causes a given health outcome. EPA generally 
estimates the number and economic value of the effects for which the 
ISA identifies the pollutant as having ``causal'' or ``likely to be 
causal'' relationship. The endpoints for which the 2020 final Ozone ISA 
\176\ and the 2019 final PM ISA \177\ identified as being causal or 
likely causal differed in some cases from the endpoints for which those 
pollutants were identified as being causal or likely causal in the 
Ozone and PM ISAs completed for the previous NAAQS reviews (see Tables 
5-5 and 5-6 in Chapter 5 of the RIA). EPA traditionally uses the ISAs' 
characterizations of the health and ecological literature to identify 
individual studies that may be of sufficient quality for use in 
supporting PM or ozone benefits analysis.
---------------------------------------------------------------------------

    \176\ U.S. Environmental Protection Agency (U.S. EPA). 2020. 
Integrated Science Assessment (ISA) for Ozone and Related 
Photochemical Oxidants (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-20/012, 2020.
    \177\ U.S. Environmental Protection Agency (U.S. EPA). 2019. 
Integrated Science Assessment (ISA) for Particulate Matter (Final 
Report, 2019). U.S. Environmental Protection Agency, Washington, DC, 
EPA/600/R-19/188, 2019.
---------------------------------------------------------------------------

    When updating its approach for quantifying the benefits of changes 
in PM2.5 and Ozone, the Agency will incorporate evidence 
reported in these two recently completed ISAs and account for 
forthcoming recommendations from the Science Advisory Board on this 
issue. When updating the evidence for a given endpoint, EPA will 
consider the extent to which there is a causal relationship, whether 
suitable epidemiologic studies exist to allow quantification of 
concentration response functions, and whether there are robust economic 
approaches for estimating the value of the impact of reducing human 
exposure to the pollutant. Carefully and systematically reviewing the 
full breadth of this information requires significant time and 
resources. This process is still underway and will not be completed in 
time for this proposal. EPA intends to update its quantitative methods 
for estimating the number and economic value of PM2.5 and 
ozone health effects in time for publication as part of the final rule. 
\178\ However, to provide perspective regarding the scope of the 
estimated benefits, Appendix 5B of the RIA illustrates the potential 
health effects associated with the change in PM2.5 and ozone 
concentrations as calculated using methods developed prior to the 2019 
p.m. ISA and 2020 Ozone ISA. The values of these estimated benefits are 
not reflected in the estimated net benefits reported in Tables IX.4 and 
IX.5 below.
---------------------------------------------------------------------------

    \178\ In particular, the 2020 Ozone ISA concludes that the 
currently available evidence for cardiovascular effects and total 
mortality is suggestive of, but not sufficient to infer, a causal 
relationship with short-term (as well as long-term) ozone exposures. 
As such, EPA is in the process of recalibrating its benefits 
estimates to quantify only premature mortality from respiratory 
causes (i.e., non-respiratory causes of premature mortality 
associated with ozone exposure would no longer be estimated). 
Similarly, the 2019 PM ISA concludes that the currently available 
evidence for nervous system effects and cancer is likely to be a 
causal relationship with long term PM2.5 exposure. EPA is 
in the process of evaluating nervous system effects from long term 
PM2.5 exposure and evaluating the relationship between 
long term PM2.5 exposure and cancer. Furthermore, the ISA 
references a variety of additional studies for consideration in 
quantifying the health implications of changes in PM2.5 
and ozone exposure. EPA is updating the estimates for several other 
health endpoints to account for this new scientific literature.
---------------------------------------------------------------------------

    EPA estimated the compliance costs, emissions changes, and climate 
benefits that may result from the proposed rule for the years of 
analysis, 2021 to 2025. The estimated costs and climate benefits are 
presented in detail in the RIA accompanying this proposed action. EPA 
notes that the estimated compliance costs and climate benefits are 
directly associated with turning on or fully operating existing SCRs to 
achieve the assigned NOx emission rate, and installing state-of-the-art 
combustion controls. The estimated compliance costs and climate 
benefits also result from a small amount of generation shifting as the 
power system adjusts to the proposed regulatory requirements.
    EPA analyzed this action's proposed emission budgets, which were 
developed using uniform control stringency represented by $1,600 per 
ton of NOX (2016$), as well as a more and a less stringent 
alternative. The more and less stringent alternatives differ in that 
they set different NOX ozone season emission budgets for the 
affected EGUs. The less stringent alternative uses emission budgets 
that were developed using uniform control stringency represented by 
$500 per ton of NOX (2016$). The more stringent alternative 
uses emission budgets that were developed using uniform control 
stringency represented by $9,600 per ton of NOX (2016$). 
Table IX.1 provides the projected 2021 and 2025 EGU emissions 
reductions for the evaluated regulatory control alternatives. For 
additional information on emissions changes in each year from 2021 
through 2025, see Table 4.5 in Chapter 4 of the RIA.

[[Page 69028]]



 Table IX.1--Estimated 2021 and 2025 \a\ EGU Emissions Reductions in the 12 States of NOX, SO2, and CO2 and More
                                         and Less Stringent Alternatives
                                                   [Tons] b c
----------------------------------------------------------------------------------------------------------------
                                                                                  More stringent  Less stringent
                                                                     Proposal       alternative     alternative
----------------------------------------------------------------------------------------------------------------
2021:
    NOX (annual)................................................          17,000          17,000           2,000
    NOX (ozone season)..........................................          17,000          17,000           2,000
    SO2 (annual)................................................  ..............  ..............  ..............
CO2 (annual, thousand metric)...................................  ..............  ..............  ..............
2025:
    NOX (annual)................................................          27,000          41,000           2,000
    NOX (ozone season)..........................................          21,000          35,000           2,000
    SO2 (annual)................................................  ..............  ..............  ..............
    CO2 (annual, thousand metric)...............................           4,000          10,000           3,000
----------------------------------------------------------------------------------------------------------------
\a\ The 2021 emissions reductions estimates are based on IPM projections for 2021 and engineering analysis. For
  more information, see the Ozone Transport Policy Analysis TSD.
\b\ NOX emissions are reported in English (short) tons; CO2 is reported in metric tons.
\c\ In addition to no annual SO2 emissions reductions as shown in the table above, there are no annual direct
  PM2.5 emissions reductions.

    EPA analyzed ozone-season NOX emission reductions and 
the associated costs to the power sector of implementing the EGU 
NOX ozone-season emissions budgets in each of the 12 states 
using the Integrated Planning Model (IPM) and its underlying data and 
inputs. The estimates of the changes in the cost of supplying 
electricity for the regulatory control alternatives are presented in 
Table IX.2.

   Table IX.2--National Compliance Cost Estimates (Millions of 2016$) for the Regulatory Control Alternatives
----------------------------------------------------------------------------------------------------------------
                                                                                  More-stringent  Less-stringent
                                                                     Proposal       alternative     alternative
----------------------------------------------------------------------------------------------------------------
2021-2025 (Annualized)..........................................            19.4            80.6             1.6
2021 (Annual)...................................................            20.9            37.2             3.8
2025 (Annual)...................................................             6.3           132.2           -12.0
----------------------------------------------------------------------------------------------------------------
The 2021-2025 (Annualized) row reflects total estimated annual compliance costs levelized over the period 2021
  through 2025, discounted using a 4.25 real discount rate. The 2021 (Annual) and 2025 (Annual) rows reflect
  annual estimates in each of those years.

    EPA estimated the climate benefits for this proposed rulemaking 
using a measure of the domestic social cost of carbon (SC-
CO2). Table IX.3 shows the estimated monetary value of the 
estimated changes in CO2 emissions in 2021 and 2025 for this 
proposed action, the more stringent alternative, and the less stringent 
alternative.

        Table IX.3--Estimated Domestic Climate Benefits From Changes in CO2 Emissions for Selected Years
                                               [Millions of 2016$]
----------------------------------------------------------------------------------------------------------------
                                                                                    3% Discount     7% Discount
                        Regulatory option                              Year            rate            rate
----------------------------------------------------------------------------------------------------------------
Proposal........................................................            2021             0.3             0.0
                                                                            2025            32.9             5.4
More Stringent Alternative......................................            2021             0.8             0.1
                                                                            2025            71.5            11.7
Less Stringent Alternative......................................            2021             0.2             0.0
                                                                            2025            25.5             4.2
----------------------------------------------------------------------------------------------------------------

    In Table IX.4, EPA presents a summary of the benefits, costs, and 
net benefits of this proposed action and the more and less stringent 
alternatives for 2021. Table IX.5 presents a summary of these impacts 
for this proposed action and the more and less stringent alternatives 
for 2025. EPA represents the present annual value of non-monetized 
benefits from ozone, PM2.5 and NO2 reductions as 
a B. The annual value of B will differ across discount rates, year of 
analysis, and the regulatory alternatives analyzed. Further discussion 
of the non-monetized health and welfare benefits from these pollutants 
is found in Chapter 5 of the RIA.

[[Page 69029]]



 Table IX.4--Benefits, Costs, and Net Benefits of the Proposal and More and Less Stringent Alternatives for 2021
                                                  for the U.S.
                                          [Millions of 2016$] a b c ,d
----------------------------------------------------------------------------------------------------------------
              Discount rate                        Benefits                Costs             Net benefits
----------------------------------------------------------------------------------------------------------------
Proposal:
    3%..................................  0.31 + B..................              21  -21 + B
    7%..................................  0.05 + B..................  ..............  -21 + B
More Stringent Alternative:
    3%..................................  0.80 + B..................              37  -36 + B
    7%..................................  0.12 +B...................  ..............  -37 + B
Less Stringent Alternative:
    3%..................................  0.17 + B..................               4  -4 + B
    7%..................................  0.03 + B..................  ..............  -4 + B
----------------------------------------------------------------------------------------------------------------
\a\ EPA focused results to provide a snapshot of costs and benefits in 2021, using the best available
  information to approximate social costs and social benefits recognizing uncertainties and limitations in those
  estimates.
\b\ Benefits ranges represent discounting of climate benefits at a real discount rate of 3 percent and 7
  percent. Climate benefits are based on changes (reductions) in CO2 emissions. The costs presented in this
  table are 2021 annual estimates for each alternative analyzed.
\c\ All costs and benefits are rounded to two significant figures; rows may not appear to add correctly.
\d\ B is the sum of all unquantified ozone, PM2.5, and NO2 benefits. The annual value of B will differ across
  discount rates, year of analysis, and the regulatory alternatives analyzed. While EPA did not estimate these
  benefits in the RIA, Appendix 5B in the RIA presents PM2.5 and ozone estimates quantified using methods
  consistent with the previously published ISAs to provide information regarding the potential magnitude of the
  benefits of this proposed rule.


 Table IX.5--Benefits, Costs, and Net Benefits of the Proposal and More and Less Stringent Alternatives for 2025
                                                  for the U.S.
                                           [Millions of 2016$] a b c d
----------------------------------------------------------------------------------------------------------------
              Discount rate                        Benefits                Costs             Net benefits
----------------------------------------------------------------------------------------------------------------
Proposal:
    3%..................................  33 + B....................               6  27 + B
    7%..................................  5.4 + B...................  ..............  -0.9 + B
More Stringent Alternative:
    3%..................................  71.5 + B..................             132  -61 + B
    7%..................................  11.7 + B..................  ..............  -120 + B
Less Stringent Alternative:
    3%..................................  25 + B....................             -12  37 + B
    7%..................................  4.2 + B...................  ..............  16 + B
----------------------------------------------------------------------------------------------------------------
\a\ EPA focused results to provide a snapshot of costs and benefits in 2025, using the best available
  information to approximate social costs and social benefits recognizing uncertainties and limitations in those
  estimates.
\b\ Benefits ranges represent discounting of climate benefits at a real discount rate of 3 percent and 7
  percent. Climate benefits are based on changes (reductions) in CO2 emissions. The costs presented in this
  table are 2025 annual estimates for each alternative analyzed.
\c\ All costs and benefits are rounded to two significant figures; rows may not appear to add correctly.
\d\ B is the sum of all unquantified ozone, PM2.5, and NO2 benefits. The annual value of B will differ across
  discount rates, year of analysis, and the regulatory alternatives analyzed. While EPA did not estimate these
  benefits in the RIA, Appendix 5B in the RIA presents PM2.5 and ozone estimates quantified using methods
  consistent with the previously published ISAs to provide information regarding the potential magnitude of the
  benefits of this proposed rule.

    In addition, Table IX-6 presents estimates of the present value 
(PV) of the benefits and costs and the equivalent annualized value 
(EAV), an estimate of the annualized value of the net benefits 
consistent with the present value, over the five-year period of 2021 to 
2025. The estimates of the PV and EAV are calculated using discount 
rates of 3 and 7 percent as directed by OMB's Circular A-4 and are 
presented in 2016 dollars discounted to 2021. The table reflects the 
present value of non-monetized benefits from ozone, PM2.5 
and NO2 reductions as a [beta], while b represents the 
equivalent annualized value of these non-monetized benefits. These 
values will differ across the discount rates and depend on the B's in 
Tables IX.4 and IX.5.

    Table IX.6--Estimated Compliance Costs, Climate Benfits, and Net
            Benefits of the Proposed Rule, 2021 Through 2025
                  [Millions 2016$, discounted to 2021]
------------------------------------------------------------------------
                                   3% Discount rate    7% Discount rate
------------------------------------------------------------------------
Present Value:
    Benefits c d................  101 + [beta]......  15 + [beta]
    Climate Benefits \c\........  101...............  15
    Compliance Costs \e\........  87................  83
    Net Benefits................  14 + [beta].......  -68 + [beta]
Equivalent Annualized Value:
    Benefits....................  22 + b............  4 + b
    Climate Benefits............  22................  4

[[Page 69030]]

 
    Compliance Costs............  19................  20
    Net Benefits................  3 + b.............  -17+ b
------------------------------------------------------------------------
\a\ All estimates in this table are rounded to two significant figures,
  so numbers may not sum due to independent rounding.
\b\ The annualized present value of costs and benefits are calculated
  over a 5 year period from 2021 to 2025.
\c\ Benefits ranges represent discounting of climate benefits at a real
  discount rate of 3 percent and 7 percent. Climate benefits are based
  on changes (reductions) in CO2 emissions.
\d\ [beta] and b is the sum of all unquantified ozone, PM2.5, and NO2
  benefits. The annual values of [beta] and b will differ across
  discount rates. While EPA did not estimate these benefits in the RIA,
  Appendix 5B in the RIA presents PM2.5 and ozone estimates quantified
  using methods consistent with the previously published ISAs to provide
  information regarding the potential magnitude of the benefits of this
  proposed rule.
\e\ The costs presented in this table reflect annualized present value
  compliance costs calculated over a 5 year period from 2021 to 2025.

    As shown in Table IX-6, the PV of the climate benefits of this 
proposed rule, discounted at a 7-percent rate, is estimated to be about 
$15 million, with an EAV of about $4 million. At a 3-percent discount 
rate, the PV of the climate benefits is estimated to be about $101 
million, with an EAV of $22 million. The PV of the compliance costs, 
discounted at a 7-percent rate, is estimated to be about $83 million, 
with an EAV of about $20 million. At a 3-percent discount rate, the PV 
of the estimated compliance costs is about $87 million, with an EAV of 
about $19 million. The PV of the net benefits of this proposed rule, 
discounted at a 7-percent rate, is estimated to be about -$68 million, 
with an EAV of about -$17 million. At a 3-percent discount rate, the PV 
of net benefits is about $14 million, with an EAV of about $3 million. 
See the RIA for additional discussion on costs, benefits, and impacts.

X. Summary of Proposed Changes to the Regulatory Text for the Federal 
Implementation Plans and Trading Programs

    This section describes the proposed amendments to the regulatory 
text for the federal implementation plans and the trading program 
regulations related to the proposed findings and remedy discussed 
elsewhere in this document. The primary amendments to the CFR would be 
revisions to the CSAPR Update FIP provisions in 40 CFR part 52 and the 
creation of a new CSAPR NOX Ozone Season Group 3 Trading 
Program in 40 CFR part 97, subpart GGGGG. In addition, amendments are 
proposed to the regulations for the existing CSAPR NOX Ozone 
Season Group 2 Trading Program to address the transition of the sources 
in certain states from the existing Group 2 program to the new Group 3 
program. The existing regulations for the administrative appeal 
procedures in 40 CFR part 78 would also be revised to reflect the 
applicability of those procedures to decisions of the EPA Administrator 
under the new Group 3 trading program.
    In addition to these primary amendments, certain revisions are 
proposed to the regulations for the existing CSAPR trading programs and 
the Texas SO2 Trading Program for conformity with the 
proposed provisions of the new Group 3 trading program, as discussed in 
section VIII.C.8. This section also describes a small number of minor 
additional proposed corrections and clarifications to the existing CFR 
text for the CSAPR trading programs, the Texas SO2 Trading 
Program, and the appeal procedures. EPA has included documents in the 
docket for this proposed action showing all of the proposed revisions 
to part 52, part 78, and subparts AAAAA through FFFFF of part 97 in 
redline-strikeout format.

A. Amended CSAPR Update FIP Provisions

    The CSAPR and the CSAPR Update FIP provisions related to ozone 
season NOX emissions are set forth in Sec.  52.38(b) as well 
as sections of part 52 specific to each covered state. Proposed 
amendments to Sec.  52.38(b)(1) would expand the overall set of CSAPR 
trading programs addressing ozone season NOX emissions to 
include the new Group 3 trading program in subpart GGGGG of part 97 in 
addition to the current Group 1 and Group 2 trading programs in 
subparts BBBBB and EEEEE of part 97, respectively while proposed 
amendments to Sec.  52.38(b)(2) would identify the states whose sources 
would be required under the new or amended FIPs to participate in each 
of the respective trading programs with regard to their emissions 
occurring in particular years. More specifically, for sources in the 
states that EPA proposes to find have further good neighbor obligations 
with respect to the 2008 ozone NAAQS under this rule, new Sec.  
52.38(b)(2)(iv) would end the requirement to participate in the Group 2 
trading program after the 2020 control period and new Sec.  
52.38(b)(2)(v) would establish the requirement to participate in the 
new Group 3 trading program starting with the 2021 control period.
    The changes in FIP requirements set forth in Sec.  52.38(b)(1) and 
(2) would be replicated in the state-specific CFR sections for each of 
the Group 3 states.\179\ In each such CFR section, the current 
provision indicating that sources in the state are required to 
participate in the CSAPR NOX Ozone Season Group 2 Trading 
Program would be revised to end that requirement with respect to 
emissions after 2020 and to restore previously removed language 
indicating that participation by those sources in the Group 2 trading 
program was only a partial remedy for the state's underlying good 
neighbor obligation.\180\ A further provision would be added in each 
section indicating that sources in the state are required to 
participate in the CSAPR NOX Ozone Season Group 3 Trading 
Program with respect to emissions starting in 2021. These added 
provisions would not contain the partial-remedy language, consistent 
with EPA's proposed determinations in this rule that participation in 
the Group 3 trading program by a state's EGUs would constitute a full 
remedy for each such state's underlying good neighbor obligation. No 
changes would be made to the CFR sections for the remaining states 
whose sources currently participate in the Group 2 trading

[[Page 69031]]

program. For these states, EPA's proposed findings in this action would 
be consistent with and would therefore affirm the previous removal of 
language indicating that participation by the states' sources in the 
Group 2 trading program was only a partial remedy for the states' 
underlying good neighbor obligations.\181\
---------------------------------------------------------------------------

    \179\ See Sec. Sec.  52.731(b) (Illinois), 52.789(b) (Indiana), 
52.940(b) (Kentucky), 52.984(d) (Louisiana), 52.1084(b) (Maryland), 
52.1186(e) (Michigan), 52.1584(e) (New Jersey), 52.1684(b) (New 
York), 52.1882(b) (Ohio), 52.2040(b) (Pennsylvania), 52.2440(b) 
(Virginia), and 52.2540(b) (West Virginia).
    \180\ As discussed elsewhere in this document, EPA is proposing 
to correct the approval of Kentucky's SIP revision that previously 
led to removal of the partial-remedy language for that state and 
instead issue a disapproval. For the remaining states, the partial-
remedy language was removed in the CSAPR Close-Out, which has been 
vacated.
    \181\ See Sec. Sec.  52.54(b) (Alabama), 52.184 (Arkansas), 
52.840(b) (Iowa), 52.882(b) (Kansas), 52,1284 (Mississippi), 
52.1326(b) (Missouri), 52.1930 (Oklahoma), 52.2283(d) (Texas), and 
52.2587(e) (Wisconsin).
---------------------------------------------------------------------------

    As under the CSAPR and the CSAPR Update, states subject to the 
proposed FIPs under this rule would have several options to revise 
their SIPs to modify or replace those FIPs while continuing to use the 
Group 3 trading program as the mechanism for meeting the states' good 
neighbor obligations. New Sec.  52.38(b)(11), (12), and (13) would 
establish options to replace allowance allocations for the 2022 control 
period, to adopt an abbreviated SIP revision for control periods in 
2023 or later years, and to adopt a full SIP revision for control 
periods in later years, respectively. The first two options would 
modify certain provisions of the trading program as applied to a 
state's sources but leave the FIP in place, while the third option 
would replace the FIP with largely identical SIP requirements for 
sources to participate in a state Group 3 trading program integrated 
with the federal Group 3 trading program. These options closely 
replicate the analogous current options in Sec.  52.38(b)(7), (8) and 
(9) with regard to the Group 2 trading program. To make use of the 
option to submit state-determined allocations for the 2022 control 
period, a state would need to notify EPA by 90 days after publication 
of the final rule of its intent to submit to EPA by 180 days after 
publication a state-approved spreadsheet setting forth the allocations. 
To modify or replace the FIP with an abbreviated or full SIP affecting 
2023 or 2024 allocations, the state would need to submit a SIP revision 
by December 1, 2021.
    Like the analogous options under the Group 2 trading program, the 
abbreviated and full SIP options under the Group 3 trading program in 
new Sec.  52.38(b)(12)(i) and (ii) and (b)(13)(i) and (ii) would 
include options for a state to expand applicability to include certain 
non-EGU boilers and combustion turbines or smaller EGUs in the state 
that were previously subject to the NOX Budget Trading 
Program. As discussed in section VIII.F.3 of this document, in 
conjunction with an expansion to include the non-EGUs, the state would 
be able to also issue an additional amount of allowances. Revised Sec.  
52.38(b)(14)(ii) \182\ clarifies that a SIP revision requiring a 
state's sources--EGUs or non-EGUs--to participate in the Group 3 
trading program would satisfy the state's obligations to adopt control 
measures for such sources under the NOX SIP Call.
---------------------------------------------------------------------------

    \182\ Redesignated from Sec.  52.38(b)(10)(ii).
---------------------------------------------------------------------------

    The proposed option discussed in section VIII.D.4 of this preamble 
for a state whose EGUs currently are required to participate the Group 
1 or Group 2 trading program to submit a full SIP revision requiring 
its sources to instead participate in the Group 3 program is set forth 
in new Sec.  52.38(b)(10). This option would be generally similar to 
the full SIP option under new Sec.  52.38(b)(13) for states whose 
sources are already subject to the Group 3 program under a FIP. To the 
extent that EPA had already commenced allocations of Group 1 or Group 2 
allowances to sources in the state for future control periods, the 
Group 1 or Group 2 allowances already allocated for those control 
periods would be converted into Group 3 allowances under revised Sec.  
97.526(c)(2) or new Sec.  97.826(c)(2).
    The principal consequences of EPA's approval of a full SIP revision 
under Sec.  52.38(b) would be set forth in Sec.  52.38(14) and (15). 
Revised Sec.  52.38(b)(14)(i) \183\ would provide that--with exceptions 
indicated in other provisions of Sec.  52.38(b)--full and unconditional 
approval of a state's full SIP revision under new Sec.  52.38(b)(10) or 
(13) as correcting the SIP's deficiency that was the basis for a given 
FIP would cause the automatic withdrawal of the corresponding FIP 
requirements with regard to the sources in the state (except sources in 
Indian country with the borders of the state). New Sec.  
52.38(b)(15)(i), which addresses the Group 1 and Group 2 trading 
programs rather than the Group 3 trading program, identifies specific 
amended provisions of the federal trading Group 1 and Group 2 trading 
programs that would continue to apply to sources in a state Group 1 or 
Group 2 trading program implemented under a SIP provision in order to 
provide programmatic consistency across sources participating in the 
federal trading program and sources participating in integrated state 
trading programs. Revised Sec.  52.38(b)(15)(ii),\184\ which addresses 
the Group 3 trading program as well as the Group 1 and Group 2 trading 
programs, would preserve EPA's ability to complete allowance 
allocations for any control period where such allocations were already 
underway when the SIP revision was approved, Provisions indicating 
these consequences of approval of a full SIP revision would also be 
added to the state-specific CFR sections.
---------------------------------------------------------------------------

    \183\ Redesignated from Sec.  52.38(b)(10)(i).
    \184\ Redesignated from Sec.  52.38(b)(11)(i).
---------------------------------------------------------------------------

    The transition between the Group 2 trading program and the Group 3 
trading program, as well as the transition between the Group 1 trading 
program and the Group 2 trading program or Group 3 trading program, is 
addressed in Sec.  52.38(b)(15)(iii), which identifies several 
allowance-related provisions of the federal trading program regulations 
that would continue to apply when the sources in a state transition to 
a different federal trading program (and also would continue to apply 
under an integrated state trading program). Revised Sec.  
52.38(b)(15)(iii)(A) \185\ would preserve EPA's authority under Sec.  
97.526(c) to carry out conversions of Group 1 allowances to Group 3 
allowances in all compliance accounts (as well as all general accounts) 
following the transition of a state's sources from the Group 1 trading 
program to the Group 3 trading program or following any SIP revision, 
adding to the provision's existing coverage with respect to conversions 
of Group 1 allowances to Group 2 allowances. New Sec.  
52.38(b)(15)(iii)(B) would preserve EPA's analogous authority under new 
Sec.  97.826(c) with respect to conversions of Group 2 allowances to 
Group 3 allowances in analogous circumstances. New Sec.  
52.38(b)(15)(iii)(C) would similarly preserve EPA's authority under new 
Sec.  97.811(d), concerning the proposed recall of Group 2 allowances 
allocated to sources in Group 3 states for control periods after 2020, 
following any SIP revision. For clarity, revisions to the state-
specific CFR sections would replicate the provisions of Sec.  
52.38(b)(15)(iii) indicating that the provisions of Sec. Sec.  
97.526(c), 97.826(c), and 97.811(d) would continue to apply following 
the transition of a state's sources from one trading program to another 
or following approval any SIP revision under Sec.  52.38(b).
---------------------------------------------------------------------------

    \185\ Redesignated from Sec.  52.38(b)(11)(ii).
---------------------------------------------------------------------------

    New Sec.  52.38(b)(17)(ii) would provide that, after the control 
period in 2020, EPA would stop administering all Group 2 trading 
program provisions established under SIP revisions previously approved 
for Group 2 states whose sources would be required to

[[Page 69032]]

participate in the Group 3 program starting with the 2021 control 
period.\186\
---------------------------------------------------------------------------

    \186\ The states with approved SIP revisions that would be 
affected under this provision are Indiana and New York.
---------------------------------------------------------------------------

    Finally, new Sec.  52.38(b)(18) would contain updatable lists of 
states with approved SIP revisions to modify or replace the FIP 
requirements for the Group 3 trading program, supplementing the 
analogous lists at Sec.  52.38(b)(16) and (b)(17)(i) \187\ for the 
Group 1 and Group 2 trading programs.
---------------------------------------------------------------------------

    \187\ Redesignated from Sec.  52.38(b)(12) and (13).
---------------------------------------------------------------------------

B. New CSAPR NOX Ozone Season Group 3 Trading Program 
Provisions

    The proposed Group 3 trading program regulations would be 
promulgated in a new subpart GGGGG of part 97 (40 CFR 97.1001 through 
97.1035). Definitions, applicability, standard requirements, and other 
general provisions would be set forth in Sec. Sec.  97.1001 through 
97.1008. State budgets and allocations of allowances to individual 
units would be addressed in Sec. Sec.  97.1010 through 97.1012, and 
provisions concerning designated representatives would be covered in 
Sec. Sec.  97.1013 through 97.1018. Management and use of allowances, 
including accounts, recordation, transfers, compliance, and banking, 
would be addressed in Sec. Sec.  97.1020 through 97.1028. Provisions 
for monitoring, recordkeeping, and reporting would be set forth in 
Sec. Sec.  97.1030 through 97.1035.
    In general, the Group 3 trading program provisions would parallel 
the existing Group 2 trading program regulations in subpart EEEEE of 
part 97 but would reflect the amounts of the budgets, new unit set-
asides, Indian country new unit set-asides, and variability limits 
established in this proposed rulemaking, all of which would be set 
forth in new Sec.  97.1010. That same section would also set forth the 
amounts of the Group 3 budgets, new unit set-asides, and variability 
limits that Group 1 or Group 2 states could adopt in SIP revisions that 
would be approvable under new Sec.  52.38(b)(10).
    Under Sec.  97.1006(c)(3)(i) and (ii), the obligations to hold one 
Group 3 allowance for each ton of emissions during the control period 
and to comply with the Group 3 trading program's assurance provisions 
would begin with the 2021 control period, four years later than the 
analogous start dates for the Group 2 trading program. The deadlines 
for certifying monitoring systems under Sec.  97.1030(b) and for 
beginning quarterly reporting under Sec.  97.1034(d)(1) similarly would 
be four years later than the analogous Group 2 trading program 
deadlines. The allowance recordation deadlines under Sec.  97.1021 
would begin generally four years later than the comparable recordation 
deadlines under the Group 2 trading program but would reach the same 
schedule by July 1, 2023, which would be the deadline for recordation 
of allowances for the control period in 2026 under both trading 
programs. However, under new Sec.  97.1021(m), EPA would not record any 
allocations of Group 3 allowances to any unit at a source until all 
deductions of Group 2 allowances previously allocated to the units at 
the source for control periods after 2020 had been completed in 
accordance with new Sec.  97.811(d).
    Like the analogous Group 2 regulations, the Group 3 regulations 
would allow a Group 3 allowance that was allocated to any account as a 
replacement for removed Group 1 or Group 2 allowances to be used for 
all of the purposes for which any other Group 3 allowance may be used. 
This would be accomplished by adding references to Sec. Sec.  97.526(c) 
and 97.826(c)--the sections under which the conversions would be 
carried out--to the definitions of ``allocate'' and ``CSAPR 
NOX Ozone Season Group 3 allowance'' in Sec.  97.1002 as 
well as the default order for deducting allowances for compliance 
purposes under Sec.  97.1024(c)(2).
    Any Group 3 allowances allocated based on conversion of Group 1 or 
Group 2 allowances allocated for future years--specifically, the Group 
3 allowances that could be allocated under Sec.  97.526(c)(2) or Sec.  
97.826(c)(2) if EPA approved a SIP revision from a Group 1 or Group 2 
state requiring sources in the state to participate in the Group 3 
trading program--would also be treated like any other Group 3 allowance 
for purposes of determining shares of responsibility for exceedances 
under the assurance provisions. New paragraphs (2)(iii) and (iv) of the 
definition of ``common designated representative's assurance level'' in 
Sec.  97.1002 would establish this equivalence. However, allocations of 
Group 3 allowances converted from banked Group 1 or Group 2 allowances 
would be excluded for purposes of determining such shares of 
responsibility because such converted allowances would not represent 
allowances allocated from the current control period's emissions 
budgets. This exclusion would be addressed in new paragraph (2)(ii) of 
the definition of ``common designated representative's assurance 
level'' in Sec.  97.1002.
    As is currently allowed under the Group 2 trading program, EPA has 
proposed that, in order to facilitate NOX SIP Call 
compliance, a state would be allowed to expand applicability of the 
Group 3 trading program to include any sources that previously 
participated in the NOX Budget Trading Program, and that the 
state would be able to issue an amount of allowances beyond the state's 
Group 3 trading program budget if applicability is expanded to include 
large non-EGU boilers and turbines. Again, like the Group 2 trading 
program, EPA has also proposed that the assurance provisions would 
apply only to emissions from the sources subject to the Group 3 trading 
program before any such expansion. Accordingly, the assurance 
provisions in the proposed Group 3 trading program regulations would 
exclude any additional units and allowances brought into the program 
through such a SIP revision. Specifically, the definitions of ``base 
CSAPR NOX Ozone Season Group 3 unit'' and ``base CSAPR 
NOX Ozone Season Group 3 source'' in Sec.  97.1002 would 
exclude units and sources that would not have been included in the 
program under Sec.  97.1004, and all provisions related to the Group 3 
assurance provisions would reference only such ``base'' units and 
sources.
    Proposed Sec. Sec.  97.1016, 97.1018, and 97.1020(c)(1) and (5) 
would reduce the administrative compliance burden for sources in the 
transition from the Group 2 trading program to the Group 3 trading 
program by providing that certain one-time or periodic submissions made 
for purposes of compliance with the Group 1 or Group 2 trading program 
will be considered valid for purposes of the Group 3 trading program as 
well. The submissions treated in this manner are a certificate of 
representation or notice of delegation submitted by a designated 
representative and an application for a general account or notice of 
delegation submitted by an authorized account representative.
    Finally, in conjunction with promulgation of the new Group 3 
trading program, EPA has proposed to amend the administrative appeal 
provisions in part 78 to make the procedures of that part applicable to 
determinations of the EPA Administrator under the new Group 3 trading 
program in the same manner as the procedures are applicable to similar 
determinations under the other CSAPR trading programs and previous EPA 
trading programs. These amendments would add provisions for the Group 3 
trading program to: The list in Sec.  78.1(a)(1) of CFR sections (and 
analogous SIP revisions) generally giving rise to determinations 
subject to the part 78 procedures; the list in

[[Page 69033]]

Sec.  78.1(b) of certain determinations that are expressly subject to 
those procedures; the list in Sec.  78.3(a) of the types of persons who 
may seek review under the procedures; the list in Sec.  78.3(b) of 
persons who must be served regarding an appeal; the list in Sec.  
78.3(c) of the required contents of petitions for review; the list in 
Sec.  78.3(d) of matters for which a right of review under part 78 is 
not provided; and the requirements in Sec.  78.4(a)(1) as to who must 
sign a filing.

C. Transitional Provisions

    As discussed in section VIII.C.4., EPA has proposed to establish 
three sets of transitional provisions to address the transition of 
sources that currently participate in the CSAPR NOX Ozone 
Season Group 2 Trading Program but that, starting with the 2021 control 
period, would instead participate in the CSAPR NOX Ozone 
Season Group 3 Trading Program.
    The first set of transitional provisions, which would be 
implemented at new Sec.  97.811(d), would address the recall of Group 2 
allowances previously allocated for control periods after 2020 to Group 
3 sources (and other entities in Group 3 states).
    The second set of transitional provisions would address the 
possibility that the effective date for the final action in this 
rulemaking would fall after May 1, 2021. In order to avoid application 
of the more stringent emission reduction requirements proposed in this 
action retroactively before the final rule's effective date, this set 
of provisions would make supplemental allocations of Group 3 allowances 
to Group 3 sources in amounts collectively equal to the differences in 
the respective states' budgets under the Group 2 and Group 3 trading 
programs for the portion of the 2021 ozone season occurring before that 
date. The total amounts of supplemental allowances for each state would 
be determined under new Sec.  97.1010(d). The amount of the allocation 
to each Group 3 unit would be the incremental amount that each unit 
would have received if the supplemental allowances had been allocated 
as part of the respective state's emissions budget for 2021, using the 
same allocation methodology EPA proposes to apply to compute the 
allocations to existing units from the emissions budget, as set forth 
in new Sec.  97.1011(a)(3). In addition, to avoid retroactive 
application of the more stringent Group 3 assurance levels associated 
with the more stringent Group 3 budgets before the final rule's 
effective date, the assurance levels for each Group 3 state for the 
2021 control period would be increased by the product of 1.21 times the 
total amount of the supplemental allocations to the units in that 
state. The language implementing this provision is included in new 
Sec.  97.1006(c)(2)(iii). New paragraph (2)(v) of the definition of 
``common designated representative's assurance level'' in Sec.  97.1002 
includes language that accounts for the allocations of supplemental 
allowances and the increment to the variability limit when apportioning 
responsibility for any exceedance of a state's assurance level among 
the owners and operators of the state's sources.
    The third set of transitional provisions would address conversions 
of Group 2 allowances (and in some instances Group 1 allowances) to 
Group 3 allowances for use in the new Group 3 program. These provisions 
would be implemented largely through the addition of new Sec.  
97.826(c) to the Group 2 trading program regulations and revisions to 
the analogous provisions in the Group 1 trading program regulations in 
97.526(c). Most notably, the proposed one-time conversion of banked 
2017-2020 Group 2 allowances to Group 3 allowances would be implemented 
through the provisions in new Sec.  97.826(c)(1). These provisions set 
forth the schedule and mechanics for a default one-time conversion of 
Group 2 allowances that were allocated for the control periods in 2017 
through 2020 and that that remain banked following the completion of 
deductions for compliance for the 2020 control period. The conversion 
would be applied to all banked Group 2 allowances that as of the 
scheduled conversion date are held in any general account and in any 
compliance account for a source located in a Group 3 state but would 
not be applied to allowances held in a compliance account for a source 
located in a Group 2 state. The owner or operator of a source located 
in a Group 2 state could retain banked Group 2 allowances for future 
use in the Group 2 trading program simply by keeping the allowances in 
the source's compliance account as of the conversion date or, 
alternatively, could elect to have banked Group 2 allowances converted 
to Group 3 allowances simply by transferring the allowances from the 
source's compliance account to a general account prior to the 
conversion date. The conversion factor would be the greater of 1.0000 
or the ratio of the total number of banked Group 2 allowances being 
converted to the sum of the variability limits (adjusted to exclude any 
portion of the first ozone season before the final rule's effective 
date) for all states covered by the Group 3 trading program.
    The proposed option under which the authorized account 
representative for a general account could elect to prevent certain 
Group 2 allowances from being included in the default conversion 
process would be implemented through the provisions in new Sec.  
97.826(c)(1)(iv). Under these provisions, before the scheduled date for 
converting Group 2 allowances to Group 3 allowances, EPA would 
establish a temporary holding account that would accept transfers of 
Group 2 allowances from general accounts. Any Group 2 allowances 
transferred to the temporary holding account in advance of the 
scheduled conversion date would not be converted to Group 3 allowances, 
and after completing the conversion procedures for other Group 2 
allowances, EPA would transfer the unconverted Group 2 allowances back 
to the general accounts from which the transfers into the temporary 
holding account were made.
    The additional conversion provisions in Sec.  97.826(c)(2) and (3) 
would apply only in instances where a Group 2 state submits and EPA 
approves a SIP revision requiring sources in the state to participate 
in the Group 3 trading program. In that case, under Sec.  97.826(c)(2), 
EPA would replace the allocations of Group 2 allowances to the state's 
sources already recorded for future control periods with allocations of 
Group 3 allowances, using a conversion factor determined based on the 
ratio of the state's emissions budget under the Group 2 trading program 
to the state's optional emissions budget under the Group 3 trading 
program. If all Group 2 states were to elect this option, following 
approval of the SIP submission for the last such state, under Sec.  
97.826(c)(3), EPA would convert any remaining banked Group 2 allowances 
from prior control periods using a conversion factor based on the ratio 
of the total number of Group 2 allowances being converted to that 
state's variability limit under the Group 3 program. Allowances would 
be converted under these provisions regardless of the accounts in which 
they were held.
    Additional provisions of Sec.  97.826(c) would address special 
circumstances. Under Sec.  97.826(c)(4), if any Group 2 allowances are 
removed for conversion from the compliance account for a source in a 
state not covered by the Group 3 program, the owner or operator could 
identify to EPA a general account to receive the Group 3 allowances. 
This provision would be necessary in such circumstances because Group 3 
allowances could not be recorded in any compliance account other than a 
compliance account for a source with a unit affected under the Group 3 
trading program. If the owner or operator did not identify a general 
account to receive

[[Page 69034]]

the Group 3 allowances within 180 days after the conversion, EPA would 
be authorized to retire the allowances. (The provisions in new Sec.  
97.826(c)(4) would not be used in the transition from the Group 2 
trading program to the Group 3 trading program if, as proposed, sources 
in all existing Group 2 states are either transitioned to the Group 3 
trading program or continue to be covered by the Group 2 trading 
program.)
    Under Sec.  97.826(c)(5), EPA would be able to group multiple 
general accounts under common ownership for purposes of performing 
conversion computations. Because allowances are only recorded as whole 
allowances, allowance conversion computations will necessarily be 
rounded to whole allowances. The purpose of the grouping provision 
would be to ensure that, given rounding, the total quantities of Group 
3 allowances issued would not be unduly affected by how the Group 2 
allowances are distributed across multiple general accounts under 
common ownership, with potentially adverse consequences to achievement 
of the emission reductions required under the rule.
    There is a possibility under the Group 2 trading program that some 
new Group 2 allowances could be issued after the conversions to Group 3 
allowances have already taken place. Under Sec.  97.826(c)(6), EPA may 
convert these allowances to Group 3 allowances as if they had been 
issued and recorded before the general conversions.
    Owners and operators of Group 3 sources generally would not be able 
to retain banked Group 2 allowances in the compliance accounts for 
those sources. However, new Sec.  97.826(c)(7) would authorize the use 
of Group 3 allowances to satisfy obligations to hold Group 2 allowances 
that might arise after the conversion date, such as an obligation to 
hold additional allowances because of excess emissions or for 
compliance with the assurance provisions. When held for this purpose, a 
single Group 3 allowance could satisfy the obligation to hold more than 
one Group 2 allowance, as though the conversion were reversed. (As an 
alternative to using these provisions, the owners and operators of a 
Group 3 source could use Group 2 allowances held in a general account.)
    Amendments addressing conversions of Group 1 allowances to Group 3 
allowances in the event Georgia were to elect to join the Group 3 
trading program would be reflected in proposed revisions to Sec.  
97.526(c)(2) through (7). The revisions would parallel the new 
provisions discussed above in Sec.  97.826(c)(2) through (7), and in 
the case of 97.526(c)(4) would include changes making that provision 
more similar to new Sec.  97.826(c)(4) in two ways. First, the 
provision would be simplified by requiring that the account identified 
to receive any otherwise unclaimed allowances must be a general 
account. Identification of another compliance account would no longer 
be allowed, making it possible to eliminate rule provisions 
distinguishing eligible compliance accounts from ineligible compliance 
accounts. (Any general account would be eligible.) Second, the 
provision would be modified to authorize the Administrator to retire 
any allowances that remain unclaimed 180 days after the conversion in 
question, or, if later, 90 days after the date of publication of a 
final rule in this action.
    Finally, in Sec.  78.1(b)(14) and (17), determinations of the EPA 
Administrator under Sec. Sec.  97.526(c) and 97.826(c) regarding 
conversions of Group 1 and Group 2 allowances to Group 3 allowances and 
determinations of the EPA Administrator under Sec.  97.811(d) regarding 
the recall of Group 2 allowances previously allocated to Group 3 units 
for control periods after 2020 would be added to the list of 
determinations expressly subject to the part 78 procedures.

D. Conforming Revisions, Corrections, and Clarifications To Existing 
Regulations

    As discussed in section VIII.C.8, EPA has proposed several 
amendments to the existing CSAPR trading programs and the Texas 
SO2 Trading Program for conformity with the analogous 
provisions of the new Group 3 trading program.
    The proposal to record allocations to existing units three instead 
of four years in advance of the control period at issue, starting with 
allocations for the 2025 control periods, would be implemented in the 
existing CSAPR trading programs through revisions to Sec. Sec.  
97.421(f), 97.521(f), 97.621(f), 97.721(f), and 97.821(f).
    The proposal to switch from a two-round process to a one-round 
process for allocating allowances from new unit set-asides and Indian 
country new unit set-asides starting with the 2023 control periods 
would be implemented in the existing CSAPR trading programs through 
revisions to Sec. Sec.  97.411(b), 97.511(b), 97.611(b), 97.711(b), and 
97.811(b) and 97.412, 97.512, 97.612, 97.712, and 97.812. The changes 
to the deadlines for EPA to record the allocations determined through 
the proposed one-round process would be implemented through revisions 
to Sec. Sec.  97.421(g) through (j), 97.521(g) through (j), 97.621(g) 
through (j), 97.721(g) through (j), and 97.821(g) through (j). The 
necessary coordinating revisions to dates included in the definitions 
of ``allowance transfer deadline'' and ``common designated 
representative'' would be made in Sec. Sec.  97.402, 97.502, 97.602, 
97.702, and 97.802. The proposed simplifications of the assurance 
provisions made possible by the changes in the new unit set-aside 
provisions would be implemented through revisions to Sec. Sec.  
97.425(b), 97.525(b), 97.625(b), 97.725(b), and 97.825(b). The related 
extensions to the deadlines for states with approved SIP revisions to 
submit to EPA any state-determined allowance allocations would be 
implemented through revisions to Sec.  52.38(a)(4) and (5) and (b)(4), 
(5), (8) and (9) and Sec.  52.39(e), (f), (h), and (i).
    As discussed in section VIII.C.8., EPA has proposed to replicate 
several of the deadline revisions proposed for the existing CSAPR 
trading programs in the similarly structured Texas SO2 
Trading Program in order to minimize unnecessary differences between 
the programs. These revisions to the Texas SO2 Trading 
Program regulations would be implemented at Sec.  97.902 (definitions 
of ``allowance transfer deadline'' and ``common designated 
representative''), 97.921(b) and (c), and 97.925(b).
    The proposed amendments that would authorize EPA to reallocate any 
incorrectly allocated allowances through the new unit set-aside 
procedures for a control period after the correction is identified, 
instead of the new unit set-aside procedures for the control period for 
which the incorrect allocations were originally made, would be 
implemented in Sec. Sec.  97.411(c)(5), 97.511(c)(5), 97.611(c)(5), 
97.711(c)(5), and 97.811(c)(5).
    The proposed amendments to correct the amounts of allowances in the 
new unit set-asides to address rounding differences from earlier 
amendments would be implemented in Sec. Sec.  97.410, 97.510, 97.610, 
and 97.710.
    New Sec.  52.38(a)(7)(i) and (b)(15)(i) and Sec.  52.39(k)(1) would 
identify the amended provisions that EPA proposes to implement in the 
existing state CSAPR trading programs to ensure consistent program 
implementation across all sources, whether the sources participate in 
the integrated trading programs under FIPs or approved SIP revisions.
    EPA proposes to make additional, non-substantive corrections and 
clarifications in various provisions of the existing CSAPR trading 
programs in subparts AAAAA through EEEEE of part 97, the Texas 
SO2 Trading Program in

[[Page 69035]]

subpart FFFFF of part 97, and the appeal procedures in part 78. The 
corrections and clarifications address minor typographical, wording, 
and formatting errors or update existing cross-references to reflect 
the new and redesignated provisions in Sec. Sec.  52.38 and 52.39. In 
addition, the proposed corrections and clarifications include the 
following items:
     Reorganization of the definitions of ``common designated 
representative's assurance level'' and ``common designated 
representative's share'' in Sec. Sec.  97.402, 97.502, 97.602, 97.702, 
and 97.802. The revisions would clarify the definitions by relocating 
certain language between them, identifying provisions that would no 
longer apply after the control periods in 2023 because of the proposed 
revisions to the new unit set-aside allocation procedures, and 
correcting the omission of certain words in the terms ``simple cycle 
combustion turbine'' and ``combined cycle combustion turbine''.
     Addition of a definition of ``CSAPR NOX Ozone Season Group 
3 allowance'' in Sec. Sec.  97.502 and 97.802 and addition of 
definitions of ``CSAPR NOX Ozone Season Group 3 Trading 
Program'' and ``nitrogen oxides'' in Sec. Sec.  97.402, 97.502, 97.602, 
97.702, 97.802, and 97.902. The new definitions of terms for the Group 
3 allowances and trading program are needed for other provisions that 
reference the Group 3 allowances or trading program, while the 
definition of nitrogen oxides corrects a current omission. Nitrogen 
oxides would be defined as ``all oxides of nitrogen except nitrous 
oxide (N2O), expressed on an equivalent molecular weight 
basis as nitrogen dioxide (NO2)'', which is consistent both 
with the definitions used in other EPA programs (see, e.g., 40 CFR 
51.50, 51.121(a), and 51.122(a)) and with historical practice in the 
existing CSAPR programs.
     Revisions to the descriptions of units and control periods 
eligible for allocations of allowances from the new unit set-asides and 
Indian country new unit set-asides in Sec. Sec.  97.412, 97.512, 
97.612, 97.712, and 97.812. The revisions would not substantively alter 
which units would receive allocations or the amounts of those 
allocations. Rather, the revisions would more clearly express the 
existing requirements of the allocation procedures, under which EPA 
calculates a given unit's allocations considering only the unit's 
emissions that occur after its deadline for monitor certification 
(because any earlier emissions would not have occurred in a ``control 
period'' for that unit).
     Revisions to the provisions for identification of specific 
allowances to be deducted for compliance in Sec. Sec.  97.424(c), 
97.524(c), 97.624(c), 97.724(c), 97.824(c), and 97.924(c). The 
revisions would clarify by referencing designated representatives 
instead of authorized account representatives, consistent with the 
existing requirement that the authorized account representative for a 
source's compliance account must be the designated representative for 
the source.
     Addition of references in part 78 to the Texas SO2 Trading 
Program. The added references would be analogous to the references that 
would be added to part 78 for the proposed new Group 3 trading program. 
The applicability of the appeal procedures in part 78 to decisions of 
the EPA Administrator under the Texas SO2 Trading Program 
has already been established in the provisions for that trading program 
at Sec.  97.908, but the addition of references in part 78 would 
clarify the regulations.

XI. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
(``E.O.'') can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

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

    This proposed action would be an economically significant 
regulatory action and was submitted to the Office of Management and 
Budget (OMB) for review. Any changes made in response to OMB 
recommendations have been documented in the docket. EPA prepared an 
analysis of the potential costs and benefits associated with this 
proposed action. This analysis, which is contained in the ``Regulatory 
Impact Analysis for the Proposed Revised Cross-State Air Pollution Rule 
Update for the 2008 Ozone NAAQS'' [EPA-452/R-15-009], is available in 
the docket and is briefly summarized in Section IX of this preamble.

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

    This proposed action is expected to be an E.O. 13771 regulatory 
action. Details on the estimated costs of this proposed rule can be 
found in EPA's analysis of the potential costs and benefits associated 
with this action.

C. Paperwork Reduction Act (PRA)

    This proposed action will not impose any new information collection 
burden under the PRA. This proposed action would relocate certain 
existing information collection requirements for certain sources from 
subpart EEEEE of 40 CFR part 97 to a new subpart GGGGG of 40 CFR part 
97, but would neither change the inventory of sources subject to 
information collection requirements nor change any existing information 
collection requirements for any source. OMB has previously approved the 
information collection activities contained in the existing regulations 
and has assigned OMB control number 2060-0667.

D. Regulatory Flexibility Act (RFA)

    I certify that this proposed action will not have a significant 
economic impact on a substantial number of small entities under the 
RFA. The small entities subject to the requirements of this proposed 
action are small businesses, small organizations, and small 
governmental jurisdictions.
    EPA has lessened the impacts for small entities by excluding all 
units serving generators with capacities equal to or smaller than 25 
MWe. This exclusion, in addition to the exemptions for cogeneration 
units and solid waste incineration units, eliminates the burden of 
higher costs for a substantial number of small entities located in the 
12 states for which EPA is proposing FIPs. Within these states, EPA 
identified seven potentially affected EGUs that are owned by two 
entities that met the Small Business Administration's criteria for 
identifying small entities. Neither of these entities is projected to 
experience compliance costs that exceed 1 percent of generation 
revenues in 2021. EPA estimated the total net compliance cost to these 
two small entities to be approximately $0.04 million (in $2016).
    EPA has concluded that there will be no significant economic impact 
on a substantial number of small entities (No SISNOSE) for this 
proposed rule. Details of this analysis are presented in the RIA, which 
is in the public docket.

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 will not 
significantly or uniquely affect small governments. Note that we expect 
the proposal to potentially have an impact on only one category of 
government-owned entities (municipality-owned entities). This analysis 
does not examine potential indirect economic impacts associated with 
the proposal, such as employment effects in industries providing fuel 
and pollution control equipment, or the potential effects of 
electricity price

[[Page 69036]]

increases on government entities. For more information on the estimated 
impact on government entities, refer to the RIA, which is in the public 
docket.

F. Executive Order 13132: Federalism

    This proposed action does not have federalism implications. If 
finalized, this proposed action 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 action has tribal implications. However, it would 
neither impose substantial direct compliance costs on federally 
recognized tribal governments, nor preempt tribal law.
    This action proposes to implement EGU NOX ozone season 
emissions reductions in 12 eastern states (Illinois, Indiana, Kentucky, 
Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, 
Pennsylvania, Virginia, and West Virginia.). However, at this time, 
none of the existing or planned EGUs affected by this rule are owned by 
tribes or located in Indian country. This proposed action may have 
tribal implications if a new affected EGU is built in Indian country. 
Additionally, tribes have a vested interest in how this proposed rule 
would affect air quality.
    In developing the CSAPR, which was promulgated on July 6, 2011, to 
address interstate transport of ozone pollution under the 1997 ozone 
NAAQS, EPA consulted with tribal officials under the EPA Policy on 
Consultation and Coordination with Indian Tribes early in the process 
of developing that regulation to allow for meaningful and timely tribal 
input into its development. A summary of that consultation is provided 
at 76 FR 48346.
    EPA received comments from several tribal commenters regarding the 
availability of the CSAPR allowance allocations to new units in Indian 
country. EPA responded to these comments by instituting Indian country 
new unit set-asides in the final CSAPR. In order to protect tribal 
sovereignty, these set-asides are managed and distributed by the 
federal government regardless of whether the CSAPR in the adjoining or 
surrounding state is implemented through a FIP or SIP. While there are 
no existing affected EGUs in Indian country covered by this proposal, 
the Indian country set-asides will ensure that any future new units 
built in Indian country will be able to obtain the necessary 
allowances. This proposal maintains the Indian country new unit set-
aside and adjusts the amounts of allowances in each set-aside according 
to the same methodology of the CSAPR rule.
    EPA informed tribes of our development of this proposal through a 
National Tribal Air Association--EPA air policy conference call on June 
25, 2020. EPA plans to further consult with tribal officials under the 
EPA Policy on Consultation and Coordination with Indian Tribes early in 
the process of developing this proposed regulation to solicit 
meaningful and timely input into its development. EPA will facilitate 
this consultation before finalizing this proposed rule.

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

    This proposed action is not subject to E.O. 13045 because EPA does 
not believe the environmental health risks or safety risks addressed by 
this action present a disproportionate risk to children. This action's 
health and risk assessments are contained in Chapter 5 of the 
accompanying RIA.

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

    This proposal, which is a significant regulatory action under E.O. 
12866, is likely to have a significant effect on the supply, 
distribution, or use of energy. EPA has prepared a Statement of Energy 
Effects for the proposed regulatory control alternative as follows. The 
Agency estimates a much less than 1 percent change in retail 
electricity prices on average across the contiguous U.S. in 2021, and a 
much less than 1 percent reduction in coal-fired electricity generation 
in 2021 as a result of this rule. EPA projects that utility power 
sector delivered natural gas prices will change by less than 1 percent 
in 2021. For more information on the estimated energy effects, refer to 
the RIA, which is in the public docket.

J. National Technology Transfer and Advancement Act (NTTAA)

    This proposed rulemaking does not involve technical standards.

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

    EPA believes the human health or environmental risk addressed by 
this action will not have potential disproportionately high and adverse 
human health or environmental effects on minority, low-income, or 
indigenous populations.
    EPA notes that this action proposes to revise the CSAPR Update to 
reduce interstate ozone transport with respect to the 2008 ozone NAAQS. 
This rule uses EPA's authority in CAA section 110(a)(2)(d) (42 U.S.C. 
7410(a)(2)(d)) to reduce NOX pollution that significantly 
contributes to downwind ozone nonattainment or maintenance areas. As a 
result, the rule will reduce exposures to ozone in the most-
contaminated areas (i.e., areas that are not meeting the 2008 ozone 
NAAQS). In addition, the proposed rule separately identifies both 
nonattainment areas and maintenance areas. This requirement reduces the 
likelihood that areas close to the level of the standard will exceed 
the current health-based standards in the future. EPA proposes to 
implement these emission reductions using the CSAPR NOX 
Ozone Season Group 3 program with assurance provisions.
    EPA recognizes that many environmental justice communities have 
voiced concerns in the past about emission trading and the potential 
for any emission increases in any location. The CSAPR NOX 
Ozone Season Group 3 Trading Program in the proposed action is the 
result of EPA's application of the 4-step framework to reduce 
interstate ozone pollution and implement those reductions, similar to 
the trading programs developed in the CSAPR (CSAPR NOX Ozone 
Season Group 1 Trading Program) and modified in the CSAPR Update (CSAPR 
NOX Ozone Season Group 2 Trading Program), both of which 
also resulted from the application of the 4-step framework. EPA 
believes that this approach used in the CSAPR and in the CSAPR Update 
mitigated community concerns about emissions trading, and that this 
proposal, which applies the same 4-step framework and proposes a 
trading program similar to those used in the CSAPR and the CSAPR 
Update, will also minimize community concerns. EPA seeks comment from 
communities on this proposal (Comment C-41).
    Ozone pollution from power plants has both local and regional 
components: Part of the pollution in a given location--even in 
locations near emission sources--is due to emissions from nearby 
sources and part is due to emissions that travel hundreds of miles and 
mix with emissions from other sources.
    It is important to note that the section of the Clean Air Act 
providing authority for this proposed rule, section 110(a)(2)(D) (42 
U.S.C. 7410(a)(2)(D)), unlike some other provisions, does not

[[Page 69037]]

dictate levels of control for particular facilities. In this proposed 
action, as in the CSAPR and the CSAPR Update, sources in the trading 
program may trade allowances with other sources in the same or 
different states, but any emissions shifting that may occur is 
constrained by an effective ceiling on emissions in each state (the 
assurance level). As in the CSAPR and the CSAPR Update, assurance 
provisions in the proposed rule outline the allowance surrender 
penalties for failing to meet the assurance level (see section 
VIII.C.2.); there are additional allowance for failing to hold an 
adequate number of allowances to cover emissions.
    This approach will reduce EGU emissions in each state that 
significantly contributes to downwind nonattainment or maintenance 
areas with respect to the 2008 ozone NAAQS, while allowing power 
companies to adjust generation as needed and ensure that the country's 
electricity needs will continue to be met. As in the CSAPR and the 
CSAPR Update, EPA believes that the existence of these assurance 
provisions in the trading program, including the penalties imposed when 
triggered, will ensure that emissions from states covered by this 
proposal will stay below the level of the budget plus variability 
limit.
    In addition, under this proposed rule all sources participating in 
the CSAPR NOX Ozone Season Group 3 Trading Program must hold 
enough allowances to cover their emissions. Therefore, if a source 
emits more than its allocation in a given year, either another source 
must have used less than its allocation and be willing to sell some of 
its excess allowances, or the source itself had emitted less than its 
allocation in one or more previous years (i.e., banked allowances for 
future use).
    In summary, like the CSAPR and the CSAPR Update, this proposed rule 
minimizes community concerns about localized hot spots and reduces 
ambient concentrations of pollution where they are most needed by 
sensitive and vulnerable populations by: Considering the science of 
ozone transport to set strict state emissions budgets to reduce 
significant contributions to ozone nonattainment and maintenance (i.e., 
the most polluted) areas; implementing air quality-assured trading; 
requiring any emissions above the level of the allocations to be offset 
by emission decreases; and imposing strict penalties for sources that 
contribute to a state's exceedance of its budget plus variability 
limit. In addition, it is important to note that nothing in this 
proposed rule allows sources to violate their title V permit or any 
other federal, state, or local emissions or air quality requirements.
    In addition, it is important to note that CAA section 110(a)(2)(D), 
which addresses transport of criteria pollutants between states, is 
only one of many provisions of the CAA that provide EPA, states, and 
local governments with authorities to reduce exposure to ozone in 
communities. These legal authorities work together to reduce exposure 
to these pollutants in communities, including for minority, low-income, 
and tribal populations, and provide substantial health benefits to both 
the general public and sensitive sub-populations.
    EPA has already taken steps to begin informing communities of our 
development of this proposal through a National Tribal Air 
Association--EPA air policy conference call on June 25, 2020. EPA plans 
to further consult with communities early in the process of developing 
this regulation to permit them to have meaningful and timely input into 
its development. EPA will facilitate this engagement before finalizing 
this proposed rule.

L. Determinations Under CAA Section 307(b)(1) and (d)

    Section 307(b)(1) of the CAA indicates which federal courts of 
appeals have venue for petitions of review of final actions by EPA. 
This section provides, in part, that petitions for review must be filed 
in the D.C. Circuit if (i) the Agency action consists of ``nationally 
applicable regulations promulgated, or final action taken, by the 
Administrator,'' or (ii) such action is locally or regionally 
applicable, if ``such action is based on a determination of nationwide 
scope or effect and if in taking such action the Administrator finds 
and publishes that such action is based on such a determination.'' EPA 
anticipates that final action related to this proposed rulemaking will 
be ``nationally applicable'' and of ``nationwide scope and effect'' 
within the meaning of CAA section 307(b)(1). Through this rulemaking 
action, EPA interprets section 110 of the CAA, a provision which has 
nationwide applicability, and thus it appears that the final action 
would be based on a determination of nationwide scope and effect. In 
addition, the rule would apply to 21 States. Also, the rule would be 
based on a common core of factual findings and analyses concerning the 
transport of pollutants from the different states subject to it, as 
well as the impacts of those pollutants and the impacts of options to 
address those pollutants, in yet other states. For these reasons, the 
Administrator proposes to determine that this proposed action is of 
nationwide scope and effect for purposes of CAA section 307(b)(1). If 
the Administrator makes this proposed determination final, then 
pursuant to CAA section 307(b) any petitions for review of any final 
actions regarding the rulemaking would be filed in the D.C. Circuit 
within 60 days from the date any final action is published in the 
Federal Register.
    In addition, pursuant to sections 307(d)(1)(B) and 307(d)(1)(V) of 
the CAA, the Administrator determines that all aspects of this proposed 
action are subject to the provisions of section 307(d). CAA section 
307(d)(1)(B) provides that section 307(d) applies to, among other 
things, ``the promulgation or revision of an implementation plan by the 
Administrator under CAA section 110(c).'' 42 U.S.C. 7407(d)(1)(B). 
Under CAA section 307(d)(1)(V), the provisions of section 307(d) also 
apply to ``such other actions as the Administrator may determine.'' 42 
U.S.C. 7407(d)(1)(V). The Agency will comply with the procedural 
requirements of CAA section 307(d) in this rulemaking.

Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS

List of Subjects

40 CFR Part 52

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Incorporation by reference, Intergovernmental 
relations, Nitrogen oxides, Ozone, Particulate matter, Sulfur dioxide.

40 CFR Part 78

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Electric power plants, Nitrogen oxides, Ozone, 
Particulate matter, Sulfur dioxide.

40 CFR Part 97

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Electric power plants, Nitrogen oxides, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
dioxide.

    Dated: October 15, 2020.
Andrew Wheeler,
Administrator.

    For the reasons stated in the preamble, EPA proposes to amend parts 
52, 78, and 97 of title 40 of the Code of Federal Regulations as 
follows:

[[Page 69038]]

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:
0
a. Revising the paragraph (a) subject heading;
0
b. In paragraph (a)(1), adding a subject heading and removing 
``(NOX).'' and adding in its place ``(NOX), 
except as otherwise provided in this section.'';
0
c. Adding a subject heading to paragraph (a)(2);
0
d. Adding a subject heading to paragraph (a)(3) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a)(1) of this 
section, a State'' and adding in its place ``A State'';
0
e. Revising paragraph (a)(4) introductory text;
0
f. In paragraph (a)(4)(i)(A), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
g. In paragraph (a)(4)(i)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 1 to this paragraph 
(a)(4)(i)(B);'', adding a heading to the table, removing the table 
entry for ``2023 and any year thereafter'', and adding table entries 
for ``2023 and 2024'' and ``2025 and any year thereafter'';
0
h. In paragraph (a)(4)(i)(C), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2023, or by April 1 of the year following the control 
period, for a control period in 2023 or thereafter; and'';
0
i. Adding a subject heading to paragraph (a)(5) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a)(1) of this 
section, a State'' and adding in its place ``A State'';
0
j. In paragraph (a)(5)(i)(A), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
k. In paragraph (a)(5)(i)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 2 to this paragraph 
(a)(5)(i)(B);'', adding a heading to the table, removing the table 
entry for ``2023 and any year thereafter'', and adding table entries 
for ``2023 and 2024'' and ``2025 and any year thereafter'';
0
l. In paragraph (a)(5)(i)(C), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2023, or by April 1 of the year following the control 
period, for a control period in 2023 or thereafter; and'';
0
m. In paragraph (a)(5)(v), adding ``and'' after the semicolon at the 
end of the paragraph;
0
n. Adding a subject heading to paragraph (a)(6) and removing 
``Following promulgation'' and adding in its place ``Except as provided 
in paragraph (a)(7) of this section, following promulgation'';
0
o. Revising paragraph (a)(7);
0
p. Adding a subject heading to paragraph (a)(8) introductory text;
0
q. Revising the paragraph (b) subject heading;
0
r. Revising paragraph (b)(1);
0
s. Adding a subject heading to paragraph (b)(2);
0
t. In paragraph (b)(2)(ii), removing ``2016 only:'' and adding in its 
place ``2016 only, except as provided in paragraph (b)(15)(iii) of this 
section:'';
0
u. Revising paragraph (b)(2)(iii);
0
v. Adding paragraphs (b)(2)(iv) and (v);
0
w. Adding a subject heading to paragraph (b)(3) introductory text and 
removing ``Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State'' and adding in its place ``A State'';
0
x. Revising paragraph (b)(4) introductory text;
0
y. In paragraph (b)(4)(ii)(A), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
z. In paragraph (b)(4)(ii)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 3 to this paragraph 
(b)(4)(ii)(B);'', adding a heading to the table, removing the table 
entry for ``2023 and any year thereafter'', and adding table entries 
for ``2023 and 2024'' and ``2025 and any year thereafter'';
0
aa. In paragraph (b)(4)(ii)(C), removing ``year of such control 
period.'' and adding in its place ``year of such control period, for a 
control period before 2023, or by April 1 of the year following the 
control period, for a control period in 2023 or thereafter; and'';
0
bb. Adding a subject heading to paragraph (b)(5) introductory text and 
removing ``Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State'' and adding in its place ``A State'';
0
cc. In paragraph (b)(5)(ii)(A), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
dd. In paragraph (b)(5)(ii)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 4 to this paragraph 
(b)(5)(ii)(B);'', adding a heading to the table, removing the table 
entry for ``2023 and any year thereafter'', and adding table entries 
for ``2023 and 2024'' and ``2025 and any year thereafter'';
0
ee. In paragraph (b)(5)(ii)(C), removing ``year of such control 
period.'' and adding in its place ``year of such control period, for a 
control period before 2023, or by April 1 of the year following the 
control period, for a control period in 2023 or thereafter; and'';
0
ff. In paragraph (b)(5)(vi), adding ``and'' after the semicolon at the 
end of the paragraph;
0
gg. Adding a subject heading to paragraph (b)(6) introductory text and 
removing ``Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State'' and adding in its place ``A State'';
0
hh. In paragraph (b)(6)(i), removing ``SIP revision.'' and adding in 
its place ``SIP revision; and'';
0
ii. Revising paragraph (b)(6)(ii);
0
jj. Adding a subject heading to paragraph (b)(7) introductory text, 
removing ``Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State'' and adding in its place ``A State'', and adding ``or 
(iv)'' after ``(b)(2)(iii)'';
0
kk. Revising paragraphs (b)(8) introductory text and (b)(8)(ii);
0
ll. In paragraph (b)(8)(iii)(A)(2), removing the period at the end of 
the paragraph and adding in its place a semicolon;
0
mm. In paragraph (b)(8)(iii)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 5 to this paragraph 
(b)(8)(iii)(B);'', adding a heading to the table, and revising the 
table entry for ``2025 and any year thereafter'';
0
nn. In paragraph (b)(8)(iii)(C), removing ``year of such control 
period.'' and adding in its place ``year of such control period, for a 
control period before 2023, or by April 1 of the year following the 
control period, for a control period in 2023 or thereafter; and'';
0
oo. Adding a subject heading to paragraph (b)(9) introductory text, 
removing ``Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State'' and adding in its place ``A State'', and adding ``or 
(iv)'' after ``(b)(2)(iii)'' wherever ``(b)(2)(iii)'' appears;
0
pp. Revising paragraph (b)(9)(ii);
0
qq. In paragraph (b)(9)(iii)(A)(2), removing the period at the end of 
the paragraph and adding in its place a semicolon;
0
rr. In paragraph (b)(9)(iii)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 6 to this paragraph 
(b)(9)(iii)(B);'', adding a heading to the table, and

[[Page 69039]]

revising the table entry for ``2025 and any year thereafter'';
0
ss. In paragraph (b)(9)(iii)(C), removing ``year of such control 
period.'' and adding in its place ``year of such control period, for a 
control period before 2023, or by April 1 of the year following the 
control period, for a control period in 2023 or thereafter; and'';
0
tt. In paragraph (b)(9)(vii), adding ``and'' after the semicolon at the 
end of the paragraph;
0
uu. Revising paragraphs (b)(10) and (11);
0
vv. Redesignating paragraphs (b)(12) and (13) as paragraphs (b)(16) and 
(17), respectively, and adding new paragraphs (b)(12) through (15), and 
further redesignating newly redesignated paragraphs (b)(17) 
introductory text and (b)(17)(i) through (iv) as paragraphs (b)(17)(i) 
introductory text and (b)(17)(i)(A) through (D), respectively;
0
ww. Adding a subject headings to newly redesignated paragraphs (b)(16) 
introductory text and (b)(17) introductory text;
0
xx. In newly redesignated paragraph (b)(17)(i)(D), adding ``or (iv)'' 
after ``(b)(2)(iii)''; and
0
yy. Adding paragraphs (b)(17)(ii) and (b)(18).
    The additions and revisions 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) NOX annual emissions--(1) General requirements. * * *
    (2) Applicability of CSAPR NOX Annual Trading Program provisions. * 
* *
* * * * *
    (3) State-determined allocations of CSAPR NOX Annual allowances for 
2016. * * *
* * * * *
    (4) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR NOX Annual Trading Program. A State listed in paragraph 
(a)(2)(i) of this section may adopt and include in a SIP revision, and 
the Administrator will approve, regulations replacing specified 
provisions of subpart AAAAA of part 97 of this chapter for purposes of 
the State's sources, and not substantively replacing any other 
provisions, as follows:
    (i) * * *
    (B) * * *

                    Table 1 to Paragraph (a)(4)(i)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR NOX Annual allowances are       allocations or auction results
         allocated or auctioned               to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2023 and 2024..........................  June 1 of the fourth year
                                          before the year of the control
                                          period.
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (5) Full SIP revisions adopting State CSAPR NOX Annual Trading 
Programs. * * *
    (i) * * *
    (B) * * *

                    Table 2 to Paragraph (a)(5)(i)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR NOX Annual allowances are       allocations or auction results
         allocated or auctioned               to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2023 and 2024..........................  June 1 of the fourth year
                                          before the year of the control
                                          period.
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (6) Withdrawal of CSAPR FIP provisions relating to NOX annual 
emissions. * * *
    (7) Continued applicability of certain federal trading program 
provisions for NOX annual emissions. (i) Notwithstanding the provisions 
of paragraph (a)(6) of this section or any State's SIP, when carrying 
out the functions of the Administrator under any State CSAPR 
NOX Annual Trading Program pursuant to a SIP revision 
approved under this section, the Administrator will apply the following 
provisions of this section, as amended, and the following provisions of 
subpart AAAAA of part 97 of this chapter, as amended, with regard to 
the State and any source subject to such State trading program:
    (A) The definitions in Sec.  97.402 of this chapter;
    (B) The provisions in Sec.  97.410(a) of this chapter concerning 
the amounts of the new unit set-asides;
    (C) The provisions in Sec. Sec.  97.411(b)(1) and 97.412(a) of this 
chapter concerning the procedures for allocating CSAPR NOX 
Annual allowances from new unit set-asides (except where the State 
allocates or auctions such allowances under an approved SIP revision);
    (D) The provisions in Sec.  97.411(c)(5) of this chapter concerning 
the disposition of incorrectly allocated CSAPR NOX Annual 
allowances;
    (E) The provisions in Sec.  97.421(f), (g), and (i) of this chapter 
concerning the deadlines for recordation of CSAPR NOX Annual 
allowances allocated in accordance with Sec.  97.411(a) or Sec.  
97.412(a) of this chapter or allocated or auctioned under an approved 
SIP revision and the provisions in paragraphs (a)(4)(i)(B) and (C) and 
(a)(5)(i)(B) and (C) of this section concerning the deadlines for 
submission to the Administrator of State-determined allocations or 
auction results; and
    (F) The provisions in Sec.  97.425(b) of this chapter concerning 
the procedures for administering the assurance provisions.
    (ii) Notwithstanding the provisions of paragraph (a)(6) of this 
section, if, at the time of any approval of a State's SIP revision 
under this section, the

[[Page 69040]]

Administrator has already started recording any allocations of CSAPR 
NOX Annual allowances under subpart AAAAA of part 97 of this 
chapter to units in the State for a control period in any year, the 
provisions of such subpart authorizing the Administrator to complete 
the allocation and recordation of such allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.
    (8) States with approved SIP revisions addressing the CSAPR NOX 
Annual Trading Program. * * *
* * * * *
    (b) NOX ozone season emissions--(1) General requirements. The CSAPR 
NOX Ozone Season Group 1 Trading Program provisions, the 
CSAPR NOX Ozone Season Group 2 Trading Program provisions, 
and the CSAPR NOX Ozone Season Group 3 Trading Program 
provisions set forth respectively in subparts BBBBB, EEEEE, and GGGGG 
of part 97 of this chapter constitute the CSAPR Federal Implementation 
Plan provisions that relate to emissions of NOX during the 
ozone season (defined as May 1 through September 30 of a calendar 
year), except as otherwise provided in this section.
    (2) Applicability of CSAPR NOX Ozone Season Group 1, Group 2, and 
Group 3 Trading Program provisions. * * *
* * * * *
    (iii) The provisions of subpart EEEEE of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2017 and each subsequent year: Alabama, Arkansas, Iowa, 
Kansas, Mississippi, Missouri, Oklahoma, Tennessee, Texas, and 
Wisconsin.
    (iv) The provisions of subpart EEEEE of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2017, 2018, 2019, and 2020 only, except as provided in 
paragraph (b)(15)(iii) of this section: Illinois, Indiana, Kentucky, 
Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, 
Pennsylvania, Virginia, and West Virginia.
    (v) The provisions of subpart GGGGG of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2021 and each subsequent year: Illinois, Indiana, 
Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, 
Pennsylvania, Virginia, and West Virginia.
    (3) State-determined allocations of CSAPR NOX Ozone Season Group 1 
allowances for 2016. * * *
* * * * *
    (4) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR NOX Ozone Season Group 1 Trading Program. A State listed 
in paragraph (b)(2)(i) of this section may adopt and include in a SIP 
revision, and the Administrator will approve, regulations replacing 
specified provisions of subpart BBBBB of part 97 of this chapter for 
the State's sources, and not substantively replacing any other 
provisions, as follows:
* * * * *
    (ii) * * *
    (B) * * *

                   Table 3 to Paragraph (b)(4)(ii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 1       allocations or auction results
 allowances are allocated or auctioned        to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2023 and 2024..........................  June 1 of the fourth year
                                          before the year of the control
                                          period.
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (5) Full SIP revisions adopting State CSAPR NOX Ozone Season Group 
1 Trading Programs. * * *
* * * * *
    (ii) * * *
    (B) * * *

                   Table 4 to Paragraph (b)(5)(ii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 1       allocations or auction results
 allowances are allocated or auctioned        to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2023 and 2024..........................  June 1 of the fourth year
                                          before the year of the control
                                          period.
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (6) Full SIP revisions to voluntarily join the CSAPR NOX Ozone 
Season Group 2 Trading Program. * * *
* * * * *
    (ii) Following promulgation of an approval by the Administrator of 
such a SIP revision, the provisions of the SIP revision will apply to 
sources in the State with regard to emissions occurring in the control 
period that begins May 1 immediately after promulgation of such 
approval, or such later control period as may be adopted by the State 
in its regulations and approved by the Administrator in the SIP 
revision, and in each subsequent control period, except as provided in 
paragraph (b)(15) of this section.
    (7) State-determined allocations of CSAPR NOX Ozone Season Group 2 
allowances for 2018. * * *
* * * * *
    (8) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR NOX Ozone Season Group 2 Trading Program. A State listed 
in paragraph (b)(2)(iii) or (iv) of this section may adopt and include 
in a SIP revision, and the Administrator will

[[Page 69041]]

approve, regulations replacing specified provisions of subpart EEEEE of 
part 97 of this chapter for the State's sources, and not substantively 
replacing any other provisions, as follows:
* * * * *
    (ii) The State may adopt, as applicability provisions replacing the 
provisions in Sec.  97.804(a) and (b) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that applicability is expanded to include all other units 
(beyond any units to which applicability could be expanded under 
paragraph (b)(8)(i) of this section) that would have been subject to 
any emissions trading program regulations approved as a SIP revision 
for the State under Sec.  51.121 of this chapter; and
    (iii) * * *
    (B) * * *

                   Table 5 to Paragraph (b)(8)(iii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 2       allocations or auction results
 allowances are allocated or auctioned        to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (9) Full SIP revisions adopting State CSAPR NOX Ozone Season Group 
2 Trading Programs. * * *
* * * * *
    (ii) May adopt, as applicability provisions replacing the 
provisions in Sec.  97.804(a) and (b) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that applicability is expanded to include all other units 
(beyond any units to which applicability could be expanded under 
paragraph (b)(9)(i) of this section) that would have been subject to 
any emissions trading program regulations approved as a SIP revision 
for the State under Sec.  51.121 of this chapter;
    (iii) * * *
    (B) * * *

                   Table 6 to Paragraph (b)(9)(iii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 2       allocations or auction results
 allowances are allocated or auctioned        to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (10) Full SIP revisions to voluntarily join the CSAPR NOX Ozone 
Season Group 3 Trading Program. A State listed in paragraph (b)(2)(i) 
or (iii) of this section may adopt and include in a SIP revision, and 
the Administrator will approve, as correcting the deficiency in the SIP 
that is the basis for the CSAPR Federal Implementation Plan set forth 
in paragraphs (b)(1), (b)(2)(i), and (b)(3) and (4) of this section or 
paragraphs (b)(1), (b)(2)(iii), and (b)(7) and (8) of this section, as 
applicable, with regard to sources in the State (but not sources in any 
Indian country within the borders of the State), regulations that are 
substantively identical to the provisions of the CSAPR NOX 
Ozone Season Group 3 Trading Program set forth in Sec. Sec.  97.1002 
through 97.1035 of this chapter, subject to the following requirements 
and exceptions:
    (i) The provisions of paragraphs (b)(13)(i) through (viii) of this 
section apply to any such SIP revision; and
    (ii) Following promulgation of an approval by the Administrator of 
such a SIP revision, the provisions of the SIP revision will apply to 
sources in the State with regard to emissions occurring in the control 
period that begins May 1 immediately after promulgation of such 
approval, or such later control period as may be adopted by the State 
in its regulations and approved by the Administrator in the SIP 
revision, and in each subsequent control period, except as provided in 
paragraph (b)(15) of this section.
    (11) State-determined allocations of CSAPR NOX Ozone Season Group 3 
allowances for 2022. A State listed in paragraph (b)(2)(v) of this 
section may adopt and include in a SIP revision, and the Administrator 
will approve, as CSAPR NOX Ozone Season Group 3 allowance 
allocation provisions replacing the provisions in Sec.  97.1011(a) of 
this chapter with regard to the State and the control period in 2022, a 
list of CSAPR NOX Ozone Season Group 3 units and the amount 
of CSAPR NOX Ozone Season Group 3 allowances allocated to 
each unit on such list, provided that the list of units and allocations 
meets the following requirements:
    (i) All of the units on the list must be units that are in the 
State and commenced commercial operation before January 1, 2019;
    (ii) The total amount of CSAPR NOX Ozone Season Group 3 
allowance allocations on the list must not exceed the amount, under 
Sec.  97.1010(a) of this chapter for the State and the control period 
in 2022, of the CSAPR NOX Ozone Season Group 3 trading 
budget minus the sum of the new unit set-aside and Indian country new 
unit set-aside;
    (iii) The list must be submitted electronically in a format 
specified by the Administrator; and
    (iv) The SIP revision must not provide for any change in the units 
and allocations on the list after approval of the SIP revision by the 
Administrator and must not provide for any change in any allocation 
determined and recorded by the Administrator under subpart GGGGG of 
part 97 of this chapter;
    (v) Provided that:
    (A) By [DATE 60 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE IN 
THE FEDERAL REGISTER], the State must notify the Administrator 
electronically in a format specified by the Administrator of the 
State's intent to submit to the Administrator a complete SIP revision 
meeting the requirements of paragraphs (b)(11)(i) through (iv) of this 
section by [DATE 180 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE 
IN THE FEDERAL REGISTER]; and

[[Page 69042]]

    (B) The State must submit to the Administrator a complete SIP 
revision described in paragraph (b)(11)(v)(A) of this section by [DATE 
180 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE FEDERAL 
REGISTER].
    (12) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR NOX Ozone Season Group 3 Trading Program. A State listed 
in paragraph (b)(2)(v) of this section may adopt and include in a SIP 
revision, and the Administrator will approve, regulations replacing 
specified provisions of subpart GGGGG of part 97 of this chapter for 
the State's sources, and not substantively replacing any other 
provisions, as follows:
    (i) The State may adopt, as applicability provisions replacing the 
provisions in Sec.  97.1004(a)(1) and (2) of this chapter with regard 
to the State, provisions substantively identical to those provisions, 
except that the words ``more than 25 MWe'' are replaced, wherever such 
words appear, by words specifying a uniform lower limit on the amount 
of megawatts that is not greater than the amount specified by the words 
``more than 25 MWe'' and is not less than the amount specified by the 
words ``15 MWe or more'';
    (ii) The State may adopt, as applicability provisions replacing the 
provisions in Sec.  97.1004(a) and (b) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that applicability is expanded to include all other units 
(beyond any units to which applicability could be expanded under 
paragraph (b)(12)(i) of this section) that would have been subject to 
any emissions trading program regulations approved as a SIP revision 
for the State under Sec.  51.121 of this chapter; and
    (iii) The State may adopt, as CSAPR NOX Ozone Season 
Group 3 allowance allocation or auction provisions replacing the 
provisions in Sec. Sec.  97.1011(a) and (b)(1) and 97.1012(a) of this 
chapter with regard to the State and the control period in 2023 or any 
subsequent year, any methodology under which the State or the 
permitting authority allocates or auctions CSAPR NOX Ozone 
Season Group 3 allowances and may adopt, in addition to the definitions 
in Sec.  97.1002 of this chapter, one or more definitions that shall 
apply only to terms as used in the adopted CSAPR NOX Ozone 
Season Group 3 allowance allocation or auction provisions, if such 
methodology--
    (A) Requires the State or the permitting authority to allocate and, 
if applicable, auction a total amount of CSAPR NOX Ozone 
Season Group 3 allowances for any such control period not exceeding the 
amount, under Sec. Sec.  97.1010(a) and 97.1021 of this chapter for the 
State and such control period, of the CSAPR NOX Ozone Season 
Group 3 trading budget minus the sum of the Indian country new unit 
set-aside and the amount of any CSAPR NOX Ozone Season Group 
3 allowances already allocated and recorded by the Administrator, plus, 
if the State adopts regulations expanding applicability to additional 
units pursuant to paragraph (b)(12)(ii) of this section, an additional 
amount of CSAPR NOX Ozone Season Group 3 allowances not 
exceeding the lesser of:
    (1) The highest of the sum, for all additional units in the State 
to which applicability is expanded pursuant to paragraph (b)(12)(ii) of 
this section, of the NOX emissions reported in accordance 
with part 75 of this chapter for the ozone season in the year before 
the year of the submission deadline for the SIP revision under 
paragraph (b)(12)(iv) of this section and the corresponding sums of the 
NOX emissions reported in accordance with part 75 of this 
chapter for each of the two immediately preceding ozone seasons, 
provided that each such seasonal sum shall exclude the amount of any 
NOX emissions reported by any unit for all hours in any 
calendar day during which the unit did not have at least one quality-
assured monitor operating hour, as defined in Sec.  72.2 of this 
chapter; or
    (2) The portion of the emissions budget under the State's emissions 
trading program regulations approved as a SIP revision under Sec.  
51.121 of this chapter that is attributable to the units to which 
applicability is expanded pursuant to paragraph (b)(12)(ii) of this 
section;
    (B) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 3 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 3 units covered by Sec.  97.1011(a) of this chapter, 
that the State or the permitting authority submit such allocations or 
the results of such auctions for such control period (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 3 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator no later than the dates in Table 7 to 
this paragraph (b)(12)(iii)(B);

                  Table 7 to Paragraph (b)(12)(iii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 3       allocations or auction results
 allowances are allocated or auctioned        to the  Administrator
------------------------------------------------------------------------
2023...................................  June 1, 2022.
2024...................................  June 1, 2022.
2025...................................  June 1, 2023.
2026...................................  June 1, 2023.
2027 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

    (C) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 3 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 3 units covered by Sec. Sec.  97.1011(b)(1) and 
97.1012(a) of this chapter, that the State or the permitting authority 
submit such allocations or the results of such auctions (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 3 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator by April 1 of the year following the 
year of such control period; and
    (D) Does not provide for any change, after the submission deadlines 
in paragraphs (b)(12)(iii)(B) and (C) of this section, in the 
allocations submitted to the Administrator by such deadlines and does 
not provide for any change in any allocation determined and recorded by 
the Administrator under subpart GGGGG of part 97 of this chapter, Sec.  
97.526(c) of this chapter, or Sec.  97.826(c) of this chapter;
    (iv) Provided that the State must submit a complete SIP revision 
meeting the requirements of paragraph (b)(12)(i), (ii), or (iii) of 
this section by December

[[Page 69043]]

1 of the year before the year of the deadlines for submission of 
allocations or auction results under paragraphs (b)(12)(iii)(B) and (C) 
of this section applicable to the first control period for which the 
State wants to replace the applicability provisions, make allocations, 
or hold an auction under paragraph (b)(12)(i), (ii), or (iii) of this 
section.
    (13) Full SIP revisions adopting State CSAPR NOX Ozone Season Group 
3 Trading Programs. A State listed in paragraph (b)(2)(v) of this 
section may adopt and include in a SIP revision, and the Administrator 
will approve, as correcting the deficiency in the SIP that is the basis 
for the CSAPR Federal Implementation Plan set forth in paragraphs 
(b)(1), (b)(2)(v), and (b)(11) and (12) of this section with regard to 
sources in the State (but not sources in any Indian country within the 
borders of the State), regulations that are substantively identical to 
the provisions of the CSAPR NOX Ozone Season Group 3 Trading 
Program set forth in Sec. Sec.  97.1002 through 97.1035 of this 
chapter, except that the SIP revision:
    (i) May adopt, as applicability provisions replacing the provisions 
in Sec.  97.1004(a)(1) and (2) of this chapter with regard to the 
State, provisions substantively identical to those provisions, except 
that the words ``more than 25 MWe'' are replaced, wherever such words 
appear, by words specifying a uniform lower limit on the amount of 
megawatts that is not greater than the amount specified by the words 
``more than 25 MWe'' and is not less than the amount specified by the 
words ``15 MWe or more'';
    (ii) May adopt, as applicability provisions replacing the 
provisions in Sec.  97.1004(a) and (b) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that applicability is expanded to include all other units 
(beyond any units to which applicability could be expanded under 
paragraph (b)(13)(i) of this section) that would have been subject to 
any emissions trading program regulations approved as a SIP revision 
for the State under Sec.  51.121 of this chapter;
    (iii) May adopt, as CSAPR NOX Ozone Season Group 3 
allowance allocation provisions replacing the provisions in Sec. Sec.  
97.1011(a) and (b)(1) and 97.1012(a) of this chapter with regard to the 
State and the control period in 2023 or any subsequent year, any 
methodology under which the State or the permitting authority allocates 
or auctions CSAPR NOX Ozone Season Group 3 allowances and 
that--
    (A) Requires the State or the permitting authority to allocate and, 
if applicable, auction a total amount of CSAPR NOX Ozone 
Season Group 3 allowances for any such control period not exceeding the 
amount, under Sec. Sec.  97.1010(a) and 97.1021 of this chapter for the 
State and such control period, of the CSAPR NOX Ozone Season 
Group 3 trading budget minus the sum of the Indian country new unit 
set-aside and the amount of any CSAPR NOX Ozone Season Group 
3 allowances already allocated and recorded by the Administrator, plus, 
if the State adopts regulations expanding applicability to additional 
units pursuant to paragraph (b)(13)(ii) of this section, an additional 
amount of CSAPR NOX Ozone Season Group 3 allowances not 
exceeding the lesser of:
    (1) The highest of the sum, for all additional units in the State 
to which applicability is expanded pursuant to paragraph (b)(13)(ii) of 
this section, of the NOX emissions reported in accordance 
with part 75 of this chapter for the ozone season in the year before 
the year of the submission deadline for the SIP revision under 
paragraph (b)(13)(viii) of this section and the corresponding sums of 
the NOX emissions reported in accordance with part 75 of 
this chapter for each of the two immediately preceding ozone seasons, 
provided that each such seasonal sum shall exclude the amount of any 
NOX emissions reported by any unit for all hours in any 
calendar day during which the unit did not have at least one quality-
assured monitor operating hour, as defined in Sec.  72.2 of this 
chapter; or
    (2) The portion of the emissions budget under the State's emissions 
trading program regulations approved as a SIP revision under Sec.  
51.121 of this chapter that is attributable to the units to which 
applicability is expanded pursuant to paragraph (b)(13)(ii) of this 
section;
    (B) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 3 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 3 units covered by Sec.  97.1011(a) of this chapter, 
that the State or the permitting authority submit such allocations or 
the results of such auctions for such control period (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 3 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator no later than the dates in Table 8 to 
this paragraph (b)(13)(iii)(B);

                  Table 8 to Paragraph (b)(13)(iii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 3       allocations or auction results
 allowances are allocated or auctioned        to the  Administrator
------------------------------------------------------------------------
2023...................................  June 1, 2022.
2024...................................  June 1, 2022.
2025...................................  June 1, 2023.
2026...................................  June 1, 2023.
2027 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

    (C) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 3 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 3 units covered by Sec. Sec.  97.1011(b)(1) and 
97.1012(a) of this chapter, that the State or the permitting authority 
submit such allocations or the results of such auctions (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 3 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator by April 1 of the year following the 
year of such control period; and
    (D) Does not provide for any change, after the submission deadlines 
in paragraphs (b)(13)(iii)(B) and (C) of this section, in the 
allocations submitted to the Administrator by such deadlines and does 
not provide for any change in any allocation determined and recorded by 
the Administrator under subpart GGGGG of part 97 of this chapter, Sec.  
97.526(c) of this chapter, or Sec.  97.826(c) of this chapter;

[[Page 69044]]

    (iv) May adopt, in addition to the definitions in Sec.  97.1002 of 
this chapter, one or more definitions that shall apply only to terms as 
used in the CSAPR NOX Ozone Season Group 3 allowance 
allocation or auction provisions adopted under paragraph (b)(13)(iii) 
of this section;
    (v) May substitute the name of the State for the term ``State'' as 
used in subpart GGGGG of part 97 of this chapter, to the extent the 
Administrator determines that such substitutions do not make 
substantive changes in the provisions in Sec. Sec.  97.1002 through 
97.1035 of this chapter; and
    (vi) Must not include any of the requirements imposed on any unit 
in Indian country within the borders of the State in the provisions in 
Sec. Sec.  97.1002 through 97.1035 of this chapter and must not include 
the provisions in Sec. Sec.  97.1011(b)(2) and (c)(5)(iii), 97.1012(b), 
and 97.1021(h) and (j) of this chapter, all of which provisions will 
continue to apply under any portion of the CSAPR Federal Implementation 
Plan that is not replaced by the SIP revision;
    (vii) Provided that, if and when any covered unit is located in 
Indian country within the borders of the State, the Administrator may 
modify his or her approval of the SIP revision to exclude the 
provisions in Sec. Sec.  97.1002 (definitions of ``base CSAPR 
NOX Ozone Season Group 3 source'', ``base CSAPR 
NOX Ozone Season Group 3 unit'', ``common designated 
representative'', ``common designated representative's assurance 
level'', and ``common designated representative's share''), 
97.1006(c)(2), and 97.1025 of this chapter and the portions of other 
provisions of subpart GGGGG of part 97 of this chapter referencing 
these sections and may modify any portion of the CSAPR Federal 
Implementation Plan that is not replaced by the SIP revision to include 
these provisions; and
    (viii) Provided that the State must submit a complete SIP revision 
meeting the requirements of paragraphs (b)(13)(i) through (vi) of this 
section by December 1 of the year before the year of the deadlines for 
submission of allocations or auction results under paragraphs 
(b)(13)(iii)(B) and (C) of this section applicable to the first control 
period for which the State wants to replace the applicability 
provisions, make allocations, or hold an auction under paragraph 
(b)(13)(i), (ii), or (iii) of this section.
    (14) Withdrawal of CSAPR FIP provisions relating to NOX ozone 
season emissions. Following promulgation of an approval by the 
Administrator of a State's SIP revision as correcting the SIP's 
deficiency that is the basis for the CSAPR Federal Implementation Plan 
set forth in paragraphs (b)(1), (b)(2)(i), and (b)(3) and (4) of this 
section, paragraphs (b)(1), (b)(2)(iii) or (iv), and (b)(7) and (8) of 
this section, or paragraphs (b)(1), (b)(2)(v), and (b)(11) and (12) of 
this section for sources in the State--
    (i) Except as provided in paragraph (b)(15) of this section, the 
provisions of paragraph (b)(2)(i), (iii), (iv), or (v) of this section, 
as applicable, will no longer apply to sources in the State, unless the 
Administrator's approval of the SIP revision is partial or conditional, 
and will continue to apply to sources in any Indian country within the 
borders of the State, provided that if the CSAPR Federal Implementation 
Plan was promulgated as a partial rather than full remedy for an 
obligation of the State to address interstate air pollution, the SIP 
revision likewise will constitute a partial rather than full remedy for 
the State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision; and
    (ii) For a State listed in Sec.  51.121(c) of this chapter, the 
State's adoption of the regulations included in such approved SIP 
revision will satisfy with regard to the sources subject to such 
regulations, including any sources made subject to such regulations 
pursuant to paragraph (b)(9)(ii) or (b)(13)(ii) of this section, the 
requirement under Sec.  51.121(r)(2) of this chapter for the State to 
revise its SIP to adopt control measures with regard to such sources, 
provided that the Administrator and the State continue to carry out 
their respective functions under such regulations.
    (15) Continued applicability of certain federal trading program 
provisions for NOX ozone season emissions. (i) Notwithstanding the 
provisions of paragraph (b)(14)(i) of this section or any State's SIP, 
when carrying out the functions of the Administrator under any State 
CSAPR NOX Ozone Season Group 1 Trading Program or State 
CSAPR NOX Ozone Season Group 2 Trading Program pursuant to a 
SIP revision approved under this section, the Administrator will apply 
the following provisions of this section, as amended, and the following 
provisions of subpart BBBBB of part 97 of this chapter, as amended, or 
subpart EEEEE of part 97 of this chapter, as amended, with regard to 
the State and any source subject to such State trading program:
    (A) The definitions in Sec.  97.502 of this chapter or Sec.  97.802 
of this chapter;
    (B) The provisions in Sec.  97.510(a) of this chapter concerning 
the amounts of the new unit set-asides;
    (C) The provisions in Sec. Sec.  97.511(b)(1) and 97.512(a) of this 
chapter or Sec. Sec.  97.811(b)(1) and 97.812(a) of this chapter 
concerning the procedures for allocating CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances from new unit set-asides (except where the State allocates 
or auctions such allowances under an approved SIP revision);
    (D) The provisions in Sec.  97.511(c)(5) of this chapter or Sec.  
97.811(c)(5) of this chapter concerning the disposition of incorrectly 
allocated CSAPR NOX Ozone Season Group 1 allowances or CSAPR 
NOX Ozone Season Group 2 allowances;
    (E) The provisions in Sec.  97.521(f), (g), and (i) of this chapter 
or Sec.  97.821(f), (g), and (i) of this chapter concerning the 
deadlines for recordation of CSAPR NOX Ozone Season Group 1 
allowances or CSAPR NOX Ozone Season Group 2 allowances 
allocated in accordance with Sec.  97.511(a) or Sec.  97.512(a) of this 
chapter or Sec.  97.811(a) or Sec.  97.812(a) of this chapter or 
allocated or auctioned under an approved SIP revision and the 
provisions in paragraphs (b)(4)(ii)(B) and (C) and (b)(5)(ii)(B) and 
(C) of this section or paragraphs (b)(8)(iii)(B) and (C) and 
(b)(9)(iii)(B) and (C) of this section concerning the deadlines for 
submission to the Administrator of State-determined allocations or 
auction results; and
    (F) The provisions in Sec.  97.525(b) of this chapter or Sec.  
97.825(b) of this chapter concerning the procedures for administering 
the assurance provisions.
    (ii) Notwithstanding the provisions of paragraph (b)(6)(ii), 
(b)(10)(ii), or (b)(14)(i) of this section, if, at the time of any 
approval of a State's SIP revision under this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 1 allowances under subpart BBBBB of 
part 97 of this chapter, or allocations of CSAPR NOX Ozone 
Season Group 2 allowances under subpart EEEEE of part 97 of this 
chapter, or allocations of CSAPR NOX Ozone Season Group 3 
allowances under subpart GGGGG of part 97 of this chapter, to units in 
the State for a control period in any year, the provisions of such 
subpart authorizing the Administrator to complete the allocation and 
recordation of such allowances to units in the State for each such 
control period, including the provisions of Sec. Sec.  97.526(c) and 
97.826(c) of this chapter, shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.
    (iii) Notwithstanding any discontinuation of the applicability of 
other provisions of subpart BBBBB or EEEEE of part 97 of this chapter 
to the sources in a State pursuant to paragraph

[[Page 69045]]

(b)(2)(ii) or (iv) or (b)(14)(i) of this section, the following 
provisions shall continue to apply with regard to all CSAPR 
NOX Ozone Season Group 1 allowances and CSAPR NOX 
Ozone Season Group 2 allowances at any time allocated to or held by any 
source or other entity in the State and to all sources or other 
entities, wherever located, that received or at any time hold such 
allowances:
    (A) The provisions of Sec.  97.526(c)(1) through (6) of this 
chapter authorizing the Administrator to remove CSAPR NOX 
Ozone Season Group 1 allowances from any Allowance Management System 
account where such CSAPR NOX Ozone Season Group 1 allowances 
are held and to allocate and record amounts of CSAPR NOX 
Ozone Season Group 2 allowances or CSAPR NOX Ozone Season 
Group 3 allowances in place of any CSAPR NOX Ozone Season 
Group 1 allowances that have been so removed or that have not been 
initially recorded, and the provisions of Sec.  97.526(c)(7) of this 
chapter authorizing the use of CSAPR NOX Ozone Season Group 
2 allowances or CSAPR NOX Ozone Season Group 3 allowances to 
satisfy requirements to hold CSAPR NOX Ozone Season Group 1 
allowances;
    (B) The provisions of Sec.  97.826(c)(1) through (6) of this 
chapter authorizing the Administrator to remove CSAPR NOX 
Ozone Season Group 2 allowances from any Allowance Management System 
account where such CSAPR NOX Ozone Season Group 2 allowances 
are held and to allocate and record amounts of CSAPR NOX 
Ozone Season Group 3 allowances in place of any CSAPR NOX 
Ozone Season Group 2 allowances that have been so removed or that have 
not been initially recorded, and the provisions of Sec.  97.826(c)(7) 
of this chapter authorizing the use of CSAPR NOX Ozone 
Season Group 3 allowances to satisfy requirements to hold CSAPR 
NOX Ozone Season Group 2 allowances; and
    (C) The provisions of Sec.  97.811(d) of this chapter recalling all 
allocations of CSAPR NOX Ozone Season Group 2 allowances for 
control periods after 2020 to sources and other entities in States 
listed in paragraph (b)(2)(iv) of this section, requiring such sources 
and other entities to surrender of equal amounts of CSAPR 
NOX Ozone Season Group 2 allowances allocated for the same 
control periods to accomplish such recalls, authorizing the 
Administrator to record the removal of such surrendered CSAPR 
NOX Ozone Season Group 2 allowances from any Allowance 
Management Account, and establishing potential remedies for any failure 
to comply with such surrender requirements.
    (16) States with approved SIP revisions addressing the CSAPR NOX 
Ozone Season Group 1 Trading Program. * * *
* * * * *
    (17) States with approved SIP revisions addressing the CSAPR NOX 
Ozone Season Group 2 Trading Program. * * *
* * * * *
    (ii) Notwithstanding any provision of subpart EEEEE of part 97 of 
this chapter or any State's SIP, with regard to any State listed in 
paragraph (b)(2)(iv) of this section and any control period that begins 
after December 31, 2020, the Administrator will not carry out any of 
the functions set forth for the Administrator in subpart EEEEE of part 
97 of this chapter, except Sec. Sec.  97.811(d) and 97.826(c) of this 
chapter, or in any emissions trading program provisions in a State's 
SIP approved under paragraph (b)(8) or (9) of this section.
    (18) States with approved SIP revisions addressing the CSAPR NOX 
Ozone Season Group 3 Trading Program. The following States have SIP 
revisions approved by the Administrator under paragraph (b)(10), (11), 
(12), or (13) of this section:
    (i) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(10) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (b)(1), (b)(2)(i), and 
(b)(3) and (4) of this section or paragraphs (b)(1), (b)(2)(iii), and 
(b)(7) and (8) of this section with regard to sources in the State (but 
not sources in any Indian country within the borders of the State): 
[none].
    (ii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(11) of this section as 
replacing the CSAPR NOX Ozone Season Group 3 allowance 
allocation provisions in Sec.  97.1011(a) of this chapter with regard 
to the State and the control period in 2022: [none].
    (iii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(12) of this section as 
replacing the CSAPR NOX Ozone Season Group 3 applicability 
provisions in Sec.  97.1004(a) and (b) or Sec.  97.1004(a)(1) and (2) 
of this chapter or the CSAPR NOX Ozone Season Group 2 
allowance allocation provisions in Sec. Sec.  97.1011(a) and (b)(1) and 
97.1012(a) of this chapter with regard to the State and the control 
period in 2023 or any subsequent year: [none].
    (iv) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(13) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (b)(1), (b)(2)(v), and 
(b)(11) and (12) of this section with regard to sources in the State 
(but not sources in any Indian country within the borders of the 
State): [none].
0
3. Amend Sec.  52.39 by:
0
a. Adding a subject heading to paragraph (a) and removing 
``(SO2).'' and adding in its place ``(SO2), 
except as otherwise provided in this section.'';
0
b. Adding a subject heading to paragraph (b);
0
c. Adding a subject heading to paragraph (c);
0
d. Adding a subject heading to paragraph (d) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a) of this 
section, a State'' and adding in its place ``A State'';
0
e. Revising paragraph (e) introductory text;
0
f. In paragraph (e)(1)(i), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
g. In paragraph (e)(1)(ii), removing ``the following dates:'' and 
adding in its place ``the dates in Table 1 to this paragraph 
(e)(1)(ii);'', adding a heading to the table, removing the table entry 
for ``2023 and any year thereafter'', and adding table entries for 
``2023 and 2024'' and ``2025 and any year thereafter'';
0
h. In paragraph (e)(1)(iii), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2023, or by April 1 of the year following the control 
period, for a control period in 2023 or thereafter; and'';
0
i. Adding a subject heading to paragraph (f) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a) of this 
section, a State'' and adding in its place ``A State'';
0
j. In paragraph (f)(1)(i), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
k. In paragraph (f)(1)(ii), removing ``the following dates:'' and 
adding in its place ``the dates in Table 2 to this paragraph 
(f)(1)(ii);'', adding a heading to the table, removing the table entry 
for ``2023 and any year thereafter'', and adding table entries for 
``2023 and 2024'' and ``2025 and any year thereafter'';
0
l. In paragraph (f)(1)(iii), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2023, or by April 1 of the year following the

[[Page 69046]]

control period, for a control period in 2023 or thereafter; and'';
0
m. In paragraph (f)(5), adding ``and'' after the semicolon at the end 
of the paragraph;
0
n. Adding a subject heading to paragraph (g) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a) of this 
section, a State'' and adding in its place ``A State'';
0
o. Revising paragraph (h) introductory text;
0
p. In paragraph (h)(1)(i), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
q. In paragraph (h)(1)(ii), removing ``the following dates:'' and 
adding in its place ``the dates in Table 3 to this paragraph 
(h)(1)(ii);'', adding a heading to the table, removing the table entry 
for ``2023 and any year thereafter'', and adding table entries for 
``2023 and 2024'' and ``2025 and any year thereafter'';
0
r. In paragraph (h)(1)(iii), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2023, or by April 1 of the year following the control 
period, for a control period in 2023 or thereafter; and'';
0
s. Adding a subject heading to paragraph (i) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a) of this 
section, a State'' and adding in its place ``A State'';
0
t. In paragraph (i)(1)(i), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
u. In paragraph (i)(1)(ii), removing ``the following dates:'' and 
adding in its place ``the dates in Table 4 to this paragraph 
(i)(1)(ii);'', adding a heading to the table, removing the table entry 
for ``2023 and any year thereafter'', and adding table entries for 
``2023 and 2024'' and ``2025 and any year thereafter'';
0
v. In paragraph (i)(1)(iii), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2023, or by April 1 of the year following the control 
period, for a control period in 2023 or thereafter; and'';
0
w. In paragraph (i)(5), adding ``and'' after the semicolon at the end 
of the paragraph;
0
x. Adding a subject heading to paragraph (j) and removing ``Following 
promulgation'' and adding in its place ``Except as provided in 
paragraph (k) of this section, following promulgation'';
0
y. Revising paragraph (k); and
0
z. Adding a subject headings to paragraphs (l) introductory text and 
(m) introductory text.
    The additions and revisions 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?

    (a) General requirements for SO2 emissions. * * *
    (b) Applicability of CSAPR SO2 Group 1 Trading Program provisions. 
* * *
    (c) Applicability of CSAPR SO2 Group 2 Trading Program provisions. 
* * *
* * * * *
    (d) State-determined allocations of CSAPR SO2 Group 1 allowances 
for 2016. * * *
* * * * *
    (e) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR SO2 Group 1 Trading Program. A State listed in paragraph 
(b) of this section may adopt and include in a SIP revision, and the 
Administrator will approve, regulations replacing specified provisions 
of subpart CCCCC of part 97 of this chapter for the State's sources, 
and not substantively replacing any other provisions, as follows:
    (1) * * *
    (ii) * * *

                     Table 1 to Paragraph (e)(1)(ii)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR SO2 Group 1 allowances are     allocations or  auction results
         allocated or auctioned                to the Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2023 and 2024..........................  June 1 of the fourth year
                                          before the year of the control
                                          period.
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (f) Full SIP revisions adopting State CSAPR SO2 Group 1 Trading 
Programs. * * *
    (1) * * *
    (ii) * * *

                     Table 2 to Paragraph (f)(1)(ii)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR SO2 Group 1 allowances are     allocations or  auction results
         allocated or auctioned                to the Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2023 and 2024..........................  June 1 of the fourth year
                                          before the year of the control
                                          period.
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (g) State-determined allocations of CSAPR SO2 Group 2 allowances 
for 2016. * * *
* * * * *
    (h) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR SO2 Group 2 Trading Program. A State listed in paragraph 
(c)(1) of this section may adopt and include in a SIP revision, and the 
Administrator will approve, regulations replacing specified provisions 
of subpart DDDDD of part 97 of this chapter for the State's sources, 
and not substantively replacing any other provisions, as follows:
    (1) * * *
    (ii) * * *

[[Page 69047]]



                     Table 3 to Paragraph (h)(1)(ii)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR SO2 Group 2 allowances are     allocations or  auction results
         allocated or auctioned                to the Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2023 and 2024..........................  June 1 of the fourth year
                                          before the year of the control
                                          period.
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (i) Full SIP revisions adopting State CSAPR SO2 Group 2 Trading 
Programs. * * *
    (1) * * *
    (ii) * * *


                     Table 4 to Paragraph (i)(1)(ii)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR SO2 Group 2 allowances are     allocations or  auction results
         allocated or auctioned                to the Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2023 and 2024..........................  June 1 of the fourth year
                                          before the year of the control
                                          period.
2025 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

* * * * *
    (j) Withdrawal of CSAPR FIP provisions relating to SO2 emissions. * 
* *
    (k) Continued applicability of certain federal trading program 
provisions for SO2 emissions. (1) Notwithstanding the provisions of 
paragraph (j) of this section or any State's SIP, when carrying out the 
functions of the Administrator under any State CSAPR SO2 
Group 1 Trading Program or State CSAPR SO2 Group 2 Trading 
Program pursuant to a SIP revision approved under this section, the 
Administrator will apply the following provisions of this section, as 
amended, and the following provisions of subpart CCCCC of part 97 of 
this chapter, as amended, or subpart DDDDD of part 97 of this chapter, 
as amended, with regard to the State and any source subject to such 
State trading program:
    (i) The definitions in Sec.  97.602 of this chapter or Sec.  97.702 
of this chapter;
    (ii) The provisions in Sec.  97.610(a) of this chapter or Sec.  
97.710(a) of this chapter concerning the amounts of the new unit set-
asides;
    (iii) The provisions in Sec. Sec.  97.611(b)(1) and 97.612(a) of 
this chapter or Sec. Sec.  97.711(b)(1) and 97.712(a) of this chapter 
concerning the procedures for allocating CSAPR SO2 Group 1 
allowances or CSAPR SO2 Group 2 allowances from new unit 
set-asides (except where the State allocates or auctions such 
allowances under an approved SIP revision);
    (iv) The provisions in Sec.  97.611(c)(5) of this chapter or Sec.  
97.711(c)(5) of this chapter concerning the disposition of incorrectly 
allocated CSAPR SO2 Group 1 allowances or CSAPR 
SO2 Group 2 allowances;
    (v) The provisions in Sec.  97.621(f), (g) and (i) of this chapter 
or Sec.  97.721(f), (g) and (i) of this chapter concerning the 
deadlines for recordation of CSAPR SO2 Group 1 allowances or 
CSAPR SO2 Group 2 allowances allocated in accordance with 
Sec.  97.611(a) or Sec.  97.612(a) of this chapter or Sec.  97.711(a) 
or Sec.  97.712(a) of this chapter or allocated or auctioned under an 
approved SIP revision and the provisions in paragraphs (e)(1)(ii) and 
(iii) and (f)(1)(ii) and (iii) of this section or paragraphs (h)(1)(ii) 
and (iii) and (i)(1)(ii) and (iii) of this section concerning the 
deadlines for submission to the Administrator of State-determined 
allocations or auction results; and
    (vi) The provisions in Sec.  97.625(b) of this chapter or Sec.  
97.725(b) of this chapter concerning the procedures for administering 
the assurance provisions.
    (2) Notwithstanding the provisions of paragraph (i) of this 
section, if, at the time of an approval of a State's SIP revision under 
this section, the Administrator has already started recording any 
allocations of CSAPR SO2 Group 1 allowances under subpart 
CCCCC of part 97 of this chapter, or allocations of CSAPR 
SO2 Group 2 allowances under subpart DDDDD of part 97 of 
this chapter, to units in the State for a control period in any year, 
the provisions of such subpart authorizing the Administrator to 
complete the allocation and recordation of such allowances to units in 
the State for each such control period shall continue to apply, unless 
provided otherwise by such approval of the State's SIP revision.
    (l) States with approved SIP revisions addressing the CSAPR SO2 
Group 1 Trading Program. * * *
* * * * *
    (m) States with approved SIP revisions addressing the CSAPR SO2 
Group 2 Trading Program. * * *
* * * * *

Subpart O--Illinois

0
4. Amend Sec.  52.731 by revising paragraphs (b)(2) and (3) and adding 
paragraph (b)(4) to read as follows:


Sec.  52.731  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b) * * *
    (2) The owner and operator of each source and each unit located in 
the State of Illinois and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017, 2018, 2019, 
and 2020. The obligation to comply with such requirements will be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Illinois' State Implementation Plan (SIP) as correcting the 
SIP's deficiency that is the basis for the CSAPR Federal Implementation 
Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(iv), except to the extent 
the Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was

[[Page 69048]]

promulgated as a partial rather than full remedy for an obligation of 
the State to address interstate air pollution, the SIP revision 
likewise will constitute a partial rather than full remedy for the 
State's obligation unless provided otherwise in the Administrator's 
approval of the SIP revision.
    (3) The owner and operator of each source and each unit located in 
the State of Illinois and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Illinois' State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
    (4) Notwithstanding the provisions of paragraphs (b)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of Illinois' SIP 
revision described in paragraph (b)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE or GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

Subpart P--Indiana

0
5. Amend Sec.  52.789 by revising paragraphs (b)(2) and (3) and adding 
paragraph (b)(4) to read as follows:


Sec.  52.789  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b) * * *
    (2) The owner and operator of each source and each unit located in 
the State of Indiana and for which requirements are set forth under the 
CSAPR NOX Ozone Season Group 2 Trading Program in subpart 
EEEEE of part 97 of this chapter must comply with such requirements 
with regard to emissions occurring in 2017, 2018, 2019, and 2020. The 
obligation to comply with such requirements will be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Indiana's State Implementation Plan (SIP) as correcting the SIP's 
deficiency that is the basis for the CSAPR Federal Implementation Plan 
(FIP) under Sec.  52.38(b)(1) and (b)(2)(iv), except to the extent the 
Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (3) The owner and operator of each source and each unit located in 
the State of Indiana and for which requirements are set forth under the 
CSAPR NOX Ozone Season Group 3 Trading Program in subpart 
GGGGG of part 97 of this chapter must comply with such requirements 
with regard to emissions occurring in 2021 and each subsequent year. 
The obligation to comply with such requirements will be eliminated by 
the promulgation of an approval by the Administrator of a revision to 
Indiana's State Implementation Plan (SIP) as correcting the SIP's 
deficiency that is the basis for the CSAPR Federal Implementation Plan 
(FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except to the extent the 
Administrator's approval is partial or conditional.
    (4) Notwithstanding the provisions of paragraphs (b)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of Indiana's SIP 
revision described in paragraph (b)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE of GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

Subpart S--Kentucky

0
6. Amend Sec.  52.940 by revising paragraphs (b)(2) and (3) and adding 
paragraph (b)(4) to read as follows:


Sec.  52.940   Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b) * * *
    (2) The owner and operator of each source and each unit located in 
the State of Kentucky and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017, 2018, 2019, 
and 2020. The obligation to comply with such requirements will be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Kentucky's State Implementation Plan (SIP) as correcting 
the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(iv), 
except to the extent the Administrator's approval is partial or 
conditional, provided that because the CSAPR FIP was promulgated as a 
partial rather than full remedy for an obligation of the State to 
address interstate air pollution, the SIP revision likewise will 
constitute a partial rather than full remedy for the State's obligation 
unless provided otherwise in the Administrator's approval of the SIP 
revision.
    (3) The owner and operator of each source and each unit located in 
the State of Kentucky and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Kentucky's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the

[[Page 69049]]

extent the Administrator's approval is partial or conditional.
    (4) Notwithstanding the provisions of paragraphs (b)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of Kentucky's SIP 
revision described in paragraph (b)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE or GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

Subpart T--Louisiana

0
7. Amend Sec.  52.984 by revising paragraphs (d)(2) and (3) and adding 
paragraph (d)(4) to read as follows:


Sec.  52.984  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (d) * * *
    (2) The owner and operator of each source and each unit located in 
the State of Louisiana and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017, 2018, 2019, and 2020. The obligation to 
comply with such requirements with regard to sources and units in the 
State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Louisiana's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b)(1) and 
(b)(2)(iv) for those sources and units, except to the extent the 
Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision. The obligation to 
comply with such requirements with regard to sources and units located 
in Indian country within the borders of the State will not be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Louisiana's SIP.
    (3) The owner and operator of each source and each unit located in 
the State of Louisiana and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 3 Trading Program in subpart GGGGG of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2021 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Louisiana's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b)(1) and 
(b)(2)(v) for those sources and units, except to the extent the 
Administrator's approval is partial or conditional. The obligation to 
comply with such requirements with regard to sources and units located 
in Indian country within the borders of the State will not be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Louisiana's SIP.
    (4) Notwithstanding the provisions of paragraphs (d)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of Louisiana's SIP 
revision described in paragraph (d)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE or GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

Subpart V--Maryland

0
8. Amend Sec.  52.1084 by revising paragraphs (b)(2) and (3) and adding 
paragraph (b)(4) to read as follows:


Sec.  52.1084  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b) * * *
    (2) The owner and operator of each source and each unit located in 
the State of Maryland and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017, 2018, 2019, 
and 2020. The obligation to comply with such requirements will be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Maryland's State Implementation Plan (SIP) as correcting 
the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(iv), 
except to the extent the Administrator's approval is partial or 
conditional, provided that because the CSAPR FIP was promulgated as a 
partial rather than full remedy for an obligation of the State to 
address interstate air pollution, the SIP revision likewise will 
constitute a partial rather than full remedy for the State's obligation 
unless provided otherwise in the Administrator's approval of the SIP 
revision.
    (3) The owner and operator of each source and each unit located in 
the State of Maryland and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Maryland's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
    (4) Notwithstanding the provisions of paragraphs (b)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other

[[Page 69050]]

entity located in the State and all CSAPR NOX Ozone Season 
Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of Maryland's SIP 
revision described in paragraph (b)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE or GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

Subpart X--Michigan

0
9. Amend Sec.  52.1186 by revising paragraphs (e)(2) and (3) and adding 
paragraph (e)(4) to read as follows:


Sec.  52.1186  Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (e) * * *
    (2) The owner and operator of each source and each unit located in 
the State of Michigan and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017, 2018, 2019, and 2020. The obligation to 
comply with such requirements with regard to sources and units in the 
State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Michigan's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b)(1) and 
(b)(2)(iv) for those sources and units, except to the extent the 
Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision. The obligation to 
comply with such requirements with regard to sources and units located 
in Indian country within the borders of the State will not be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Michigan's SIP.
    (3) The owner and operator of each source and each unit located in 
the State of Michigan and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 3 Trading Program in subpart GGGGG of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2021 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Michigan's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b)(1) and 
(b)(2)(v) for those sources and units, except to the extent the 
Administrator's approval is partial or conditional. The obligation to 
comply with such requirements with regard to sources and units located 
in Indian country within the borders of the State will not be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Michigan's SIP.
    (4) Notwithstanding the provisions of paragraphs (e)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of Michigan's SIP 
revision described in paragraph (e)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE or GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

Subpart FF--New Jersey

0
10. Amend Sec.  52.1584 by revising paragraphs (e)(2) and (3) and 
adding paragraph (e)(4) to read as follows:


Sec.  52.1584   Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (e) * * *
    (2) The owner and operator of each source and each unit located in 
the State of New Jersey and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017, 2018, 2019, 
and 2020. The obligation to comply with such requirements will be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to New Jersey's State Implementation Plan (SIP) as correcting 
the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(iv), 
except to the extent the Administrator's approval is partial or 
conditional, provided that because the CSAPR FIP was promulgated as a 
partial rather than full remedy for an obligation of the State to 
address interstate air pollution, the SIP revision likewise will 
constitute a partial rather than full remedy for the State's obligation 
unless provided otherwise in the Administrator's approval of the SIP 
revision.
    (3) The owner and operator of each source and each unit located in 
the State of New Jersey and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to New Jersey's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
    (4) Notwithstanding the provisions of paragraphs (e)(2) and (3) of 
this section the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all

[[Page 69051]]

CSAPR NOX Ozone Season Group 1 allowances or CSAPR 
NOX Ozone Season Group 2 allowances at any time allocated to 
or held by any such source or other entity. Further, if, at the time of 
the approval of New Jersey's SIP revision described in paragraph (e)(2) 
or (3) of this section, the Administrator has already started recording 
any allocations of CSAPR NOX Ozone Season Group 2 allowances 
or CSAPR NOX Ozone Season Group 3 allowances under subpart 
EEEEE or GGGGG, respectively, of part 97 of this chapter to units in 
the State for a control period in any year, the provisions of such 
subpart authorizing the Administrator to complete the allocation and 
recordation of such allowances to units in the State for each such 
control period shall continue to apply, unless provided otherwise by 
such approval of the State's SIP revision.

Subpart HH--New York

0
11. Amend Sec.  52.1684 by revising paragraphs (b)(2) and (3) and 
adding paragraph (b)(4) to read as follows:


Sec.  52.1684   Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b) * * *
    (2) The owner and operator of each source and each unit located in 
the State of New York and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 2 Trading Program in subpart EEEEE of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2017, 2018, 2019, and 2020. The obligation to 
comply with such requirements with regard to sources and units in the 
State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to New York's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b)(1) and 
(b)(2)(iv) for those sources and units, except to the extent the 
Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision. The obligation to 
comply with such requirements with regard to sources and units located 
in Indian country within the borders of the State will not be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to New York's SIP.
    (3) The owner and operator of each source and each unit located in 
the State of New York and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 3 Trading Program in subpart GGGGG of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2021 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to New York's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b)(1) and 
(b)(2)(v) for those sources and units, except to the extent the 
Administrator's approval is partial or conditional. The obligation to 
comply with such requirements with regard to sources and units located 
in Indian country within the borders of the State will not be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to New York's SIP.
    (4) Notwithstanding the provisions of paragraphs (b)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of New York's SIP 
revision described in paragraph (b)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE or GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

Subpart KK--Ohio

0
12. Amend Sec.  52.1882 by revising paragraphs (b)(2) and (3) and 
adding paragraph (b)(4) to read as follows:


Sec.  52.1882   Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b) * * *
    (2) The owner and operator of each source and each unit located in 
the State of Ohio and for which requirements are set forth under the 
CSAPR NOX Ozone Season Group 2 Trading Program in subpart 
EEEEE of part 97 of this chapter must comply with such requirements 
with regard to emissions occurring in 2017, 2018, 2019, and 2020. The 
obligation to comply with such requirements will be eliminated by the 
promulgation of an approval by the Administrator of a revision to 
Ohio's State Implementation Plan (SIP) as correcting the SIP's 
deficiency that is the basis for the CSAPR Federal Implementation Plan 
(FIP) under Sec.  52.38(b)(1) and (b)(2)(iv), except to the extent the 
Administrator's approval is partial or conditional, provided that 
because the CSAPR FIP was promulgated as a partial rather than full 
remedy for an obligation of the State to address interstate air 
pollution, the SIP revision likewise will constitute a partial rather 
than full remedy for the State's obligation unless provided otherwise 
in the Administrator's approval of the SIP revision.
    (3) The owner and operator of each source and each unit located in 
the State of Ohio and for which requirements are set forth under the 
CSAPR NOX Ozone Season Group 3 Trading Program in subpart 
GGGGG of part 97 of this chapter must comply with such requirements 
with regard to emissions occurring in 2021 and each subsequent year. 
The obligation to comply with such requirements will be eliminated by 
the promulgation of an approval by the Administrator of a revision to 
Ohio's State Implementation Plan (SIP) as correcting the SIP's 
deficiency that is the basis for the CSAPR Federal Implementation Plan 
(FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except to the extent the 
Administrator's approval is partial or conditional.
    (4) Notwithstanding the provisions of paragraphs (b)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone

[[Page 69052]]

Season Group 2 allowances at any time allocated to or held by any such 
source or other entity. Further, if, at the time of the approval of 
Ohio's SIP revision described in paragraph (b)(2) or (3) of this 
section, the Administrator has already started recording any 
allocations of CSAPR NOX Ozone Season Group 2 allowances or 
CSAPR NOX Ozone Season Group 3 allowances under subpart 
EEEEE or GGGGG, respectively, of part 97 of this chapter to units in 
the State for a control period in any year, the provisions of such 
subpart authorizing the Administrator to complete the allocation and 
recordation of such allowances to units in the State for each such 
control period shall continue to apply, unless provided otherwise by 
such approval of the State's SIP revision.

Subpart NN--Pennsylvania

0
13. Amend Sec.  52.2040 by revising paragraphs (b)(2) and (3) and 
adding paragraph (b)(4) to read as follows:


Sec.  52.2040   Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b) * * *
    (2) The owner and operator of each source and each unit located in 
the State of Pennsylvania and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017, 2018, 2019, 
and 2020. The obligation to comply with such requirements will be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Pennsylvania's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(iv), 
except to the extent the Administrator's approval is partial or 
conditional, provided that because the CSAPR FIP was promulgated as a 
partial rather than full remedy for an obligation of the State to 
address interstate air pollution, the SIP revision likewise will 
constitute a partial rather than full remedy for the State's obligation 
unless provided otherwise in the Administrator's approval of the SIP 
revision.
    (3) The owner and operator of each source and each unit located in 
the State of Pennsylvania and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Pennsylvania's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
    (4) Notwithstanding the provisions of paragraphs (b)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of Pennsylvania's SIP 
revision described in paragraph (b)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE or GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

Subpart VV--Virginia

0
14. Amend Sec.  52.2440 by revising paragraphs (b)(2) and (3) and 
adding paragraph (b)(4) to read as follows:


Sec.  52.2440   Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b) * * *
    (2) The owner and operator of each source and each unit located in 
the State of Virginia and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017, 2018, 2019, 
and 2020. The obligation to comply with such requirements will be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Virginia's State Implementation Plan (SIP) as correcting 
the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(iv), 
except to the extent the Administrator's approval is partial or 
conditional, provided that because the CSAPR FIP was promulgated as a 
partial rather than full remedy for an obligation of the State to 
address interstate air pollution, the SIP revision likewise will 
constitute a partial rather than full remedy for the State's obligation 
unless provided otherwise in the Administrator's approval of the SIP 
revision.
    (3) The owner and operator of each source and each unit located in 
the State of Virginia and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Virginia's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
    (4) Notwithstanding the provisions of paragraphs (b)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of Virginia's SIP 
revision described in paragraph (b)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE or GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

[[Page 69053]]

Subpart XX--West Virginia

0
15. Amend Sec.  52.2540 by revising paragraphs (b)(2) and (3) and 
adding paragraph (b)(4) to read as follows:


Sec.  52.2540   Interstate pollutant transport provisions; What are the 
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b) * * *
    (2) The owner and operator of each source and each unit located in 
the State of West Virginia and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 2 Trading Program in 
subpart EEEEE of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2017, 2018, 2019, 
and 2020. The obligation to comply with such requirements will be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to West Virginia's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(iv), 
except to the extent the Administrator's approval is partial or 
conditional, provided that because the CSAPR FIP was promulgated as a 
partial rather than full remedy for an obligation of the State to 
address interstate air pollution, the SIP revision likewise will 
constitute a partial rather than full remedy for the State's obligation 
unless provided otherwise in the Administrator's approval of the SIP 
revision.
    (3) The owner and operator of each source and each unit located in 
the State of West Virginia and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to West Virginia's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
    (4) Notwithstanding the provisions of paragraphs (b)(2) and (3) of 
this section, the provisions of Sec. Sec.  97.526(c), 97.826(c), and 
97.811(d) of this chapter shall apply with respect to each source or 
other entity located in the State and all CSAPR NOX Ozone 
Season Group 1 allowances or CSAPR NOX Ozone Season Group 2 
allowances at any time allocated to or held by any such source or other 
entity. Further, if, at the time of the approval of West Virginia's SIP 
revision described in paragraph (b)(2) or (3) of this section, the 
Administrator has already started recording any allocations of CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances under subpart EEEEE or GGGGG, 
respectively, of part 97 of this chapter to units in the State for a 
control period in any year, the provisions of such subpart authorizing 
the Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.

PART 78--APPEAL PROCEDURES

0
16. The authority citation for part 78 is revised to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

0
17. Amend Sec.  78.1 by:
0
a. In paragraphs (a)(1)(i)(A) and (B), removing the period at the end 
of the paragraph and adding in its place a semicolon;
0
b. Revising paragraphs (a)(1)(i)(C) and (D);
0
c. Removing paragraph (a)(1)(i)(E) and redesignating paragraph 
(a)(1)(i)(F) as paragraph (a)(1)(i)(E);
0
d. Revising paragraph (a)(1)(iv);
0
e. In paragraph (b)(1) introductory text, removing the semicolon at the 
end of the paragraph and adding in its place a comma;
0
f. In paragraph (b)(9)(i), removing ``(c)(2) of'' and adding in its 
place ``(c)(2) of'';
0
g. In paragraph (b)(13)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.412'';
0
h. In paragraph (b)(13)(iii), removing ``Sec. Sec.  97.424 and 97.425'' 
and adding in its place ``Sec.  97.424 or Sec.  97.425'';
0
i. In paragraph (b)(14)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.512'';
0
j. In paragraph (b)(14)(iii), removing ``Sec. Sec.  97.524 and 97.525'' 
and adding in its place ``Sec.  97.524 or Sec.  97.525'';
0
k. In paragraph (b)(14)(viii), adding ``or CSAPR NOX Ozone 
Season Group 3 allowances'' after ``CSAPR NOX Ozone Season 
Group 2 allowances'';
0
l. In paragraph (b)(15)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.612'';
0
m. In paragraph (b)(15)(iii), removing ``Sec. Sec.  97.624 and 97.625'' 
and adding in its place ``Sec.  97.624 or Sec.  97.625'';
0
n. In paragraph (b)(16)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.712'';
0
o. In paragraph (b)(16)(iii), removing ``Sec. Sec.  97.724 and 97.725'' 
and adding in its place ``Sec.  97.724 or Sec.  97.725'';
0
p. In paragraph (b)(17)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.812'';
0
q. In paragraph (b)(17)(iii), removing ``Sec. Sec.  97.824 and 97.825'' 
and adding in its place ``Sec.  97.824 or Sec.  97.825'';
0
r. Adding paragraphs (b)(17)(viii) and (ix);
0
s. Redesignating paragraph (b)(18) as paragraph (b)(20) and adding new 
paragraphs (b)(18) and (19);
0
t. In newly redesignated paragraph (b)(20)(i), removing ``The 
determination of eligibility for'' and adding in its place ``The 
decision on eligibility for a''; and
0
u. In newly redesignated paragraph (b)(20)(iii), removing ``and Sec.  
98.448(d)'' and adding in its place ``or (d)''.
    The revisions and additions read as follows:


Sec.  78.1   Purpose and scope.

    (a) * * *
    (1) * * *
    (i) * * *
    (C) Subparts AA through II, AAA through III, or AAAA through IIII 
of part 96 of this chapter; subparts AA through II, AAA through III, or 
AAAA through IIII of part 97 of this chapter; or State regulations 
approved under Sec.  51.123(o)(1) or (2) or (aa)(1) or (2) or Sec.  
51.124(o)(1) or (2) of this chapter;
    (D) Subpart AAAAA, BBBBB, CCCCC, DDDDD, EEEEE, FFFFF, or GGGGG of 
part 97 of this chapter or State regulations approved under Sec.  
52.38(a)(4) or (5) or (b)(4), (5), (6), (8), (9), (10), (12), or (13) 
or Sec.  52.39(e), (f), (h), or (i) of this chapter; or
* * * * *
    (iv) All references in paragraph (b) of this section and in Sec.  
78.3 to subpart AAAAA of part 97 of this chapter, subpart BBBBB of part 
97 of this chapter, subpart CCCCC of part 97 of this chapter, subpart 
DDDDD of part 97 of this chapter, subpart EEEEE of part 97 of this 
chapter, and subpart GGGGG of part 97 of this chapter shall be read to 
include the comparable provisions in State regulations approved under 
Sec.  52.38(a)(4) or (5) of this chapter, Sec.  52.38(b)(4) or (5) of 
this chapter, Sec.  52.39(e) or (f) of this chapter, Sec.  52.39(h) or 
(i) of this chapter, Sec.  52.38(b)(6), (8), or (9) of this chapter, 
and Sec.  52.38(b)(10), (12), or (13) of this chapter, respectively.
* * * * *
    (b) * * *
    (17) * * *

[[Page 69054]]

    (viii) The decision on the removal of CSAPR NOX Ozone 
Season Group 2 allowances from an Allowance Management System account 
and the allocation to such account or another account of CSAPR 
NOX Ozone Season Group 3 allowances under Sec.  97.826(c) of 
this chapter.
    (ix) The decision on the recall of allocations of CSAPR 
NOX Ozone Season Group 2 allowances and the removal of such 
allowances from an Allowance Management System account under Sec.  
97.811(d) of this chapter.
    (18) Under subpart FFFFF of part 97 of this chapter,
    (i) The decision on the allocation of Texas SO2 Trading 
Program allowances under Sec.  97.911(a)(2) or (c) or Sec.  97.912 of 
this chapter.
    (ii) The decision on the transfer of Texas SO2 Trading 
Program allowances under Sec.  97.923 of this chapter.
    (iii) The decision on the deduction of Texas SO2 Trading 
Program allowances under Sec.  97.924 or Sec.  97.925 of this chapter.
    (iv) The correction of an error in an Allowance Management System 
account under Sec.  97.927 of this chapter.
    (v) The adjustment of information in a submission and the decision 
on the deduction and transfer of Texas SO2 Trading Program 
allowances based on the information as adjusted under Sec.  97.928 of 
this chapter.
    (vi) The finalization of control period emissions data, including 
retroactive adjustment based on audit.
    (vii) The approval or disapproval of a petition under Sec.  97.935 
of this chapter.
    (19) Under subpart GGGGG of part 97 of this chapter,
    (i) The decision on the allocation of CSAPR NOX Ozone 
Season Group 3 allowances under Sec.  97.1011(a)(2) or (3) or (c) or 
Sec.  97.1012 of this chapter.
    (ii) The decision on the transfer of CSAPR NOX Ozone 
Season Group 3 allowances under Sec.  97.1023 of this chapter.
    (iii) The decision on the deduction of CSAPR NOX Ozone 
Season Group 3 allowances under Sec.  97.1024 or Sec.  97.1025 of this 
chapter.
    (iv) The correction of an error in an Allowance Management System 
account under Sec.  97.1027 of this chapter.
    (v) The adjustment of information in a submission and the decision 
on the deduction and transfer of CSAPR NOX Ozone Season 
Group 3 allowances based on the information as adjusted under Sec.  
97.1028 of this chapter.
    (vi) The finalization of control period emissions data, including 
retroactive adjustment based on audit.
    (vii) The approval or disapproval of a petition under Sec.  97.1035 
of this chapter.
* * * * *
0
18. Amend Sec.  78.2 by:
0
a. Revising paragraph (a)(1);
0
b. In paragraphs (a)(2)(ii) and (iii), removing ``Who submitted'' and 
adding in its place ``Any person who submitted''; and
0
c. In paragraph (b), removing ``subpart'' and adding in its place 
``part''.
    The revision reads as follows:


Sec.  78.2   General.

    (a) * * *
    (1) The terms used in this part with regard to a decision of the 
Administrator that is appealed under this part shall have the meanings 
as set forth in the regulations under which the Administrator made such 
decision and as set forth in paragraph (a)(2) of this section and Sec.  
72.2 of this chapter.
* * * * *
0
19. Amend Sec.  78.3 by:
0
a. In paragraph (a)(1) introductory text, adding ``73,'' after ``72,'';
0
b. Revising paragraph (a)(1)(i);
0
c. Removing paragraphs (a)(1)(ii) and (a)(2) and (5) through (9) and 
redesignating paragraphs (a)(1)(iii) and (a)(3), (4), (10), and (11) as 
paragraphs (a)(1)(ii) and (a)(2), (3), (4), and (5), respectively;
0
d. In newly redesignated paragraph (a)(2)(i), removing ``the unit'' and 
adding in its place ``a unit or source covered by the decision'';
0
e. In newly redesignated paragraph (a)(3) introductory text, removing 
``AA through II of part 96'' and adding in its place ``AA through II, 
AAA through III, or AAAA through IIII of part 96 of this chapter or AA 
through II, AAA through III, or AAAA through IIII of part 97'';
0
f. Revising newly redesignated paragraph (a)(3)(i);
0
g. In newly redesignated paragraph (a)(4) introductory text, removing 
``or EEEEE'' and adding in its place ``EEEEE, FFFFF, or GGGGG'';
0
h. Revising newly redesignated paragraphs (a)(4)(i) and (a)(5)(i);
0
i. In paragraph (b)(3)(i)(A), removing ``(a)(1), (2), (10), or (11) of 
this section.'' and adding in its place ``(a)(1) of this section;'';
0
j. In paragraph (b)(3)(i)(B), removing ``(a)(3) of this section.'' and 
adding in its place ``(a)(2) of this section;'';
0
k. In paragraph (b)(3)(i)(C), removing ``(a)(4), (5), (6), (7), (8), or 
(9) of this section.'' and adding in its place ``(a)(3) of this 
section;'';
0
l. Adding paragraphs (b)(3)(i)(D) and (E);
0
m. In paragraph (c)(5)(ii), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
n. Revising paragraphs (c)(7)(i) through (v);
0
o. In paragraph (d)(1), removing the period at the end of the paragraph 
and adding in its place a semicolon;
0
p. In paragraph (d)(2)(i), removing ``the Acid Rain Program or subpart 
AAAAA, BBBBB, CCCCC, DDDDD, or EEEEE of part 97 of this chapter.'' and 
adding in its place ``parts 72, 73, 74, 75, 76, and 77 of this 
chapter;'';
0
q. In paragraph (d)(2)(ii), removing ``the NOX Budget 
Trading Program.'' and adding in its place ``subparts A through J of 
part 97 of this chapter;'';
0
r. In paragraph (d)(2)(iii), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
s. Adding paragraphs (d)(2)(iv) and (v);
0
t. In paragraphs (d)(3) and (4), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
u. Revising paragraphs (d)(5) and (6); and
0
v. Removing paragraph (d)(7) and redesignating paragraph (d)(8) as 
paragraph (d)(7).
    The revisions and additions read as follows:


Sec.  78.3   Petition for administrative review and request for 
evidentiary hearing.

    (a) * * *
    (1) * * *
    (i) The designated representative for a unit or source covered by 
the decision or the authorized account representative for any Allowance 
Tracking System account covered by the decision; or
* * * * *
    (3) * * *
    (i) The CAIR designated representative for a unit or source covered 
by the decision or the CAIR authorized account representative for any 
CAIR NOX Allowance Tracking System account, CAIR 
SO2 Allowance Tracking System account, or CAIR 
NOX Ozone Season Allowance Tracking System account covered 
by the decision; or
* * * * *
    (4) * * *
    (i) The designated representative for a unit or source covered by 
the decision or the authorized account representative for any Allowance 
Management System account covered by the decision; or
* * * * *
    (5) * * *
    (i) The designated representative for a facility covered by the 
decision; or
* * * * *
    (b) * * *
    (3) * * *
    (i) * * *

[[Page 69055]]

    (D) The designated representative or authorized account 
representative, for a petition under paragraph (a)(4) of this section; 
or
    (E) The designated representative, for a petition under paragraph 
(a)(5) of this section; and
* * * * *
    (c) * * *
    (7) * * *
    (i) Parts 72, 73, 74, 75, 76, and 77 of this chapter;
    (ii) Subparts A through J of part 97 of this chapter;
    (iii) Subparts AA through II, AAA through III, or AAAA through IIII 
of part 96 of this chapter or subparts AA through II, AAA through III, 
or AAAA through IIII of part 97 of this chapter;
    (iv) Subpart AAAAA, BBBBB, CCCCC, DDDDD, EEEEE, FFFFF, or GGGGG of 
part 97 of this chapter; or
    (v) Subpart RR of part 98 of this chapter.
    (d) * * *
    (2) * * *
    (iv) A certificate of representation submitted by a designated 
representative or an application for a general account submitted by an 
authorized account representative under subpart AAAAA, BBBBB, CCCCC, 
DDDDD, EEEEE, FFFFF, or GGGGG of part 97 of this chapter; or
    (v) A certificate of representation submitted by a designated 
representative under part 98 of this chapter;
* * * * *
    (5) Any provision or requirement of subparts AA through II, AAA 
through III, or AAAA through IIII of part 96 of this chapter or 
subparts AA through II, AAA through III, or AAAA through IIII of part 
97 of this chapter, including the standard requirements under Sec.  
96.106, Sec.  96.206, or Sec.  96.306 of this chapter or Sec.  97.106, 
Sec.  97.206, or Sec.  97.306 of this chapter, respectively, and any 
emission monitoring or reporting requirements;
    (6) Any provision or requirement of subpart AAAAA, BBBBB, CCCCC, 
DDDDD, EEEEE, FFFFF, or GGGGG of part 97 of this chapter, including the 
standard requirements under Sec.  97.406, Sec.  97.506, Sec.  97.606, 
Sec.  97.706, Sec.  97.806, Sec.  97.906, or Sec.  97.1006 of this 
chapter, respectively, and any emission monitoring or reporting 
requirements; or
* * * * *
0
20. Amend Sec.  78.4 by:
0
a. Revising paragraph (a)(1)(i);
0
b. In paragraph (a)(1)(ii), designating the first sentence as paragraph 
(a)(1)(ii)(A) and designating the second sentence as paragraph 
(a)(1)(ii)(B);
0
c. In paragraph (a)(1)(iii), designating the first sentence as 
paragraph (a)(1)(iii)(A) and designating the second sentence as 
paragraph (a)(1)(iii)(B); and
0
d. Redesignating paragraph (a)(1)(iv) as paragraph (a)(1)(v) and adding 
a new paragraph (a)(1)(iv).
    The revision and addition read as follows:


Sec.  78.4   Filings.

    (a) * * *
    (1) * * *
    (i)(A) Any filings on behalf of owners and operators of an affected 
unit or affected source under parts 72, 73, 74, 75, 76, and 77 of this 
chapter shall be signed by the designated representative.
    (B) Any filings on behalf of persons with an ownership interest 
with respect to allowances in a general account under parts 72, 73, 74, 
75, 76, and 77 of this chapter shall be signed by the authorized 
account representative.
* * * * *
    (iv)(A) Any filings on behalf of owners and operators of a CSAPR 
NOX Annual unit or CSAPR NOX Annual source, CSAPR 
NOX Ozone Season Group 1 unit or CSAPR NOX Ozone 
Season Group 1 source, CSAPR NOX Ozone Season Group 2 unit 
or CSAPR NOX Ozone Season Group 2 source, CSAPR 
NOX Ozone Season Group 3 unit or CSAPR NOX Ozone 
Season Group 3 source, CSAPR SO2 Group 1 unit or CSAPR 
SO2 Group 1 source, CSAPR SO2 Group 2 unit or 
CSAPR SO2 Group 2 source, or Texas SO2 Trading 
Program unit or Texas SO2 Trading Program source shall be 
signed by the designated representative.
    (B) Any filings on behalf of persons with an ownership interest 
with respect to CSAPR NOX Annual allowances, CSAPR 
NOX Ozone Season Group 1 allowances, CSAPR NOX 
Ozone Season Group 2 allowances, CSAPR NOX Ozone Season 
Group 3 allowances, CSAPR SO2 Group 1 allowances, CSAPR 
SO2 Group 2 allowances, or Texas SO2 Trading 
Program allowances in a general account shall be signed by the 
authorized account representative.
* * * * *


Sec.  78.5   [Amended]

0
21. In Sec.  78.5, amend paragraph (a) by removing from the second 
sentence ``presented, the issue could not'' and adding in its place 
``presented or the issue could not''.


Sec.  78.6   [Amended]

0
22. Amend Sec.  78.6 by:
0
a. In paragraph (a), removing ``of this part'';
0
b. In paragraph (b)(2) introductory text, removing ``in part, it 
will:'' and adding in its place ``in part:'';
0
c. In paragraph (b)(2)(i), removing ``Identify the portions'' and 
adding in its place ``It will identify the portions'', and removing the 
comma after ``contested''; and
0
d. In paragraph (b)(2)(ii), removing ``Refer the disputed'' and adding 
in its place ``It will refer the disputed''.


Sec.  78.10   [Amended]

0
23. Amend Sec.  78.10 by:
0
a. In paragraph (a)(3), removing ``this paragraph'' and adding in its 
place ``paragraph (a)(1) or (2) of this section'';
0
b. In paragraph (b), adding a comma after ``knowingly caused to be 
made''; and
0
c. In paragraph (c), removing ``under Sec.  78.9 of this part. This 
prohibition terminates'' and adding in its place ``under Sec.  78.9. 
These prohibitions terminate''.


Sec.  78.11   [Amended]

0
24. Amend Sec.  78.11 by:
0
a. In paragraph (a), removing ``of this part'' wherever it appears; and
0
b. In paragraph (b) introductory text, removing ``of'' and adding in 
its place ``or''.


Sec.  78.12   [Amended]

0
25. Amend Sec.  78.12 by:
0
a. In paragraph (a)(1), removing ``warrants review.'' and adding in its 
place ``warrants review; and''; and
0
b. In paragraph (a)(2), adding a comma after ``Acid Rain permit''.


Sec.  78.13  [Amended]

0
26. In Sec.  78.13, amend paragraph (a)(3) by removing ``of this 
part''.


Sec.  78.14  [Amended]

0
27. In Sec.  78.14, amend paragraphs (a)(4) and (7) and (c)(4) by 
removing ``of this part''.


Sec.  78.15  [Amended]

0
28. Amend Sec.  78.15 by:
0
a. In paragraph (a), removing ``of this part'' wherever it appears; and
0
b. In paragraph (e), removing ``of this part''.


Sec.  78.16  [Amended]

0
29. In Sec.  78.16, amend paragraph (b) introductory text by removing 
the period at the end of the second sentence and adding in its place a 
colon.


Sec.  78.17  [Amended]

0
30. Amend Sec.  78.17 by removing ``of this part''.


Sec.  78.18  [Amended]

0
31. In Sec.  78.18, amend paragraphs (a) and (b)(1) and (2) by removing 
``of this part''.


Sec.  78.19  [Amended]

0
32. Amend Sec.  78.19 by:

[[Page 69056]]

0
a. In paragraph (d), adding ``the'' in the second sentence before 
``Environmental Appeals Board''; and
0
b. In paragraph (e), removing ``of this part''.


Sec.  78.20  [Amended]

0
33. Amend Sec.  78.20 by:
0
a. In paragraph (a)(2), removing ``Sec.  78.12(a) (1) and (2) of this 
part.'' and adding in its place ``Sec.  78.12(a)(1) and (2).''; and
0
b. In paragraph (c), removing ``of this part''.

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
34. The authority citation for part 97 continues to read as follows:

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

Subpart AAAAA--CSAPR NOX Annual Trading Program

0
35. Amend Sec.  97.402 by:
0
a. Revising the definition of ``allowance transfer deadline'';
0
b. In the definition of ``alternate designated representative'', adding 
``CSAPR NOX Ozone Season Group 3 Trading Program,'' before 
``CSAPR SO2 Group 1 Trading Program,'';
0
c. In the definition of ``common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2023, or as of July 1 immediately after such 
deadline for such a control period in 2023 or thereafter, the same'';
0
d. Revising the definitions of ``common designated representative's 
assurance level'' and ``common designated representative's share'';
0
e. In the definition of ``CSAPR NOX Ozone Season Group 1 
Trading Program'', removing ``(b)(3) through (5), and (b)(10) through 
(12)'' and adding in its place ``and (b)(3) through (5) and (14) 
through (16)'';
0
f. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(6) through (9), (14), (15), and (17)'';
0
g. Adding in alphabetical order a definition for ``CSAPR NOX 
Ozone Season Group 3 Trading Program'';
0
h. In the definition of ``designated representative'', adding ``CSAPR 
NOX Ozone Season Group 3 Trading Program,'' before ``CSAPR 
SO2 Group 1 Trading Program,'';
0
i. In the definition of ``fossil fuel'', paragraph (2), removing 
``Sec.  97.404(b)(2)(i)(B) and (ii)'' and adding in its place ``Sec.  
97.404(b)(2)(i)(B) and (b)(2)(ii)''; and
0
j. Adding in alphabetical order a definition for ``nitrogen oxides''.
    The revisions and additions read as follows:


Sec.  97.402  Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2023, midnight of March 1 immediately after such control period or, for 
a control period in 2023 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR NOX Annual allowance transfer must 
be submitted for recordation in a CSAPR NOX Annual source's 
compliance account in order to be available for use in complying with 
the source's CSAPR NOX Annual emissions limitation for such 
control period in accordance with Sec. Sec.  97.406 and 97.424.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.406(c)(2)(iii):
    (1) The amount (rounded to the nearest allowance) equal to the sum 
of the total amount of CSAPR NOX Annual allowances allocated 
for such control period to a group of one or more CSAPR NOX 
Annual units located in the State (and Indian country within the 
borders of such State) and having the common designated representative 
for such control period and the total amount of CSAPR NOX 
Annual allowances purchased by an owner or operator of such CSAPR 
NOX Annual units in an auction for such control period and 
submitted by the State or the permitting authority to the Administrator 
for recordation in the compliance accounts for such CSAPR 
NOX Annual units in accordance with the CSAPR NOX 
Annual allowance auction provisions in a SIP revision approved by the 
Administrator under Sec.  52.38(a)(4) or (5) of this chapter, 
multiplied by the sum of the State NOX Annual trading budget 
under Sec.  97.410(a) and the State's variability limit under Sec.  
97.410(b) for such control period and divided by such State 
NOX Annual trading budget;
    (2) Provided that, for a control period in a year before 2023 only, 
in the case of a unit that operates during, but has no amount of CSAPR 
NOX Annual allowances allocated under Sec. Sec.  97.411 and 
97.412 for, such control period, the unit shall be treated, solely for 
purposes of this definition, as being allocated an amount (rounded to 
the nearest allowance) of CSAPR NOX Annual allowances for 
such control period equal to the unit's allowable NOX 
emission rate applicable to such control period, multiplied by a 
capacity factor of 0.85 (if the unit is a boiler combusting any amount 
of coal or coal-derived fuel during such control period), 0.24 (if the 
unit is a simple cycle combustion turbine during such control period), 
0.67 (if the unit is a combined cycle combustion turbine during such 
control period), 0.74 (if the unit is an integrated coal gasification 
combined cycle unit during such control period), or 0.36 (for any other 
unit), multiplied by the unit's maximum hourly load as reported in 
accordance with this subpart and by 8,760 hours/control period, and 
divided by 2,000 lb/ton.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of NOX emissions from all 
CSAPR NOX Annual units in a State (and Indian country within 
the borders of such State) during such control period, the total 
tonnage of NOX emissions during such control period from the 
group of one or more CSAPR NOX Annual units located in such 
State (and such Indian country) and having the common designated 
representative for such control period.
* * * * *
    CSAPR NOX Ozone Season Group 3 Trading Program means a 
multi-state NOX air pollution control and emission reduction 
program established in accordance with subpart GGGGG of this part and 
Sec.  52.38(b)(1), (b)(2)(v), and (b)(10) through (15) and (18) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(11) or (12) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10) or (13) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *

[[Page 69057]]

Sec.  97.404   [Amended]

0
36. In Sec.  97.404, amend paragraph (b) introductory text by removing 
``or (2)(i)'' and adding in its place ``or (b)(2)(i)''.


Sec.  97.405   [Amended]

0
37. In Sec.  97.405, amend paragraph (b) by removing the subject 
heading.


Sec.  97.406   [Amended]

0
38. In Sec.  97.406, amend paragraph (c)(4)(ii) by removing ``and 
(2)(i)'' and adding in its place ``and (c)(2)(i)''.


Sec.  97.410   [Amended]

0
39. Amend Sec.  97.410 by:
0
a. In paragraph (a)(1)(v), removing ``1,439'' and adding in its place 
``1,441'';
0
b. In paragraph (a)(2)(v), removing ``1,075'' and adding in its place 
``1,074'';
0
c. In paragraph (a)(3)(v), removing ``3,830'' and adding in its place 
``3,831'';
0
d. In paragraph (a)(4)(v), removing ``3,253'' and adding in its place 
``3,256'';
0
e. In paragraph (a)(5)(v), removing ``712'' and adding in its place 
``715'';
0
f. In paragraph (a)(8)(v), removing ``331'' and adding in its place 
``333'';
0
g. In paragraph (a)(9)(v), removing ``1,198'' and adding in its place 
``1,201'';
0
h. In paragraph (a)(10)(v), removing ``561'' and adding in its place 
``565'';
0
i. In paragraph (a)(11)(v), removing ``2,925'' and adding in its place 
``2,929'';
0
j. In paragraph (a)(12)(v), removing ``1,772'' and adding in its place 
``1,771'';
0
k. In paragraph (a)(13)(v), removing ``159'' and adding in its place 
``155'';
0
l. In paragraph (a)(14)(v), removing ``412'' and adding in its place 
``410'';
0
m. In paragraph (a)(17)(v), removing ``2,384'' and adding in its place 
``2,383'';
0
n. In paragraph (a)(18)(v), removing ``617'' and adding in its place 
``620'';
0
o. In paragraph (a)(19)(v), removing ``387'' and adding in its place 
``381'';
0
p. In paragraph (a)(21)(v), removing ``1,662'' and adding in its place 
``1,663''; and
0
q. In paragraph (a)(22)(v), removing ``2,729'' and adding in its place 
``2,730''.
0
40. Amend Sec.  97.411 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), 
removing ``By June 1, 2015 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2015 through 2022,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``through (7) and (12) and'' 
and adding in its place ``through (7) and (12) for a control period 
before 2023, or Sec.  97.412(a)(2) through (7), (10), and (12) for a 
control period in 2023 or thereafter, and'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii), removing ``such control period'' and 
adding in its place ``a control period before 2023'';
0
f. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(1)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
g. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), 
removing ``By June 1, 2015 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2015 through 2022,'';
0
h. Adding paragraph (b)(2)(i)(B);
0
i. In paragraph (b)(2)(ii)(A), removing ``through (7) and (12) and'' 
and adding in its place ``through (7) and (12) for a control period 
before 2023, or Sec.  97.412(b)(2) through (7), (10), and (12) for a 
control period in 2023 or thereafter, and'';
0
j. Revising paragraph (b)(2)(ii)(B);
0
k. In paragraph (b)(2)(iii), removing ``such control period'' and 
adding in its place ``a control period before 2023'';
0
l. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(2)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
m. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
n. In paragraph (c)(5)(i)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
o. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
p. In paragraph (c)(5)(ii)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision''; and
0
q. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph.
    The additions and revisions read as follows:


Sec.  97.411  Timing requirements for CSAPR NOX Annual allowance 
allocations.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Annual allowance 
allocation to each CSAPR NOX Annual unit in a State, in 
accordance with Sec.  97.412(a)(2) through (7), (10), and (12), for the 
control period in the year before the year of the applicable 
calculation deadline under this paragraph and will promulgate a notice 
of data availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(1)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(1)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(1)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Annual allowance 
allocation to each CSAPR NOX Annual unit in Indian country 
within the borders of a State, in accordance with Sec.  97.412(b)(2) 
through (7), (10), and (12), for the control period in the year before 
the year of the applicable calculation deadline under this paragraph 
and will promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(2)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(2)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(2)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(2)(ii)(A) of this section.
* * * * *
0
41. Amend Sec.  97.412 by:

[[Page 69058]]

0
a. Adding a subject heading to paragraph (a) introductory text;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.411(a)(1);'' and adding 
in its place ``Sec.  97.411(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.430(b) not later 
than December 31 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for a control period before 2023, or 
that operate during such control period, for a control period in 2023 
or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraphs (a)(3)(ii) and (iv);
0
f. In paragraph (a)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for a control period 
before 2023, or the unit's total tons of NOX emissions 
during the control period, for a control period in 2023 or 
thereafter.'';
0
g. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
h. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';
0
i. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
j. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2023, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2023 or thereafter, any unallocated'';
0
k. Redesignating paragraph (a)(11) as paragraph (a)(11)(i), removing 
``The Administrator'' and adding in its place ``For a control period 
before 2023, the Administrator'';
0
l. Adding paragraph (a)(11)(ii);
0
m. Revising paragraph (a)(12);
0
n. Adding a subject heading to paragraph (b) introductory text;
0
o. In paragraph (b)(1)(i), removing ``Sec.  97.411(a)(1); or'' and 
adding in its place ``Sec.  97.411(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.430(b) not later 
than December 31 of the year of the control period; or'';
0
p. Revising paragraph (b)(3)(ii);
0
q. In paragraph (b)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for a control period 
before 2023, or the unit's total tons of NOX emissions 
during the control period, for a control period in 2023 or 
thereafter.'';
0
r. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
s. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';
0
t. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
u. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2023, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2023 or thereafter, any 
unallocated'';
0
v. Redesignating paragraph (b)(11) as paragraph (b)(11)(i), removing 
``The Administrator'' and adding in its place ``For a control period 
before 2023, the Administrator'';
0
w. Adding paragraph (b)(11)(ii); and
0
x. Revising paragraph (b)(12).
    The additions and revisions read as follows:


Sec.  97.412   CSAPR NOX Annual allowance allocations to new units.

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR NOX Annual 
unit's monitoring systems under Sec.  97.430(b), for allocations for a 
control period before 2023, or the control period containing such 
deadline, for allocations for a control period in 2023 or thereafter;
* * * * *
    (iv) For a unit described in paragraph (a)(1)(iii) of this section, 
the first control period after the control period in which the unit 
resumes operation, for allocations for a control period before 2023, or 
the control period in which the unit resumes operation, for allocations 
for a control period in 2023 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.411(b)(1)(i), (ii), and (v), of the 
amount of CSAPR NOX Annual allowances allocated under 
paragraphs (a)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR NOX Annual unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2023 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2023 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR NOX Annual units in descending order 
based on such units' allocation amounts under paragraph (a)(7), 
(a)(9)(iv), or (a)(10) of this section, as applicable, and, in cases of 
equal allocation amounts, in alphabetical order of the relevant 
sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR NOX 
Annual allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such new unit set-aside equal the total 
amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR NOX Annual 
unit's monitoring systems under Sec.  97.430(b), for allocations for a 
control period before 2023, or the control period containing such 
deadline, for allocations for a control period in 2023 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.411(b)(2)(i), (ii), and (v), of the 
amount of CSAPR NOX Annual allowances allocated under 
paragraphs (b)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR NOX Annual unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2023 under 
paragraph (b)(7) of this section or

[[Page 69059]]

paragraphs (b)(6) and (b)(9)(iv) of this section, or for a control 
period in 2023 or thereafter under paragraph (b)(7) of this section, 
would otherwise result in total allocations from such Indian country 
new unit set-aside unequal to the total amount of such Indian country 
new unit set-aside, then the Administrator will adjust the results of 
such calculations as follows. The Administrator will list the CSAPR 
NOX Annual units in descending order based on such units' 
allocation amounts under paragraph (b)(7) or (b)(9)(iv) of this 
section, as applicable, and, in cases of equal allocation amounts, in 
alphabetical order of the relevant sources' names and numerical order 
of the relevant units' identification numbers, and will adjust each 
unit's allocation amount under such paragraph upward or downward by one 
CSAPR NOX Annual allowance (but not below zero) in the order 
in which the units are listed, and will repeat this adjustment process 
as necessary, until the total allocations from such Indian country new 
unit set-aside equal the total amount of such Indian country new unit 
set-aside.


Sec.  97.420   [Amended]

0
42. In Sec.  97.420, amend paragraph (c)(3)(iii)(B) by removing ``to 
NOX'' and adding in its place ``to CSAPR NOX''.
0
43. Amend Sec.  97.421 by:
0
a. Redesignating paragraph (f) as paragraph (f)(1), removing ``By July 
1, 2019 and July 1 of each year thereafter,'' and adding in its place 
``By July 1, 2019 and July 1, 2020,'';
0
b. Adding paragraph (f)(2);
0
c. Redesignating paragraph (g) as paragraph (g)(1), removing ``By 
August 1, 2015 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2015 through 2022,'';
0
d. Adding paragraph (g)(2);
0
e. Redesignating paragraph (h) as paragraph (h)(1), removing ``By 
August 1, 2015 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2015 through 2022,'';
0
f. Adding paragraph (h)(2); and
0
g. In paragraphs (i) and (j), removing ``By February 15, 2016 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2016 through 2023,''.
    The additions read as follows:


Sec.  97.421   Recordation of CSAPR NOX Annual allowance allocations 
and auction results.

* * * * *
    (f) * * *
    (2) By July 1, 2022 and July 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Annual source's 
compliance account the CSAPR NOX Annual allowances allocated 
to the CSAPR NOX Annual units at the source, or in each 
appropriate Allowance Management System account the CSAPR 
NOX Annual allowances auctioned to CSAPR NOX 
Annual units, in accordance with Sec.  97.411(a), or with a SIP 
revision approved under Sec.  52.38(a)(4) or (5) of this chapter, for 
the control period in the third year after the year of the applicable 
recordation deadline under this paragraph.
    (g) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Annual source's 
compliance account the CSAPR NOX Annual allowances allocated 
to the CSAPR NOX Annual units at the source, or in each 
appropriate Allowance Management System account the CSAPR 
NOX Annual allowances auctioned to CSAPR NOX 
Annual units, in accordance with Sec.  97.412(a)(2) through (12), or 
with a SIP revision approved under Sec.  52.38(a)(4) or (5) of this 
chapter, for the control period in the year before the year of the 
applicable recordation deadline under this paragraph.
    (h) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Annual source's 
compliance account the CSAPR NOX Annual allowances allocated 
to the CSAPR NOX Annual units at the source in accordance 
with Sec.  97.412(b)(2) through (12) for the control period in the year 
before the year of the applicable recordation deadline under this 
paragraph.
* * * * *
0
44. Amend Sec.  97.424 by adding a paragraph (c) subject heading and 
revising paragraph (c)(1) to read as follows:


Sec.  97.424   Compliance with CSAPR NOX Annual emissions limitation.

* * * * *
    (c) Selection of CSAPR NOX Annual allowances for 
deduction--(1) Identification by serial number. The designated 
representative for a source may request that specific CSAPR 
NOX Annual allowances, identified by serial number, in the 
source's compliance account be deducted for emissions or excess 
emissions for a control period in a given year in accordance with 
paragraph (b) or (d) of this section. In order to be complete, such 
request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the CSAPR 
NOX Annual source and the appropriate serial numbers.
* * * * *
0
45. Amend Sec.  97.425 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. In paragraph (b)(2)(i), removing ``By July 1'' and adding in its 
place ``For a control period before 2023 only, by July 1'';
0
c. Revising paragraphs (b)(2)(ii), (b)(2)(iii) introductory text, and 
(b)(2)(iii)(A);
0
d. In paragraph (b)(2)(iii)(B), removing ``such notice,'' and adding in 
its place ``such notice or notices,''; and
0
e. In paragraph (b)(6)(ii), removing ``If any such data'' and adding in 
its place ``For a control period before 2023 only, if any such data''.
    The revisions read as follows:


Sec.  97.425   Compliance with CSAPR NOX Annual assurance provisions.

* * * * *
    (b) * * *
    (1) By June 1 of each year from 2018 through 2023 and by August 1 
of each year thereafter, the Administrator will:
* * * * *
    (ii) If the calculations under paragraph (b)(1)(i) of this section 
indicate that the total NOX emissions from all CSAPR 
NOX Annual units at CSAPR NOX Annual sources in 
any State (and Indian country within the borders of such State) during 
such control period exceed the State assurance level for such control 
period, promulgate a notice of data availability of the results of the 
calculations required in paragraph (b)(1)(i) of this section, including 
separate calculations of the NOX emissions from each CSAPR 
NOX Annual source.
    (2) * * *
    (ii) The Administrator will calculate, for each such State (and 
Indian country within the borders of such State) and such control 
period and each common designated representative for such control 
period for a group of one or more CSAPR NOX Annual sources 
and units in the State (and Indian country within the borders of such 
State), the common designated representative's share of the total 
NOX emissions from all CSAPR NOX Annual units at 
CSAPR NOX Annual sources in the State (and Indian country 
within the borders of such State), the common designated 
representative's assurance level, and the amount (if any) of CSAPR 
NOX Annual allowances that the owners and operators of such 
group of sources and units must hold in accordance with the calculation 
formula in Sec.  97.406(c)(2)(i). For a control period before 2023, if 
the

[[Page 69060]]

results of these calculations were not included in the notice of data 
availability required in paragraph (b)(1)(ii) of this section, the 
Administrator will promulgate a notice of data availability of the 
results of these calculations by August 1 immediately after the 
promulgation of such notice. For a control period in 2023 or 
thereafter, the Administrator will include the results of these 
calculations in the notice of data availability required in paragraph 
(b)(1)(ii) of this section.
    (iii) The Administrator will provide an opportunity for submission 
of objections to the calculations referenced by the notice or notices 
of data availability required in paragraphs (b)(1)(ii) and (b)(2)(ii) 
of this section.
    (A) Objections shall be submitted by the deadline specified in such 
notice or notices and shall be limited to addressing whether the 
calculations referenced in the notice or notices are in accordance with 
Sec.  97.406(c)(2)(iii), Sec. Sec.  97.406(b) and 97.430 through 
97.435, the definitions of ``common designated representative'', 
``common designated representative's assurance level'', and ``common 
designated representative's share'' in Sec.  97.402, and the 
calculation formula in Sec.  97.406(c)(2)(i).
* * * * *


Sec.  97.431   [Amended]

0
46. In Sec.  97.431, amend paragraph (d)(3) introductory text by 
removing in the last sentence ``with'' after ``is replaced by''.


Sec.  97.434   [Amended]

0
47. In Sec.  97.434, amend paragraph (d)(3) by adding ``CSAPR 
NOX Ozone Season Group 3 Trading Program,'' before ``CSAPR 
SO2 Group 1 Trading Program,''.

Subpart BBBBB--CSAPR NOX Ozone Season Group 1 Trading Program

0
48. Amend Sec.  97.502 by:
0
a. Revising the definition of ``allowance transfer deadline'';
0
b. In the definition of ``common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2023, or as of July 1 immediately after such 
deadline for such a control period in 2023 or thereafter, the same'';
0
c. Revising the definitions of ``common designated representative's 
assurance level'' and ``common designated representative's share'';
0
d. In the definition of ``CSAPR NOX Ozone Season Group 1 
Trading Program'', removing ``(b)(3) through (5), and (b)(10) through 
(12)'' and adding in its place ``and (b)(3) through (5) and (14) 
through (16)'''';
0
e. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(6) through (9), (14), (15) and (17)'';
0
f. Adding in alphabetical order definitions for ``CSAPR NOX 
Ozone Season Group 3 allowance'' and ``CSAPR NOX Ozone 
Season Group 3 Trading Program'';
0
g. In the definition of ``fossil fuel'', paragraph (2), removing 
``Sec.  97.504(b)(2)(i)(B) and (ii)'' and adding in its place ``Sec.  
97.504(b)(2)(i)(B) and (b)(2)(ii)'';
0
h. Adding in alphabetical order a definition for ``nitrogen oxides''; 
and
0
i. In the definition of ``State'', removing ``(b)(3) through (5), and 
(b)(10) through (12)'' and adding in its place ``and (b)(3) through (5) 
and (14) through (16)''.
    The revisions and additions read as follows:


Sec.  97.502   Definitions.

* * * * *
    Allowance transfer deadline means, for a control period in 2015 or 
2016, midnight of December 1 immediately after such control period or, 
for a control period in a year from 2017 through 2022, midnight of 
March 1 immediately after such control period or, for a control period 
in 2023 or thereafter, midnight of June 1 immediately after such 
control period (or if such December 1, March 1, or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR NOX Ozone Season Group 1 allowance 
transfer must be submitted for recordation in a CSAPR NOX 
Ozone Season Group 1 source's compliance account in order to be 
available for use in complying with the source's CSAPR NOX 
Ozone Season Group 1 emissions limitation for such control period in 
accordance with Sec. Sec.  97.506 and 97.524.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.506(c)(2)(iii):
    (1) The amount (rounded to the nearest allowance) equal to the sum 
of the total amount of CSAPR NOX Ozone Season Group 1 
allowances allocated for such control period to a group of one or more 
CSAPR NOX Ozone Season Group 1 units located in the State 
(and Indian country within the borders of such State) and having the 
common designated representative for such control period and the total 
amount of CSAPR NOX Ozone Season Group 1 allowances 
purchased by an owner or operator of such CSAPR NOX Ozone 
Season Group 1 units in an auction for such control period and 
submitted by the State or the permitting authority to the Administrator 
for recordation in the compliance accounts for such CSAPR 
NOX Ozone Season Group 1 units in accordance with the CSAPR 
NOX Ozone Season Group 1 allowance auction provisions in a 
SIP revision approved by the Administrator under Sec.  52.38(b)(4) or 
(5) of this chapter, multiplied by the sum of the State NOX 
Ozone Season Group 1 trading budget under Sec.  97.510(a) and the 
State's variability limit under Sec.  97.510(b) for such control period 
and divided by such State NOX Ozone Season Group 1 trading 
budget;
    (2) Provided that, for a control period before 2023 only, in the 
case of a unit that operates during, but has no amount of CSAPR 
NOX Ozone Season Group 1 allowances allocated under 
Sec. Sec.  97.511 and 97.512 for, such control period, the unit shall 
be treated, solely for purposes of this definition, as being allocated 
an amount (rounded to the nearest allowance) of CSAPR NOX 
Ozone Season Group 1 allowances for such control period equal to the 
unit's allowable NOX emission rate applicable to such 
control period, multiplied by a capacity factor of 0.92 (if the unit is 
a boiler combusting any amount of coal or coal-derived fuel during such 
control period), 0.32 (if the unit is a simple cycle combustion turbine 
during such control period), 0.71 (if the unit is a combined cycle 
combustion turbine during such control period), 0.73 (if the unit is an 
integrated coal gasification combined cycle unit during such control 
period), or 0.44 (for any other unit), multiplied by the unit's maximum 
hourly load as reported in accordance with this subpart and by 3,672 
hours/control period, and divided by 2,000 lb/ton.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of NOX emissions from all 
CSAPR NOX Ozone Season Group 1 units in such State (and 
Indian country within the borders of such State) during such control 
period, the total tonnage of NOX emissions during such 
control period from the group of one or more CSAPR NOX Ozone 
Season Group 1

[[Page 69061]]

units located in such State (and such Indian country) and having the 
common designated representative for such control period.
* * * * *
    CSAPR NOX Ozone Season Group 3 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under subpart GGGGG of this part, Sec.  97.526(c), or Sec.  97.826(c), 
or by a State or permitting authority under a SIP revision approved by 
the Administrator under Sec.  52.38(b)(10), (11), (12), or (13) of this 
chapter, to emit one ton of NOX during a control period of 
the specified calendar year for which the authorization is allocated or 
auctioned or of any calendar year thereafter under the CSAPR 
NOX Ozone Season Group 3 Trading Program.
    CSAPR NOX Ozone Season Group 3 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart GGGGG of this part and Sec.  
52.38(b)(1), (b)(2)(v), and (b)(10) through (15) and (18) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(11) or (12) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10) or (13) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.504   [Amended]

0
49. In Sec.  97.504, amend paragraph (b) introductory text by removing 
``or (2)(i)'' and adding in its place ``or (b)(2)(i)''.


Sec.  97.505   [Amended]

0
50. In Sec.  97.505, amend paragraph (b) by removing the subject 
heading.


Sec.  97.506   [Amended]

0
51. In Sec.  97.506, amend paragraph (c)(4)(ii) by removing ``and 
(2)(i)'' and adding in its place ``and (c)(2)(i)''.


Sec.  97.510   [Amended]

0
52. In Sec.  97.510, amend paragraph (a)(4)(v) by removing ``481'' and 
adding in its place ``485''.
0
53. Amend Sec.  97.511 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), 
removing ``By June 1, 2015 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2015 through 2022,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``through (7) and (12) and'' 
and adding in its place ``through (7) and (12) for a control period 
before 2023, or Sec.  97.512(a)(2) through (7), (10), and (12) for a 
control period in 2023 or thereafter, and'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii)(B), removing ``2017 or any subsequent 
year'' and adding in its place ``a year from 2017 through 2022'';
0
f. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(1)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
g. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), 
removing ``By June 1, 2015 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2015 through 2022,'';
0
h. Adding paragraph (b)(2)(i)(B);
0
i. In paragraph (b)(2)(ii)(A), removing ``through (7) and (12) and'' 
and adding in its place ``through (7) and (12) for a control period 
before 2023, or Sec.  97.512(b)(2) through (7), (10), and (12) for a 
control period in 2023 or thereafter, and'';
0
j. Revising paragraph (b)(2)(ii)(B);
0
k. In paragraph (b)(2)(iii)(B), removing ``2017 or any subsequent 
year'' and adding in its place ``a year from 2017 through 2022'';
0
l. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(2)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
m. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
n. In paragraph (c)(5)(i)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
o. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
p. In paragraph (c)(5)(ii)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision''; and
0
q. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph.
    The additions and revisions read as follows:


Sec.  97.511  Timing requirements for CSAPR NOX Ozone Season Group 1 
allowance allocations.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Ozone Season 
Group 1 allowance allocation to each CSAPR NOX Ozone Season 
Group 1 unit in a State, in accordance with Sec.  97.512(a)(2) through 
(7), (10), and (12), for the control period in the year before the year 
of the applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(1)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(1)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(1)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Ozone Season 
Group 1 allowance allocation to each CSAPR NOX Ozone Season 
Group 1 unit in a State, in accordance with Sec.  97.512(b)(2) through 
(7), (10), and (12), for the control period in the year before the year 
of the applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(2)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(2)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required

[[Page 69062]]

in paragraph (b)(2)(i)(B) of this section for a control period in 2023 
or thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(2)(ii)(A) of this section.
* * * * *
0
54. Amend Sec.  97.512 by:
0
a. Adding a subject heading to paragraph (a) introductory text;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.511(a)(1);'' and adding 
in its place ``Sec.  97.511(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.530(b) not later 
than September 30 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for a control period before 2023, or 
that operate during such control period, for a control period in 2023 
or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraphs (a)(3)(ii) and (iv);
0
f. In paragraph (a)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for a control period 
before 2023, or the unit's total tons of NOX emissions 
during the control period, for a control period in 2023 or 
thereafter.'';
0
g. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
h. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';
0
i. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
j. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2023, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2023 or thereafter, any unallocated'';
0
k. Redesignating paragraph (a)(11) as paragraph (a)(11)(i), removing 
``The Administrator'' and adding in its place ``For a control period 
before 2023, the Administrator'';
0
l. Adding paragraph (a)(11)(ii);
0
m. Revising paragraph (a)(12);
0
n. Adding a subject heading to paragraph (b) introductory text;
0
o. In paragraph (b)(1)(i), removing ``Sec.  97.511(a)(1); or'' and 
adding in its place ``Sec.  97.511(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.530(b) not later 
than September 30 of the year of the control period; or'';
0
p. Revising paragraph (b)(3)(ii);
0
q. In paragraph (b)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for a control period 
before 2023, or the unit's total tons of NOX emissions 
during the control period, for a control period in 2023 or 
thereafter.'';
0
r. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
s. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';
0
t. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
u. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2023, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2023 or thereafter, any 
unallocated'';
0
v. Redesignating paragraph (b)(11) as paragraph (b)(11)(i), removing 
``The Administrator'' and adding in its place ``For a control period 
before 2023, the Administrator'';
0
w. Adding paragraph (b)(11)(ii); and
0
x. Revising paragraph (b)(12).
    The additions and revisions read as follows:


Sec.  97.512   CSAPR NOX Ozone Season Group 1 allowance allocations to 
new units.

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR NOX Ozone Season 
Group 1 unit's monitoring systems under Sec.  97.530(b), for 
allocations for a control period before 2023, or the control period 
containing such deadline, for allocations for a control period in 2023 
or thereafter;
* * * * *
    (iv) For a unit described in paragraph (a)(1)(iii) of this section, 
the first control period after the control period in which the unit 
resumes operation, for allocations for a control period before 2023, or 
the control period in which the unit resumes operation, for allocations 
for a control period in 2023 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.511(b)(1)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 1 allowances 
allocated under paragraphs (a)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone 
Season Group 1 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2023 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2023 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR NOX Ozone Season Group 1 units in 
descending order based on such units' allocation amounts under 
paragraph (a)(7), (a)(9)(iv), or (a)(10) of this section, as 
applicable, and, in cases of equal allocation amounts, in alphabetical 
order of the relevant sources' names and numerical order of the 
relevant units' identification numbers, and will adjust each unit's 
allocation amount under such paragraph upward or downward by one CSAPR 
NOX Ozone Season Group 1 allowance (but not below zero) in 
the order in which the units are listed, and will repeat this 
adjustment process as necessary, until the total allocations from such 
new unit set-aside equal the total amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR NOX Ozone Season 
Group 1 unit's monitoring systems under Sec.  97.530(b), for 
allocations for a control period before 2023, or the control period 
containing such deadline, for

[[Page 69063]]

allocations for a control period in 2023 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.511(b)(2)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 1 allowances 
allocated under paragraphs (b)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone 
Season Group 1 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2023 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2023 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR NOX Ozone Season Group 
1 units in descending order based on such units' allocation amounts 
under paragraph (b)(7) or (b)(9)(iv) of this section, as applicable, 
and, in cases of equal allocation amounts, in alphabetical order of the 
relevant sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR NOX 
Ozone Season Group 1 allowance (but not below zero) in the order in 
which the units are listed, and will repeat this adjustment process as 
necessary, until the total allocations from such Indian country new 
unit set-aside equal the total amount of such Indian country new unit 
set-aside.


Sec.  97.520   [Amended]

0
55. In Sec.  97.520, amend paragraph (c)(3)(iii)(B) by removing ``to 
NOX'' and adding in its place ``to CSAPR NOX''.
0
56. Amend Sec.  97.521 by:
0
a. Redesignating paragraph (f) as paragraph (f)(1), removing ``By July 
1, 2019 and July 1 of each year thereafter,'' and adding in its place 
``By July 1, 2019 and July 1, 2020,'';
0
b. Adding paragraph (f)(2);
0
c. Redesignating paragraph (g) as paragraph (g)(1), removing ``By 
August 1, 2015 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2015 through 2022,'';
0
d. Adding paragraph (g)(2);
0
e. Redesignating paragraph (h) as paragraph (h)(1), removing ``By 
August 1, 2015 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2015 through 2022,'';
0
f. Adding paragraph (h)(2); and
0
g. In paragraphs (i)(2) and (j)(2), removing ``By February 15, 2018 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2018 through 2023,''.
    The additions read as follows:


Sec.  97.521   Recordation of CSAPR NOX Ozone Season Group 1 allowance 
allocations and auction results.

* * * * *
    (f) * * *
    (2) By July 1, 2022 and July 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 1 source's compliance account the CSAPR NOX Ozone 
Season Group 1 allowances allocated to the CSAPR NOX Ozone 
Season Group 1 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 1 
allowances auctioned to CSAPR NOX Ozone Season Group 1 
units, in accordance with Sec.  97.511(a), or with a SIP revision 
approved under Sec.  52.38(b)(4) or (5) of this chapter, for the 
control period in the third year after the year of the applicable 
recordation deadline under this paragraph.
    (g) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 1 source's compliance account the CSAPR NOX Ozone 
Season Group 1 allowances allocated to the CSAPR NOX Ozone 
Season Group 1 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 1 
allowances auctioned to CSAPR NOX Ozone Season Group 1 
units, in accordance with Sec.  97.512(a)(2) through (12), or with a 
SIP revision approved under Sec.  52.38(b)(4) or (5) of this chapter, 
for the control period in the year before the year of the applicable 
recordation deadline under this paragraph.
    (h) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 1 source's compliance account the CSAPR NOX Ozone 
Season Group 1 allowances allocated to the CSAPR NOX Ozone 
Season Group 1 units at the source in accordance with Sec.  
97.512(b)(2) through (12) for the control period in the year before the 
year of the applicable recordation deadline under this paragraph.
* * * * *
0
57. Amend Sec.  97.524 by adding a paragraph (c) subject heading and 
revising paragraph (c)(1) to read as follows:


Sec.  97.524   Compliance with CSAPR NOX Ozone Season Group 1 emissions 
limitation.

* * * * *
    (c) Selection of CSAPR NOX Ozone Season Group 1 allowances for 
deduction--(1) Identification by serial number. The designated 
representative for a source may request that specific CSAPR 
NOX Ozone Season Group 1 allowances, identified by serial 
number, in the source's compliance account be deducted for emissions or 
excess emissions for a control period in a given year in accordance 
with paragraph (b) or (d) of this section. In order to be complete, 
such request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the CSAPR 
NOX Ozone Season Group 1 source and the appropriate serial 
numbers.
* * * * *
0
58. Amend Sec.  97.525 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. In paragraph (b)(2)(i), removing ``By July 1'' and adding in its 
place ``For a control period before 2023 only, by July 1'';
0
c. Revising paragraphs (b)(2)(ii), (b)(2)(iii) introductory text, and 
(b)(2)(iii)(A);
0
d. In paragraph (b)(2)(iii)(B), removing ``such notice,'' and adding in 
its place ``such notice or notices,''; and
0
e. In paragraph (b)(6)(ii), removing ``If any such data'' and adding in 
its place ``For a control period before 2023 only, if any such data''.
    The revisions read as follows:


Sec.  97.525   Compliance with CSAPR NOX Ozone Season Group 1 assurance 
provisions.

* * * * *
    (b) * * *
    (1) By June 1 of each year from 2018 through 2023 and by August 1 
of each year thereafter, the Administrator will:
* * * * *
    (ii) If the calculations under paragraph (b)(1)(i) of this section 
indicate that the total NOX emissions from all CSAPR 
NOX Ozone Season Group 1 units at CSAPR NOX Ozone

[[Page 69064]]

Season Group 1 sources in any State (and Indian country within the 
borders of such State) during such control period exceed the State 
assurance level for such control period, promulgate a notice of data 
availability of the results of the calculations required in paragraph 
(b)(1)(i) of this section, including separate calculations of the 
NOX emissions from each CSAPR NOX Ozone Season 
Group 1 source.
    (2) * * *
    (ii) The Administrator will calculate, for each such State (and 
Indian country within the borders of such State) and such control 
period and each common designated representative for such control 
period for a group of one or more CSAPR NOX Ozone Season 
Group 1 sources and units in the State (and Indian country within the 
borders of such State), the common designated representative's share of 
the total NOX emissions from all CSAPR NOX Ozone 
Season Group 1 units at CSAPR NOX Ozone Season Group 1 
sources in the State (and Indian country within the borders of such 
State), the common designated representative's assurance level, and the 
amount (if any) of CSAPR NOX Ozone Season Group 1 allowances 
that the owners and operators of such group of sources and units must 
hold in accordance with the calculation formula in Sec.  
97.506(c)(2)(i). For a control period before 2023, if the results of 
these calculations were not included in the notice of data availability 
required in paragraph (b)(1)(ii) of this section, the Administrator 
will promulgate a notice of data availability of the results of these 
calculations by August 1 immediately after the promulgation of such 
notice. For a control period in 2023 or thereafter, the Administrator 
will include the results of these calculations in the notice of data 
availability required in paragraph (b)(1)(ii) of this section.
    (iii) The Administrator will provide an opportunity for submission 
of objections to the calculations referenced by the notice or notices 
of data availability required in paragraphs (b)(1)(ii) and (b)(2)(ii) 
of this section.
    (A) Objections shall be submitted by the deadline specified in such 
notice or notices and shall be limited to addressing whether the 
calculations referenced in the notice or notices are in accordance with 
Sec.  97.506(c)(2)(iii), Sec. Sec.  97.506(b) and 97.530 through 
97.535, the definitions of ``common designated representative'', 
``common designated representative's assurance level'', and ``common 
designated representative's share'' in Sec.  97.502, and the 
calculation formula in Sec.  97.506(c)(2)(i).
* * * * *
0
59. Amend Sec.  97.526 by:
0
a. Revising the section heading;
0
b. Removing the paragraph (c) subject heading;
0
c. Revising paragraphs (c) introductory text, (c)(2) introductory text, 
(c)(2)(ii) and (iii), (c)(3) introductory text, (c)(3)(ii) and (iii), 
and (c)(4);
0
d. In paragraphs (c)(5)(i) and (ii), adding ``or CSAPR NOX 
Ozone Season Group 3 allowances'' after ``CSAPR NOX Ozone 
Season Group 2 allowances'';
0
e. In paragraph (c)(5)(iii), adding ``or CSAPR NOX Ozone 
Season Group 3 allowances'' after ``CSAPR NOX Ozone Season 
Group 2 allowances'' wherever it appears;
0
f. In paragraph (c)(6), adding ``or CSAPR NOX Ozone Season 
Group 3 allowances, as applicable,'' after ``CSAPR NOX Ozone 
Season Group 2 allowances'';
0
g. Revising paragraph (c)(7) introductory text;
0
h. In paragraph (c)(7)(i), adding ``or (iv)'' after ``Sec.  
52.38(b)(2)(iii)''; and
0
i. Revising paragraph (c)(7)(ii).
    The revisions read as follows:


Sec.  97.526   Banking and conversion.

* * * * *
    (c) Notwithstanding any other provision of this subpart, part 52 of 
this chapter, or any SIP revision approved under Sec.  52.38(b)(4) or 
(5) of this chapter, the Administrator will remove CSAPR NOX 
Ozone Season Group 1 allowances from compliance accounts and general 
accounts and allocate in their place amounts of CSAPR NOX 
Ozone Season Group 2 allowances or CSAPR NOX Ozone Season 
Group 3 allowances as provided in paragraphs (c)(1) through (5) of this 
section and will record CSAPR NOX Ozone Season Group 2 
allowances or CSAPR NOX Ozone Season Group 3 allowances in 
lieu of initially recording CSAPR NOX Ozone Season Group 1 
allowances as provided in paragraph (c)(6) of this section.
* * * * *
    (2) As soon as practicable after approval of a SIP revision under 
Sec.  52.38(b)(6) or (10) of this chapter for a State listed in Sec.  
52.38(b)(2)(i) of this chapter, but not later than the allowance 
transfer deadline defined under Sec.  97.802 or Sec.  97.1002 for the 
initial control period described with regard to such SIP revision in 
Sec.  52.38(b)(6)(ii)(A) of this chapter or Sec.  52.38(b)(10)(ii)(A) 
of this chapter, as applicable, the Administrator will temporarily 
suspend acceptance of CSAPR NOX Ozone Season Group 1 
allowance transfers submitted under Sec.  97.522 and, before resuming 
acceptance of such transfers, will take the following actions with 
regard to every general account and every compliance account, unless 
otherwise provided in such approval of the SIP revision:
* * * * *
    (ii) The Administrator will determine a conversion factor equal to 
the greater of 1.0000 or the quotient, expressed to four decimal 
places, of the NOX Ozone Season Group 1 trading budget set 
forth for such State in Sec.  97.510(a) divided by the NOX 
Ozone Season Group 2 trading budget set forth for such State in Sec.  
97.810(a), in the case of a SIP revision under Sec.  52.38(b)(6) of 
this chapter, or divided by the NOX Ozone Season Group 3 
trading budget set forth for such State in Sec.  97.1010(a), in the 
case of a SIP revision under Sec.  52.38(b)(10) of this chapter.
    (iii) The Administrator will allocate to and record in each such 
account an amount of CSAPR NOX Ozone Season Group 2 
allowances, in the case of a SIP revision under Sec.  52.38(b)(6) of 
this chapter, or CSAPR NOX Ozone Season Group 3 allowances, 
in the case of a SIP revision under Sec.  52.38(b)(10) of this chapter, 
for each control period for which CSAPR NOX Ozone Season 
Group 1 allowances were removed from such account, where each such 
amount is determined as the quotient of the number of CSAPR 
NOX Ozone Season Group 1 allowances for such control period 
removed from such account under paragraph (c)(2)(i) of this section 
divided by the conversion factor determined under paragraph (c)(2)(ii) 
of this section, rounded up to the nearest whole allowance, except as 
provided in paragraphs (c)(4) and (5) of this section.
    (3) As soon as practicable after approval of a SIP revision under 
Sec.  52.38(b)(6) or (10) of this chapter for a State listed in Sec.  
52.38(b)(2)(i) of this chapter, but not before the completion of 
deductions under Sec.  97.524 for the control period before the initial 
control period described with regard to such SIP revision in Sec.  
52.38(b)(6)(ii)(A) of this chapter or Sec.  52.38(b)(10)(ii)(A) of this 
chapter, as applicable, and not later than the allowance transfer 
deadline defined under Sec.  97.802 or Sec.  97.1002 for such initial 
control period, the Administrator will temporarily suspend acceptance 
of CSAPR NOX Ozone Season Group 1 allowance transfers 
submitted under Sec.  97.522 and, before resuming acceptance of such 
transfers, will take the following actions with regard to every 
compliance account for a CSAPR NOX Ozone Season Group 1

[[Page 69065]]

source located in such State, provided that if the provisions of Sec.  
52.38(b)(2)(i) of this chapter or a SIP revision approved under Sec.  
52.38(b)(5) of this chapter will no longer apply to any source in any 
State or Indian country within the borders of any State with regard to 
emissions occurring in such initial control period or any subsequent 
control period, the Administrator instead will permanently end 
acceptance of CSAPR NOX Ozone Season Group 1 allowance 
transfers submitted under Sec.  97.522 and will take the following 
actions with regard to every general account and every compliance 
account:
* * * * *
    (ii) The Administrator will determine a conversion factor equal to 
the greater of 1.0000 or the quotient, expressed to four decimal 
places, of the sum of all CSAPR NOX Ozone Season Group 1 
allowances removed from all such accounts under paragraph (c)(3)(i) of 
this section divided by the product of 1.5 times the variability limit 
for such initial control period set forth for such State in Sec.  
97.810(b), in the case of a SIP revision under Sec.  52.38(b)(6) of 
this chapter, or divided by the variability limit for such initial 
control period set forth for such State in Sec.  97.1010(b), in the 
case of a SIP revision under Sec.  52.38(b)(10) of this chapter.
    (iii) The Administrator will allocate to and record in each such 
account an amount of CSAPR NOX Ozone Season Group 2 
allowances, in the case of a SIP revision under Sec.  52.38(b)(6) of 
this chapter, or CSAPR NOX Ozone Season Group 3 allowances, 
in the case of a SIP revision under Sec.  52.38(b)(10) of this chapter, 
for such initial control period, where such amount is determined as the 
quotient of the number of CSAPR NOX Ozone Season Group 1 
allowances removed from such account under paragraph (c)(3)(i) of this 
section divided by the conversion factor determined under paragraph 
(c)(3)(ii) of this section, rounded up to the nearest whole allowance, 
except as provided in paragraphs (c)(4) and (5) of this section.
    (4)(i) Where, pursuant to paragraph (c)(1)(i), (c)(2)(i), or 
(c)(3)(i) of this section, the Administrator removes CSAPR 
NOX Ozone Season Group 1 allowances from the compliance 
account for a source located in a State that is not listed in Sec.  
52.38(b)(2)(iii) or (v) of this chapter and for which no SIP revision 
has been approved under Sec.  52.38(b)(6) or (10) of this chapter or 
Indian country within the borders of such a State, the Administrator 
will not record CSAPR NOX Ozone Season Group 2 allowances or 
CSAPR NOX Ozone Season Group 3 allowances in that compliance 
account but instead will allocate to and record in a general account 
CSAPR NOX Ozone Season Group 2 allowances or CSAPR 
NOX Ozone Season Group 3 allowances, as applicable, for the 
control periods and in the amounts determined in accordance with 
paragraph (c)(1)(iii), (c)(2)(iii), or (c)(3)(iii) of this section, 
respectively, provided that the designated representative for such 
source identifies such general account in a submission to the 
Administrator by the later of [DATE 90 DAYS AFTER DATE OF PUBLICATION 
OF THE FINAL RULE IN THE Federal Register] or 180 days after the date 
on which the Administrator removes CSAPR NOX Ozone Season 
Group 1 allowances from the source's compliance account under paragraph 
(c)(1)(i), (c)(2)(i), or (c)(3)(i) of this section.
    (ii) If the designated representative for a source described in 
paragraph (c)(4)(i) of this section does not make a submission 
identifying a general account for recordation of CSAPR NOX 
Ozone Season Group 2 allowances or CSAPR NOX Ozone Season 
Group 3 allowances, as applicable, by the later of [DATE 90 DAYS AFTER 
DATE OF PUBLICATION OF THE FINAL RULE IN THE Federal Register] or 180 
days after the date on which the Administrator removes CSAPR 
NOX Ozone Season Group 1 allowances from the source's 
compliance account under paragraph (c)(1)(i), (c)(2)(i), or (c)(3)(i) 
of this section, the Administrator will transfer the CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances to a surrender account. A submission by 
the designated representative under paragraph (c)(4)(i) of this section 
after such a transfer has taken place shall have no effect.
* * * * *
    (7) Notwithstanding any other provision of this subpart or subpart 
EEEEE or GGGGG of this part, CSAPR NOX Ozone Season Group 2 
allowances or CSAPR NOX Ozone Season Group 3 allowances may 
be used to satisfy requirements to hold CSAPR NOX Ozone 
Season Group 1 allowances under this subpart as follows, provided that 
nothing in this paragraph alters the time as of which any such 
allowance holding requirement must be met or limits any consequence of 
a failure to timely meet any such allowance holding requirement:
* * * * *
    (ii) After the Administrator has carried out the procedures set 
forth in paragraph (c)(3) of this section, the owner or operator of a 
CSAPR NOX Ozone Season Group 1 unit in a State listed in 
Sec.  52.38(b)(2)(i) of this chapter may satisfy a requirement to hold 
a given number of CSAPR NOX Ozone Season Group 1 allowances 
for a control period before the initial control period described with 
regard to the State's SIP revision in Sec.  52.38(b)(6)(ii)(A) or 
(b)(10)(ii)(A) of this chapter by holding instead, in a general account 
established for this sole purpose, an amount of CSAPR NOX 
Ozone Season Group 2 allowances or CSAPR NOX Ozone Season 
Group 3 allowances, as applicable, for such initial control period or 
any previous control period, where such amount of CSAPR NOX 
Ozone Season Group 2 allowances or CSAPR NOX Ozone Season 
Group 3 allowances is computed as the quotient of such given number of 
CSAPR NOX Ozone Season Group 1 allowances divided by the 
conversion factor determined under paragraph (c)(3)(ii) of this 
section, rounded up to the nearest whole allowance.


Sec.  97.531   [Amended]

0
60. In Sec.  97.531, amend paragraph (d)(3) introductory text by 
removing in the last sentence ``with'' after ``is replaced by''.

Subpart CCCCC--CSAPR SO2 Group 1 Trading Program

0
61. Amend Sec.  97.602 by:
0
a. Revising the definition of ``allowance transfer deadline'';
0
b. In the definition of ``alternate designated representative'', 
removing ``or CSAPR NOX Ozone Season Group 2 Trading 
Program,'' and adding in its place ``CSAPR NOX Ozone Season 
Group 2 Trading Program, or CSAPR NOX Ozone Season Group 3 
Trading Program,'';
0
c. In the definition of ``common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2023, or as of July 1 immediately after such 
deadline for such a control period in 2023 or thereafter, the same'';
0
d. Revising the definitions of ``common designated representative's 
assurance level'' and ``common designated representative's share'';
0
e. In the definition of ``CSAPR NOX Ozone Season Group 1 
Trading Program'', removing ``(b)(3) through (5), and (b)(10) through 
(12)'' and adding in its place ``and (b)(3) through (5) and (14) 
through (16)'';
0
f. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii),

[[Page 69066]]

(b)(6) through (11), and (b)(13)'' and adding in its place 
``(b)(2)(iii) and (iv), and (b)(6) through (9), (14), (15), and (17)'';
0
g. Adding in alphabetical order a definition for ``CSAPR NOX 
Ozone Season Group 3 Trading Program'';
0
h. In the definition of ``designated representative'', removing ``or 
CSAPR NOX Ozone Season Group 2 Trading Program,'' and adding 
in its place ``CSAPR NOX Ozone Season Group 2 Trading 
Program, or CSAPR NOX Ozone Season Group 3 Trading 
Program,'';
0
i. In the definition of ``fossil fuel'', paragraph (2), removing 
``Sec.  97.604(b)(2)(i)(B) and (ii)'' and adding in its place ``Sec.  
97.604(b)(2)(i)(B) and (b)(2)(ii)''; and
0
j. Adding in alphabetical order a definition for ``nitrogen oxides''.
    The revisions and additions read as follows:


Sec.  97.602   Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2023, midnight of March 1 immediately after such control period or, for 
a control period in 2023 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR SO2 Group 1 allowance transfer 
must be submitted for recordation in a CSAPR SO2 Group 1 
source's compliance account in order to be available for use in 
complying with the source's CSAPR SO2 Group 1 emissions 
limitation for such control period in accordance with Sec. Sec.  97.606 
and 97.624.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.606(c)(2)(iii):
    (1) The amount (rounded to the nearest allowance) equal to the sum 
of the total amount of CSAPR SO2 Group 1 allowances 
allocated for such control period to the group of one or more CSAPR 
SO2 Group 1 units located in such State (and such Indian 
country) and having the common designated representative for such 
control period and the total amount of CSAPR SO2 Group 1 
allowances purchased by an owner or operator of such CSAPR 
SO2 Group 1 units in an auction for such control period and 
submitted by the State or the permitting authority to the Administrator 
for recordation in the compliance accounts for such CSAPR 
SO2 Group 1 units in accordance with the CSAPR 
SO2 Group 1 allowance auction provisions in a SIP revision 
approved by the Administrator under Sec.  52.39(e) or (f) of this 
chapter, multiplied by the sum of the State SO2 Group 1 
trading budget under Sec.  97.610(a) and the State's variability limit 
under Sec.  97.610(b) for such control period and divided by such State 
SO2 Group 1 trading budget;
    (2) Provided that, in the case of a unit that operates during, but 
has no amount of CSAPR SO2 Group 1 allowances allocated 
under Sec. Sec.  97.611 and 97.612 for, such control period, the unit 
shall be treated, solely for purposes of this definition, as being 
allocated an amount (rounded to the nearest allowance) of CSAPR 
SO2 Group 1 allowances for such control period equal to the 
unit's allowable SO2 emission rate applicable to such 
control period, multiplied by a capacity factor of 0.85 (if the unit is 
a boiler combusting any amount of coal or coal-derived fuel during such 
control period), 0.24 (if the unit is a simple cycle combustion turbine 
during such control period), 0.67 (if the unit is a combined cycle 
combustion turbine during such control period), 0.74 (if the unit is an 
integrated coal gasification combined cycle unit during such control 
period), or 0.36 (for any other unit), multiplied by the unit's maximum 
hourly load as reported in accordance with this subpart and by 8,760 
hours/control period, and divided by 2,000 lb/ton.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of SO2 emissions from all 
CSAPR SO2 Group 1 units in a State (and Indian country 
within the borders of such State) during such control period, the total 
tonnage of SO2 emissions during such control period from the 
group of one or more CSAPR SO2 Group 1 units located in such 
State (and such Indian country) and having the common designated 
representative for such control period.
* * * * *
    CSAPR NOX Ozone Season Group 3 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart GGGGG of this part and Sec.  
52.38(b)(1), (b)(2)(v), and (b)(10) through (15) and (18) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(11) or (12) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10) or (13) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.604   [Amended]

0
62. In Sec.  97.604, amend paragraph (b) introductory text by removing 
``or (2)(i)'' and adding in its place ``or (b)(2)(i)''.


Sec.  97.605   [Amended]

0
63. In Sec.  97.605, amend paragraph (b) by removing the subject 
heading.


Sec.  97.606   [Amended]

0
64. In Sec.  97.606, amend paragraph (c)(4)(ii) by removing ``and 
(2)(i)'' and adding in its place ``and (c)(2)(i)''.


Sec.  97.610   [Amended]

0
65. Amend Sec.  97.610 by:
0
a. In paragraph (a)(1)(v), removing ``6,206'' and adding in its place 
``6,223'';
0
b. In paragraph (a)(3)(v), removing ``1,429'' and adding in its place 
``1,426'';
0
c. In paragraph (a)(4)(v), removing ``6,377'' and adding in its place 
``6,381'';
0
d. In paragraph (a)(5)(v), removing ``564'' and adding in its place 
``568'';
0
e. In paragraph (a)(6)(v), removing ``2,736'' and adding in its place 
``2,743'';
0
f. In paragraph (a)(7)(v), removing ``4,978'' and adding in its place 
``4,982'';
0
g. In paragraph (a)(8)(v), removing ``111'' and adding in its place 
``110'';
0
h. In paragraph (a)(9)(v), removing ``523'' and adding in its place 
``535'';
0
i. In paragraph (a)(10)(v), removing ``4,552'' and adding in its place 
``4,559'';
0
j. In paragraph (a)(11)(v), removing ``2,845'' and adding in its place 
``2,850'';
0
k. In paragraph (a)(12)(v), removing ``2,240'' and adding in its place 
``2,242'';
0
l. In paragraph (a)(13)(v), removing ``1,177'' and adding in its place 
``1,181'';
0
m. In paragraph (a)(14)(v), removing ``1,402'' and adding in its place 
``1,401'';
0
n. In paragraph (a)(15)(v), removing ``5,297'' and adding in its place 
``5,299''; and
0
o. In paragraph (a)(16)(v), removing ``1,867'' and adding in its place 
``1,870'';
0
66. Amend Sec.  97.611 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), 
removing ``By June 1, 2015 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2015 through 2022,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``through (7) and (12) and'' 
and adding

[[Page 69067]]

in its place ``through (7) and (12) for a control period before 2023, 
or Sec.  97.612(a)(2) through (7), (10), and (12) for a control period 
in 2023 or thereafter, and'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii), removing ``such control period'' and 
adding in its place ``a control period before 2023'';
0
f. In paragraphs (b)(1)(iv) introductory text and (b)(1)(iv)(A), 
removing ``SO2 annual'' and adding in its place 
``SO2 Group 1'';
0
g. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(1)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
h. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), 
removing ``By June 1, 2015 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2015 through 2022,'';
0
i. Adding paragraph (b)(2)(i)(B);
0
j. In paragraph (b)(2)(ii)(A), removing ``through (7) and (12) and'' 
and adding in its place ``through (7) and (12) for a control period 
before 2023, or Sec.  97.612(b)(2) through (7), (10), and (12) for a 
control period in 2023 or thereafter, and'';
0
k. Revising paragraph (b)(2)(ii)(B);
0
l. In paragraph (b)(2)(iii), removing ``such control period'' and 
adding in its place ``a control period before 2023'';
0
m. In paragraphs (b)(2)(iv) introductory text and (b)(2)(iv)(A), 
removing ``SO2 annual'' and adding in its place 
``SO2 Group 1'';
0
n. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(2)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
o. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
p. In paragraph (c)(5)(i)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
q. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
r. In paragraph (c)(5)(ii)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision''; and
0
s. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph.
    The additions and revisions read as follows:


Sec.  97.611   Timing requirements for CSAPR SO2 Group 1 allowance 
allocations.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR SO2 Group 1 allowance 
allocation to each CSAPR SO2 Group 1 unit in a State, in 
accordance with Sec.  97.612(a)(2) through (7), (10), and (12), for the 
control period in the year before the year of the applicable 
calculation deadline under this paragraph and will promulgate a notice 
of data availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(1)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(1)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(1)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR SO2 Group 1 allowance 
allocation to each CSAPR SO2 Group 1 unit in Indian country 
within the borders of a State, in accordance with Sec.  97.612(b)(2) 
through (7), (10), and (12), for the control period in the year before 
the year of the applicable calculation deadline under this paragraph 
and will promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(2)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(2)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(2)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(2)(ii)(A) of this section.
* * * * *
0
67. Amend Sec.  97.612 by:
0
a. Adding a heading to paragraph (a) introductory text;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.611(a)(1);'' and adding 
in its place ``Sec.  97.611(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.630(b) not later 
than December 31 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for a control period before 2023, or 
that operate during such control period, for a control period in 2023 
or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraphs (a)(3)(ii) and (iv) and (a)(4)(i);
0
f. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
g. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';
0
h. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
i. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2023, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2023 or thereafter, any unallocated'';
0
j. Redesignating paragraph (a)(11) as paragraph (a)(11)(i), removing 
``The Administrator'' and adding in its place ``For a control period 
before 2023, the Administrator'';
0
k. Adding paragraph (a)(11)(ii);
0
l. Revising paragraph (a)(12);
0
m. Adding a subject heading to paragraph (b) introductory text;
0
n. In paragraph (b)(1)(i), removing ``Sec.  97.611(a)(1); or'' and 
adding in its

[[Page 69068]]

place ``Sec.  97.611(a)(1) and that have deadlines for certification of 
monitoring systems under Sec.  97.630(b) not later than December 31 of 
the year of the control period; or'';
0
o. Revising paragraphs (b)(3)(ii) and (b)(4)(i);
0
p. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
q. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';
0
r. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
s. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2023, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2023 or thereafter, any 
unallocated'';
0
t. Redesignating paragraph (b)(11) as paragraph (b)(11)(i), removing 
``The Administrator'' and adding in its place ``For a control period 
before 2023, the Administrator'';
0
u. Adding paragraph (b)(11)(ii); and
0
v. Revising paragraph (b)(12).
    The additions and revisions read as follows:


Sec.  97.612   CSAPR SO2 Group 1 allowance allocations to new units.

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR SO2 Group 1 
unit's monitoring systems under Sec.  97.630(b), for allocations for a 
control period before 2023, or the control period containing such 
deadline, for allocations for a control period in 2023 or thereafter;
* * * * *
    (iv) For a unit described in paragraph (a)(1)(iii) of this section, 
the first control period after the control period in which the unit 
resumes operation, for allocations for a control period before 2023, or 
the control period in which the unit resumes operation, for allocations 
for a control period in 2023 or thereafter.
    (4)(i) The allocation to each CSAPR SO2 Group 1 unit 
described in paragraphs (a)(1)(i) through (iii) of this section and for 
each control period described in paragraph (a)(3) of this section will 
be an amount equal to the unit's total tons of SO2 emissions 
during the immediately preceding control period, for a control period 
before 2023, or the unit's total tons of SO2 emissions 
during the control period, for a control period in 2023 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.611(b)(1)(i), (ii), and (v), of the 
amount of CSAPR SO2 Group 1 allowances allocated under 
paragraphs (a)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR SO2 Group 1 unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2023 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2023 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR SO2 Group 1 units in descending order 
based on such units' allocation amounts under paragraph (a)(7), 
(a)(9)(iv), or (a)(10) of this section, as applicable, and, in cases of 
equal allocation amounts, in alphabetical order of the relevant 
sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR SO2 
Group 1 allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such new unit set-aside equal the total 
amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR SO2 Group 1 
unit's monitoring systems under Sec.  97.630(b), for allocations for a 
control period before 2023, or the control period containing such 
deadline, for allocations for a control period in 2023 or thereafter.
    (4)(i) The allocation to each CSAPR SO2 Group 1 unit 
described in paragraph (b)(1)(i) of this section and for each control 
period described in paragraph (b)(3) of this section will be an amount 
equal to the unit's total tons of SO2 emissions during the 
immediately preceding control period, for a control period before 2023, 
or the unit's total tons of SO2 emissions during the control 
period, for a control period in 2023 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.611(b)(2)(i), (ii), and (v), of the 
amount of CSAPR SO2 Group 1 allowances allocated under 
paragraphs (b)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR SO2 Group 1 unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2023 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2023 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR SO2 Group 1 units in 
descending order based on such units' allocation amounts under 
paragraph (b)(7) or (b)(9)(iv) of this section, as applicable, and, in 
cases of equal allocation amounts, in alphabetical order of the 
relevant sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR SO2 
Group 1 allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such Indian country new unit set-aside equal 
the total amount of such Indian country new unit set-aside.


Sec.  97.620   [Amended]

0
68. In Sec.  97.620, amend paragraph (c)(3)(iii)(B) by removing ``to 
SO2'' and adding in its place ``to CSAPR SO2''.
0
69. Amend Sec.  97.621 by:

[[Page 69069]]

0
a. Redesignating paragraph (f) as paragraph (f)(1), removing ``By July 
1, 2019 and July 1 of each year thereafter,'' and adding in its place 
``By July 1, 2019 and July 1, 2020,'';
0
b. Adding paragraph (f)(2);
0
c. Redesignating paragraph (g) as paragraph (g)(1), removing ``By 
August 1, 2015 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2015 through 2022,'';
0
d. Adding paragraph (g)(2);
0
e. Redesignating paragraph (h) as paragraph (h)(1), removing ``By 
August 1, 2015 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2015 through 2022,'';
0
f. Adding paragraph (h)(2); and
0
g. In paragraphs (i) and (j), removing ``By February 15, 2016 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2016 through 2023,''.
    The additions read as follows:


Sec.  97.621   Recordation of CSAPR SO2 Group 1 allowance allocations 
and auction results.

* * * * *
    (f) * * *
    (2) By July 1, 2022 and July 1 of each year thereafter, the 
Administrator will record in each CSAPR SO2 Group 1 source's 
compliance account the CSAPR SO2 Group 1 allowances 
allocated to the CSAPR SO2 Group 1 units at the source, or 
in each appropriate Allowance Management System account the CSAPR 
SO2 Group 1 allowances auctioned to CSAPR SO2 
Group 1 units, in accordance with Sec.  97.611(a), or with a SIP 
revision approved under Sec.  52.39(e) or (f) of this chapter, for the 
control period in the third year after the year of the applicable 
recordation deadline under this paragraph.
    (g) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR SO2 Group 1 source's 
compliance account the CSAPR SO2 Group 1 allowances 
allocated to the CSAPR SO2 Group 1 units at the source, or 
in each appropriate Allowance Management System account the CSAPR 
SO2 Group 1 allowances auctioned to CSAPR SO2 
Group 1 units, in accordance with Sec.  97.612(a)(2) through (12), or 
with a SIP revision approved under Sec.  52.39(e) or (f) of this 
chapter, for the control period in the year before the year of the 
applicable recordation deadline under this paragraph.
    (h) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR SO2 Group 1 source's 
compliance account the CSAPR SO2 Group 1 allowances 
allocated to the CSAPR SO2 Group 1 units at the source in 
accordance with Sec.  97.612(b)(2) through (12) for the control period 
in the year before the year of the applicable recordation deadline 
under this paragraph.
* * * * *
0
70. Amend Sec.  97.624 by adding a paragraph (c) subject heading and 
revising paragraph (c)(1) to read as follows:


Sec.  97.624   Compliance with CSAPR SO2 Group 1 emissions limitation.

* * * * *
    (c) Selection of CSAPR SO2 Group 1 allowances for 
deduction--(1) Identification by serial number. The designated 
representative for a source may request that specific CSAPR 
SO2 Group 1 allowances, identified by serial number, in the 
source's compliance account be deducted for emissions or excess 
emissions for a control period in a given year in accordance with 
paragraph (b) or (d) of this section. In order to be complete, such 
request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the CSAPR 
SO2 Group 1 source and the appropriate serial numbers.
* * * * *
0
71. Amend Sec.  97.625 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. In paragraph (b)(2)(i), removing ``By July 1'' and adding in its 
place ``For a control period before 2023 only, by July 1'';
0
c. Revising paragraphs (b)(2)(ii), (b)(2)(iii) introductory text, and 
(b)(2)(iii)(A);
0
d. In paragraph (b)(2)(iii)(B), removing ``such notice,'' and adding in 
its place ``such notice or notices,''; and
0
e. In paragraph (b)(6)(ii), removing ``If any such data'' and adding in 
its place ``For a control period before 2023 only, if any such data''.
    The revisions read as follows:


Sec.  97.625   Compliance with CSAPR SO2 Group 1 assurance provisions.

* * * * *
    (b) * * *
    (1) By June 1 of each year from 2018 through 2023 and by August 1 
of each year thereafter, the Administrator will:
* * * * *
    (ii) If the calculations under paragraph (b)(1)(i) of this section 
indicate that the total SO2 emissions from all CSAPR 
SO2 Group 1 units at CSAPR SO2 Group 1 sources in 
any State (and Indian country within the borders of such State) during 
such control period exceed the State assurance level for such control 
period, promulgate a notice of data availability of the results of the 
calculations required in paragraph (b)(1)(i) of this section, including 
separate calculations of the SO2 emissions from each CSAPR 
SO2 Group 1 source.
    (2) * * *
    (ii) The Administrator will calculate, for each such State (and 
Indian country within the borders of such State) and such control 
period and each common designated representative for such control 
period for a group of one or more CSAPR SO2 Group 1 sources 
and units in the State (and Indian country within the borders of such 
State), the common designated representative's share of the total 
SO2 emissions from all CSAPR SO2 Group 1 units at 
CSAPR SO2 Group 1 sources in the State (and Indian country 
within the borders of such State), the common designated 
representative's assurance level, and the amount (if any) of CSAPR 
SO2 Group 1 allowances that the owners and operators of such 
group of sources and units must hold in accordance with the calculation 
formula in Sec.  97.606(c)(2)(i). For a control period before 2023, if 
the results of these calculations were not included in the notice of 
data availability required in paragraph (b)(1)(ii) of this section, the 
Administrator will promulgate a notice of data availability of the 
results of these calculations by August 1 immediately after the 
promulgation of such notice. For a control period in 2023 or 
thereafter, the Administrator will include the results of these 
calculations in the notice of data availability required in paragraph 
(b)(1)(ii) of this section.
    (iii) The Administrator will provide an opportunity for submission 
of objections to the calculations referenced by the notice or notices 
of data availability required in paragraphs (b)(1)(ii) and (b)(2)(ii) 
of this section.
    (A) Objections shall be submitted by the deadline specified in such 
notice or notices and shall be limited to addressing whether the 
calculations referenced in the notice or notices are in accordance with 
Sec.  97.606(c)(2)(iii), Sec. Sec.  97.606(b) and 97.630 through 
97.635, the definitions of ``common designated representative'', 
``common designated representative's assurance level'', and ``common 
designated representative's share'' in Sec.  97.602, and the 
calculation formula in Sec.  97.606(c)(2)(i).
* * * * *

[[Page 69070]]

Sec.  97.634   [Amended]

0
72. In Sec.  97.634, amend paragraph (d)(3) by removing ``or CSAPR 
NOX Ozone Season Group 2 Trading Program,'' and adding in 
its place ``CSAPR NOX Ozone Season Group 2 Trading Program, 
or CSAPR NOX Ozone Season Group 3 Trading Program,''.

Subpart DDDDD--CSAPR SO2 Group 2 Trading Program

0
73. Amend Sec.  97.702 by:
0
a. Revising the definition of ``allowance transfer deadline'';
0
b. In the definition of ``alternate designated representative'', 
removing ``or CSAPR NOX Ozone Season Group 2 Trading 
Program,'' and adding in its place ``CSAPR NOX Ozone Season 
Group 2 Trading Program, or CSAPR NOX Ozone Season Group 3 
Trading Program,'';
0
c. In the definition of ``common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2023, or as of July 1 immediately after such 
deadline for such a control period in 2023 or thereafter, the same'';
0
d. Revising the definitions of ``common designated representative's 
assurance level'' and ``common designated representative's share'';
0
e. In the definition of ``CSAPR NOX Ozone Season Group 1 
Trading Program'', removing ``(b)(3) through (5), and (b)(10) through 
(12)'' and adding in its place ``and (b)(3) through (5) and (14) 
through (16)'';
0
f. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(6) through (9), (14), (15), and (17)'';
0
g. Adding in alphabetical order a definition for ``CSAPR NOX 
Ozone Season Group 3 Trading Program'';
0
h. In the definition of ``designated representative'', removing ``or 
CSAPR NOX Ozone Season Group 2 Trading Program,'' and adding 
in its place ``CSAPR NOX Ozone Season Group 2 Trading 
Program, or CSAPR NOX Ozone Season Group 3 Trading 
Program,'';
0
i. In the definition of ``fossil fuel'', paragraph (2), removing 
``Sec.  97.704(b)(2)(i)(B) and (ii)'' and adding in its place ``Sec.  
97.704(b)(2)(i)(B) and (b)(2)(ii)''; and
0
j. Adding in alphabetical order a definition for ``nitrogen oxides''.
    The revisions and additions read as follows:


Sec.  97.702   Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2023, midnight of March 1 immediately after such control period or, for 
a control period in 2023 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR SO2 Group 2 allowance transfer 
must be submitted for recordation in a CSAPR SO2 Group 2 
source's compliance account in order to be available for use in 
complying with the source's CSAPR SO2 Group 2 emissions 
limitation for such control period in accordance with Sec. Sec.  97.706 
and 97.724.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.706(c)(2)(iii):
    (1) The amount (rounded to the nearest allowance) equal to the sum 
of the total amount of CSAPR SO2 Group 2 allowances 
allocated for such control period to the group of one or more CSAPR 
SO2 Group 2 units located in the State (and such Indian 
country) and having the common designated representative for such 
control period and the total amount of CSAPR SO2 Group 2 
allowances purchased by an owner or operator of such CSAPR 
SO2 Group 2 units in an auction for such control period and 
submitted by the State or the permitting authority to the Administrator 
for recordation in the compliance accounts for such CSAPR 
SO2 Group 2 units in accordance with the CSAPR 
SO2 Group 2 allowance auction provisions in a SIP revision 
approved by the Administrator under Sec.  52.39(h) or (i) of this 
chapter, multiplied by the sum of the State SO2 Group 2 
trading budget under Sec.  97.710(a) and the State's variability limit 
under Sec.  97.710(b) for such control period and divided by such State 
SO2 Group 2 trading budget;
    (2) Provided that, in the case of a unit that operates during, but 
has no amount of CSAPR SO2 Group 2 allowances allocated 
under Sec. Sec.  97.711 and 97.712 for, such control period, the unit 
shall be treated, solely for purposes of this definition, as being 
allocated an amount (rounded to the nearest allowance) of CSAPR 
SO2 Group 2 allowances for such control period equal to the 
unit's allowable SO2 emission rate applicable to such 
control period, multiplied by a capacity factor of 0.85 (if the unit is 
a boiler combusting any amount of coal or coal-derived fuel during such 
control period), 0.24 (if the unit is a simple cycle combustion turbine 
during such control period), 0.67 (if the unit is a combined cycle 
combustion turbine during such control period), 0.74 (if the unit is an 
integrated coal gasification combined cycle unit during such control 
period), or 0.36 (for any other unit), multiplied by the unit's maximum 
hourly load as reported in accordance with this subpart and by 8,760 
hours/control period, and divided by 2,000 lb/ton.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of SO2 emissions from all 
CSAPR SO2 Group 2 units in a State (and Indian country 
within the borders of such State) during such control period, the total 
tonnage of SO2 emissions during such control period from the 
group of one or more CSAPR SO2 Group 2 units located in such 
State (and such Indian country) and having the common designated 
representative for such control period.
* * * * *
    CSAPR NOX Ozone Season Group 3 Trading Program means a 
multi-state NOX air pollution control and emission reduction 
program established in accordance with subpart GGGGG of this part and 
Sec.  52.38(b)(1), (b)(2)(v), and (b)(10) through (15) and (18) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(11) or (12) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10) or (13) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.704   [Amended]

0
74. In Sec.  97.704, amend paragraph (b) introductory text by removing 
``or (2)(i)'' and adding in its place ``or (b)(2)(i)''.


Sec.  97.705   [Amended]

0
75. In Sec.  97.705, amend paragraph (b) by removing the subject 
heading.


Sec.  97.706   [Amended]

0
76. In Sec.  97.706, amend paragraph (c)(4)(ii) by removing ``and 
(2)(i)'' and adding in its place ``and (c)(2)(i)''.

[[Page 69071]]

Sec.  97.710   [Amended]

0
77. Amend Sec.  97.710 by:
0
a. In paragraph (a) introductory text, removing ``Group 1 allowances'' 
and adding in its place ``Group 2 allowances'';
0
b. In paragraph (a)(2)(v), removing ``2,711'' and adding in its place 
``2,721'';
0
c. In paragraph (a)(3)(v), removing ``798'' and adding in its place 
``801'';
0
d. In paragraph (a)(4)(v), removing ``798'' and adding in its place 
``800''; and
0
e. In paragraph (a)(5)(v), removing ``2,658'' and adding in its place 
``2,662'';
0
78. Amend Sec.  97.711 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), 
removing ``By June 1, 2015 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2015 through 2022,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``through (7) and (12) and'' 
and adding in its place ``through (7) and (12) for a control period 
before 2023, or Sec.  97.712(a)(2) through (7), (10), and (12) for a 
control period in 2023 or thereafter, and'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii), removing ``such control period'' and 
adding in its place ``a control period before 2023'';
0
f. In paragraphs (b)(1)(iv) introductory text and (b)(1)(iv)(A), 
removing ``SO2 annual'' and adding in its place 
``SO2 Group 2'';
0
g. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(1)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
h. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), 
removing ``By June 1, 2015 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2015 through 2022,'';
0
i. Adding paragraph (b)(2)(i)(B);
0
j. In paragraph (b)(2)(ii)(A), removing ``through (7) and (12) and'' 
and adding in its place ``through (7) and (12) for a control period 
before 2023, or Sec.  97.712(b)(2) through (7), (10), and (12) for a 
control period in 2023 or thereafter, and'';
0
k. Revising paragraph (b)(2)(ii)(B);
0
l. In paragraph (b)(2)(iii), removing ``such control period'' and 
adding in its place ``a control period before 2023'';
0
m. In paragraphs (b)(2)(iv) introductory text and (b)(2)(iv)(A), 
removing ``SO2 annual'' and adding in its place 
``SO2 Group 2'';
0
n. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(2)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
o. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
p. In paragraph (c)(5)(i)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
q. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
r. In paragraph (c)(5)(ii)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision''; and
0
s. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph.
    The additions and revisions read as follows:


Sec.  97.711   Timing requirements for CSAPR SO2 Group 2 
allowance allocations.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR SO2 Group 2 allowance 
allocation to each CSAPR SO2 Group 2 unit in a State, in 
accordance with Sec.  97.712(a)(2) through (7), (10), and (12), for the 
control period in the year before the year of the applicable 
calculation deadline under this paragraph and will promulgate a notice 
of data availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(1)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(1)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(1)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR SO2 Group 2 allowance 
allocation to each CSAPR SO2 Group 2 unit in Indian country 
within the borders of a State, in accordance with Sec.  97.712(b)(2) 
through (7), (10), and (12), for the control period in the year before 
the year of the applicable calculation deadline under this paragraph 
and will promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(2)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(2)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(2)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(2)(ii)(A) of this section.
* * * * *
0
79. Amend Sec.  97.712 by:
0
a. Adding a subject heading to paragraph (a) introductory text;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.711(a)(1);'' and adding 
in its place ``Sec.  97.711(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.730(b) not later 
than December 31 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for a control period before 2023, or 
that operate during such control period, for a control period in 2023 
or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraphs (a)(3)(ii) and (iv) and (a)(4)(i);
0
f. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
g. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';

[[Page 69072]]

0
h. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
i. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2023, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2023 or thereafter, any unallocated'';
0
j. Redesignating paragraph (a)(11) as paragraph (a)(11)(i), removing 
``The Administrator'' and adding in its place ``For a control period 
before 2023, the Administrator'';
0
k. Adding paragraph (a)(11)(ii);
0
l. Revising paragraph (a)(12);
0
m. Adding a subject heading to paragraph (b) introductory text;
0
n. In paragraph (b)(1)(i), removing ``Sec.  97.711(a)(1); or'' and 
adding in its place ``Sec.  97.711(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.730(b) not later 
than December 31 of the year of the control period; or'';
0
o. Revising paragraphs (b)(3)(ii) and (b)(4)(i);
0
p. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
q. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';
0
r. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
s. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2023, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2023 or thereafter, any 
unallocated'';
0
t. Redesignating paragraph (b)(11) as paragraph (b)(11)(i), removing 
``The Administrator'' and adding in its place ``For a control period 
before 2023, the Administrator'';
0
u. Adding paragraph (b)(11)(ii); and
0
v. Revising paragraph (b)(12).
    The additions and revisions read as follows:


Sec.  97.712   CSAPR SO2 Group 2 allowance allocations to new units.

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR SO2 Group 2 
unit's monitoring systems under Sec.  97.730(b), for allocations for a 
control period before 2023, or the control period containing such 
deadline, for allocations for a control period in 2023 or thereafter;
* * * * *
    (iv) For a unit described in paragraph (a)(1)(iii) of this section, 
the first control period after the control period in which the unit 
resumes operation, for allocations for a control period before 2023, or 
the control period in which the unit resumes operation, for allocations 
for a control period in 2023 or thereafter.
    (4)(i) The allocation to each CSAPR SO2 Group 2 unit 
described in paragraphs (a)(1)(i) through (iii) of this section and for 
each control period described in paragraph (a)(3) of this section will 
be an amount equal to the unit's total tons of SO2 emissions 
during the immediately preceding control period, for a control period 
before 2023, or the unit's total tons of SO2 emissions 
during the control period, for a control period in 2023 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.711(b)(1)(i), (ii), and (v), of the 
amount of CSAPR SO2 Group 2 allowances allocated under 
paragraphs (a)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR SO2 Group 2 unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2023 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2023 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR SO2 Group 2 units in descending order 
based on such units' allocation amounts under paragraph (a)(7), 
(a)(9)(iv), or (a)(10) of this section, as applicable, and, in cases of 
equal allocation amounts, in alphabetical order of the relevant 
sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR SO2 
Group 2 allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such new unit set-aside equal the total 
amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR SO2 Group 2 
unit's monitoring systems under Sec.  97.730(b), for allocations for a 
control period before 2023, or the control period containing such 
deadline, for allocations for a control period in 2023 or thereafter.
    (4)(i) The allocation to each CSAPR SO2 Group 2 unit 
described in paragraph (b)(1)(i) of this section and for each control 
period described in paragraph (b)(3) of this section will be an amount 
equal to the unit's total tons of SO2 emissions during the 
immediately preceding control period, for a control period before 2023, 
or the unit's total tons of SO2 emissions during the control 
period, for a control period in 2023 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.711(b)(2)(i), (ii), and (v), of the 
amount of CSAPR SO2 Group 2 allowances allocated under 
paragraphs (b)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR SO2 Group 2 unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2023 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2023 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR SO2 Group 2 units in 
descending order based on such units' allocation amounts under 
paragraph (b)(7) or (b)(9)(iv) of this

[[Page 69073]]

section, as applicable, and, in cases of equal allocation amounts, in 
alphabetical order of the relevant sources' names and numerical order 
of the relevant units' identification numbers, and will adjust each 
unit's allocation amount under such paragraph upward or downward by one 
CSAPR SO2 Group 2 allowance (but not below zero) in the 
order in which the units are listed, and will repeat this adjustment 
process as necessary, until the total allocations from such Indian 
country new unit set-aside equal the total amount of such Indian 
country new unit set-aside.


Sec.  97.720   [Amended]

0
80. In Sec.  97.720, amend paragraph (c)(3)(iii)(B) by removing ``to 
SO2'' and adding in its place ``to CSAPR SO2''.
0
81. Amend Sec.  97.721 by:
0
a. Redesignating paragraph (f) as paragraph (f)(1), removing ``By July 
1, 2019 and July 1 of each year thereafter,'' and adding in its place 
``By July 1, 2019 and July 1, 2020,'';
0
b. Adding paragraph (f)(2);
0
c. Redesignating paragraph (g) as paragraph (g)(1), removing ``By 
August 1, 2015 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2015 through 2022,'';
0
d. Adding paragraph (g)(2);
0
e. Redesignating paragraph (h) as paragraph (h)(1), removing ``By 
August 1, 2015 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2015 through 2022,'';
0
f. Adding paragraph (h)(2); and
0
g. In paragraphs (i) and (j), removing ``By February 15, 2016 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2016 through 2023,''.
    The additions read as follows:


Sec.  97.721   Recordation of CSAPR SO2 Group 2 allowance allocations 
and auction results.

* * * * *
    (f) * * *
    (2) By July 1, 2022 and July 1 of each year thereafter, the 
Administrator will record in each CSAPR SO2 Group 2 source's 
compliance account the CSAPR SO2 Group 2 allowances 
allocated to the CSAPR SO2 Group 2 units at the source, or 
in each appropriate Allowance Management System account the CSAPR 
SO2 Group 2 allowances auctioned to CSAPR SO2 
Group 2 units, in accordance with Sec.  97.711(a), or with a SIP 
revision approved under Sec.  52.39(h) or (i) of this chapter, for the 
control period in the third year after the year of the applicable 
recordation deadline under this paragraph.
    (g) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR SO2 Group 2 source's 
compliance account the CSAPR SO2 Group 2 allowances 
allocated to the CSAPR SO2 Group 2 units at the source, or 
in each appropriate Allowance Management System account the CSAPR 
SO2 Group 2 allowances auctioned to CSAPR SO2 
Group 2 units, in accordance with Sec.  97.712(a)(2) through (12), or 
with a SIP revision approved under Sec.  52.39(h) or (i) of this 
chapter, for the control period in the year before the year of the 
applicable recordation deadline under this paragraph.
    (h) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR SO2 Group 2 source's 
compliance account the CSAPR SO2 Group 2 allowances 
allocated to the CSAPR SO2 Group 2 units at the source in 
accordance with Sec.  97.712(b)(2) through (12) for the control period 
in the year before the year of the applicable recordation deadline 
under this paragraph.
* * * * *
0
82. Amend Sec.  97.724 by adding a paragraph (c) subject heading and 
revising paragraph (c)(1) to read as follows:


Sec.  97.724   Compliance with CSAPR SO2 Group 2 emissions 
limitation.

* * * * *
    (c) Selection of CSAPR SO2 Group 2 allowances for deduction--(1) 
Identification by serial number. The designated representative for a 
source may request that specific CSAPR SO2 Group 2 
allowances, identified by serial number, in the source's compliance 
account be deducted for emissions or excess emissions for a control 
period in a given year in accordance with paragraph (b) or (d) of this 
section. In order to be complete, such request shall be submitted to 
the Administrator by the allowance transfer deadline for such control 
period and include, in a format prescribed by the Administrator, the 
identification of the CSAPR SO2 Group 2 source and the 
appropriate serial numbers.
* * * * *
0
83. Amend Sec.  97.725 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. In paragraph (b)(2)(i), removing ``By July 1'' and adding in its 
place ``For a control period before 2023 only, by July 1'';
0
c. Revising paragraphs (b)(2)(ii), (b)(2)(iii) introductory text, and 
(b)(2)(iii)(A);
0
d. In paragraph (b)(2)(iii)(B), removing ``such notice,'' and adding in 
its place ``such notice or notices,''; and
0
e. In paragraph (b)(6)(ii), removing ``If any such data'' and adding in 
its place ``For a control period before 2023 only, if any such data''.
    The revisions read as follows:


Sec.  97.725   Compliance with CSAPR SO2 Group 2 assurance provisions.

* * * * *
    (b) * * *
    (1) By June 1 of each year from 2018 through 2023 and by August 1 
of each year thereafter, the Administrator will:
* * * * *
    (ii) If the calculations under paragraph (b)(1)(i) of this section 
indicate that the total SO2 emissions from all CSAPR 
SO2 Group 2 units at CSAPR SO2 Group 2 sources in 
any State (and Indian country within the borders of such State) during 
such control period exceed the State assurance level for such control 
period, promulgate a notice of data availability of the results of the 
calculations required in paragraph (b)(1)(i) of this section, including 
separate calculations of the SO2 emissions from each CSAPR 
SO2 Group 2 source.
    (2) * * *
    (ii) The Administrator will calculate, for each such State (and 
Indian country within the borders of such State) and such control 
period and each common designated representative for such control 
period for a group of one or more CSAPR SO2 Group 2 sources 
and units in the State (and Indian country within the borders of such 
State), the common designated representative's share of the total 
SO2 emissions from all CSAPR SO2 Group 2 units at 
CSAPR SO2 Group 2 sources in the State (and Indian country 
within the borders of such State), the common designated 
representative's assurance level, and the amount (if any) of CSAPR 
SO2 Group 2 allowances that the owners and operators of such 
group of sources and units must hold in accordance with the calculation 
formula in Sec.  97.706(c)(2)(i). For a control period before 2023, if 
the results of these calculations were not included in the notice of 
data availability required in paragraph (b)(1)(ii) of this section, the 
Administrator will promulgate a notice of data availability of the 
results of these calculations by August 1 immediately after the 
promulgation of such notice. For a control period in 2023 or 
thereafter, the Administrator will include the results of these 
calculations in the notice of data availability required in paragraph 
(b)(1)(ii) of this section.

[[Page 69074]]

    (iii) The Administrator will provide an opportunity for submission 
of objections to the calculations referenced by the notice or notices 
of data availability required in paragraphs (b)(1)(ii) and (b)(2)(ii) 
of this section.
    (A) Objections shall be submitted by the deadline specified in such 
notice or notices and shall be limited to addressing whether the 
calculations referenced in the notice or notices are in accordance with 
Sec.  97.706(c)(2)(iii), Sec. Sec.  97.706(b), and 97.730 through 
97.735, the definitions of ``common designated representative'', 
``common designated representative's assurance level'', and ``common 
designated representative's share'' in Sec.  97.702, and the 
calculation formula in Sec.  97.706(c)(2)(i).
* * * * *


Sec.  97.731   [Amended]

0
84. In Sec.  97.731, amend paragraph (d)(3) introductory text by 
removing in the last sentence ``with'' after ``is replaced by''.


Sec.  97.734   [Amended]

0
85. In Sec.  97.734, amend paragraph (d)(3) by removing ``or CSAPR 
NOX Ozone Season Group 2 Trading Program,'' and adding in 
its place ``CSAPR NOX Ozone Season Group 2 Trading Program, 
or CSAPR NOX Ozone Season Group 3 Trading Program,''.

Subpart EEEEE--CSAPR NOX Ozone Season Group 2 Trading Program

0
86. Amend Sec.  97.802 by:
0
a. Revising the definition of ``allowance transfer deadline'',
0
b. In the definition of ``common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2023, or as of July 1 immediately after such 
deadline for such a control period in 2023 or thereafter, the same'';
0
c. Revising the definitions of ``common designated representative's 
assurance level'' and ``common designated representative's share'';
0
d. In the definition of ``CSAPR NOX Ozone Season Group 1 
Trading Program'', removing ``(b)(3) through (5), and (b)(10) through 
(12)'' and adding in its place ``and (b)(3) through (5) and (14) 
through (16)'';
0
e. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(6) through (9), (14), (15), and (17)'';
0
f. Adding in alphabetical order definitions for ``CSAPR NOX 
Ozone Season Group 3 allowance'', ``CSAPR NOX Ozone Season 
Group 3 Trading Program'', and ``nitrogen oxides''; and
0
g. In the definition of ``State'', removing ``(2)(i) and (iii), (6) 
through (11), and (13)'' and adding in its place ``(b)(2)(iii) and 
(iv), and (b)(6) through (9), (14), (15), and (17)''.
    The revisions and additions read as follows:


Sec.  97.802   Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2023, midnight of March 1 immediately after such control period or, for 
a control period in 2023 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR NOX Ozone Season Group 2 allowance 
transfer must be submitted for recordation in a CSAPR NOX 
Ozone Season Group 2 source's compliance account in order to be 
available for use in complying with the source's CSAPR NOX 
Ozone Season Group 2 emissions limitation for such control period in 
accordance with Sec. Sec.  97.806 and 97.824.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.806(c)(2)(iii):
    (1) The amount (rounded to the nearest allowance) equal to the sum 
of the total amount of CSAPR NOX Ozone Season Group 2 
allowances allocated for such control period to a group of one or more 
base CSAPR NOX Ozone Season Group 2 units located in such 
State (and such Indian country) and having the common designated 
representative for such control period and the total amount of CSAPR 
NOX Ozone Season Group 2 allowances purchased by an owner or 
operator of such base CSAPR NOX Ozone Season Group 2 units 
in an auction for such control period and submitted by the State or the 
permitting authority to the Administrator for recordation in the 
compliance accounts for such base CSAPR NOX Ozone Season 
Group 2 units in accordance with the CSAPR NOX Ozone Season 
Group 2 allowance auction provisions in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(6), (8), or (9) of this chapter, 
multiplied by the sum of the State NOX Ozone Season Group 2 
trading budget under Sec.  97.810(a) and the State's variability limit 
under Sec.  97.810(b) for such control period and divided by the 
greater of such State NOX Ozone Season Group 2 trading 
budget or the sum of all amounts of CSAPR NOX Ozone Season 
Group 2 allowances for such control period treated for purposes of this 
definition as having been allocated to or purchased in the State's 
auction for all such base CSAPR NOX Ozone Season Group 2 
units;
    (2) Provided that--
    (i) For a control period before 2023 only, in the case of a base 
CSAPR NOX Ozone Season Group 2 unit that operates during, 
but has no amount of CSAPR NOX Ozone Season Group 2 
allowances allocated under Sec. Sec.  97.811 and 97.812 for, such 
control period, the unit shall be treated, solely for purposes of this 
definition, as being allocated an amount (rounded to the nearest 
allowance) of CSAPR NOX Ozone Season Group 2 allowances for 
such control period equal to the unit's allowable NOX 
emission rate applicable to such control period, multiplied by a 
capacity factor of 0.92 (if the unit is a boiler combusting any amount 
of coal or coal-derived fuel during such control period), 0.32 (if the 
unit is a simple cycle combustion turbine during such control period), 
0.71 (if the unit is a combined cycle combustion turbine during such 
control period), 0.73 (if the unit is an integrated coal gasification 
combined cycle unit during such control period), or 0.44 (for any other 
unit), multiplied by the unit's maximum hourly load as reported in 
accordance with this subpart and by 3,672 hours/control period, and 
divided by 2,000 lb/ton;
    (ii) The allocations of CSAPR NOX Ozone Season Group 2 
allowances for any control period taken into account for purposes of 
this definition exclude any CSAPR NOX Ozone Season Group 2 
allowances allocated for such control period under Sec.  97.526(c)(1) 
or (3), or under Sec.  97.526(c)(4) or (5) pursuant to an exception 
under Sec.  97.526(c)(1) or (3); and
    (iii) In the case of the base CSAPR NOX Ozone Season 
Group 2 units at a base CSAPR NOX Ozone Season Group 2 
source in a State with regard to which CSAPR NOX Ozone 
Season Group 2 allowances have been allocated under Sec.  97.526(c)(2) 
for a given control period, the units at each such source will be 
treated, solely for purposes of this definition, as having been 
allocated under Sec.  97.526(c)(2), or under Sec.  97.526(c)(4) or (5) 
pursuant to an exception under Sec.  97.526(c)(2), an amount of CSAPR 
NOX Ozone Season Group 2 allowances for such control

[[Page 69075]]

period equal to the sum of the total amount of CSAPR NOX 
Ozone Season Group 1 allowances allocated for such control period to 
such units and the total amount of CSAPR NOX Ozone Season 
Group 1 allowances purchased by an owner or operator of such units in 
an auction for such control period and submitted by the State or the 
permitting authority to the Administrator for recordation in the 
compliance account for such source in accordance with the CSAPR 
NOX Ozone Season Group 1 allowance auction provisions in a 
SIP revision approved by the Administrator under Sec.  52.38(b)(4) or 
(5) of this chapter, divided by the conversion factor determined under 
Sec.  97.526(c)(2)(ii) with regard to the State's SIP revision under 
Sec.  52.38(b)(6) of this chapter, and rounded up to the nearest whole 
allowance.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of NOX emissions from all base 
CSAPR NOX Ozone Season Group 2 units in a State (and Indian 
country within the borders of such State) during such control period, 
the total tonnage of NOX emissions during such control 
period from the group of one or more base CSAPR NOX Ozone 
Season Group 2 units located in such State (and such Indian country) 
and having the common designated representative for such control 
period.
* * * * *
    CSAPR NOX Ozone Season Group 3 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under subpart GGGGG of this part, Sec.  97.526(c), or Sec.  97.826(c), 
or by a State or permitting authority under a SIP revision approved by 
the Administrator under Sec.  52.38(b)(10), (11), (12), or (13) of this 
chapter, to emit one ton of NOX during a control period of 
the specified calendar year for which the authorization is allocated or 
auctioned or of any calendar year thereafter under the CSAPR 
NOX Ozone Season Group 3 Trading Program.
    CSAPR NOX Ozone Season Group 3 Trading Program means a 
multi-state NOX air pollution control and emission reduction 
program established in accordance with subpart GGGGG of this part and 
Sec.  52.38(b)(1), (b)(2)(v), and (b)(10) through (15) and (18) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(11) or (12) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10) or (13) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.805   [Amended]

0
87. In Sec.  97.805, amend paragraph (b) by removing the subject 
heading.
0
88. Amend Sec.  97.811 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), 
removing ``By June 1, 2017 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2017 through 2022,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``through (7) and (12) and'' 
and adding in its place ``through (7) and (12) for a control period 
before 2023, or Sec.  97.812(a)(2) through (7), (10), and (12) for a 
control period in 2023 or thereafter, and'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii), removing ``such control period'' and 
adding in its place ``a control period before 2023'';
0
f. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(1)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
g. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), 
removing ``By June 1, 20175 and June 1 of each year thereafter,'' and 
adding in its place ``By June 1 of each year from 2017 through 2022,'';
0
h. Adding paragraph (b)(2)(i)(B);
0
i. In paragraph (b)(2)(ii)(A), removing ``through (7) and (12) and'' 
and adding in its place ``through (7) and (12) for a control period 
before 2023, or Sec.  97.812(b)(2) through (7), (10), and (12) for a 
control period in 2023 or thereafter, and'';
0
j. Revising paragraph (b)(2)(ii)(B);
0
k. In paragraph (b)(2)(iii), removing ``such control period'' and 
adding in its place ``a control period before 2023'';
0
l. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2023, or in 
paragraph (b)(2)(ii) of this section for a control period in 2023 or 
thereafter,'';
0
m. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
n. In paragraph (c)(5)(i)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
o. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
p. In paragraph (c)(5)(ii)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
q. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph; and
0
r. Adding paragraph (d).
    The additions and revisions read as follows:


Sec.  97.811   Timing requirements for CSAPR NOX Ozone Season Group 2 
allowance allocations.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Ozone Season 
Group 2 allowance allocation to each CSAPR NOX Ozone Season 
Group 2 unit in a State, in accordance with Sec.  97.812(a)(2) through 
(7), (10), and (12), for the control period in the year before the year 
of the applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(1)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(1)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(1)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Ozone Season 
Group 2 allowance allocation to each CSAPR NOX Ozone Season 
Group 2 unit in a State, in accordance with Sec.  97.812(b)(2) through 
(7), (10), and (12),

[[Page 69076]]

for the control period in the year before the year of the applicable 
calculation deadline under this paragraph and will promulgate a notice 
of data availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(2)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(2)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(2)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(2)(ii)(A) of this section.
* * * * *
    (d) Recall of CSAPR NOX Ozone Season Group 2 allowances allocated 
for control periods after 2020. Notwithstanding any other provision of 
this subpart, part 52 of this chapter, or any SIP revision approved 
under Sec.  52.38(b) of this chapter, with regard to any CSAPR 
NOX Ozone Season Group 2 allowances allocated to units or 
other entities located in a State listed in Sec.  52.38(b)(2)(iv) of 
this chapter for a control period after 2020, whether such CSAPR 
NOX Ozone Season Group 2 allowances were allocated pursuant 
to this subpart or a SIP revision approved under Sec.  52.38(b) of this 
chapter--
    (1) For each such CSAPR NOX Ozone Season Group 2 
allowance that was allocated for a given control period to any unit, 
including a unit subject to an exemption under Sec.  97.805, and that 
was recorded in the compliance account for the source at which the unit 
is located before [DATE 60 DAYS AFTER DATE OF PUBLICATION OF THE FINAL 
RULE IN THE Federal Register], the Administrator will deduct from such 
compliance account a CSAPR NOX Ozone Season Group 2 
allowance allocated for the same control period. The owners and 
operators of the unit shall ensure that sufficient CSAPR NOX 
Ozone Season Group 2 allowances allocated for the appropriate control 
periods are available in such compliance account for completion of the 
deductions not later than [DATE 90 DAYS AFTER DATE OF PUBLICATION OF 
THE FINAL RULE IN THE Federal Register].
    (2) For each such CSAPR NOX Ozone Season Group 2 
allowance that was allocated for a given control period to an entity 
other than a unit and that was recorded in a general account for the 
entity before [DATE 60 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE 
IN THE Federal Register] the Administrator will deduct from such 
general account a CSAPR NOX Ozone Season Group 2 allowance 
allocated for the same control period. The authorized account 
representative for the general account shall ensure that sufficient 
CSAPR NOX Ozone Season Group 2 allowances allocated for the 
appropriate control periods are available in such general account for 
completion of the deductions not later than [DATE 90 DAYS AFTER DATE OF 
PUBLICATION OF THE FINAL RULE IN THE Federal Register].
    (3) The Administrator will record in the appropriate Allowance 
Management System accounts all deductions of CSAPR NOX Ozone 
Season Group 2 allowances under paragraphs (d)(1) and (2) of this 
section.
    (4) With respect to any CSAPR NOX Ozone Season Group 2 
allowances for a given control period that the owners and operators of 
a unit fail to hold in the compliance account for the source at which 
the unit is located by the applicable deadline in accordance with 
paragraph (d)(1) of this section, or that the authorized account 
representative for a general account fails to hold in such general 
account by the applicable deadline in accordance with paragraph (d)(2) 
of this section, each such CSAPR NOX Ozone Season Group 2 
allowance, and each day in such control period, shall constitute a 
separate violation of this subpart and the Clean Air Act.
0
89. Amend Sec.  97.812 by:
0
a. Adding a subject heading to paragraph (a) introductory text;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.811(a)(1);'' and adding 
in its place ``Sec.  97.811(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.830(b) not later 
than September 30 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for a control period before 2023, or 
that operate during such control period, for a control period in 2023 
or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraphs (a)(3)(ii) and (iv);
0
f. In paragraph (a)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for a control period 
before 2023, or the unit's total tons of NOX emissions 
during the control period, for a control period in 2023 or 
thereafter.'';
0
g. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
h. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';
0
i. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
j. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2023, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2023 or thereafter, any unallocated'';
0
k. Redesignating paragraph (a)(11) as paragraph (a)(11)(i), removing 
``The Administrator'' and adding in its place ``For a control period 
before 2023, the Administrator'';
0
l. Adding paragraph (a)(11)(ii);
0
m. Revising paragraph (a)(12);
0
n. Adding a subject heading to paragraph (b) introductory text;
0
o. In paragraph (b)(1)(i), removing ``Sec.  97.811(a)(1); or'' and 
adding in its place ``Sec.  97.811(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.830(b) not later 
than September 30 of the year of the control period; or'';
0
p. Revising paragraph (b)(3)(ii);
0
q. In paragraph (b)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for a control period 
before 2023, or the unit's total tons of NOX emissions 
during the control period, for a control period in 2023 or 
thereafter.'';
0
r. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
s. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2023 only, the Administrator'';
0
t. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 2023 
only, if, after completion'';
0
u. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2023, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2023 or thereafter, any 
unallocated'';
0
v. Redesignating paragraph (b)(11) as paragraph (b)(11)(i), removing 
``The

[[Page 69077]]

Administrator'' and adding in its place ``For a control period before 
2023, the Administrator'';
0
w. Adding paragraph (b)(11)(ii); and
0
x. Revising paragraph (b)(12).
    The additions and revisions read as follows:


Sec.  97.812   CSAPR NOX Ozone Season Group 2 allowance allocations to 
new units.

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR NOX Ozone Season 
Group 2 unit's monitoring systems under Sec.  97.830(b), for 
allocations for a control period before 2023, or the control period 
containing such deadline, for allocations for a control period in 2023 
or thereafter;
* * * * *
    (iv) For a unit described in paragraph (a)(1)(iii) of this section, 
the first control period after the control period in which the unit 
resumes operation, for allocations for a control period before 2023, or 
the control period in which the unit resumes operation, for allocations 
for a control period in 2023 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.811(b)(1)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 2 allowances 
allocated under paragraphs (a)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone 
Season Group 2 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2023 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2023 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR NOX Ozone Season Group 2 units in 
descending order based on such units' allocation amounts under 
paragraph (a)(7), (a)(9)(iv), or (a)(10) of this section, as 
applicable, and, in cases of equal allocation amounts, in alphabetical 
order of the relevant sources' names and numerical order of the 
relevant units' identification numbers, and will adjust each unit's 
allocation amount under such paragraph upward or downward by one CSAPR 
NOX Ozone Season Group 2 allowance (but not below zero) in 
the order in which the units are listed, and will repeat this 
adjustment process as necessary, until the total allocations from such 
new unit set-aside equal the total amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR NOX Ozone Season 
Group 2 unit's monitoring systems under Sec.  97.830(b), for 
allocations for a control period before 2023, or the control period 
containing such deadline, for allocations for a control period in 2023 
or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.811(b)(2)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 2 allowances 
allocated under paragraphs (b)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone 
Season Group 2 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2023 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2023 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR NOX Ozone Season Group 
2 units in descending order based on such units' allocation amounts 
under paragraph (b)(7) or (b)(9)(iv) of this section, as applicable, 
and, in cases of equal allocation amounts, in alphabetical order of the 
relevant sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR NOX 
Ozone Season Group 2 allowance (but not below zero) in the order in 
which the units are listed, and will repeat this adjustment process as 
necessary, until the total allocations from such Indian country new 
unit set-aside equal the total amount of such Indian country new unit 
set-aside.


Sec.  97.820   [Amended]

0
90. In Sec.  97.820, amend paragraph (c)(3)(iii)(B) by removing ``to 
NOX'' and adding in its place ``to CSAPR NOX''.
0
91. Amend Sec.  97.821 by:
0
a. In paragraph (f), removing ``By July 1, 2021'' and adding in its 
place ``By July 1, 2022'', and removing ``in the fourth year'' and 
adding in its place ``in the third year'';
0
b. Redesignating paragraph (g) as paragraph (g)(1), removing ``By 
August 1, 2017 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2017 through 2022,'';
0
c. Adding paragraph (g)(2);
0
d. Redesignating paragraph (h) as paragraph (h)(1), removing ``By 
August 1, 2017 and August 1 of each year thereafter,'' and adding in 
its place ``By August 1 of each year from 2017 through 2022,'';
0
e. Adding paragraph (h)(2); and
0
f. In paragraphs (i) and (j), removing ``By February 15, 2018 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2018 through 2023.''
    The additions read as follows:


Sec.  97.821   Recordation of CSAPR NOX Ozone Season Group 2 allowance 
allocations and auction results.

* * * * *
    (g) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 2 source's compliance account the CSAPR NOX Ozone 
Season Group 2 allowances allocated to the CSAPR NOX Ozone 
Season Group 2 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 2 
allowances auctioned to CSAPR NOX Ozone Season Group 2 
units, in accordance with Sec.  97.812(a)(2) through (12), or with a 
SIP revision approved under Sec.  52.38(b)(6), (8), or (9) of this 
chapter, for the control period in

[[Page 69078]]

the year before the year of the applicable recordation deadline under 
this paragraph.
    (h) * * *
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 2 source's compliance account the CSAPR NOX Ozone 
Season Group 2 allowances allocated to the CSAPR NOX Ozone 
Season Group 2 units at the source in accordance with Sec.  
97.812(b)(2) through (12) for the control period in the year before the 
year of the applicable recordation deadline under this paragraph.
* * * * *
0
92. Amend Sec.  97.824 by adding a paragraph (c) subject heading and 
revising paragraph (c)(1) to read as follows:


Sec.  97.824   Compliance with CSAPR NOX Ozone Season Group 2 emissions 
limitation.

* * * * *
    (c) Selection of CSAPR NOX Ozone Season Group 2 
allowances for deduction--(1) Identification by serial number. The 
designated representative for a source may request that specific CSAPR 
NOX Ozone Season Group 2 allowances, identified by serial 
number, in the source's compliance account be deducted for emissions or 
excess emissions for a control period in a given year in accordance 
with paragraph (b) or (d) of this section. In order to be complete, 
such request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the CSAPR 
NOX Ozone Season Group 2 source and the appropriate serial 
numbers.
* * * * *
0
93. Amend Sec.  97.825 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. In paragraph (b)(2)(i), removing ``By July 1'' and adding in its 
place ``For a control period before 2023 only, by July 1'';
0
c. Revising paragraphs (b)(2)(ii), (b)(2)(iii) introductory text, and 
(b)(2)(iii)(A);
0
d. In paragraph (b)(2)(iii)(B), removing ``such notice,'' and adding in 
its place ``such notice or notices,''; and
0
e. In paragraph (b)(6)(ii), removing ``If any such data'' and adding in 
its place ``For a control period before 2023 only, if any such data.''
    The revisions read as follows:


Sec.  97.825   Compliance with CSAPR NOX Ozone Season Group 2 assurance 
provisions.

* * * * *
    (b) * * *
    (1) By June 1 of each year from 2018 through 2023 and by August 1 
of each year thereafter, the Administrator will:
* * * * *
    (ii) If the calculations under paragraph (b)(1)(i) of this section 
indicate that the total NOX emissions from all CSAPR 
NOX Ozone Season Group 2 units at CSAPR NOX Ozone 
Season Group 2 sources in any State (and Indian country within the 
borders of such State) during such control period exceed the State 
assurance level for such control period, promulgate a notice of data 
availability of the results of the calculations required in paragraph 
(b)(1)(i) of this section, including separate calculations of the 
NOX emissions from each base CSAPR NOX Ozone 
Season Group 2 source.
    (2) * * *
    (ii) The Administrator will calculate, for each such State (and 
Indian country within the borders of such State) and such control 
period and each common designated representative for such control 
period for a group of one or more base CSAPR NOX Ozone 
Season Group 2 sources and units in the State (and Indian country 
within the borders of such State), the common designated 
representative's share of the total NOX emissions from all 
base CSAPR NOX Ozone Season Group 2 units at base CSAPR 
NOX Ozone Season Group 2 sources in the State (and Indian 
country within the borders of such State), the common designated 
representative's assurance level, and the amount (if any) of CSAPR 
NOX Ozone Season Group 2 allowances that the owners and 
operators of such group of sources and units must hold in accordance 
with the calculation formula in Sec.  97.806(c)(2)(i). For a control 
period before 2023, if the results of these calculations were not 
included in the notice of data availability required in paragraph 
(b)(1)(ii) of this section, the Administrator will promulgate a notice 
of data availability of the results of these calculations by August 1 
immediately after the promulgation of such notice. For a control period 
in 2023 or thereafter, the Administrator will include the results of 
these calculations in the notice of data availability required in 
paragraph (b)(1)(ii) of this section.
    (iii) The Administrator will provide an opportunity for submission 
of objections to the calculations referenced by the notice or notices 
of data availability required in paragraphs (b)(1)(ii) and (b)(2)(ii) 
of this section.
    (A) Objections shall be submitted by the deadline specified in such 
notice or notices and shall be limited to addressing whether the 
calculations referenced in the notice or notices are in accordance with 
Sec.  97.806(c)(2)(iii), Sec. Sec.  97.806(b), and 97.830 through 
97.835, the definitions of ``common designated representative'', 
``common designated representative's assurance level'', and ``common 
designated representative's share'' in Sec.  97.802, and the 
calculation formula in Sec.  97.806(c)(2)(i).
* * * * *
0
94. Amend Sec.  97.826 by revising the section heading and paragraph 
(b) and adding paragraph (c) to read as follows:


Sec.  97.826   Banking and conversion.

* * * * *
    (b) Any CSAPR NOX Ozone Season Group 2 allowance that is 
held in a compliance account or a general account will remain in such 
account unless and until the CSAPR NOX Ozone Season Group 2 
allowance is deducted or transferred under Sec.  97.811(c) or (d), 
Sec.  97.823, Sec.  97.824, Sec.  97.825, Sec.  97.827, or Sec.  97.828 
or removed under paragraph (c) of this section.
    (c) Notwithstanding any other provision of this subpart, part 52 of 
this chapter, or any SIP revision approved under Sec.  52.38(b)(6), 
(8), or (9) of this chapter, the Administrator will remove CSAPR 
NOX Ozone Season Group 2 allowances from compliance accounts 
and general accounts and allocate in their place amounts of CSAPR 
NOX Ozone Season Group 3 allowances as provided in 
paragraphs (c)(1) through (5) of this section and will record CSAPR 
NOX Ozone Season Group 3 allowances in lieu of initially 
recording CSAPR NOX Ozone Season Group 2 allowances as 
provided in paragraph (c)(6) of this section.
    (1) By [DATE 180 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE 
IN THE FEDERAL REGISTER], the Administrator will temporarily suspend 
acceptance of CSAPR NOX Ozone Season Group 2 allowance 
transfers submitted under Sec.  97.822 and, before resuming acceptance 
of such transfers, will take the following actions with regard to every 
general account and every compliance account except a compliance 
account for a CSAPR NOX Ozone Season Group 2 source located 
in a State listed in Sec.  52.38(b)(2)(iii) of this chapter or Indian 
country within the borders of such a State, subject to the prior 
opportunity for temporary modifications of the holdings of each general 
account as described in paragraph (c)(1)(iv) of this section:
    (i) The Administrator will remove all CSAPR NOX Ozone 
Season Group 2 allowances allocated for the control

[[Page 69079]]

periods in 2017, 2018, 2019, and 2020 from each such account.
    (ii) The Administrator will determine a conversion factor equal to 
the greater of 1.0000 or the quotient, expressed to four decimal 
places, of the sum of all CSAPR NOX Ozone Season Group 2 
allowances removed from all such accounts under paragraph (c)(1)(i) of 
this section divided by the product of the sum of the variability 
limits for the control period in 2022 set forth in Sec.  97.1010(b) for 
all States listed in Sec.  52.38(b)(2)(v) of this chapter multiplied by 
a fraction whose numerator is the number of days from [DATE 60 DAYS 
AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE FEDERAL REGISTER] 
through September 30, 2021, inclusive, and whose denominator is 153.
    (iii) The Administrator will allocate to and record in each such 
account an amount of CSAPR NOX Ozone Season Group 3 
allowances for the control period in 2021, where such amount is 
determined as the quotient of the number of CSAPR NOX Ozone 
Season Group 2 allowances removed from such account under paragraph 
(c)(1)(i) of this section divided by the conversion factor determined 
under paragraph (c)(1)(ii) of this section, rounded up to the nearest 
whole allowance, except as provided in paragraphs (c)(4) and (5) of 
this section.
    (iv) The authorized account representative for a general account 
may elect to prevent the application of the provisions of paragraphs 
(c)(1)(i) through (iii) of this section to any or all CSAPR 
NOX Ozone Season Group 2 allowances held in such general 
account as follows:
    (A) Not less than 30 days before taking the action described in 
paragraph (c)(1)(i) of this section, the Administrator will establish a 
reserve account for the sole purpose of temporarily holding CSAPR 
NOX Ozone Season Group 2 allowances that will not be subject 
to the provisions of paragraphs (c)(1)(i) through (iii) of this 
section.
    (B) The authorized account representative for any general account 
may transfer any or all CSAPR NOX Ozone Season Group 2 
allowances held in such general account to the reserve account, 
provided that each such transfer must be submitted not less than 7 days 
before the action described in paragraph (c)(1)(i) of this section. 
CSAPR NOX Ozone Season Group 2 allowances held in a 
compliance account may not be transferred directly to the reserve 
account but may be transferred to a general account and then 
transferred from the general account to the reserve account, subject to 
the deadline under this paragraph for submission of the transfer to the 
reserve account.
    (C) Not more than 7 days after completion of the action described 
in paragraph (c)(1)(iii) of this section, the Administrator will 
transfer all CSAPR NOX Ozone Season Group 2 allowances held 
in the reserve account back to the general accounts from which such 
CSAPR NOX Ozone Season Group 2 allowances were transferred 
to the reserve account.
    (2) As soon as practicable after approval of a SIP revision under 
Sec.  52.38(b)(10) of this chapter for a State listed in Sec.  
52.38(b)(2)(iii) of this chapter (or a State listed in Sec.  
52.38(b)(2)(i) of this chapter for which a SIP revision under Sec.  
52.38(b)(6) of this chapter was previously approved), but not later 
than the allowance transfer deadline defined under Sec.  97.1002 for 
the initial control period described with regard to such SIP revision 
in Sec.  52.38(b)(10)(ii)(A) of this chapter, the Administrator will 
temporarily suspend acceptance of CSAPR NOX Ozone Season 
Group 2 allowance transfers submitted under Sec.  97.822 and, before 
resuming acceptance of such transfers, will take the following actions 
with regard to every general account and every compliance account, 
unless otherwise provided in such approval of the SIP revision:
    (i) The Administrator will remove from each such account all CSAPR 
NOX Ozone Season Group 2 allowances for such initial control 
period and each subsequent control period that were allocated to units 
located in such State under this subpart or Sec.  97.526(c)(2) or that 
were allocated or auctioned to any entity under a SIP revision for such 
State approved by the Administrator under Sec.  52.38(b)(6), (8), or 
(9) of this chapter, whether such CSAPR NOX Ozone Season 
Group 2 allowances were initially recorded in such account or were 
transferred to such account from another account.
    (ii) The Administrator will determine a conversion factor equal to 
the greater of 1.0000 or the quotient, expressed to four decimal 
places, of the NOX Ozone Season Group 2 trading budget set 
forth for such State in Sec.  97.810(a) divided by the NOX 
Ozone Season Group 3 trading budget set forth for such State in Sec.  
97.1010(a).
    (iii) The Administrator will allocate to and record in each such 
account an amount of CSAPR NOX Ozone Season Group 3 
allowances for each control period for which CSAPR NOX Ozone 
Season Group 2 allowances were removed from such account, where each 
such amount is determined as the quotient of the number of CSAPR 
NOX Ozone Season Group 2 allowances for such control period 
removed from such account under paragraph (c)(2)(i) of this section 
divided by the conversion factor determined under paragraph (c)(2)(ii) 
of this section, rounded up to the nearest whole allowance, except as 
provided in paragraphs (c)(4) and (5) of this section.
    (3) As soon as practicable after approval of a SIP revision under 
Sec.  52.38(b)(10) of this chapter for a State listed in Sec.  
52.38(b)(2)(iii) of this chapter (or a State listed in Sec.  
52.38(b)(2)(i) of this chapter for which a SIP revision under Sec.  
52.38(b)(6) of this chapter was previously approved), but not before 
the completion of deductions under Sec.  97.824 for the control period 
before the initial control period described with regard to such SIP 
revision in Sec.  52.38(b)(10)(ii)(A) of this chapter and not later 
than the allowance transfer deadline defined under Sec.  97.1002 for 
such initial control period, the Administrator will temporarily suspend 
acceptance of CSAPR NOX Ozone Season Group 2 allowance 
transfers submitted under Sec.  97.822 and, before resuming acceptance 
of such transfers, will take the following actions with regard to every 
compliance account for a CSAPR NOX Ozone Season Group 2 
source located in such State, provided that if the provisions of Sec.  
52.38(b)(2)(iii) of this chapter or a SIP revision approved under Sec.  
52.38(b)(6) or (9) of this chapter will no longer apply to any source 
in any State or Indian country within the borders of any State with 
regard to emissions occurring in such initial control period or any 
subsequent control period, the Administrator instead will permanently 
end acceptance of CSAPR NOX Ozone Season Group 2 allowance 
transfers submitted under Sec.  97.822 and will take the following 
actions with regard to every general account and every compliance 
account:
    (i) The Administrator will remove from each such account all CSAPR 
NOX Ozone Season Group 2 allowances allocated for all 
control periods before such initial control period.
    (ii) The Administrator will determine a conversion factor equal to 
the greater of 1.0000 or the quotient, expressed to four decimal 
places, of the sum of all CSAPR NOX Ozone Season Group 2 
allowances removed from all such accounts under paragraph (c)(3)(i) of 
this section divided by the variability limit for such initial control 
period set forth for such State in Sec.  97.1010(b).
    (iii) The Administrator will allocate to and record in each such 
account an amount of CSAPR NOX Ozone Season Group 3 
allowances for such initial

[[Page 69080]]

control period, where such amount is determined as the quotient of the 
number of CSAPR NOX Ozone Season Group 2 allowances removed 
from such account under paragraph (c)(3)(i) of this section divided by 
the conversion factor determined under paragraph (c)(3)(ii) of this 
section, rounded up to the nearest whole allowance, except as provided 
in paragraphs (c)(4) and (5) of this section.
    (4)(i) Where, pursuant to paragraph (c)(1)(i), (c)(2)(i), or 
(c)(3)(i) of this section, the Administrator removes CSAPR 
NOX Ozone Season Group 2 allowances from the compliance 
account for a source located in a State that is not listed in Sec.  
52.38(b)(2)(v) of this chapter and for which no SIP revision has been 
approved under Sec.  52.38(b)(10) of this chapter, or Indian country 
within the borders of such a State, the Administrator will not record 
CSAPR NOX Ozone Season Group 3 allowances in that compliance 
account but instead will allocate to and record in a general account 
CSAPR NOX Ozone Season Group 3 allowances for the control 
periods and in the amounts determined in accordance with paragraph 
(c)(1)(iii), (c)(2)(iii), or (c)(3)(iii) of this section, respectively, 
provided that the designated representative for such source identifies 
such general account in a submission to the Administrator within 180 
days after the date on which the Administrator removes CSAPR 
NOX Ozone Season Group 2 allowances from the source's 
compliance account under paragraph (c)(1)(i), (c)(2)(i), or (c)(3)(i) 
of this section.
    (ii) If the designated representative for a source described in 
paragraph (c)(4)(i) of this section does not make a submission 
identifying a general account for recordation of CSAPR NOX 
Ozone Season Group 3 allowances within 180 days after the date on which 
the Administrator removes CSAPR NOX Ozone Season Group 2 
allowances from the source's compliance account under paragraph 
(c)(1)(i), (c)(2)(i), or (c)(3)(i) of this section, the Administrator 
will transfer the CSAPR NOX Ozone Season Group 3 allowances 
to a surrender account. A submission by the designated representative 
under paragraph (c)(4)(i) of this section after such a transfer has 
taken place shall have no effect.
    (5)(i) In computing any amounts of CSAPR NOX Ozone 
Season Group 3 allowances to be allocated to and recorded in general 
accounts under paragraph (c)(1)(iii), (c)(2)(iii), or (c)(3)(iii) of 
this section, the Administrator may group multiple general accounts 
whose ownership interests are held by the same or related persons or 
entities and treat the group of accounts as a single account for 
purposes of such computation.
    (ii) Following a computation for a group of general accounts in 
accordance with paragraph (c)(5)(i) of this section, the Administrator 
will allocate to and record in each individual account in such group a 
proportional share of the quantity of CSAPR NOX Ozone Season 
Group 3 allowances computed for such group, basing such shares on the 
respective quantities of CSAPR NOX Ozone Season Group 2 
allowances removed from such individual accounts under paragraph 
(c)(1)(i), (c)(2)(i), or (c)(3)(i) of this section, as applicable.
    (iii) In determining the proportional shares under paragraph 
(c)(5)(ii) of this section, the Administrator may employ any reasonable 
adjustment methodology to truncate or round each such share up or down 
to a whole number and to cause the total of such whole numbers to equal 
the amount of CSAPR NOX Ozone Season Group 3 allowances 
computed for such group of accounts in accordance with paragraph 
(c)(5)(i) of this section, even where such adjustments cause the 
numbers of CSAPR NOX Ozone Season Group 3 allowances 
allocated to some individual accounts to equal zero.
    (6) After the Administrator has carried out the procedures set 
forth in paragraph (c)(1), (2), or (3) of this section, upon any 
determination that would otherwise result in the initial recordation of 
any CSAPR NOX Ozone Season Group 2 allowances in any 
account, where if such allowances had been recorded before the 
Administrator had carried out such procedures the allowances would have 
been removed from such account under paragraph (c)(1)(i), (c)(2)(i), or 
(c)(3)(i) of this section, respectively, the Administrator will not 
record such CSAPR NOX Ozone Season Group 2 allowances but 
instead will record CSAPR NOX Ozone Season Group 3 
allowances for the control periods and in the amounts determined in 
accordance with paragraph (c)(1)(iii), (c)(2)(iii), or (c)(3)(iii) of 
this section, respectively, in such account or another account 
identified in accordance with paragraph (c)(4) of this section.
    (7) Notwithstanding any other provision of this subpart or subpart 
GGGGG of this part, CSAPR NOX Ozone Season Group 3 
allowances may be used to satisfy requirements to hold CSAPR 
NOX Ozone Season Group 2 allowances under this subpart as 
follows, provided that nothing in this paragraph alters the time as of 
which any such allowance holding requirement must be met or limits any 
consequence of a failure to timely meet any such allowance holding 
requirement:
    (i) After the Administrator has carried out the procedures set 
forth in paragraph (c)(1) of this section, the owner or operator of a 
CSAPR NOX Ozone Season Group 2 unit in a State listed in 
Sec.  52.38(b)(2)(v) of this chapter or Indian country within the 
borders of such a State may satisfy a requirement to hold a given 
number of CSAPR NOX Ozone Season Group 2 allowances for the 
control period in 2017, 2018, 2019, or 2020 by holding instead, in a 
general account established for this sole purpose, an amount of CSAPR 
NOX Ozone Season Group 3 allowances for the control period 
in 2021, where such amount of CSAPR NOX Ozone Season Group 3 
allowances is computed as the quotient of such given number of CSAPR 
NOX Ozone Season Group 2 allowances divided by the 
conversion factor determined under paragraph (c)(1)(ii) of this 
section, rounded up to the nearest whole allowance.
    (ii) After the Administrator has carried out the procedures set 
forth in paragraph (c)(3) of this section, the owner or operator of a 
CSAPR NOX Ozone Season Group 2 unit in a State listed in 
Sec.  52.38(b)(2)(iii) of this chapter (or a State listed in Sec.  
52.38(b)(2)(i) of this chapter for which a SIP revision under Sec.  
52.38(b)(6) of this chapter was previously approved) may satisfy a 
requirement to hold a given number of CSAPR NOX Ozone Season 
Group 2 allowances for a control period before the initial control 
period described with regard to the State's SIP revision in Sec.  
52.38(b)(10)(ii)(A) of this chapter by holding instead, in a general 
account established for this sole purpose, an amount of CSAPR 
NOX Ozone Season Group 3 allowances for such initial control 
period or any previous control period, where such amount of CSAPR 
NOX Ozone Season Group 3 allowances is computed as the 
quotient of such given number of CSAPR NOX Ozone Season 
Group 2 allowances divided by the conversion factor determined under 
paragraph (c)(3)(ii) of this section, rounded up to the nearest whole 
allowance.


Sec.  97.831   [Amended]

0
95. In Sec.  97.831, amend paragraph (d)(3) introductory text by 
removing in the last sentence ``with'' after ``is replaced by''.

Subpart FFFFF--Texas SO2 Trading Program

0
96. Amend Sec.  97.902 by:
0
a. Revising the definition of ``allowance transfer deadline'';

[[Page 69081]]

0
b. In the definition of ``alternate designated representative'', 
removing ``Program or CSAPR NOX Ozone Season Group 2 Trading 
Program,'' and adding in its place ``Program, CSAPR NOX 
Ozone Season Group 2 Trading Program, or CSAPR NOX Ozone 
Season Group 3 Trading Program,'';
0
c. In the definition of ``common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2023, or as of July 1 immediately after such 
deadline for such a control period in 2023 or thereafter, the same'';
0
d. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(6) through (9), (14), (15), and (17)'';
0
e. Adding in alphabetical order a definition for ``CSAPR NOX 
Ozone Season Group 3 Trading Program'';
0
f. In the definition of ``designated representative'', removing 
``Program or CSAPR NOX Ozone Season Group 2 Trading 
Program,'' and adding in its place ``Program, CSAPR NOX 
Ozone Season Group 2 Trading Program, or CSAPR NOX Ozone 
Season Group 3 Trading Program,''; and
0
g. Adding in alphabetical order a definition for ``nitrogen oxides''.
    The revision and additions read as follows:


Sec.  97.902   Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2023, midnight of March 1 immediately after such control period or, for 
a control period in 2023 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a Texas SO2 Trading Program allowance 
transfer must be submitted for recordation in a Texas SO2 
Trading Program source's compliance account in order to be available 
for use in complying with the source's Texas SO2 Trading 
Program emissions limitation for such control period in accordance with 
Sec. Sec.  97.906 and 97.924.
* * * * *
    CSAPR NOX Ozone Season Group 3 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart GGGGG of this part and Sec.  
52.38(b)(1), (b)(2)(v), and (b)(10) through (15) and (18) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(11) or (12) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10) or (13) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.905   [Amended]

0
97. In Sec.  97.905, amend paragraph (b) by removing the subject 
heading.
0
98. Amend Sec.  97.911 by:
0
a. Adding a paragraph (a) subject heading; and
0
b. In Table 1 to paragraph (a)(1), capitalizing ``Trading Program'' 
each time it appears, removing the extra period at the end of the table 
entry for ``Big Brown Unit 1'', and removing ``Vistra Energy.'' and 
adding in its place ``Vistra.'' each time it appears.
    The addition reads as follows:


Sec.  97.911   Texas SO2 Trading Program allowance allocations.

    (a) Allocations from the Texas SO2 Trading Program 
budget. * * *
* * * * *


Sec.  97.912   [Amended]

0
99. Amend Sec.  97.912 by:
0
a. In paragraph (a)(3)(i), removing ``paragraph (b)'' and adding in its 
place ``paragraph (d)''; and
0
b. In paragraph (b)(2), removing ``February 15, 2022 and each 
subsequent February 15,'' and adding in its place ``February 15 of 2022 
and 2023 and May 1 of each year thereafter,''.


Sec.  97.920   [Amended]

0
100. In Sec.  97.920, amend paragraph (d) by removing ``paragraphs (a), 
(b), and (c)'' and adding in its place ``paragraph (a), (b), or (c)''.
0
101. Amend Sec.  97.921 by:
0
a. Redesignating paragraph (b) as paragraph (b)(1), removing ``By July 
1, 2019,'' and adding in its place ``By July 1, 2019 and July 1, 
2020,'';
0
b. Adding paragraph (b)(2); and
0
c. Revising paragraph (c).
    The addition and revision read as follows:


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

* * * * *
    (b) * * *
    (2) By July 1, 2022 and July 1 of each year thereafter, 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 third 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 of each year from 2020 through 2023 and by May 1 
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 before 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.
* * * * *
0
102. Amend Sec.  97.924 by adding a paragraph (c) subject heading and 
revising paragraph (c)(1) to read as follows:


Sec.  97.924   Compliance with Texas SO2 Trading Program emissions 
limitations.

* * * * *
    (c) Selection of Texas SO2 Trading Program allowances 
for deduction--(1) Identification by serial number. The designated 
representative for a source may request that specific Texas 
SO2 Trading Program allowances, identified by serial number, 
in the source's compliance account be deducted for emissions or excess 
emissions for a control period in a given year in accordance with 
paragraph (b) or (d) of this section. In order to be complete, such 
request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the Texas 
SO2 Trading Program source and the appropriate serial 
numbers.
* * * * *
0
103. Amend Sec.  97.925 by:
0
a. Revising paragraph (b)(1) introductory text; and
0
b. In paragraph (b)(2)(ii), removing in the first sentence ``this 
section, the Administrator'' and adding in its place ``this section for 
a control period before 2023, or by the August 1 deadline for such 
calculations for a control period in 2023 or thereafter, the 
Administrator''.
    The revision reads as follows:

[[Page 69082]]

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

* * * * *
    (b) * * *
    (1) By June 1 of 2022 and 2023 and by August 1 of each year 
thereafter, the Administrator will:
* * * * *


Sec.  97.934   [Amended]

0
104. In Sec.  97.934, amend paragraph (d)(3) by removing ``Program or 
CSAPR NOX Ozone Season Group 2 Trading Program,'' and adding 
in its place ``Program, CSAPR NOX Ozone Season Group 2 
Trading Program, or CSAPR NOX Ozone Season Group 3 Trading 
Program,''.
0
105. Add subpart GGGGG, consisting of Sec. Sec.  97.1001 through 
97.1035, to read as follows:
Subpart GGGGG--CSAPR NOX Ozone Season Group 3 Trading Program
Sec.
97.1001 Purpose.
97.1002 Definitions.
97.1003 Measurements, abbreviations, and acronyms.
97.1004 Applicability.
97.1005 Retired unit exemption.
97.1006 Standard requirements.
97.1007 Computation of time.
97.1008 Administrative appeal procedures.
97.1009 [Reserved]
97.1010 State NOX Ozone Season Group 3 trading budgets, 
new unit set-asides, Indian country new unit set-asides, and 
variability limits.
97.1011 Timing requirements for CSAPR NOX Ozone Season 
Group 3 allowance allocations.
97.1012 CSAPR NOX Ozone Season Group 3 allowance 
allocations to new units.
97.1013 Authorization of designated representative and alternate 
designated representative.
97.1014 Responsibilities of designated representative and alternate 
designated representative.
97.1015 Changing designated representative and alternate designated 
representative; changes in owners and operators; changes in units at 
the source.
97.1016 Certificate of representation.
97.1017 Objections concerning designated representative and 
alternate designated representative.
97.1018 Delegation by designated representative and alternate 
designated representative.
97.1019 [Reserved]
97.1020 Establishment of compliance accounts, assurance accounts, 
and general accounts.
97.1021 Recordation of CSAPR NOX Ozone Season Group 3 
allowance allocations and auction results.
97.1022 Submission of CSAPR NOX Ozone Season Group 3 
allowance transfers.
97.1023 Recordation of CSAPR NOX Ozone Season Group 3 
allowance transfers.
97.1024 Compliance with CSAPR NOX Ozone Season Group 3 
emissions limitation.
97.1025 Compliance with CSAPR NOX Ozone Season Group 3 
assurance provisions.
97.1026 Banking.
97.1027 Account error.
97.1028 Administrator's action on submissions.
97.1029 [Reserved]
97.1030 General monitoring, recordkeeping, and reporting 
requirements.
97.1031 Initial monitoring system certification and recertification 
procedures.
97.1032 Monitoring system out-of-control periods.
97.1033 Notifications concerning monitoring.
97.1034 Recordkeeping and reporting.
97.1035 Petitions for alternatives to monitoring, recordkeeping, or 
reporting requirements.

Subpart GGGGG--CSAPR NOX Ozone Season Group 3 Trading Program


Sec.  97.1001   Purpose.

    This subpart sets forth the general, designated representative, 
allowance, and monitoring provisions for the Cross-State Air Pollution 
Rule (CSAPR) NOX Ozone Season Group 3 Trading Program, under 
section 110 of the Clean Air Act and Sec.  52.38 of this chapter, as a 
means of mitigating interstate transport of ozone and nitrogen oxides.


Sec.  97.1002   Definitions.

    The terms used in this subpart shall have the meanings set forth in 
this section as follows, provided that any term that includes the 
acronym ``CSAPR'' shall be considered synonymous with a term that is 
used in a SIP revision approved by the Administrator under Sec.  52.38 
or Sec.  52.39 of this chapter and that is substantively identical 
except for the inclusion of the acronym ``TR'' in place of the acronym 
``CSAPR'':
    Acid Rain Program means a multi-state SO2 and 
NOX air pollution control and emission reduction program 
established by the Administrator under title IV of the Clean Air Act 
and parts 72 through 78 of this chapter.
    Administrator means the Administrator of the United States 
Environmental Protection Agency or the Director of the Clean Air 
Markets Division (or its successor determined by the Administrator) of 
the United States Environmental Protection Agency, the Administrator's 
duly authorized representative under this subpart.
    Allocate or allocation means, with regard to CSAPR NOX 
Ozone Season Group 3 allowances, the determination by the 
Administrator, State, or permitting authority, in accordance with this 
subpart, Sec.  97.526(c), Sec.  97.826(c), and any SIP revision 
submitted by the State and approved by the Administrator under Sec.  
52.38(b)(10), (11), (12), or (13) of this chapter, of the amount of 
such CSAPR NOX Ozone Season Group 3 allowances to be 
initially credited, at no cost to the recipient, to:
    (1) A CSAPR NOX Ozone Season Group 3 unit;
    (2) A new unit set-aside;
    (3) An Indian country new unit set-aside; or
    (4) An entity not listed in paragraphs (1) through (3) of this 
definition;
    (5) Provided that, if the Administrator, State, or permitting 
authority initially credits, to a CSAPR NOX Ozone Season 
Group 3 unit qualifying for an initial credit, a credit in the amount 
of zero CSAPR NOX Ozone Season Group 3 allowances, the CSAPR 
NOX Ozone Season Group 3 unit will be treated as being 
allocated an amount (i.e., zero) of CSAPR NOX Ozone Season 
Group 3 allowances.
    Allowable NOX emission rate means, for a unit, the most 
stringent State or federal NOX emission rate limit (in lb/
MWh or, if in lb/mmBtu, converted to lb/MWh by multiplying it by the 
unit's heat rate in mmBtu/MWh) that is applicable to the unit and 
covers the longest averaging period not exceeding one year.
    Allowance Management System means the system by which the 
Administrator records allocations, auctions, transfers, and deductions 
of CSAPR NOX Ozone Season Group 3 allowances under the CSAPR 
NOX Ozone Season Group 3 Trading Program. Such allowances 
are allocated, auctioned, recorded, held, transferred, or deducted only 
as whole allowances.
    Allowance Management System account means an account in the 
Allowance Management System established by the Administrator for 
purposes of recording the allocation, auction, holding, transfer, or 
deduction of CSAPR NOX Ozone Season Group 3 allowances.
    Allowance transfer deadline means, for a control period before 
2023, midnight of March 1 immediately after such control period or, for 
a control period in 2023 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR NOX Ozone Season Group 3 allowance 
transfer must be submitted for recordation in a CSAPR NOX 
Ozone Season Group 3 source's compliance account in order to be 
available for use in complying with the source's CSAPR NOX 
Ozone Season Group 3 emissions limitation for such

[[Page 69083]]

control period in accordance with Sec. Sec.  97.1006 and 97.1024.
    Alternate designated representative means, for a CSAPR 
NOX Ozone Season Group 3 source and each CSAPR 
NOX Ozone Season Group 3 unit at the source, the natural 
person who is authorized by the owners and operators of the source and 
all such units at the source, in accordance with this subpart, to act 
on behalf of the designated representative in matters pertaining to the 
CSAPR NOX Ozone Season Group 3 Trading Program. If the CSAPR 
NOX Ozone Season Group 3 source is also subject to the Acid 
Rain Program, CSAPR NOX Annual Trading Program, CSAPR 
SO2 Group 1 Trading Program, or CSAPR SO2 Group 2 
Trading Program, then this natural person shall be the same natural 
person as the alternate designated representative as defined in the 
respective program.
    Assurance account means an Allowance Management System account, 
established by the Administrator under Sec.  97.1025(b)(3) for certain 
owners and operators of a group of one or more base CSAPR 
NOX Ozone Season Group 3 sources and units in a given State 
(and Indian country within the borders of such State), in which are 
held CSAPR NOX Ozone Season Group 3 allowances available for 
use for a control period in a given year in complying with the CSAPR 
NOX Ozone Season Group 3 assurance provisions in accordance 
with Sec. Sec.  97.1006 and 97.1025.
    Auction means, with regard to CSAPR NOX Ozone Season 
Group 3 allowances, the sale to any person by a State or permitting 
authority, in accordance with a SIP revision submitted by the State and 
approved by the Administrator under Sec.  52.38(b)(10), (12), or (13) 
of this chapter, of such CSAPR NOX Ozone Season Group 3 
allowances to be initially recorded in an Allowance Management System 
account.
    Authorized account representative means, for a general account, the 
natural person who is authorized, in accordance with this subpart, to 
transfer and otherwise dispose of CSAPR NOX Ozone Season 
Group 3 allowances held in the general account and, for a CSAPR 
NOX Ozone Season Group 3 source's compliance account, the 
designated representative of the source.
    Automated data acquisition and handling system or DAHS means the 
component of the continuous emission monitoring system, or other 
emissions monitoring system approved for use under this subpart, 
designed to interpret and convert individual output signals from 
pollutant concentration monitors, flow monitors, diluent gas monitors, 
and other component parts of the monitoring system to produce a 
continuous record of the measured parameters in the measurement units 
required by this subpart.
    Base CSAPR NOX Ozone Season Group 3 source means a 
source that includes one or more base CSAPR NOX Ozone Season 
Group 3 units.
    Base CSAPR NOX Ozone Season Group 3 unit means a CSAPR 
NOX Ozone Season Group 3 unit, provided that any unit that 
would not be a CSAPR NOX Ozone Season Group 3 unit under 
Sec.  97.1004(a) and (b) is not a base CSAPR NOX Ozone 
Season Group 3 unit notwithstanding the provisions of any SIP revision 
approved by the Administrator under Sec.  52.38(b)(10), (12), or (13) 
of this chapter.
    Biomass means--
    (1) Any organic material grown for the purpose of being converted 
to energy;
    (2) Any organic byproduct of agriculture that can be converted into 
energy; or
    (3) Any material that can be converted into energy and is 
nonmerchantable for other purposes, that is segregated from other 
material that is nonmerchantable for other purposes, and that is;
    (i) A forest-related organic resource, including mill residues, 
precommercial thinnings, slash, brush, or byproduct from conversion of 
trees to merchantable material; or
    (ii) A wood material, including pallets, crates, dunnage, 
manufacturing and construction materials (other than pressure-treated, 
chemically-treated, or painted wood products), and landscape or right-
of-way tree trimmings.
    Boiler means an enclosed fossil- or other-fuel-fired combustion 
device used to produce heat and to transfer heat to recirculating 
water, steam, or other medium.
    Bottoming-cycle unit means a unit in which the energy input to the 
unit is first used to produce useful thermal energy, where at least 
some of the reject heat from the useful thermal energy application or 
process is then used for electricity production.
    Business day means a day that does not fall on a weekend or a 
federal holiday.
    Certifying official means a natural person who is:
    (1) For a corporation, a president, secretary, treasurer, or vice-
president of the corporation in charge of a principal business function 
or any other person who performs similar policy- or decision-making 
functions for the corporation;
    (2) For a partnership or sole proprietorship, a general partner or 
the proprietor respectively; or
    (3) For a local government entity or State, federal, or other 
public agency, a principal executive officer or ranking elected 
official.
    Clean Air Act means the Clean Air Act, 42 U.S.C. 7401, et seq.
    Coal means ``coal'' as defined in Sec.  72.2 of this chapter.
    Coal-derived fuel means any fuel (whether in a solid, liquid, or 
gaseous state) produced by the mechanical, thermal, or chemical 
processing of coal.
    Cogeneration system means an integrated group, at a source, of 
equipment (including a boiler, or combustion turbine, and a generator) 
designed to produce useful thermal energy for industrial, commercial, 
heating, or cooling purposes and electricity through the sequential use 
of energy.
    Cogeneration unit means a stationary, fossil-fuel-fired boiler or 
stationary, fossil-fuel-fired combustion turbine that is a topping-
cycle unit or a bottoming-cycle unit:
    (1) Operating as part of a cogeneration system; and
    (2) Producing on an annual average basis--
    (i) For a topping-cycle unit,
    (A) Useful thermal energy not less than 5 percent of total energy 
output; and
    (B) Useful power that, when added to one-half of useful thermal 
energy produced, is not less than 42.5 percent of total energy input, 
if useful thermal energy produced is 15 percent or more of total energy 
output, or not less than 45 percent of total energy input, if useful 
thermal energy produced is less than 15 percent of total energy output.
    (ii) For a bottoming-cycle unit, useful power not less than 45 
percent of total energy input;
    (3) Provided that the requirements in paragraph (2) of this 
definition shall not apply to a calendar year referenced in paragraph 
(2) of this definition during which the unit did not operate at all;
    (4) Provided that the total energy input under paragraphs (2)(i)(B) 
and (2)(ii) of this definition shall equal the unit's total energy 
input from all fuel, except biomass if the unit is a boiler; and
    (5) Provided that, if, throughout its operation during the 12-month 
period or a calendar year referenced in paragraph (2) of this 
definition, a unit is operated as part of a cogeneration system and the 
cogeneration system meets on a system-wide basis the requirement in 
paragraph (2)(i)(B) or (2)(ii) of this definition, the unit shall be 
deemed to meet such requirement during that 12-month period or calendar 
year.

[[Page 69084]]

    Combustion turbine means an enclosed device comprising:
    (1) If the device is simple cycle, a compressor, a combustor, and a 
turbine and in which the flue gas resulting from the combustion of fuel 
in the combustor passes through the turbine, rotating the turbine; and
    (2) If the device is combined cycle, the equipment described in 
paragraph (1) of this definition and any associated duct burner, heat 
recovery steam generator, and steam turbine.
    Commence commercial operation means, with regard to a unit:
    (1) To have begun to produce steam, gas, or other heated medium 
used to generate electricity for sale or use, including test 
generation, except as provided in Sec.  97.1005.
    (i) For a unit that is a CSAPR NOX Ozone Season Group 3 
unit under Sec.  97.1004 on the later of January 1, 2005 or the date 
the unit commences commercial operation as defined in the introductory 
text of paragraph (1) of this definition and that subsequently 
undergoes a physical change or is moved to a new location or source, 
such date shall remain the date of commencement of commercial operation 
of the unit, which shall continue to be treated as the same unit.
    (ii) For a unit that is a CSAPR NOX Ozone Season Group 3 
unit under Sec.  97.1004 on the later of January 1, 2005 or the date 
the unit commences commercial operation as defined in the introductory 
text of paragraph (1) of this definition and that is subsequently 
replaced by a unit at the same or a different source, such date shall 
remain the replaced unit's date of commencement of commercial 
operation, and the replacement unit shall be treated as a separate unit 
with a separate date for commencement of commercial operation as 
defined in paragraph (1) or (2) of this definition as appropriate.
    (2) Notwithstanding paragraph (1) of this definition and except as 
provided in Sec.  97.1005, for a unit that is not a CSAPR 
NOX Ozone Season Group 3 unit under Sec.  97.1004 on the 
later of January 1, 2005 or the date the unit commences commercial 
operation as defined in the introductory text of paragraph (1) of this 
definition, the unit's date for commencement of commercial operation 
shall be the date on which the unit becomes a CSAPR NOX 
Ozone Season Group 3 unit under Sec.  97.1004.
    (i) For a unit with a date for commencement of commercial operation 
as defined in the introductory text of paragraph (2) of this definition 
and that subsequently undergoes a physical change or is moved to a 
different location or source, such date shall remain the date of 
commencement of commercial operation of the unit, which shall continue 
to be treated as the same unit.
    (ii) For a unit with a date for commencement of commercial 
operation as defined in the introductory text of paragraph (2) of this 
definition and that is subsequently replaced by a unit at the same or a 
different source, such date shall remain the replaced unit's date of 
commencement of commercial operation, and the replacement unit shall be 
treated as a separate unit with a separate date for commencement of 
commercial operation as defined in paragraph (1) or (2) of this 
definition as appropriate.
    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 a control 
period before 2023, or as of July 1 immediately after such deadline for 
such a control period in 2023 or thereafter, the same natural person is 
authorized under Sec. Sec.  97.1013(a) and 97.1015(a) as the designated 
representative for a group of one or more base CSAPR NOX 
Ozone Season Group 3 sources and units located in a State (and Indian 
country within the borders of such State).
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.1006(c)(2)(iii):
    (1) The amount (rounded to the nearest allowance) equal to the sum 
of the total amount of CSAPR NOX Ozone Season Group 3 
allowances allocated for such control period to the group of one or 
more base CSAPR NOX Ozone Season Group 3 units located in 
such State (and such Indian country) and having the common designated 
representative for such control period and the total amount of CSAPR 
NOX Ozone Season Group 3 allowances purchased by an owner or 
operator of such base CSAPR NOX Ozone Season Group 3 units 
in an auction for such control period and submitted by the State or the 
permitting authority to the Administrator for recordation in the 
compliance accounts for such base CSAPR NOX Ozone Season 
Group 3 units in accordance with the CSAPR NOX Ozone Season 
Group 3 allowance auction provisions in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10), (12), or (13) of this chapter, 
multiplied by the sum of the State NOX Ozone Season Group 3 
trading budget under Sec.  97.1010(a) and the State's variability limit 
under Sec.  97.1010(b) for such control period and divided by the 
greater of such State NOX Ozone Season Group 3 trading 
budget or the sum of all amounts of CSAPR NOX Ozone Season 
Group 3 allowances for such control period treated for purposes of this 
definition as having been allocated to or purchased in the State's 
auction for all such base CSAPR NOX Ozone Season Group 3 
units;
    (2) Provided that--
    (i) For a control period before 2023 only, in the case of a base 
CSAPR NOX Ozone Season Group 3 unit that operates during, 
but has no amount of CSAPR NOX Ozone Season Group 3 
allowances allocated under Sec. Sec.  97.1011 and 97.1012 for, such 
control period, the unit shall be treated, solely for purposes of this 
definition, as being allocated an amount (rounded to the nearest 
allowance) of CSAPR NOX Ozone Season Group 3 allowances for 
such control period equal to the unit's allowable NOX 
emission rate applicable to such control period, multiplied by a 
capacity factor of 0.92 (if the unit is a boiler combusting any amount 
of coal or coal-derived fuel during such control period), 0.32 (if the 
unit is a simple cycle combustion turbine during such control period), 
0.71 (if the unit is a combined cycle combustion turbine during such 
control period), 0.73 (if the unit is an integrated coal gasification 
combined cycle unit during such control period), or 0.44 (for any other 
unit), multiplied by the unit's maximum hourly load as reported in 
accordance with this subpart and by 3,672 hours/control period, and 
divided by 2,000 lb/ton;
    (ii) The allocations of CSAPR NOX Ozone Season Group 3 
allowances for any control period taken into account for purposes of 
this definition exclude any CSAPR NOX Ozone Season Group 3 
allowances allocated for such control period under Sec.  97.526(c)(3), 
under Sec.  97.526(c)(4) or (5) pursuant to an exception under Sec.  
97.526(c)(3), under Sec.  97.826(c)(1) or (3), or under Sec.  
97.826(c)(4) or (5) pursuant to an exception under Sec.  97.826(c)(1) 
or (3);
    (iii) In the case of the base CSAPR NOX Ozone Season 
Group 3 units at a base CSAPR NOX Ozone Season Group 3 
source in a State with regard to which CSAPR NOX Ozone 
Season Group 3 allowances have been allocated under Sec.  97.526(c)(2) 
for a given control period, the units at each such source will be 
treated, solely for purposes of this definition, as having been 
allocated under Sec.  97.526(c)(2), or under

[[Page 69085]]

Sec.  97.526(c)(4) or (5) pursuant to an exception under Sec.  
97.526(c)(2), an amount of CSAPR NOX Ozone Season Group 3 
allowances for such control period equal to the sum of the total amount 
of CSAPR NOX Ozone Season Group 1 allowances allocated for 
such control period to such units and the total amount of CSAPR 
NOX Ozone Season Group 1 allowances purchased by an owner or 
operator of such units in an auction for such control period and 
submitted by the State or the permitting authority to the Administrator 
for recordation in the compliance account for such source in accordance 
with the CSAPR NOX Ozone Season Group 1 allowance auction 
provisions in a SIP revision approved by the Administrator under Sec.  
52.38(b)(4) or (5) of this chapter, divided by the conversion factor 
determined under Sec.  97.526(c)(2)(ii) with regard to the State's SIP 
revision under Sec.  52.38(b)(10) of this chapter, and rounded up to 
the nearest whole allowance;
    (iv) In the case of the base CSAPR NOX Ozone Season 
Group 3 units at a base CSAPR NOX Ozone Season Group 3 
source in a State with regard to which CSAPR NOX Ozone 
Season Group 3 allowances have been allocated under Sec.  97.826(c)(2) 
for a given control period, the units at each such source will be 
treated, solely for purposes of this definition, as having been 
allocated under Sec.  97.826(c)(2), or under Sec.  97.826(c)(4) or (5) 
pursuant to an exception under Sec.  97.826(c)(2), an amount of CSAPR 
NOX Ozone Season Group 3 allowances for such control period 
equal to the sum of the total amount of CSAPR NOX Ozone 
Season Group 2 allowances allocated for such control period to such 
units and the total amount of CSAPR NOX Ozone Season Group 2 
allowances purchased by an owner or operator of such units in an 
auction for such control period and submitted by the State or the 
permitting authority to the Administrator for recordation in the 
compliance account for such source in accordance with the CSAPR 
NOX Ozone Season Group 2 allowance auction provisions in a 
SIP revision approved by the Administrator under Sec.  52.38(b)(8) or 
(9) of this chapter, divided by the conversion factor determined under 
Sec.  97.826(c)(2)(ii) with regard to the State's SIP revision under 
Sec.  52.38(b)(10) of this chapter, and rounded up to the nearest whole 
allowance; and
    (v) For purposes of the calculations under paragraph (1) of this 
definition for the control period in 2021 only, for each State the 
amount of the State NOX Ozone Season Group 3 trading budget 
shall be deemed to be increased by the supplemental amount of CSAPR 
NOX Ozone Season Group 3 allowances determined for the State 
under Sec.  97.1010(d) and the amount of the State's variability limit 
shall be deemed to be increased by the product of the supplemental 
amount of CSAPR NOX Ozone Season Group 3 allowances 
determined for the State under Sec.  97.1010(d) multiplied by 0.21, 
rounded to the nearest allowance;
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of NOX emissions from all base 
CSAPR NOX Ozone Season Group 3 units in a State (and Indian 
country within the borders of such State) during such control period, 
the total tonnage of NOX emissions during such control 
period from the group of one or more base CSAPR NOX Ozone 
Season Group 3 units located in such State (and such Indian country) 
and having the common designated representative for such control 
period.
    Common stack means a single flue through which emissions from 2 or 
more units are exhausted.
    Compliance account means an Allowance Management System account, 
established by the Administrator for a CSAPR NOX Ozone 
Season Group 3 source under this subpart, in which any CSAPR 
NOX Ozone Season Group 3 allowance allocations to the CSAPR 
NOX Ozone Season Group 3 units at the source are recorded 
and in which are held any CSAPR NOX Ozone Season Group 3 
allowances available for use for a control period in a given year in 
complying with the source's CSAPR NOX Ozone Season Group 3 
emissions limitation in accordance with Sec. Sec.  97.1006 and 97.1024.
    Continuous emission monitoring system or CEMS means the equipment 
required under this subpart to sample, analyze, measure, and provide, 
by means of readings recorded at least once every 15 minutes and using 
an automated data acquisition and handling system (DAHS), a permanent 
record of NOX emissions, stack gas volumetric flow rate, 
stack gas moisture content, and O2 or CO2 
concentration (as applicable), in a manner consistent with part 75 of 
this chapter and Sec. Sec.  97.1030 through 97.1035. The following 
systems are the principal types of continuous emission monitoring 
systems:
    (1) A flow monitoring system, consisting of a stack flow rate 
monitor and an automated data acquisition and handling system and 
providing a permanent, continuous record of stack gas volumetric flow 
rate, in standard cubic feet per hour (scfh);
    (2) A NOX concentration monitoring system, consisting of 
a NOX pollutant concentration monitor and an automated data 
acquisition and handling system and providing a permanent, continuous 
record of NOX emissions, in parts per million (ppm);
    (3) A NOX emission rate (or NOX-diluent) 
monitoring system, consisting of a NOX pollutant 
concentration monitor, a diluent gas (CO2 or O2) 
monitor, and an automated data acquisition and handling system and 
providing a permanent, continuous record of NOX 
concentration, in parts per million (ppm), diluent gas concentration, 
in percent CO2 or O2, and NOX emission 
rate, in pounds per million British thermal units (lb/mmBtu);
    (4) A moisture monitoring system, as defined in Sec.  75.11(b)(2) 
of this chapter and providing a permanent, continuous record of the 
stack gas moisture content, in percent H2O;
    (5) A CO2 monitoring system, consisting of a 
CO2 pollutant concentration monitor (or an O2 
monitor plus suitable mathematical equations from which the 
CO2 concentration is derived) and an automated data 
acquisition and handling system and providing a permanent, continuous 
record of CO2 emissions, in percent CO2; and
    (6) An O2 monitoring system, consisting of an 
O2 concentration monitor and an automated data acquisition 
and handling system and providing a permanent, continuous record of 
O2, in percent O2.
    Control period means the period starting May 1 of a calendar year, 
except as provided in Sec.  97.1006(c)(3), and ending on September 30 
of the same year, inclusive.
    CSAPR NOX Annual Trading Program means a multi-state NOX 
air pollution control and emission reduction program established in 
accordance with subpart AAAAA of this part and Sec.  52.38(a) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(a)(3) or (4) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(a)(5) of this chapter), as a means of 
mitigating interstate transport of fine particulates and 
NOX.
    CSAPR NOX Ozone Season Group 1 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under subpart BBBBB of this part, or by a State or permitting authority 
under a SIP revision approved by the Administrator

[[Page 69086]]

under Sec.  52.38(b)(3), (4), or (5) of this chapter, to emit one ton 
of NOX during a control period of the specified calendar 
year for which the authorization is allocated or auctioned or of any 
calendar year thereafter under the CSAPR NOX Ozone Season 
Group 1 Trading Program.
    CSAPR NOX Ozone Season Group 1 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart BBBBB of this part and Sec.  
52.38(b)(1), (b)(2)(i) and (ii), and (b)(3) through (5) and (14) 
through (16) of this chapter (including such a program that is revised 
in a SIP revision approved by the Administrator under Sec.  52.38(b)(3) 
or (4) of this chapter or that is established in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(5) of this chapter), 
as a means of mitigating interstate transport of ozone and 
NOX.
    CSAPR NOX Ozone Season Group 2 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under subpart EEEEE of this part or Sec.  97.526(c), or by a State or 
permitting authority under a SIP revision approved by the Administrator 
under Sec.  52.38(b)(6), (7), (8), or (9) of this chapter, to emit one 
ton of NOX during a control period of the specified calendar 
year for which the authorization is allocated or auctioned or of any 
calendar year thereafter under the CSAPR NOX Ozone Season 
Group 2 Trading Program.
    CSAPR NOX Ozone Season Group 2 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart EEEEE of this part and Sec.  
52.38(b)(1), (b)(2)(iii) and (iv), and (b)(6) through (9), (14), (15), 
and (17) of this chapter (including such a program that is revised in a 
SIP revision approved by the Administrator under Sec.  52.38(b)(7) or 
(8) of this chapter or that is established in a SIP revision approved 
by the Administrator under Sec.  52.38(b)(6) or (9) of this chapter), 
as a means of mitigating interstate transport of ozone and 
NOX.
    CSAPR NOX Ozone Season Group 3 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under this subpart, Sec.  97.526(c), or Sec.  97.826(c), or by a State 
or permitting authority under a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10), (11), (12), or (13) of this 
chapter, to emit one ton of NOX during a control period of 
the specified calendar year for which the authorization is allocated or 
auctioned or of any calendar year thereafter under the CSAPR 
NOX Ozone Season Group 3 Trading Program.
    CSAPR NOX Ozone Season Group 3 allowance deduction or deduct CSAPR 
NOX Ozone Season Group 3 allowances means the permanent 
withdrawal of CSAPR NOX Ozone Season Group 3 allowances by 
the Administrator from a compliance account (e.g., in order to account 
for compliance with the CSAPR NOX Ozone Season Group 3 
emissions limitation) or from an assurance account (e.g., in order to 
account for compliance with the assurance provisions under Sec. Sec.  
97.1006 and 97.1025).
    CSAPR NOX Ozone Season Group 3 allowances held or hold CSAPR NOX 
Ozone Season Group 3 allowances means the CSAPR NOX Ozone 
Season Group 3 allowances treated as included in an Allowance 
Management System account as of a specified point in time because at 
that time they:
    (1) Have been recorded by the Administrator in the account or 
transferred into the account by a correctly submitted, but not yet 
recorded, CSAPR NOX Ozone Season Group 3 allowance transfer 
in accordance with this subpart; and
    (2) Have not been transferred out of the account by a correctly 
submitted, but not yet recorded, CSAPR NOX Ozone Season 
Group 3 allowance transfer in accordance with this subpart.
    CSAPR NOX Ozone Season Group 3 emissions limitation means, for a 
CSAPR NOX Ozone Season Group 3 source, the tonnage of 
NOX emissions authorized in a control period in a given year 
by the CSAPR NOX Ozone Season Group 3 allowances available 
for deduction for the source under Sec.  97.1024(a) for such control 
period.
    CSAPR NOX Ozone Season Group 3 source means a source that includes 
one or more CSAPR NOX Ozone Season Group 3 units.
    CSAPR NOX Ozone Season Group 3 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with this subpart and Sec.  52.38(b)(1), 
(b)(2)(v), and (b)(10) through (15) and (18) of this chapter (including 
such a program that is revised in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(11) or (12) of this chapter or that 
is established in a SIP revision approved by the Administrator under 
Sec.  52.38(b)(10) or (13) of this chapter), as a means of mitigating 
interstate transport of ozone and NOX.
    CSAPR NOX Ozone Season Group 3 unit means a unit that is subject to 
the CSAPR NOX Ozone Season Group 3 Trading Program.
    CSAPR SOX Group 1 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with subpart CCCCC of this part and Sec.  
52.39(a), (b), (d) through (f), and (j) through (l) of this chapter 
(including such a program that is revised in a SIP revision approved by 
the Administrator under Sec.  52.39(d) or (e) of this chapter or that 
is established in a SIP revision approved by the Administrator under 
Sec.  52.39(f) of this chapter), as a means of mitigating interstate 
transport of fine particulates and SO2.
    CSAPR SOX Group 2 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with subpart DDDDD of this part and Sec.  
52.39(a), (c), (g) through (k), and (m) of this chapter (including such 
a program that is revised in a SIP revision approved by the 
Administrator under Sec.  52.39(g) or (h) of this chapter or that is 
established in a SIP revision approved by the Administrator under Sec.  
52.39(i) of this chapter), as a means of mitigating interstate 
transport of fine particulates and SO2.
    Designated representative means, for a CSAPR NOX Ozone 
Season Group 3 source and each CSAPR NOX Ozone Season Group 
3 unit at the source, the natural person who is authorized by the 
owners and operators of the source and all such units at the source, in 
accordance with this subpart, to represent and legally bind each owner 
and operator in matters pertaining to the CSAPR NOX Ozone 
Season Group 3 Trading Program. If the CSAPR NOX Ozone 
Season Group 3 source is also subject to the Acid Rain Program, CSAPR 
NOX Annual Trading Program, CSAPR SO2 Group 1 
Trading Program, or CSAPR SO2 Group 2 Trading Program, then 
this natural person shall be the same natural person as the designated 
representative as defined in the respective program.
    Emissions means air pollutants exhausted from a unit or source into 
the atmosphere, as measured, recorded, and reported to the 
Administrator by the designated representative, and as modified by the 
Administrator:
    (1) In accordance with this subpart; and
    (2) With regard to a period before the unit or source is required 
to measure, record, and report such air pollutants in accordance with 
this subpart, in accordance with part 75 of this chapter.
    Excess emissions means any ton of emissions from the CSAPR 
NOX Ozone Season Group 3 units at a CSAPR NOX 
Ozone Season Group 3 source during a control period in a given year 
that

[[Page 69087]]

exceeds the CSAPR NOX Ozone Season Group 3 emissions 
limitation for the source for such control period.
    Fossil fuel means--
    (1) Natural gas, petroleum, coal, or any form of solid, liquid, or 
gaseous fuel derived from such material; or
    (2) For purposes of applying the limitation on ``average annual 
fuel consumption of fossil fuel'' in Sec.  97.1004(b)(2)(i)(B) and 
(b)(2)(ii), natural gas, petroleum, coal, or any form of solid, liquid, 
or gaseous fuel derived from such material for the purpose of creating 
useful heat.
    Fossil-fuel-fired means, with regard to a unit, combusting any 
amount of fossil fuel in 2005 or any calendar year thereafter.
    General account means an Allowance Management System account, 
established under this subpart, that is not a compliance account or an 
assurance account.
    Generator means a device that produces electricity.
    Heat input means, for a unit for a specified period of unit 
operating time, the product (in mmBtu) of the gross calorific value of 
the fuel (in mmBtu/lb) fed into the unit multiplied by the fuel feed 
rate (in lb of fuel/time) and unit operating time, as measured, 
recorded, and reported to the Administrator by the designated 
representative and as modified by the Administrator in accordance with 
this subpart and excluding the heat derived from preheated combustion 
air, recirculated flue gases, or exhaust.
    Heat input rate means, for a unit, the quotient (in mmBtu/hr) of 
the amount of heat input for a specified period of unit operating time 
(in mmBtu) divided by unit operating time (in hr) or, for a unit and a 
specific fuel, the amount of heat input attributed to the fuel (in 
mmBtu) divided by the unit operating time (in hr) during which the unit 
combusts the fuel.
    Heat rate means, for a unit, the quotient (in mmBtu/unit of load) 
of the unit's maximum design heat input rate (in Btu/hr) divided by the 
product of 1,000,000 Btu/mmBtu and the unit's maximum hourly load.
    Indian country means ``Indian country'' as defined in 18 U.S.C. 
1151.
    Life-of-the-unit, firm power contractual arrangement means a unit 
participation power sales agreement under which a utility or industrial 
customer reserves, or is entitled to receive, a specified amount or 
percentage of nameplate capacity and associated energy generated by any 
specified unit and pays its proportional amount of such unit's total 
costs, pursuant to a contract:
    (1) For the life of the unit;
    (2) For a cumulative term of no less than 30 years, including 
contracts that permit an election for early termination; or
    (3) For a period no less than 25 years or 70 percent of the 
economic useful life of the unit determined as of the time the unit is 
built, with option rights to purchase or release some portion of the 
nameplate capacity and associated energy generated by the unit at the 
end of the period.
    Maximum design heat input rate means, for a unit, the maximum 
amount of fuel per hour (in Btu/hr) that the unit is capable of 
combusting on a steady state basis as of the initial installation of 
the unit as specified by the manufacturer of the unit.
    Monitoring system means any monitoring system that meets the 
requirements of this subpart, including a continuous emission 
monitoring system, an alternative monitoring system, or an excepted 
monitoring system under part 75 of this chapter.
    Nameplate capacity means, starting from the initial installation of 
a generator, the maximum electrical generating output (in MWe, rounded 
to the nearest tenth) that the generator is capable of producing on a 
steady state basis and during continuous operation (when not restricted 
by seasonal or other deratings) as of such installation as specified by 
the manufacturer of the generator or, starting from the completion of 
any subsequent physical change in the generator resulting in an 
increase in the maximum electrical generating output that the generator 
is capable of producing on a steady state basis and during continuous 
operation (when not restricted by seasonal or other deratings), such 
increased maximum amount (in MWe, rounded to the nearest tenth) as of 
such completion as specified by the person conducting the physical 
change.
    Natural gas means ``natural gas'' as defined in Sec.  72.2 of this 
chapter.
    Newly affected CSAPR NOX Ozone Season Group 3 unit means 
a unit that was not a CSAPR NOX Ozone Season Group 3 unit 
when it began operating but that thereafter becomes a CSAPR 
NOX Ozone Season Group 3 unit.
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
    Operate or operation means, with regard to a unit, to combust fuel.
    Operator means, for a CSAPR NOX Ozone Season Group 3 
source or a CSAPR NOX Ozone Season Group 3 unit at a source 
respectively, any person who operates, controls, or supervises a CSAPR 
NOX Ozone Season Group 3 unit at the source or the CSAPR 
NOX Ozone Season Group 3 unit and shall include, but not be 
limited to, any holding company, utility system, or plant manager of 
such source or unit.
    Owner means, for a CSAPR NOX Ozone Season Group 3 source 
or a CSAPR NOX Ozone Season Group 3 unit at a source 
respectively, any of the following persons:
    (1) Any holder of any portion of the legal or equitable title in a 
CSAPR NOX Ozone Season Group 3 unit at the source or the 
CSAPR NOX Ozone Season Group 3 unit;
    (2) Any holder of a leasehold interest in a CSAPR NOX 
Ozone Season Group 3 unit at the source or the CSAPR NOX 
Ozone Season Group 3 unit, provided that, unless expressly provided for 
in a leasehold agreement, ``owner'' shall not include a passive lessor, 
or a person who has an equitable interest through such lessor, whose 
rental payments are not based (either directly or indirectly) on the 
revenues or income from such CSAPR NOX Ozone Season Group 3 
unit; and
    (3) Any purchaser of power from a CSAPR NOX Ozone Season 
Group 3 unit at the source or the CSAPR NOX Ozone Season 
Group 3 unit under a life-of-the-unit, firm power contractual 
arrangement.
    Permanently retired means, with regard to a unit, a unit that is 
unavailable for service and that the unit's owners and operators do not 
expect to return to service in the future.
    Permitting authority means ``permitting authority'' as defined in 
Sec. Sec.  70.2 and 71.2 of this chapter.
    Potential electrical output capacity means, for a unit (in MWh/yr), 
33 percent of the unit's maximum design heat input rate (in Btu/hr), 
divided by 3,413 Btu/kWh, divided by 1,000 kWh/MWh, and multiplied by 
8,760 hr/yr.
    Receive or receipt of means, when referring to the Administrator, 
to come into possession of a document, information, or correspondence 
(whether sent in hard copy or by authorized electronic transmission), 
as indicated in an official log, or by a notation made on the document, 
information, or correspondence, by the Administrator in the regular 
course of business.
    Recordation, record, or recorded means, with regard to CSAPR 
NOX Ozone Season Group 3 allowances, the moving of CSAPR 
NOX Ozone Season Group 3 allowances by the Administrator 
into, out of, or between Allowance Management System accounts, for 
purposes of allocation, auction, transfer, or deduction.

[[Page 69088]]

    Reference method means any direct test method of sampling and 
analyzing for an air pollutant as specified in Sec.  75.22 of this 
chapter.
    Replacement, replace, or replaced means, with regard to a unit, the 
demolishing of a unit, or the permanent retirement and permanent 
disabling of a unit, and the construction of another unit (the 
replacement unit) to be used instead of the demolished or retired unit 
(the replaced unit).
    Sequential use of energy means:
    (1) The use of reject heat from electricity production in a useful 
thermal energy application or process; or
    (2) The use of reject heat from a useful thermal energy application 
or process in electricity production.
    Serial number means, for a CSAPR NOX Ozone Season Group 
3 allowance, the unique identification number assigned to each CSAPR 
NOX Ozone Season Group 3 allowance by the Administrator.
    Solid waste incineration unit means a stationary, fossil-fuel-fired 
boiler or stationary, fossil-fuel-fired combustion turbine that is a 
``solid waste incineration unit'' as defined in section 129(g)(1) of 
the Clean Air Act.
    Source means all buildings, structures, or installations located in 
one or more contiguous or adjacent properties under common control of 
the same person or persons. This definition does not change or 
otherwise affect the definition of ``major source'', ``stationary 
source'', or ``source'' as set forth and implemented in a title V 
operating permit program or any other program under the Clean Air Act.
    State means one of the States that is subject to the CSAPR 
NOX Ozone Season Group 3 Trading Program pursuant to Sec.  
52.38(b)(1), (b)(2)(v), and (b)(10) through (15) and (18) of this 
chapter.
    Submit or serve means to send or transmit a document, information, 
or correspondence to the person specified in accordance with the 
applicable regulation:
    (1) In person;
    (2) By United States Postal Service; or
    (3) By other means of dispatch or transmission and delivery;
    (4) Provided that compliance with any ``submission'' or ``service'' 
deadline shall be determined by the date of dispatch, transmission, or 
mailing and not the date of receipt.
    Topping-cycle unit means a unit in which the energy input to the 
unit is first used to produce useful power, including electricity, 
where at least some of the reject heat from the electricity production 
is then used to provide useful thermal energy.
    Total energy input means, for a unit, total energy of all forms 
supplied to the unit, excluding energy produced by the unit. Each form 
of energy supplied shall be measured by the lower heating value of that 
form of energy calculated as follows:

LHV = HHV-10.55 (W + 9H)

where:

LHV = lower heating value of the form of energy in Btu/lb,
HHV = higher heating value of the form of energy in Btu/lb,
W = weight % of moisture in the form of energy, and
H = weight % of hydrogen in the form of energy.

    Total energy output means, for a unit, the sum of useful power and 
useful thermal energy produced by the unit.
    Unit means a stationary, fossil-fuel-fired boiler, stationary, 
fossil-fuel-fired combustion turbine, or other stationary, fossil-fuel-
fired combustion device. A unit that undergoes a physical change or is 
moved to a different location or source shall continue to be treated as 
the same unit. A unit (the replaced unit) that is replaced by another 
unit (the replacement unit) at the same or a different source shall 
continue to be treated as the same unit, and the replacement unit shall 
be treated as a separate unit.
    Unit operating day means, with regard to a unit, a calendar day in 
which the unit combusts any fuel.
    Unit operating hour or hour of unit operation means, with regard to 
a unit, an hour in which the unit combusts any fuel.
    Useful power means, with regard to a unit, electricity or 
mechanical energy that the unit makes available for use, excluding any 
such energy used in the power production process (which process 
includes, but is not limited to, any on-site processing or treatment of 
fuel combusted at the unit and any on-site emission controls).
    Useful thermal energy means thermal energy that is:
    (1) Made available to an industrial or commercial process (not a 
power production process), excluding any heat contained in condensate 
return or makeup water;
    (2) Used in a heating application (e.g., space heating or domestic 
hot water heating); or
    (3) Used in a space cooling application (i.e., in an absorption 
chiller).
    Utility power distribution system means the portion of an 
electricity grid owned or operated by a utility and dedicated to 
delivering electricity to customers.


Sec.  97.1003   Measurements, abbreviations, and acronyms.

    Measurements, abbreviations, and acronyms used in this subpart are 
defined as follows:

Btu--British thermal unit
CO2--carbon dioxide
CSAPR--Cross-State Air Pollution Rule
H2O--water
hr--hour
kWh--kilowatt-hour
lb--pound
mmBtu--million Btu
MWe--megawatt electrical
MWh--megawatt-hour
NOX--nitrogen oxides
O2--oxygen
ppm--parts per million
scfh--standard cubic feet per hour
SIP--State implementation plan
SO2--sulfur dioxide
TR--Transport Rule
yr--year


Sec.  97.1004   Applicability.

    (a) Except as provided in paragraph (b) of this section:
    (1) The following units in a State (and Indian country within the 
borders of such State) shall be CSAPR NOX Ozone Season Group 
3 units, and any source that includes one or more such units shall be a 
CSAPR NOX Ozone Season Group 3 source, subject to the 
requirements of this subpart: Any stationary, fossil-fuel-fired boiler 
or stationary, fossil-fuel-fired combustion turbine serving at any 
time, on or after January 1, 2005, a generator with nameplate capacity 
of more than 25 MWe producing electricity for sale.
    (2) If a stationary boiler or stationary combustion turbine that, 
under paragraph (a)(1) of this section, is not a CSAPR NOX 
Ozone Season Group 3 unit begins to combust fossil fuel or to serve a 
generator with nameplate capacity of more than 25 MWe producing 
electricity for sale, the unit shall become a CSAPR NOX 
Ozone Season Group 3 unit as provided in paragraph (a)(1) of this 
section on the first date on which it both combusts fossil fuel and 
serves such generator.
    (b) Any unit in a State (and Indian country within the borders of 
such State) that otherwise is a CSAPR NOX Ozone Season Group 
3 unit under paragraph (a) of this section and that meets the 
requirements set forth in paragraph (b)(1)(i) or (b)(2)(i) of this 
section shall not be a CSAPR NOX Ozone Season Group 3 unit:
    (1)(i) Any unit:
    (A) Qualifying as a cogeneration unit throughout the later of 2005 
or the 12-month period starting on the date the unit first produces 
electricity and

[[Page 69089]]

continuing to qualify as a cogeneration unit throughout each calendar 
year ending after the later of 2005 or such 12-month period; and
    (B) Not supplying in 2005 or any calendar year thereafter more than 
one-third of the unit's potential electrical output capacity or 219,000 
MWh, whichever is greater, to any utility power distribution system for 
sale.
    (ii) If, after qualifying under paragraph (b)(1)(i) of this section 
as not being a CSAPR NOX Ozone Season Group 3 unit, a unit 
subsequently no longer meets all the requirements of paragraph 
(b)(1)(i) of this section, the unit shall become a CSAPR NOX 
Ozone Season Group 3 unit starting on the earlier of January 1 after 
the first calendar year during which the unit first no longer qualifies 
as a cogeneration unit or January 1 after the first calendar year 
during which the unit no longer meets the requirements of paragraph 
(b)(1)(i)(B) of this section. The unit shall thereafter continue to be 
a CSAPR NOX Ozone Season Group 3 unit.
    (2)(i) Any unit:
    (A) Qualifying as a solid waste incineration unit throughout the 
later of 2005 or the 12-month period starting on the date the unit 
first produces electricity and continuing to qualify as a solid waste 
incineration unit throughout each calendar year ending after the later 
of 2005 or such 12-month period; and
    (B) With an average annual fuel consumption of fossil fuel for the 
first 3 consecutive calendar years of operation starting no earlier 
than 2005 of less than 20 percent (on a Btu basis) and an average 
annual fuel consumption of fossil fuel for any 3 consecutive calendar 
years thereafter of less than 20 percent (on a Btu basis).
    (ii) If, after qualifying under paragraph (b)(2)(i) of this section 
as not being a CSAPR NOX Ozone Season Group 3 unit, a unit 
subsequently no longer meets all the requirements of paragraph 
(b)(2)(i) of this section, the unit shall become a CSAPR NOX 
Ozone Season Group 3 unit starting on the earlier of January 1 after 
the first calendar year during which the unit first no longer qualifies 
as a solid waste incineration unit or January 1 after the first 3 
consecutive calendar years after 2005 for which the unit has an average 
annual fuel consumption of fossil fuel of 20 percent or more. The unit 
shall thereafter continue to be a CSAPR NOX Ozone Season 
Group 3 unit.
    (c) A certifying official of an owner or operator of any unit or 
other equipment may submit a petition (including any supporting 
documents) to the Administrator at any time for a determination 
concerning the applicability, under paragraphs (a) and (b) of this 
section or a SIP revision approved under Sec.  52.38(b)(10), (12), or 
(13) of this chapter, of the CSAPR NOX Ozone Season Group 3 
Trading Program to the unit or other equipment.
    (1) Petition content. The petition shall be in writing and include 
the identification of the unit or other equipment and the relevant 
facts about the unit or other equipment. The petition and any other 
documents provided to the Administrator in connection with the petition 
shall include the following certification statement, signed by the 
certifying official: ``I am authorized to make this submission on 
behalf of the owners and operators of the unit or other equipment for 
which the submission is made. I certify under penalty of law that I 
have personally examined, and am familiar with, the statements and 
information submitted in this document and all its attachments. Based 
on my inquiry of those individuals with primary responsibility for 
obtaining the information, I certify that the statements and 
information are to the best of my knowledge and belief true, accurate, 
and complete. I am aware that there are significant penalties for 
submitting false statements and information or omitting required 
statements and information, including the possibility of fine or 
imprisonment.''
    (2) Response. The Administrator will issue a written response to 
the petition and may request supplemental information determined by the 
Administrator to be relevant to such petition. The Administrator's 
determination concerning the applicability, under paragraphs (a) and 
(b) of this section, of the CSAPR NOX Ozone Season Group 3 
Trading Program to the unit or other equipment shall be binding on any 
State or permitting authority unless the Administrator determines that 
the petition or other documents or information provided in connection 
with the petition contained significant, relevant errors or omissions.


Sec.  97.1005   Retired unit exemption.

    (a)(1) Any CSAPR NOX Ozone Season Group 3 unit that is 
permanently retired shall be exempt from Sec.  97.1006(b) and (c)(1), 
Sec.  97.1024, and Sec. Sec.  97.1030 through 97.1035.
    (2) The exemption under paragraph (a)(1) of this section shall 
become effective the day on which the CSAPR NOX Ozone Season 
Group 3 unit is permanently retired. Within 30 days of the unit's 
permanent retirement, the designated representative shall submit a 
statement to the Administrator. The statement shall state, in a format 
prescribed by the Administrator, that the unit was permanently retired 
on a specified date and will comply with the requirements of paragraph 
(b) of this section.
    (b)(1) A unit exempt under paragraph (a) of this section shall not 
emit any NOX, starting on the date that the exemption takes 
effect.
    (2) For a period of 5 years from the date the records are created, 
the owners and operators of a unit exempt under paragraph (a) of this 
section shall retain, at the source that includes the unit, records 
demonstrating that the unit is permanently retired. The 5-year period 
for keeping records may be extended for cause, at any time before the 
end of the period, in writing by the Administrator. The owners and 
operators bear the burden of proof that the unit is permanently 
retired.
    (3) The owners and operators and, to the extent applicable, the 
designated representative of a unit exempt under paragraph (a) of this 
section shall comply with the requirements of the CSAPR NOX 
Ozone Season Group 3 Trading Program concerning all periods for which 
the exemption is not in effect, even if such requirements arise, or 
must be complied with, after the exemption takes effect.
    (4) A unit exempt under paragraph (a) of this section shall lose 
its exemption on the first date on which the unit resumes operation. 
Such unit shall be treated, for purposes of applying allocation, 
monitoring, reporting, and recordkeeping requirements under this 
subpart, as a unit that commences commercial operation on the first 
date on which the unit resumes operation.


Sec.  97.1006   Standard requirements.

    (a) Designated representative requirements. The owners and 
operators shall comply with the requirement to have a designated 
representative, and may have an alternate designated representative, in 
accordance with Sec. Sec.  97.1013 through 97.1018.
    (b) Emissions monitoring, reporting, and recordkeeping 
requirements. (1) The owners and operators, and the designated 
representative, of each CSAPR NOX Ozone Season Group 3 
source and each CSAPR NOX Ozone Season Group 3 unit at the 
source shall comply with the monitoring, reporting, and recordkeeping 
requirements of Sec. Sec.  97.1030 through 97.1035.
    (2) The emissions data determined in accordance with Sec. Sec.  
97.1030 through 97.1035 shall be used to calculate allocations of CSAPR 
NOX Ozone Season Group 3 allowances under Sec. Sec.  
97.1011(a)(2) and (b) and 97.1012 and

[[Page 69090]]

to determine compliance with the CSAPR NOX Ozone Season 
Group 3 emissions limitation and assurance provisions under paragraph 
(c) of this section, provided that, for each monitoring location from 
which mass emissions are reported, the mass emissions amount used in 
calculating such allocations and determining such compliance shall be 
the mass emissions amount for the monitoring location determined in 
accordance with Sec. Sec.  97.1030 through 97.1035 and rounded to the 
nearest ton, with any fraction of a ton less than 0.50 being deemed to 
be zero.
    (c) NOX emissions requirements--(1) CSAPR NOX 
Ozone Season Group 3 emissions limitation. (i) As of the allowance 
transfer deadline for a control period in a given year, the owners and 
operators of each CSAPR NOX Ozone Season Group 3 source and 
each CSAPR NOX Ozone Season Group 3 unit at the source shall 
hold, in the source's compliance account, CSAPR NOX Ozone 
Season Group 3 allowances available for deduction for such control 
period under Sec.  97.1024(a) in an amount not less than the tons of 
total NOX emissions for such control period from all CSAPR 
NOX Ozone Season Group 3 units at the source.
    (ii) If total NOX emissions during a control period in a 
given year from the CSAPR NOX Ozone Season Group 3 units at 
a CSAPR NOX Ozone Season Group 3 source are in excess of the 
CSAPR NOX Ozone Season Group 3 emissions limitation set 
forth in paragraph (c)(1)(i) of this section, then:
    (A) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 3 unit at the source shall hold the 
CSAPR NOX Ozone Season Group 3 allowances required for 
deduction under Sec.  97.1024(d); and
    (B) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 3 unit at the source shall pay any 
fine, penalty, or assessment or comply with any other remedy imposed, 
for the same violations, under the Clean Air Act, and each ton of such 
excess emissions and each day of such control period shall constitute a 
separate violation of this subpart and the Clean Air Act.
    (2) CSAPR NOX Ozone Season Group 3 assurance provisions. 
(i) If total NOX emissions during a control period in a 
given year from all base CSAPR NOX Ozone Season Group 3 
units at base CSAPR NOX Ozone Season Group 3 sources in a 
State (and Indian country within the borders of such State) 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 NOX 
emissions during such control period exceeds the common designated 
representative's assurance level for the State and such control period, 
shall hold (in the assurance account established for the owners and 
operators of such group) CSAPR NOX Ozone Season Group 3 
allowances available for deduction for such control period under Sec.  
97.1025(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.  97.1025(b), of multiplying--
    (A) The quotient of the amount by which the common designated 
representative's share of such NOX 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 in the State (and Indian country within the 
borders of such State) for such control period, by which each common 
designated representative's share of such NOX emissions 
exceeds the respective common designated representative's assurance 
level; and
    (B) The amount by which total NOX emissions from all 
base CSAPR NOX Ozone Season Group 3 units at base CSAPR 
NOX Ozone Season Group 3 sources in the State (and Indian 
country within the borders of such State) for such control period 
exceed the State assurance level.
    (ii) The owners and operators shall hold the CSAPR NOX 
Ozone Season Group 3 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 NOX emissions from all base CSAPR 
NOX Ozone Season Group 3 units at base CSAPR NOX 
Ozone Season Group 3 sources in a State (and Indian country within the 
borders of such State) during a control period in a given year exceed 
the State assurance level if such total NOX emissions exceed 
the sum, for such control period, of the State NOX Ozone 
Season Group 3 trading budget under Sec.  97.1010(a), the State's 
variability limit under Sec.  97.1010(b), and, for the control period 
in 2021 only, the product of the supplemental amount of CSAPR 
NOX Ozone Season Group 3 allowances determined for the State 
under Sec.  97.1010(d) multiplied by 1.21, rounded to the nearest 
allowance.
    (iv) It shall not be a violation of this subpart or of the Clean 
Air Act if total NOX emissions from all base CSAPR 
NOX Ozone Season Group 3 units at base CSAPR NOX 
Ozone Season Group 3 sources in a State (and Indian country within the 
borders of such State) during a control period exceed the State 
assurance level or if a common designated representative's share of 
total NOX emissions from the base CSAPR NOX Ozone 
Season Group 3 units at base CSAPR NOX Ozone Season Group 3 
sources in a State (and Indian country within the borders of such 
State) during a control period exceeds the common designated 
representative's assurance level.
    (v) To the extent the owners and operators fail to hold CSAPR 
NOX Ozone Season Group 3 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 CSAPR NOX Ozone Season Group 3 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) Compliance periods. (i) A CSAPR NOX Ozone Season 
Group 3 unit shall be subject to the requirements under paragraph 
(c)(1) of this section for the control period starting on the later of 
May 1, 2021 or the deadline for meeting the unit's monitor 
certification requirements under Sec.  97.1030(b) and for each control 
period thereafter.
    (ii) A base CSAPR NOX Ozone Season Group 3 unit shall be 
subject to the requirements under paragraph (c)(2) of this section for 
the control period starting on the later of May 1, 2021 or the deadline 
for meeting the unit's monitor certification requirements under Sec.  
97.1030(b) and for each control period thereafter.
    (4) Vintage of CSAPR NOX Ozone Season Group 3 allowances 
held for compliance. (i) A CSAPR NOX Ozone Season Group 3 
allowance held for compliance with the requirements under paragraph 
(c)(1)(i) of this section for a control period in a given year must be 
a CSAPR NOX Ozone Season Group 3 allowance that was 
allocated or auctioned for such control period or a control period in a 
prior year.
    (ii) A CSAPR NOX Ozone Season Group 3 allowance held for 
compliance

[[Page 69091]]

with the requirements under paragraphs (c)(1)(ii)(A) and (c)(2)(i) 
through (iii) of this section for a control period in a given year must 
be a CSAPR NOX Ozone Season Group 3 allowance that was 
allocated or auctioned for a control period in a prior year or the 
control period in the given year or in the immediately following year.
    (5) Allowance Management System requirements. Each CSAPR 
NOX Ozone Season Group 3 allowance shall be held in, 
deducted from, or transferred into, out of, or between Allowance 
Management System accounts in accordance with this subpart.
    (6) Limited authorization. A CSAPR NOX Ozone Season 
Group 3 allowance is a limited authorization to emit one ton of 
NOX during the control period in one year. Such 
authorization is limited in its use and duration as follows:
    (i) Such authorization shall only be used in accordance with the 
CSAPR NOX Ozone Season Group 3 Trading Program; and
    (ii) Notwithstanding any other provision of this subpart, the 
Administrator has the authority to terminate or limit the use and 
duration of such authorization to the extent the Administrator 
determines is necessary or appropriate to implement any provision of 
the Clean Air Act.
    (7) Property right. A CSAPR NOX Ozone Season Group 3 
allowance does not constitute a property right.
    (d) Title V permit requirements. (1) No title V permit revision 
shall be required for any allocation, holding, deduction, or transfer 
of CSAPR NOX Ozone Season Group 3 allowances in accordance 
with this subpart.
    (2) A description of whether a unit is required to monitor and 
report NOX emissions using a continuous emission monitoring 
system (under subpart H of part 75 of this chapter), an excepted 
monitoring system (under appendices D and E to part 75 of this 
chapter), a low mass emissions excepted monitoring methodology (under 
Sec.  75.19 of this chapter), or an alternative monitoring system 
(under subpart E of part 75 of this chapter) in accordance with 
Sec. Sec.  97.1030 through 97.1035 may be added to, or changed in, a 
title V permit using minor permit modification procedures in accordance 
with Sec. Sec.  70.7(e)(2) and 71.7(e)(1) of this chapter, provided 
that the requirements applicable to the described monitoring and 
reporting (as added or changed, respectively) are already incorporated 
in such permit. This paragraph explicitly provides that the addition 
of, or change to, a unit's description as described in the prior 
sentence is eligible for minor permit modification procedures in 
accordance with Sec. Sec.  70.7(e)(2)(i)(B) and 71.7(e)(1)(i)(B) of 
this chapter.
    (e) Additional recordkeeping and reporting requirements. (1) Unless 
otherwise provided, the owners and operators of each CSAPR 
NOX Ozone Season Group 3 source and each CSAPR 
NOX Ozone Season Group 3 unit at the source shall keep on 
site at the source each of the following documents (in hardcopy or 
electronic format) for a period of 5 years from the date the document 
is created. This period may be extended for cause, at any time before 
the end of 5 years, in writing by the Administrator.
    (i) The certificate of representation under Sec.  97.1016 for the 
designated representative for the source and each CSAPR NOX 
Ozone Season Group 3 unit at the source and all documents that 
demonstrate the truth of the statements in the certificate of 
representation; provided that the certificate and documents shall be 
retained on site at the source beyond such 5-year period until such 
certificate of representation and documents are superseded because of 
the submission of a new certificate of representation under Sec.  
97.1016 changing the designated representative.
    (ii) All emissions monitoring information, in accordance with this 
subpart.
    (iii) Copies of all reports, compliance certifications, and other 
submissions and all records made or required under, or to demonstrate 
compliance with the requirements of, the CSAPR NOX Ozone 
Season Group 3 Trading Program.
    (2) The designated representative of a CSAPR NOX Ozone 
Season Group 3 source and each CSAPR NOX Ozone Season Group 
3 unit at the source shall make all submissions required under the 
CSAPR NOX Ozone Season Group 3 Trading Program, except as 
provided in Sec.  97.1018. This requirement does not change, create an 
exemption from, or otherwise affect the responsible official submission 
requirements under a title V operating permit program in parts 70 and 
71 of this chapter.
    (f) Liability. (1) Any provision of the CSAPR NOX Ozone 
Season Group 3 Trading Program that applies to a CSAPR NOX 
Ozone Season Group 3 source or the designated representative of a CSAPR 
NOX Ozone Season Group 3 source shall also apply to the 
owners and operators of such source and of the CSAPR NOX 
Ozone Season Group 3 units at the source.
    (2) Any provision of the CSAPR NOX Ozone Season Group 3 
Trading Program that applies to a CSAPR NOX Ozone Season 
Group 3 unit or the designated representative of a CSAPR NOX 
Ozone Season Group 3 unit shall also apply to the owners and operators 
of such unit.
    (g) Effect on other authorities. No provision of the CSAPR 
NOX Ozone Season Group 3 Trading Program or exemption under 
Sec.  97.1005 shall be construed as exempting or excluding the owners 
and operators, and the designated representative, of a CSAPR 
NOX Ozone Season Group 3 source or CSAPR NOX 
Ozone Season Group 3 unit from compliance with any other provision of 
the applicable, approved State implementation plan, a federally 
enforceable permit, or the Clean Air Act.


Sec.  97.1007   Computation of time.

    (a) Unless otherwise stated, any time period scheduled, under the 
CSAPR NOX Ozone Season Group 3 Trading Program, to begin on 
the occurrence of an act or event shall begin on the day the act or 
event occurs.
    (b) Unless otherwise stated, any time period scheduled, under the 
CSAPR NOX Ozone Season Group 3 Trading Program, to begin 
before the occurrence of an act or event shall be computed so that the 
period ends the day before the act or event occurs.
    (c) Unless otherwise stated, if the final day of any time period, 
under the CSAPR NOX Ozone Season Group 3 Trading Program, is 
not a business day, the time period shall be extended to the next 
business day.


Sec.  97.1008   Administrative appeal procedures.

    The administrative appeal procedures for decisions of the 
Administrator under the CSAPR NOX Ozone Season Group 3 
Trading Program are set forth in part 78 of this chapter.


Sec.  97.1009   [Reserved]


Sec.  97.1010   State NOX Ozone Season Group 3 trading budgets, new 
unit set-asides, Indian country new unit set-asides, and variability 
limits.

    (a) The State NOX Ozone Season Group 3 trading budgets, 
new unit set-asides, and Indian country new unit set-asides for 
allocations of CSAPR NOX Ozone Season Group 3 allowances for 
the control periods in 2021, 2022, 2023, and 2024 and thereafter are as 
indicated in Tables 1, 2, and 3 to this paragraph (a), respectively:

[[Page 69092]]



                Table 1 to Paragraph (a)--State NOX Ozone Season Group 3 Trading Budgets by Year
                                                     [tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                     2024 and
                      State                            2021            2022            2023         thereafter
----------------------------------------------------------------------------------------------------------------
Alabama.........................................           7,786           7,610           7,610           7,610
Arkansas........................................           8,708           8,330           8,330           8,330
Georgia.........................................           7,808           7,808           7,808           7,808
Illinois........................................           9,444           9,415           8,397           8,397
Indiana.........................................          12,500          11,998          11,998           9,447
Iowa............................................           7,714           7,626           7,266           7,266
Kansas..........................................           5,384           5,384           5,384           5,384
Kentucky........................................          14,384          11,936          11,936          11,936
Louisiana.......................................          15,402          14,871          14,871          14,871
Maryland........................................           1,522           1,498           1,498           1,498
Michigan........................................          12,727          11,767           9,803           9,614
Mississippi.....................................           6,315           6,315           6,315           6,315
Missouri........................................          11,358          11,358          11,079          11,079
New Jersey......................................           1,253           1,253           1,253           1,253
New York........................................           3,137           3,137           3,137           3,119
Ohio............................................           9,605           9,676           9,676           9,676
Oklahoma........................................           8,717           8,717           8,717           8,717
Pennsylvania....................................           8,076           8,076           8,076           8,076
Tennessee.......................................           4,367           4,367           4,367           4,367
Texas...........................................          42,312          41,995          41,807          41,807
Virginia........................................           4,544           3,656           3,656           3,395
West Virginia...................................          13,686          12,813          11,810          11,810
Wisconsin.......................................           4,875           4,875           4,622           4,104
----------------------------------------------------------------------------------------------------------------


                              Table 2 to Paragraph (a)--New Unit Set-Asides by Year
                                                     [tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                     2024 and
                      State                            2021            2022            2023         thereafter
----------------------------------------------------------------------------------------------------------------
Alabama.........................................             148             144             144             144
Arkansas........................................             174             167             167             167
Georgia.........................................             156             156             156             156
Illinois........................................             181             181             173             173
Indiana.........................................             253             238             238             188
Iowa............................................             146             145             138             138
Kansas..........................................             103             103             103             103
Kentucky........................................             289             240             240             240
Louisiana.......................................             444             430             430             430
Maryland........................................              31              33              33              33
Michigan........................................             371             340             286             277
Mississippi.....................................             120             120             120             120
Missouri........................................             227             227             222             222
New Jersey......................................              27              27              27              27
New York........................................             154             154             154             153
Ohio............................................             285             291             291             291
Oklahoma........................................             165             165             165             165
Pennsylvania....................................             326             326             326             326
Tennessee.......................................              87              87              87              87
Texas...........................................             804             798             794             794
Virginia........................................              91              76              76              68
West Virginia...................................             273             261             236             236
Wisconsin.......................................             141             141             134             119
----------------------------------------------------------------------------------------------------------------


                      Table 3 to Paragraph (a)--Indian Country New Unit Set-Asides by Year
                                                     [tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                     2024 and
                      State                            2021            2022            2023         thereafter
----------------------------------------------------------------------------------------------------------------
Alabama.........................................               8               8               8               8
Arkansas........................................  ..............  ..............  ..............  ..............
Georgia.........................................  ..............  ..............  ..............  ..............
Illinois........................................  ..............  ..............  ..............  ..............
Indiana.........................................  ..............  ..............  ..............  ..............
Iowa............................................               8               8               7               7
Kansas..........................................               5               5               5               5

[[Page 69093]]

 
Kentucky........................................  ..............  ..............  ..............  ..............
Louisiana.......................................              15              15              15              15
Maryland........................................  ..............  ..............  ..............  ..............
Michigan........................................              13              12              10              10
Mississippi.....................................               6               6               6               6
Missouri........................................  ..............  ..............  ..............  ..............
New Jersey......................................  ..............  ..............  ..............  ..............
New York........................................               3               3               3               3
Ohio............................................  ..............  ..............  ..............  ..............
Oklahoma........................................               9               9               9               9
Pennsylvania....................................  ..............  ..............  ..............  ..............
Tennessee.......................................  ..............  ..............  ..............  ..............
Texas...........................................              42              42              42              42
Virginia........................................  ..............  ..............  ..............  ..............
West Virginia...................................  ..............  ..............  ..............  ..............
Wisconsin.......................................               5               5               5               4
----------------------------------------------------------------------------------------------------------------

    (b) The States' variability limits for the State NOX 
Ozone Season Group 3 trading budgets for the control periods in 2021, 
2022, 2023, and 2024 and thereafter are as indicated in Table 4 to this 
paragraph (b):

                              Table 4 to Paragraph (b)--Variability Limits by Year
                                                     [tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                     2024 and
                      State                            2021            2022            2023         thereafter
----------------------------------------------------------------------------------------------------------------
Alabama.........................................           1,635           1,598           1,598           1,598
Arkansas........................................           1,829           1,749           1,749           1,749
Georgia.........................................           1,640           1,640           1,640           1,640
Illinois........................................           1,983           1,977           1,763           1,763
Indiana.........................................           2,625           2,520           2,520           1,984
Iowa............................................           1,620           1,601           1,526           1,526
Kansas..........................................           1,131           1,131           1,131           1,131
Kentucky........................................           3,021           2,507           2,507           2,507
Louisiana.......................................           3,234           3,123           3,123           3,123
Maryland........................................             320             315             315             315
Michigan........................................           2,673           2,471           2,059           2,019
Mississippi.....................................           1,326           1,326           1,326           1,326
Missouri........................................           2,385           2,385           2,327           2,327
New Jersey......................................             263             263             263             263
New York........................................             659             659             659             655
Ohio............................................           2,017           2,032           2,032           2,032
Oklahoma........................................           1,831           1,831           1,831           1,831
Pennsylvania....................................           1,696           1,696           1,696           1,696
Tennessee.......................................             917             917             917             917
Texas...........................................           8,886           8,819           8,779           8,779
Virginia........................................             954             768             768             713
West Virginia...................................           2,874           2,691           2,480           2,480
Wisconsin.......................................           1,024           1,024             971             862
----------------------------------------------------------------------------------------------------------------

    (c) Each State NOX Ozone Season Group 3 trading budget 
in this section includes any tons in a new unit set-aside or Indian 
country new unit set-aside but does not include any tons in a 
variability limit.
    (d) For the control period in 2021 only, the Administrator will 
determine for each State a supplemental amount of CSAPR NOX 
Ozone Season Group 3 allowances computed as the product, rounded to the 
nearest allowance, of the difference between the State NOX 
Ozone Season Group 2 trading budget for the control period in 2021 
under Sec.  97.810(a) and the State NOX Ozone Season Group 3 
trading budget for the control period in 2021 under paragraph (a) of 
this section multiplied by a fraction whose numerator is the number of 
days from May 1, 2021 through [DATE 59 DAYS AFTER DATE OF PUBLICATION 
OF THE FINAL RULE IN THE FEDERAL REGISTER], inclusive, and whose 
denominator is 153.


Sec.  97.1011   Timing requirements for CSAPR NOX Ozone Season Group 3 
allowance allocations.

    (a) Existing units. (1) CSAPR NOX Ozone Season Group 3 
allowances are allocated, for the control periods in 2021 and each year 
thereafter, as provided in a notice of data availability issued by the 
Administrator. Providing an allocation to a unit in such notice does 
not constitute a determination that the unit is a CSAPR NOX 
Ozone Season Group 3 unit, and not providing an allocation to a unit in 
such notice does

[[Page 69094]]

not constitute a determination that the unit is not a CSAPR 
NOX Ozone Season Group 3 unit.
    (2) Notwithstanding paragraph (a)(1) of this section, if a unit 
provided an allocation in the notice of data availability issued under 
paragraph (a)(1) of this section does not operate, starting after 2020, 
during the control period in two consecutive years, such unit will not 
be allocated the CSAPR NOX Ozone Season Group 3 allowances 
provided in such notice for the unit for the control periods in the 
fifth year after the first such year and in each year after that fifth 
year. All CSAPR NOX Ozone Season Group 3 allowances that 
would otherwise have been allocated to such unit will be allocated to 
the new unit set-aside for the State where such unit is located and for 
the respective years involved. If such unit resumes operation, the 
Administrator will allocate CSAPR NOX Ozone Season Group 3 
allowances to the unit in accordance with paragraph (b) of this 
section.
    (3) For the control period in 2021 only, the Administrator will 
allocate to each unit to which CSAPR NOX Ozone Season Group 
3 allowances are allocated under paragraph (a)(1) of this section a 
share of the supplemental amount of CSAPR NOX Ozone Season 
Group 3 allowances determined for the State in which the unit is 
located under Sec.  97.1010(d), where each such unit's share will be 
computed as the difference between--
    (i) The amount that would have been established as the unit's 
allocation for purposes of the notice of data availability referenced 
in paragraph (a)(1) of this section if the total amount of CSAPR 
NOX Ozone Season Group 3 allowances being allocated to the 
units in the State for purposes of such notice were increased by the 
supplemental amount determined for the State under Sec.  97.1010(d); 
and
    (ii) The amount that was actually established as the unit's 
allocation for purposes of the notice of data availability referenced 
in paragraph (a)(1) of this section.
    (b) New units--(1) New unit set-asides. (i)(A) By June 1, 2021 and 
June 1, 2022, the Administrator will calculate the CSAPR NOX 
Ozone Season Group 3 allowance allocation to each CSAPR NOX 
Ozone Season Group 3 unit in a State, in accordance with Sec.  
97.1012(a)(2) through (7) and (12), for the control period in the year 
of the applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Ozone Season 
Group 3 allowance allocation to each CSAPR NOX Ozone Season 
Group 3 unit in a State, in accordance with Sec.  97.1012(a)(2) through 
(7), (10), and (12), for the control period in the year before the year 
of the applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) For each notice of data availability required in paragraph 
(b)(1)(i) of this section, the Administrator will provide an 
opportunity for submission of objections to the calculations referenced 
in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(1)(i) of this 
section and shall be limited to addressing whether the calculations 
(including the identification of the CSAPR NOX Ozone Season 
Group 3 units) are in accordance with Sec.  97.1012(a)(2) through (7) 
and (12) for a control period before 2023, or Sec.  97.1012(a)(2) 
through (7), (10), and (12) for a control period in 2023 or thereafter, 
and Sec. Sec.  97.1006(b)(2) and 97.1030 through 97.1035.
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(1)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(1)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(1)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(1)(ii)(A) of this section.
    (iii) If the new unit set-aside for a control period before 2023 
contains any CSAPR NOX Ozone Season Group 3 allowances that 
have not been allocated in the applicable notice of data availability 
required in paragraph (b)(1)(ii) of this section, the Administrator 
will promulgate, by December 15 immediately after such notice, a notice 
of data availability that identifies any CSAPR NOX Ozone 
Season Group 3 units that commenced commercial operation during the 
period starting January 1 of the year before the year of such control 
period and ending November 30 of the year of such control period.
    (iv) For each notice of data availability required in paragraph 
(b)(1)(iii) of this section, the Administrator will provide an 
opportunity for submission of objections to the identification of CSAPR 
NOX Ozone Season Group 3 units in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(1)(iii) of this 
section and shall be limited to addressing whether the identification 
of CSAPR NOX Ozone Season Group 3 units in such notice is in 
accordance with paragraph (b)(1)(iii) of this section.
    (B) The Administrator will adjust the identification of CSAPR 
NOX Ozone Season Group 3 units in each notice of data 
availability required in paragraph (b)(1)(iii) of this section to the 
extent necessary to ensure that it is in accordance with paragraph 
(b)(1)(iii) of this section and will calculate the CSAPR NOX 
Ozone Season Group 3 allowance allocation to each CSAPR NOX 
Ozone Season Group 3 unit in accordance with Sec.  97.1012(a)(9), (10), 
and (12) and Sec. Sec.  97.1006(b)(2) and 97.1030 through 97.1035. By 
February 15 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(1)(iii) of this section, the 
Administrator will promulgate a notice of data availability of any 
adjustments of the identification of CSAPR NOX Ozone Season 
Group 3 units that the Administrator determines to be necessary, the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(1)(iv)(A) of this section, and the 
results of such calculations.
    (v) To the extent any CSAPR NOX Ozone Season Group 3 
allowances are added to the new unit set-aside after promulgation of 
each notice of data availability required in paragraph (b)(1)(iv) of 
this section for a control period before 2023, or in paragraph 
(b)(1)(ii) of this section for a control period in 2023 or thereafter, 
the Administrator will promulgate additional notices of data 
availability, as deemed appropriate, of the allocation of such CSAPR 
NOX Ozone Season Group 3 allowances in accordance with Sec.  
97.1012(a)(10).
    (2) Indian country new unit set-asides. (i)(A) By June 1, 2021 and 
June 1, 2022, the Administrator will calculate the CSAPR NOX 
Ozone Season Group 3 allowance allocation to each CSAPR

[[Page 69095]]

NOX Ozone Season Group 3 unit in Indian country within the 
borders of a State, in accordance with Sec.  97.1012(b)(2) through (7) 
and (12), for the control period in the year of the applicable 
calculation deadline under this paragraph and will promulgate a notice 
of data availability of the results of the calculations.
    (B) By March 1, 2024 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Ozone Season 
Group 3 allowance allocation to each CSAPR NOX Ozone Season 
Group 3 unit in a State, in accordance with Sec.  97.1012(b)(2) through 
(7), (10), and (12), for the control period in the year before the year 
of the applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) For each notice of data availability required in paragraph 
(b)(2)(i) of this section, the Administrator will provide an 
opportunity for submission of objections to the calculations referenced 
in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(2)(i) of this 
section and shall be limited to addressing whether the calculations 
(including the identification of the CSAPR NOX Ozone Season 
Group 3 units) are in accordance with Sec.  97.1012(b)(2) through (7) 
and (12) for a control period before 2023, or Sec.  97.1012(b)(2) 
through (7), (10), and (12) for a control period in 2023 or thereafter, 
and Sec. Sec.  97.1006(b)(2) and 97.1030 through 97.1035.
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the applicable 
provisions referenced in paragraph (b)(2)(ii)(A) of this section. By 
August 1 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(2)(i)(A) of this section for a 
control period before 2023, or by May 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(2)(i)(B) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate a notice of data 
availability of the calculations incorporating any adjustments that the 
Administrator determines to be necessary with regard to allocations 
under such applicable provisions and the reasons for accepting or 
rejecting any objections submitted in accordance with paragraph 
(b)(2)(ii)(A) of this section.
    (iii) If the Indian country new unit set-aside for a control period 
before 2023 contains any CSAPR NOX Ozone Season Group 3 
allowances that have not been allocated in the applicable notice of 
data availability required in paragraph (b)(2)(ii) of this section, the 
Administrator will promulgate, by December 15 immediately after such 
notice, a notice of data availability that identifies any CSAPR 
NOX Ozone Season Group 3 units that commenced commercial 
operation during the period starting January 1 of the year before the 
year of such control period and ending November 30 of the year of such 
control period.
    (iv) For each notice of data availability required in paragraph 
(b)(2)(iii) of this section, the Administrator will provide an 
opportunity for submission of objections to the identification of CSAPR 
NOX Ozone Season Group 3 units in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(2)(iii) of this 
section and shall be limited to addressing whether the identification 
of CSAPR NOX Ozone Season Group 3 units in such notice is in 
accordance with paragraph (b)(2)(iii) of this section.
    (B) The Administrator will adjust the identification of CSAPR 
NOX Ozone Season Group 3 units in each notice of data 
availability required in paragraph (b)(2)(iii) of this section to the 
extent necessary to ensure that it is in accordance with paragraph 
(b)(2)(iii) of this section and will calculate the CSAPR NOX 
Ozone Season Group 3 allowance allocation to each CSAPR NOX 
Ozone Season Group 3 unit in accordance with Sec.  97.1012(b)(9), (10), 
and (12) and Sec. Sec.  97.1006(b)(2) and 97.1030 through 97.1035. By 
February 15 immediately after the promulgation of each notice of data 
availability required in paragraph (b)(2)(iii) of this section, the 
Administrator will promulgate a notice of data availability of any 
adjustments of the identification of CSAPR NOX Ozone Season 
Group 3 units that the Administrator determines to be necessary, the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(2)(iv)(A) of this section, and the 
results of such calculations.
    (v) To the extent any CSAPR NOX Ozone Season Group 3 
allowances are added to the Indian country new unit set-aside after 
promulgation of each notice of data availability required in paragraph 
(b)(2)(iv) of this section for a control period before 2023, or in 
paragraph (b)(2)(ii) of this section for a control period in 2023 or 
thereafter, the Administrator will promulgate additional notices of 
data availability, as deemed appropriate, of the allocation of such 
CSAPR NOX Ozone Season Group 3 allowances in accordance with 
Sec.  97.1012(b)(10).
    (c) Units incorrectly allocated CSAPR NOX Ozone Season 
Group 3 allowances. (1) For each control period in 2021 and thereafter, 
if the Administrator determines that CSAPR NOX Ozone Season 
Group 3 allowances were allocated under paragraph (a) of this section, 
or under a provision of a SIP revision approved under Sec.  
52.38(b)(10), (11), (12), or (13) of this chapter, where such control 
period and the recipient are covered by the provisions of paragraph 
(c)(1)(i) of this section or were allocated under Sec.  97.1012(a)(2) 
through (7) and (12) and (b)(2) through (7) and (12), or under a 
provision of a SIP revision approved under Sec.  52.38(b)(10), (12), or 
(13) of this chapter, where such control period and the recipient are 
covered by the provisions of paragraph (c)(1)(ii) of this section, then 
the Administrator will notify the designated representative of the 
recipient and will act in accordance with the procedures set forth in 
paragraphs (c)(2) through (5) of this section:
    (i)(A) The recipient is not actually a CSAPR NOX Ozone 
Season Group 3 unit under Sec.  97.1004 as of May 1, 2021 and is 
allocated CSAPR NOX Ozone Season Group 3 allowances for such 
control period or, in the case of an allocation under a provision of a 
SIP revision approved under Sec.  52.38(b)(10), (11), (12), or (13) of 
this chapter, the recipient is not actually a CSAPR NOX 
Ozone Season Group 3 unit as of May 1, 2021 and is allocated CSAPR 
NOX Ozone Season Group 3 allowances for such control period 
that the SIP revision provides should be allocated only to recipients 
that are CSAPR NOX Ozone Season Group 3 units as of May 1, 
2021; or
    (B) The recipient is not located as of May 1 of the control period 
in the State from whose NOX Ozone Season Group 3 trading 
budget the CSAPR NOX Ozone Season Group 3 allowances 
allocated under paragraph (a) of this section, or under a provision of 
a SIP revision approved under Sec.  52.38(b)(10), (11), (12), or (13) 
of this chapter, were allocated for such control period.
    (ii) The recipient is not actually a CSAPR NOX Ozone 
Season Group 3 unit under Sec.  97.1004 as of May 1 of such control 
period and is allocated CSAPR NOX Ozone Season Group 3 
allowances for such control period or, in the case of an allocation 
under a provision of a SIP revision approved under Sec.  52.38(b)(10), 
(12), or (13) of this chapter, the recipient is not actually a

[[Page 69096]]

CSAPR NOX Ozone Season Group 3 unit as of May 1 of such 
control period and is allocated CSAPR NOX Ozone Season Group 
3 allowances for such control period that the SIP revision provides 
should be allocated only to recipients that are CSAPR NOX 
Ozone Season Group 3 units as of May 1 of such control period.
    (2) Except as provided in paragraph (c)(3) or (4) of this section, 
the Administrator will not record such CSAPR NOX Ozone 
Season Group 3 allowances under Sec.  97.1021.
    (3) If the Administrator already recorded such CSAPR NOX 
Ozone Season Group 3 allowances under Sec.  97.1021 and if the 
Administrator makes the determination under paragraph (c)(1) of this 
section before making deductions for the source that includes such 
recipient under Sec.  97.1024(b) for such control period, then the 
Administrator will deduct from the account in which such CSAPR 
NOX Ozone Season Group 3 allowances were recorded an amount 
of CSAPR NOX Ozone Season Group 3 allowances allocated for 
the same or a prior control period equal to the amount of such already 
recorded CSAPR NOX Ozone Season Group 3 allowances. The 
authorized account representative shall ensure that there are 
sufficient CSAPR NOX Ozone Season Group 3 allowances in such 
account for completion of the deduction.
    (4) If the Administrator already recorded such CSAPR NOX 
Ozone Season Group 3 allowances under Sec.  97.1021 and if the 
Administrator makes the determination under paragraph (c)(1) of this 
section after making deductions for the source that includes such 
recipient under Sec.  97.1024(b) for such control period, then the 
Administrator will not make any deduction to take account of such 
already recorded CSAPR NOX Ozone Season Group 3 allowances.
    (5)(i) With regard to the CSAPR NOX Ozone Season Group 3 
allowances that are not recorded, or that are deducted as an incorrect 
allocation, in accordance with paragraphs (c)(2) and (3) of this 
section for a recipient under paragraph (c)(1)(i) of this section, the 
Administrator will:
    (A) Transfer such CSAPR NOX Ozone Season Group 3 
allowances to the new unit set-aside for such control period (or a 
subsequent control period) for the State from whose NOX 
Ozone Season Group 3 trading budget the CSAPR NOX Ozone 
Season Group 3 allowances were allocated; or
    (B) If the State has a SIP revision approved under Sec.  
52.38(b)(10), (12), or (13) of this chapter covering such control 
period, include such CSAPR NOX Ozone Season Group 3 
allowances in the portion of the State NOX Ozone Season 
Group 3 trading budget that may be allocated for such control period 
(or a subsequent control period) in accordance with such SIP revision.
    (ii) With regard to the CSAPR NOX Ozone Season Group 3 
allowances that were not allocated from the Indian country new unit 
set-aside for such control period and that are not recorded, or that 
are deducted as an incorrect allocation, in accordance with paragraphs 
(c)(2) and (3) of this section for a recipient under paragraph 
(c)(1)(ii) of this section, the Administrator will:
    (A) Transfer such CSAPR NOX Ozone Season Group 3 
allowances to the new unit set-aside for such control period (or a 
subsequent control period); or
    (B) If the State has a SIP revision approved under Sec.  
52.38(b)(10), (12), or (13) of this chapter covering such control 
period, include such CSAPR NOX Ozone Season Group 3 
allowances in the portion of the State NOX Ozone Season 
Group 3 trading budget that may be allocated for such control period 
(or a subsequent control period) in accordance with such SIP revision.
    (iii) With regard to the CSAPR NOX Ozone Season Group 3 
allowances that were allocated from the Indian country new unit set-
aside for such control period and that are not recorded, or that are 
deducted as an incorrect allocation, in accordance with paragraphs 
(c)(2) and (3) of this section for a recipient under paragraph 
(c)(1)(ii) of this section, the Administrator will transfer such CSAPR 
NOX Ozone Season Group 3 allowances to the Indian country 
new unit set-aside for such control period (or a subsequent control 
period).


Sec.  97.1012   CSAPR NOX Ozone Season Group 3 allowance allocations to 
new units.

    (a) Allocations from new unit set-asides. For each control period 
in 2021 and thereafter and for the CSAPR NOX Ozone Season 
Group 3 units in each State, the Administrator will allocate CSAPR 
NOX Ozone Season Group 3 allowances to the CSAPR 
NOX Ozone Season Group 3 units as follows:
    (1) The CSAPR NOX Ozone Season Group 3 allowances will 
be allocated to the following CSAPR NOX Ozone Season Group 3 
units, except as provided in paragraph (a)(10) of this section:
    (i) CSAPR NOX Ozone Season Group 3 units that are not 
allocated an amount of CSAPR NOX Ozone Season Group 3 
allowances in the notice of data availability issued under Sec.  
97.1011(a)(1) and that have deadlines for certification of monitoring 
systems under Sec.  97.1030(b) not later than September 30 of the year 
of the control period;
    (ii) CSAPR NOX Ozone Season Group 3 units whose 
allocation of an amount of CSAPR NOX Ozone Season Group 3 
allowances for such control period in the notice of data availability 
issued under Sec.  97.1011(a)(1) is covered by Sec.  97.1011(c)(2) or 
(3);
    (iii) CSAPR NOX Ozone Season Group 3 units that are 
allocated an amount of CSAPR NOX Ozone Season Group 3 
allowances for such control period in the notice of data availability 
issued under Sec.  97.1011(a)(1), which allocation is terminated for 
such control period pursuant to Sec.  97.1011(a)(2), and that operate 
during the control period immediately preceding such control period, 
for a control period before 2023, or that operate during such control 
period, for a control period in 2023 or thereafter; or
    (iv) For purposes of paragraph (a)(9) of this section, CSAPR 
NOX Ozone Season Group 3 units under Sec.  97.1011(c)(1)(ii) 
whose allocation of an amount of CSAPR NOX Ozone Season 
Group 3 allowances for such control period in the notice of data 
availability issued under Sec.  97.1011(b)(1)(ii)(B) is covered by 
Sec.  97.1011(c)(2) or (3).
    (2) The Administrator will establish a separate new unit set-aside 
for the State for each such control period. Each such new unit set-
aside will be allocated CSAPR NOX Ozone Season Group 3 
allowances in an amount equal to the applicable amount of tons of 
NOX emissions as set forth in Sec.  97.1010(a) and will be 
allocated additional CSAPR NOX Ozone Season Group 3 
allowances (if any) in accordance with Sec.  97.1011(a)(2) and (c)(5) 
and paragraph (b)(10) of this section.
    (3) The Administrator will determine, for each CSAPR NOX 
Ozone Season Group 3 unit described in paragraph (a)(1) of this 
section, an allocation of CSAPR NOX Ozone Season Group 3 
allowances for the latest of the following control periods and for each 
subsequent control period:
    (i) The control period in 2021;
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR NOX Ozone Season 
Group 3 unit's monitoring systems under Sec.  97.1030(b), for 
allocations for a control period before 2023, or the control period 
containing such deadline, for allocations for a control period in 2023 
or thereafter;
    (iii) For a unit described in paragraph (a)(1)(ii) of this section, 
the first control period in which the CSAPR NOX Ozone Season 
Group 3 unit operates in the State after operating in another

[[Page 69097]]

jurisdiction and for which the unit is not already allocated one or 
more CSAPR NOX Ozone Season Group 3 allowances; and
    (iv) For a unit described in paragraph (a)(1)(iii) of this section, 
the first control period after the control period in which the unit 
resumes operation, for allocations for a control period before 2023, or 
the control period in which the unit resumes operation, for allocations 
for a control period in 2023 or thereafter.
    (4) The allocation to each CSAPR NOX Ozone Season Group 
3 unit described in paragraphs (a)(1)(i) through (iii) of this section 
and for each control period described in paragraph (a)(3) of this 
section will be an amount equal to the unit's total tons of 
NOX emissions during the immediately preceding control 
period, for a control period before 2023, or the unit's total tons of 
NOX emissions during the control period, for a control 
period in 2023 or thereafter.
    (ii) The Administrator will adjust the allocation amount in 
paragraph (a)(4)(i) of this section in accordance with paragraphs 
(a)(5) through (7) and (12) of this section.
    (5) The Administrator will calculate the sum of the allocation 
amounts of CSAPR NOX Ozone Season Group 3 allowances 
determined for all such CSAPR NOX Ozone Season Group 3 units 
under paragraph (a)(4)(i) of this section in the State for such control 
period.
    (6) If the amount of CSAPR NOX Ozone Season Group 3 
allowances in the new unit set-aside for the State for such control 
period is greater than or equal to the sum under paragraph (a)(5) of 
this section, then the Administrator will allocate the amount of CSAPR 
NOX Ozone Season Group 3 allowances determined for each such 
CSAPR NOX Ozone Season Group 3 unit under paragraph 
(a)(4)(i) of this section.
    (7) If the amount of CSAPR NOX Ozone Season Group 3 
allowances in the new unit set-aside for the State for such control 
period is less than the sum under paragraph (a)(5) of this section, 
then the Administrator will allocate to each such CSAPR NOX 
Ozone Season Group 3 unit the amount of the CSAPR NOX Ozone 
Season Group 3 allowances determined under paragraph (a)(4)(i) of this 
section for the unit, multiplied by the amount of CSAPR NOX 
Ozone Season Group 3 allowances in the new unit set-aside for such 
control period, divided by the sum under paragraph (a)(5) of this 
section, and rounded to the nearest allowance.
    (8) For a control period before 2023 only, the Administrator will 
notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.1011(b)(1)(i) and (ii), of the 
amount of CSAPR NOX Ozone Season Group 3 allowances 
allocated under paragraphs (a)(2) through (7) and (12) of this section 
for such control period to each CSAPR NOX Ozone Season Group 
3 unit eligible for such allocation.
    (9) For a control period before 2023 only, if, after completion of 
the procedures under paragraphs (a)(5) through (8) of this section for 
such control period, any unallocated CSAPR NOX Ozone Season 
Group 3 allowances remain in the new unit set-aside for the State for 
such control period, the Administrator will allocate such CSAPR 
NOX Ozone Season Group 3 allowances as follows--
    (i) The Administrator will determine, for each unit described in 
paragraph (a)(1) of this section that commenced commercial operation 
during the period starting January 1 of the year before the year of 
such control period and ending November 30 of the year of such control 
period, the positive difference (if any) between the unit's emissions 
during such control period and the amount of CSAPR NOX Ozone 
Season Group 3 allowances referenced in the notice of data availability 
required under Sec.  97.1011(b)(1)(ii) for the unit for such control 
period;
    (ii) The Administrator will determine the sum of the positive 
differences determined under paragraph (a)(9)(i) of this section;
    (iii) If the amount of unallocated CSAPR NOX Ozone 
Season Group 3 allowances remaining in the new unit set-aside for the 
State for such control period is greater than or equal to the sum 
determined under paragraph (a)(9)(ii) of this section, then the 
Administrator will allocate the amount of CSAPR NOX Ozone 
Season Group 3 allowances determined for each such CSAPR NOX 
Ozone Season Group 3 unit under paragraph (a)(9)(i) of this section; 
and
    (iv) If the amount of unallocated CSAPR NOX Ozone Season 
Group 3 allowances remaining in the new unit set-aside for the State 
for such control period is less than the sum under paragraph (a)(9)(ii) 
of this section, then the Administrator will allocate to each such 
CSAPR NOX Ozone Season Group 3 unit the amount of the CSAPR 
NOX Ozone Season Group 3 allowances determined under 
paragraph (a)(9)(i) of this section for the unit, multiplied by the 
amount of unallocated CSAPR NOX Ozone Season Group 3 
allowances remaining in the new unit set-aside for such control period, 
divided by the sum under paragraph (a)(9)(ii) of this section, and 
rounded to the nearest allowance.
    (10) If, after completion of the procedures under paragraphs (a)(9) 
and (12) of this section for a control period before 2023, or under 
paragraphs (a)(2) through (7) and (12) of this section for a control 
period in 2023 or thereafter, any unallocated CSAPR NOX 
Ozone Season Group 3 allowances remain in the new unit set-aside for 
the State for such control period, the Administrator will allocate to 
each CSAPR NOX Ozone Season Group 3 unit that is in the 
State, is allocated an amount of CSAPR NOX Ozone Season 
Group 3 allowances in the notice of data availability issued under 
Sec.  97.1011(a)(1), and continues to be allocated CSAPR NOX 
Ozone Season Group 3 allowances for such control period in accordance 
with Sec.  97.1011(a)(2), an amount of CSAPR NOX Ozone 
Season Group 3 allowances equal to the following: The total amount of 
such remaining unallocated CSAPR NOX Ozone Season Group 3 
allowances in such new unit set-aside, multiplied by the unit's 
allocation under Sec.  97.1011(a) for such control period, divided by 
the remainder of the amount of tons in the applicable State 
NOX Ozone Season Group 3 trading budget minus the sum of the 
amounts of tons in such new unit set-aside and the Indian country new 
unit set-aside for the State for such control period, and rounded to 
the nearest allowance.
    (11)(i) For a control period before 2023, the Administrator will 
notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.1011(b)(1)(iii), (iv), and (v), of 
the amount of CSAPR NOX Ozone Season Group 3 allowances 
allocated under paragraphs (a)(9), (10), and (12) of this section for 
such control period to each CSAPR NOX Ozone Season Group 3 
unit eligible for such allocation.
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.1011(b)(1)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 3 allowances 
allocated under paragraphs (a)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone 
Season Group 3 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2023 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or

[[Page 69098]]

for a control period in 2023 or thereafter under paragraph (a)(7) of 
this section or paragraphs (a)(6) and (10) of this section, would 
otherwise result in total allocations from such new unit set-aside 
unequal to the total amount of such new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR NOX Ozone Season Group 
3 units in descending order based on such units' allocation amounts 
under paragraph (a)(7), (a)(9)(iv), or (a)(10) of this section, as 
applicable, and, in cases of equal allocation amounts, in alphabetical 
order of the relevant sources' names and numerical order of the 
relevant units' identification numbers, and will adjust each unit's 
allocation amount under such paragraph upward or downward by one CSAPR 
NOX Ozone Season Group 3 allowance (but not below zero) in 
the order in which the units are listed, and will repeat this 
adjustment process as necessary, until the total allocations from such 
new unit set-aside equal the total amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. For each 
control period in 2021 and thereafter and for the CSAPR NOX 
Ozone Season Group 3 units located in Indian country within the borders 
of each State, the Administrator will allocate CSAPR NOX 
Ozone Season Group 3 allowances to the CSAPR NOX Ozone 
Season Group 3 units as follows:
    (1) The CSAPR NOX Ozone Season Group 3 allowances will 
be allocated to the following CSAPR NOX Ozone Season Group 3 
units, except as provided in paragraph (b)(10) of this section:
    (i) CSAPR NOX Ozone Season Group 3 units that are not 
allocated an amount of CSAPR NOX Ozone Season Group 3 
allowances in the notice of data availability issued under Sec.  
97.1011(a)(1) and that have deadlines for certification of monitoring 
systems under Sec.  97.1030(b) not later than September 30 of the year 
of the control period; or
    (ii) For purposes of paragraph (b)(9) of this section, CSAPR 
NOX Ozone Season Group 3 units under Sec.  97.1011(c)(1)(ii) 
whose allocation of an amount of CSAPR NOX Ozone Season 
Group 3 allowances for such control period in the notice of data 
availability issued under Sec.  97.1011(b)(2)(ii)(B) is covered by 
Sec.  97.1011(c)(2) or (3).
    (2) The Administrator will establish a separate Indian country new 
unit set-aside for the State for each such control period. Each such 
Indian country new unit set-aside will be allocated CSAPR 
NOX Ozone Season Group 3 allowances in an amount equal to 
the applicable amount of tons of NOX emissions as set forth 
in Sec.  97.1010(a) and will be allocated additional CSAPR 
NOX Ozone Season Group 3 allowances (if any) in accordance 
with Sec.  97.1011(c)(5).
    (3) The Administrator will determine, for each CSAPR NOX 
Ozone Season Group 3 unit described in paragraph (b)(1) of this 
section, an allocation of CSAPR NOX Ozone Season Group 3 
allowances for the later of the following control periods and for each 
subsequent control period:
    (i) The control period in 2021; and
    (ii) The first control period after the control period containing 
the deadline for certification of the CSAPR NOX Ozone Season 
Group 3 unit's monitoring systems under Sec.  97.1030(b), for 
allocations for a control period before 2023, or the control period 
containing such deadline, for allocations for a control period in 2023 
or thereafter.
    (4) The allocation to each CSAPR NOX Ozone Season Group 
3 unit described in paragraph (b)(1)(i) of this section and for each 
control period described in paragraph (b)(3) of this section will be an 
amount equal to the unit's total tons of NOX emissions 
during the immediately preceding control period, for a control period 
before 2023, or the unit's total tons of NOX emissions 
during the control period, for a control period in 2023 or thereafter.
    (ii) The Administrator will adjust the allocation amount in 
paragraph (b)(4)(i) of this section in accordance with paragraphs 
(b)(5) through (7) and (12) of this section.
    (5) The Administrator will calculate the sum of the allocation 
amounts of CSAPR NOX Ozone Season Group 3 allowances 
determined for all such CSAPR NOX Ozone Season Group 3 units 
under paragraph (b)(4)(i) of this section in Indian country within the 
borders of the State for such control period.
    (6) If the amount of CSAPR NOX Ozone Season Group 3 
allowances in the Indian country new unit set-aside for the State for 
such control period is greater than or equal to the sum under paragraph 
(b)(5) of this section, then the Administrator will allocate the amount 
of CSAPR NOX Ozone Season Group 3 allowances determined for 
each such CSAPR NOX Ozone Season Group 3 unit under 
paragraph (b)(4)(i) of this section.
    (7) If the amount of CSAPR NOX Ozone Season Group 3 
allowances in the Indian country new unit set-aside for the State for 
such control period is less than the sum under paragraph (b)(5) of this 
section, then the Administrator will allocate to each such CSAPR 
NOX Ozone Season Group 3 unit the amount of the CSAPR 
NOX Ozone Season Group 3 allowances determined under 
paragraph (b)(4)(i) of this section for the unit, multiplied by the 
amount of CSAPR NOX Ozone Season Group 3 allowances in the 
Indian country new unit set-aside for such control period, divided by 
the sum under paragraph (b)(5) of this section, and rounded to the 
nearest allowance.
    (8) For a control period before 2023 only, the Administrator will 
notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.1011(b)(2)(i) and (ii), of the 
amount of CSAPR NOX Ozone Season Group 3 allowances 
allocated under paragraphs (b)(2) through (7) and (12) of this section 
for such control period to each CSAPR NOX Ozone Season Group 
3 unit eligible for such allocation.
    (9) For a control period before 2023 only, if, after completion of 
the procedures under paragraphs (b)(5) through (8) of this section for 
such control period, any unallocated CSAPR NOX Ozone Season 
Group 3 allowances remain in the Indian country new unit set-aside for 
the State for such control period, the Administrator will allocate such 
CSAPR NOX Ozone Season Group 3 allowances as follows--
    (i) The Administrator will determine, for each unit described in 
paragraph (b)(1) of this section that commenced commercial operation 
during the period starting January 1 of the year before the year of 
such control period and ending November 30 of the year of such control 
period, the positive difference (if any) between the unit's emissions 
during such control period and the amount of CSAPR NOX Ozone 
Season Group 3 allowances referenced in the notice of data availability 
required under Sec.  97.1011(b)(2)(ii) for the unit for such control 
period;
    (ii) The Administrator will determine the sum of the positive 
differences determined under paragraph (b)(9)(i) of this section;
    (iii) If the amount of unallocated CSAPR NOX Ozone 
Season Group 3 allowances remaining in the Indian country new unit set-
aside for the State for such control period is greater than or equal to 
the sum determined under paragraph (b)(9)(ii) of this section, then the 
Administrator will allocate the amount of CSAPR NOX Ozone 
Season Group 3 allowances determined for each such CSAPR NOX 
Ozone Season Group 3 unit under paragraph (b)(9)(i) of this section; 
and
    (iv) If the amount of unallocated CSAPR NOX Ozone Season 
Group 3 allowances remaining in the Indian country new unit set-aside 
for the State

[[Page 69099]]

for such control period is less than the sum under paragraph (b)(9)(ii) 
of this section, then the Administrator will allocate to each such 
CSAPR NOX Ozone Season Group 3 unit the amount of the CSAPR 
NOX Ozone Season Group 3 allowances determined under 
paragraph (b)(9)(i) of this section for the unit, multiplied by the 
amount of unallocated CSAPR NOX Ozone Season Group 3 
allowances remaining in the Indian country new unit set-aside for such 
control period, divided by the sum under paragraph (b)(9)(ii) of this 
section, and rounded to the nearest allowance.
    (10) If, after completion of the procedures under paragraphs (b)(9) 
and (12) of this section for a control period before 2023, or under 
paragraphs (b)(2) through (7) and (12) of this section for a control 
period in 2023 or thereafter, any unallocated CSAPR NOX 
Ozone Season Group 3 allowances remain in the Indian country new unit 
set-aside for the State for such control period, the Administrator 
will:
    (i) Transfer such unallocated CSAPR NOX Ozone Season 
Group 3 allowances to the new unit set-aside for the State for such 
control period; or
    (ii) If the State has a SIP revision approved under Sec.  
52.38(b)(10), (12), or (13) of this chapter covering such control 
period, include such unallocated CSAPR NOX Ozone Season 
Group 3 allowances in the portion of the State NOX Ozone 
Season Group 3 trading budget that may be allocated for such control 
period in accordance with such SIP revision.
    (11)(i) For a control period before 2023, the Administrator will 
notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.1011(b)(2)(iii), (iv), and (v), of 
the amount of CSAPR NOX Ozone Season Group 3 allowances 
allocated under paragraphs (b)(9), (10), and (12) of this section for 
such control period to each CSAPR NOX Ozone Season Group 3 
unit eligible for such allocation.
    (ii) For a control period in 2023 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.1011(b)(2)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 3 allowances 
allocated under paragraphs (b)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone 
Season Group 3 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2023 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2023 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR NOX Ozone Season Group 
3 units in descending order based on such units' allocation amounts 
under paragraph (b)(7) or (b)(9)(iv) of this section, as applicable, 
and, in cases of equal allocation amounts, in alphabetical order of the 
relevant sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR NOX 
Ozone Season Group 3 allowance (but not below zero) in the order in 
which the units are listed, and will repeat this adjustment process as 
necessary, until the total allocations from such Indian country new 
unit set-aside equal the total amount of such Indian country new unit 
set-aside.


Sec.  97.1013   Authorization of designated representative and 
alternate designated representative.

    (a) Except as provided under Sec.  97.1015, each CSAPR 
NOX Ozone Season Group 3 source, including all CSAPR 
NOX Ozone Season Group 3 units at the source, shall have one 
and only one designated representative, with regard to all matters 
under the CSAPR NOX Ozone Season Group 3 Trading Program.
    (1) The designated representative shall be selected by an agreement 
binding on the owners and operators of the source and all CSAPR 
NOX Ozone Season Group 3 units at the source and shall act 
in accordance with the certification statement in Sec.  
97.1016(a)(4)(iii).
    (2) Upon and after receipt by the Administrator of a complete 
certificate of representation under Sec.  97.1016:
    (i) The designated representative shall be authorized and shall 
represent and, by his or her representations, actions, inactions, or 
submissions, legally bind each owner and operator of the source and 
each CSAPR NOX Ozone Season Group 3 unit at the source in 
all matters pertaining to the CSAPR NOX Ozone Season Group 3 
Trading Program, notwithstanding any agreement between the designated 
representative and such owners and operators; and
    (ii) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 3 unit at the source shall be bound 
by any decision or order issued to the designated representative by the 
Administrator regarding the source or any such unit.
    (b) Except as provided under Sec.  97.1015, each CSAPR 
NOX Ozone Season Group 3 source may have one and only one 
alternate designated representative, who may act on behalf of the 
designated representative. The agreement by which the alternate 
designated representative is selected shall include a procedure for 
authorizing the alternate designated representative to act in lieu of 
the designated representative.
    (1) The alternate designated representative shall be selected by an 
agreement binding on the owners and operators of the source and all 
CSAPR NOX Ozone Season Group 3 units at the source and shall 
act in accordance with the certification statement in Sec.  
97.1016(a)(4)(iii).
    (2) Upon and after receipt by the Administrator of a complete 
certificate of representation under Sec.  97.1016,
    (i) The alternate designated representative shall be authorized;
    (ii) Any representation, action, inaction, or submission by the 
alternate designated representative shall be deemed to be a 
representation, action, inaction, or submission by the designated 
representative; and
    (iii) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 3 unit at the source shall be bound 
by any decision or order issued to the alternate designated 
representative by the Administrator regarding the source or any such 
unit.
    (c) Except in this section, Sec.  97.1002, and Sec. Sec.  97.1014 
through 97.1018, 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.


Sec.  97.1014   Responsibilities of designated representative and 
alternate designated representative.

    (a) Except as provided under Sec.  97.1018 concerning delegation of 
authority to make submissions, each submission under the CSAPR 
NOX Ozone Season Group 3 Trading Program shall be made, 
signed, and certified by the designated representative or alternate 
designated representative for each CSAPR NOX Ozone Season 
Group 3 source and CSAPR NOX Ozone Season Group 3 unit for 
which the submission

[[Page 69100]]

is made. Each such submission shall include the following certification 
statement by the designated representative or alternate designated 
representative: ``I am authorized to make this submission on behalf of 
the owners and operators of the source or units for which the 
submission is made. I certify under penalty of law that I have 
personally examined, and am familiar with, the statements and 
information submitted in this document and all its attachments. Based 
on my inquiry of those individuals with primary responsibility for 
obtaining the information, I certify that the statements and 
information are to the best of my knowledge and belief true, accurate, 
and complete. I am aware that there are significant penalties for 
submitting false statements and information or omitting required 
statements and information, including the possibility of fine or 
imprisonment.''
    (b) The Administrator will accept or act on a submission made for a 
CSAPR NOX Ozone Season Group 3 source or a CSAPR 
NOX Ozone Season Group 3 unit only if the submission has 
been made, signed, and certified in accordance with paragraph (a) of 
this section and Sec.  97.1018.


Sec.  97.1015   Changing designated representative and alternate 
designated representative; changes in owners and operators; changes in 
units at the source.

    (a) Changing designated representative. The designated 
representative may be changed at any time upon receipt by the 
Administrator of a superseding complete certificate of representation 
under Sec.  97.1016. Notwithstanding any such change, all 
representations, actions, inactions, and submissions by the previous 
designated representative before the time and date when the 
Administrator receives the superseding certificate of representation 
shall be binding on the new designated representative and the owners 
and operators of the CSAPR NOX Ozone Season Group 3 source 
and the CSAPR NOX Ozone Season Group 3 units at the source.
    (b) Changing alternate designated representative. The alternate 
designated representative may be changed at any time upon receipt by 
the Administrator of a superseding complete certificate of 
representation under Sec.  97.1016. Notwithstanding any such change, 
all representations, actions, inactions, and submissions by the 
previous alternate designated representative before the time and date 
when the Administrator receives the superseding certificate of 
representation shall be binding on the new alternate designated 
representative, the designated representative, and the owners and 
operators of the CSAPR NOX Ozone Season Group 3 source and 
the CSAPR NOX Ozone Season Group 3 units at the source.
    (c) Changes in owners and operators. (1) In the event an owner or 
operator of a CSAPR NOX Ozone Season Group 3 source or a 
CSAPR NOX Ozone Season Group 3 unit at the source is not 
included in the list of owners and operators in the certificate of 
representation under Sec.  97.1016, such owner or operator shall be 
deemed to be subject to and bound by the certificate of representation, 
the representations, actions, inactions, and submissions of the 
designated representative and any alternate designated representative 
of the source or unit, and the decisions and orders of the 
Administrator, as if the owner or operator were included in such list.
    (2) Within 30 days after any change in the owners and operators of 
a CSAPR NOX Ozone Season Group 3 source or a CSAPR 
NOX Ozone Season Group 3 unit at the source, including the 
addition or removal of an owner or operator, the designated 
representative or any alternate designated representative shall submit 
a revision to the certificate of representation under Sec.  97.1016 
amending the list of owners and operators to reflect the change.
    (d) Changes in units at the source. Within 30 days of any change in 
which units are located at a CSAPR NOX Ozone Season Group 3 
source (including the addition or removal of a unit), the designated 
representative or any alternate designated representative shall submit 
a certificate of representation under Sec.  97.1016 amending the list 
of units to reflect the change.
    (1) If the change is the addition of a unit that operated (other 
than for purposes of testing by the manufacturer before initial 
installation) before being located at the source, then the certificate 
of representation shall identify, in a format prescribed by the 
Administrator, the entity from whom the unit was purchased or otherwise 
obtained (including name, address, telephone number, and facsimile 
number (if any)), the date on which the unit was purchased or otherwise 
obtained, and the date on which the unit became located at the source.
    (2) If the change is the removal of a unit, then the certificate of 
representation shall identify, in a format prescribed by the 
Administrator, the entity to which the unit was sold or that otherwise 
obtained the unit (including name, address, telephone number, and 
facsimile number (if any)), the date on which the unit was sold or 
otherwise obtained, and the date on which the unit became no longer 
located at the source.


Sec.  97.1016   Certificate of representation.

    (a) A complete certificate of representation for a designated 
representative or an alternate designated representative shall include 
the following elements in a format prescribed by the Administrator:
    (1) Identification of the CSAPR NOX Ozone Season Group 3 
source, and each CSAPR NOX Ozone Season Group 3 unit at the 
source, for which the certificate of representation is submitted, 
including source name, source category and NAICS code (or, in the 
absence of a NAICS code, an equivalent code), State, plant code, 
county, latitude and longitude, unit identification number and type, 
identification number and nameplate capacity (in MWe, rounded to the 
nearest tenth) of each generator served by each such unit, actual or 
projected date of commencement of commercial operation, and a statement 
of whether such source is located in Indian country. If a projected 
date of commencement of commercial operation is provided, the actual 
date of commencement of commercial operation shall be provided when 
such information becomes available.
    (2) The name, address, email address (if any), telephone number, 
and facsimile transmission number (if any) of the designated 
representative and any alternate designated representative.
    (3) A list of the owners and operators of the CSAPR NOX 
Ozone Season Group 3 source and of each CSAPR NOX Ozone 
Season Group 3 unit at the source.
    (4) The following certification statements by the designated 
representative and any alternate designated representative--
    (i) ``I certify that I was selected as the designated 
representative or alternate designated representative, as applicable, 
by an agreement binding on the owners and operators of the source and 
each CSAPR NOX Ozone Season Group 3 unit at the source.''
    (ii) ``I certify that I have all the necessary authority to carry 
out my duties and responsibilities under the CSAPR NOX Ozone 
Season Group 3 Trading Program on behalf of the owners and operators of 
the source and of each CSAPR NOX Ozone Season Group 3 unit 
at the source and that each such owner and operator shall be fully 
bound by my representations, actions, inactions, or submissions and by 
any decision or order issued to me by the Administrator regarding the 
source or unit.''

[[Page 69101]]

    (iii) ``Where there are multiple holders of a legal or equitable 
title to, or a leasehold interest in, a CSAPR NOX Ozone 
Season Group 3 unit, or where a utility or industrial customer 
purchases power from a CSAPR NOX Ozone Season Group 3 unit 
under a life-of-the-unit, firm power contractual arrangement, I certify 
that: I have given a written notice of my selection as the `designated 
representative' or `alternate designated representative', as 
applicable, and of the agreement by which I was selected to each owner 
and operator of the source and of each CSAPR NOX Ozone 
Season Group 3 unit at the source; and CSAPR NOX Ozone 
Season Group 3 allowances and proceeds of transactions involving CSAPR 
NOX Ozone Season Group 3 allowances will be deemed to be 
held or distributed in proportion to each holder's legal, equitable, 
leasehold, or contractual reservation or entitlement, except that, if 
such multiple holders have expressly provided for a different 
distribution of CSAPR NOX Ozone Season Group 3 allowances by 
contract, CSAPR NOX Ozone Season Group 3 allowances and 
proceeds of transactions involving CSAPR NOX Ozone Season 
Group 3 allowances will be deemed to be held or distributed in 
accordance with the contract.''
    (5) The signature of the designated representative and any 
alternate designated representative and the dates signed.
    (b) Unless otherwise required by the Administrator, documents of 
agreement referred to in the certificate of representation shall not be 
submitted to the Administrator. The Administrator shall not be under 
any obligation to review or evaluate the sufficiency of such documents, 
if submitted.
    (c) A certificate of representation under this section, Sec.  
97.516, or Sec.  97.816 that complies with the provisions of paragraph 
(a) of this section except that it contains the phrase ``TR 
NOX Ozone Season'', the phrase ``CSAPR NOX Ozone 
Season Group 1'', or the phrase ``CSAPR NOX Ozone Season 
Group 2'' in place of the phrase ``CSAPR NOX Ozone Season 
Group 3'' in the required certification statements will be considered a 
complete certificate of representation under this section, and the 
certification statements included in such certificate of representation 
will be interpreted for purposes of this subpart as if the phrase 
``CSAPR NOX Ozone Season Group 3'' appeared in place of the 
phrase ``TR NOX Ozone Season'', the phrase ``CSAPR 
NOX Ozone Season Group 1'', or the phrase ``CSAPR 
NOX Ozone Season Group 2''.


Sec.  97.1017   Objections concerning designated representative and 
alternate designated representative.

    (a) Once a complete certificate of representation under Sec.  
97.1016 has been submitted and received, the Administrator will rely on 
the certificate of representation unless and until a superseding 
complete certificate of representation under Sec.  97.1016 is received 
by the Administrator.
    (b) Except as provided in paragraph (a) of this section, no 
objection or other communication submitted to the Administrator 
concerning the authorization, or any representation, action, inaction, 
or submission, of a designated representative or alternate designated 
representative shall affect any representation, action, inaction, or 
submission of the designated representative or alternate designated 
representative or the finality of any decision or order by the 
Administrator under the CSAPR NOX Ozone Season Group 3 
Trading Program.
    (c) The Administrator will not adjudicate any private legal dispute 
concerning the authorization or any representation, action, inaction, 
or submission of any designated representative or alternate designated 
representative, including private legal disputes concerning the 
proceeds of CSAPR NOX Ozone Season Group 3 allowance 
transfers.


Sec.  97.1018   Delegation by designated representative and alternate 
designated representative.

    (a) A designated representative may delegate, to one or more 
natural persons, his or her authority to make an electronic submission 
to the Administrator provided for or required under this subpart.
    (b) An alternate designated representative may delegate, to one or 
more natural persons, his or her authority to make an electronic 
submission to the Administrator provided for or required under this 
subpart.
    (c) In order to delegate authority to a natural person to make an 
electronic submission to the Administrator in accordance with paragraph 
(a) or (b) of this section, the designated representative or alternate 
designated representative, as appropriate, must submit to the 
Administrator a notice of delegation, in a format prescribed by the 
Administrator, that includes the following elements:
    (1) The name, address, email address, telephone number, and 
facsimile transmission number (if any) of such designated 
representative or alternate designated representative;
    (2) The name, address, email address, telephone number, and 
facsimile transmission number (if any) of each such natural person 
(referred to in this section as an ``agent'');
    (3) For each such natural person, a list of the type or types of 
electronic submissions under paragraph (a) or (b) of this section for 
which authority is delegated to him or her; and
    (4) The following certification statements by such designated 
representative or alternate designated representative:
    (i) ``I agree that any electronic submission to the Administrator 
that is made by an agent identified in this notice of delegation and of 
a type listed for such agent in this notice of delegation and that is 
made when I am a designated representative or alternate designated 
representative, as appropriate, and before this notice of delegation is 
superseded by another notice of delegation under 40 CFR 97.1018(d) 
shall be deemed to be an electronic submission by me.''
    (ii) ``Until this notice of delegation is superseded by another 
notice of delegation under 40 CFR 97.1018(d), I agree to maintain an 
email account and to notify the Administrator immediately of any change 
in my email address unless all delegation of authority by me under 40 
CFR 97.1018 is terminated.''.
    (d) A notice of delegation submitted under paragraph (c) of this 
section shall be effective, with regard to the designated 
representative or alternate designated representative identified in 
such notice, upon receipt of such notice by the Administrator and until 
receipt by the Administrator of a superseding notice of delegation 
submitted by such designated representative or alternate designated 
representative, as appropriate. The superseding notice of delegation 
may replace any previously identified agent, add a new agent, or 
eliminate entirely any delegation of authority.
    (e) Any electronic submission covered by the certification in 
paragraph (c)(4)(i) of this section and made in accordance with a 
notice of delegation effective under paragraph (d) of this section 
shall be deemed to be an electronic submission by the designated 
representative or alternate designated representative submitting such 
notice of delegation.
    (f) A notice of delegation submitted under paragraph (c) of this 
section, Sec.  97.518(c), or Sec.  97.818(c) that complies with the 
provisions of paragraph (c) of this section except that it contains the 
terms ``40 CFR 97.518(d)'' and ``40 CFR 97.518'' or the terms ``40 CFR 
97.818(d)'' and ``40 CFR 97.818'' in

[[Page 69102]]

place of the terms ``40 CFR 97.1018(d)'' and ``40 CFR 97.1018'', 
respectively, in the required certification statements will be 
considered a valid notice of delegation submitted under paragraph (c) 
of this section, and the certification statements included in such 
notice of delegation will be interpreted for purposes of this subpart 
as if the terms ``40 CFR 97.1018(d)'' and ``40 CFR 97.1018'' appeared 
in place of the terms ``40 CFR 97.518(d)'' and ``40 CFR 97.518'' or the 
terms ``40 CFR 97.818(d)'' and ``40 CFR 97.818'', respectively.


Sec.  97.1019   [Reserved]


Sec.  97.1020   Establishment of compliance accounts, assurance 
accounts, and general accounts.

    (a) Compliance accounts. Upon receipt of a complete certificate of 
representation under Sec.  97.1016, the Administrator will establish a 
compliance account for the CSAPR NOX Ozone Season Group 3 
source for which the certificate of representation was submitted, 
unless the source already has a compliance account. The designated 
representative and any alternate designated representative of the 
source shall be the authorized account representative and the alternate 
authorized account representative respectively of the compliance 
account.
    (b) Assurance accounts. The Administrator will establish assurance 
accounts for certain owners and operators and States in accordance with 
Sec.  97.1025(b)(3).
    (c) General accounts--(1) Application for general account. (i) Any 
person may apply to open a general account, for the purpose of holding 
and transferring CSAPR NOX Ozone Season Group 3 allowances, 
by submitting to the Administrator a complete application for a general 
account. Such application shall designate one and only one authorized 
account representative and may designate one and only one alternate 
authorized account representative who may act on behalf of the 
authorized account representative.
    (A) The authorized account representative and alternate authorized 
account representative shall be selected by an agreement binding on the 
persons who have an ownership interest with respect to CSAPR 
NOX Ozone Season Group 3 allowances held in the general 
account.
    (B) The agreement by which the alternate authorized account 
representative is selected shall include a procedure for authorizing 
the alternate authorized account representative to act in lieu of the 
authorized account representative.
    (ii) A complete application for a general account shall include the 
following elements in a format prescribed by the Administrator:
    (A) Name, mailing address, email address (if any), telephone 
number, and facsimile transmission number (if any) of the authorized 
account representative and any alternate authorized account 
representative;
    (B) An identifying name for the general account;
    (C) A list of all persons subject to a binding agreement for the 
authorized account representative and any alternate authorized account 
representative to represent their ownership interest with respect to 
the CSAPR NOX Ozone Season Group 3 allowances held in the 
general account;
    (D) The following certification statement by the authorized account 
representative and any alternate authorized account representative: ``I 
certify that I was selected as the authorized account representative or 
the alternate authorized account representative, as applicable, by an 
agreement that is binding on all persons who have an ownership interest 
with respect to CSAPR NOX Ozone Season Group 3 allowances 
held in the general account. I certify that I have all the necessary 
authority to carry out my duties and responsibilities under the CSAPR 
NOX Ozone Season Group 3 Trading Program on behalf of such 
persons and that each such person shall be fully bound by my 
representations, actions, inactions, or submissions and by any decision 
or order issued to me by the Administrator regarding the general 
account.''
    (E) The signature of the authorized account representative and any 
alternate authorized account representative and the dates signed.
    (iii) Unless otherwise required by the Administrator, documents of 
agreement referred to in the application for a general account shall 
not be submitted to the Administrator. The Administrator shall not be 
under any obligation to review or evaluate the sufficiency of such 
documents, if submitted.
    (iv) An application for a general account under paragraph (c)(1) of 
this section, Sec.  97.520(c)(1), or Sec.  97.820(c)(1) that complies 
with the provisions of paragraph (c)(1) of this section except that it 
contains the phrase ``TR NOX Ozone Season'', ``CSAPR 
NOX Ozone Season Group 1'', or ``CSAPR NOX Ozone 
Season Group 2'' in place of the phrase ``CSAPR NOX Ozone 
Season Group 3'' in the required certification statement will be 
considered a complete application for a general account under paragraph 
(c)(1) of this section, and the certification statement included in 
such application for a general account will be interpreted for purposes 
of this subpart as if the phrase ``CSAPR NOX Ozone Season 
Group 3'' appeared in place of the phrase ``TR NOX Ozone 
Season'', ``CSAPR NOX Ozone Season Group 1'', or ``CSAPR 
NOX Ozone Season Group 2''.
    (2) Authorization of authorized account representative and 
alternate authorized account representative. (i) Upon receipt by the 
Administrator of a complete application for a general account under 
paragraph (c)(1) of this section, the Administrator will establish a 
general account for the person or persons for whom the application is 
submitted, and upon and after such receipt by the Administrator:
    (A) The authorized account representative of the general account 
shall be authorized and shall represent and, by his or her 
representations, actions, inactions, or submissions, legally bind each 
person who has an ownership interest with respect to CSAPR 
NOX Ozone Season Group 3 allowances held in the general 
account in all matters pertaining to the CSAPR NOX Ozone 
Season Group 3 Trading Program, notwithstanding any agreement between 
the authorized account representative and such person.
    (B) Any alternate authorized account representative shall be 
authorized, and any representation, action, inaction, or submission by 
any alternate authorized account representative shall be deemed to be a 
representation, action, inaction, or submission by the authorized 
account representative.
    (C) Each person who has an ownership interest with respect to CSAPR 
NOX Ozone Season Group 3 allowances held in the general 
account shall be bound by any decision or order issued to the 
authorized account representative or alternate authorized account 
representative by the Administrator regarding the general account.
    (ii) Except as provided in paragraph (c)(5) of this section 
concerning delegation of authority to make submissions, each submission 
concerning the general account shall be made, signed, and certified by 
the authorized account representative or any alternate authorized 
account representative for the persons having an ownership interest 
with respect to CSAPR NOX Ozone Season Group 3 allowances 
held in the general account. Each such submission shall include the 
following certification statement by the authorized account 
representative or any alternate authorized account representative: ``I 
am authorized to

[[Page 69103]]

make this submission on behalf of the persons having an ownership 
interest with respect to the CSAPR NOX Ozone Season Group 3 
allowances held in the general account. I certify under penalty of law 
that I have personally examined, and am familiar with, the statements 
and information submitted in this document and all its attachments. 
Based on my inquiry of those individuals with primary responsibility 
for obtaining the information, I certify that the statements and 
information are to the best of my knowledge and belief true, accurate, 
and complete. I am aware that there are significant penalties for 
submitting false statements and information or omitting required 
statements and information, including the possibility of fine or 
imprisonment.''
    (iii) Except in this section, whenever the term ``authorized 
account representative'' is used in this subpart, the term shall be 
construed to include the authorized account representative or any 
alternate authorized account representative.
    (iv) A certification statement submitted in accordance with 
paragraph (c)(2)(ii) of this section that contains the phrase ``TR 
NOX Ozone Season'' will be interpreted for purposes of this 
subpart as if the phrase ``CSAPR NOX Ozone Season Group 2'' 
appeared in place of the phrase ``TR NOX Ozone Season''.
    (3) Changing authorized account representative and alternate 
authorized account representative; changes in persons with ownership 
interest. (i) The authorized account representative of a general 
account may be changed at any time upon receipt by the Administrator of 
a superseding complete application for a general account under 
paragraph (c)(1) of this section. Notwithstanding any such change, all 
representations, actions, inactions, and submissions by the previous 
authorized account representative before the time and date when the 
Administrator receives the superseding application for a general 
account shall be binding on the new authorized account representative 
and the persons with an ownership interest with respect to the CSAPR 
NOX Ozone Season Group 3 allowances in the general account.
    (ii) The alternate authorized account representative of a general 
account may be changed at any time upon receipt by the Administrator of 
a superseding complete application for a general account under 
paragraph (c)(1) of this section. Notwithstanding any such change, all 
representations, actions, inactions, and submissions by the previous 
alternate authorized account representative before the time and date 
when the Administrator receives the superseding application for a 
general account shall be binding on the new alternate authorized 
account representative, the authorized account representative, and the 
persons with an ownership interest with respect to the CSAPR 
NOX Ozone Season Group 3 allowances in the general account.
    (iii)(A) In the event a person having an ownership interest with 
respect to CSAPR NOX Ozone Season Group 3 allowances in the 
general account is not included in the list of such persons in the 
application for a general account, such person shall be deemed to be 
subject to and bound by the application for a general account, the 
representation, actions, inactions, and submissions of the authorized 
account representative and any alternate authorized account 
representative of the account, and the decisions and orders of the 
Administrator, as if the person were included in such list.
    (B) Within 30 days after any change in the persons having an 
ownership interest with respect to CSAPR NOX Ozone Season 
Group 3 allowances in the general account, including the addition or 
removal of a person, the authorized account representative or any 
alternate authorized account representative shall submit a revision to 
the application for a general account amending the list of persons 
having an ownership interest with respect to the CSAPR NOX 
Ozone Season Group 3 allowances in the general account to include the 
change.
    (4) Objections concerning authorized account representative and 
alternate authorized account representative. (i) Once a complete 
application for a general account under paragraph (c)(1) of this 
section has been submitted and received, the Administrator will rely on 
the application unless and until a superseding complete application for 
a general account under paragraph (c)(1) of this section is received by 
the Administrator.
    (ii) Except as provided in paragraph (c)(4)(i) of this section, no 
objection or other communication submitted to the Administrator 
concerning the authorization, or any representation, action, inaction, 
or submission of the authorized account representative or any alternate 
authorized account representative of a general account shall affect any 
representation, action, inaction, or submission of the authorized 
account representative or any alternate authorized account 
representative or the finality of any decision or order by the 
Administrator under the CSAPR NOX Ozone Season Group 3 
Trading Program.
    (iii) The Administrator will not adjudicate any private legal 
dispute concerning the authorization or any representation, action, 
inaction, or submission of the authorized account representative or any 
alternate authorized account representative of a general account, 
including private legal disputes concerning the proceeds of CSAPR 
NOX Ozone Season Group 3 allowance transfers.
    (5) Delegation by authorized account representative and alternate 
authorized account representative. (i) An authorized account 
representative of a general account may delegate, to one or more 
natural persons, his or her authority to make an electronic submission 
to the Administrator provided for or required under this subpart.
    (ii) An alternate authorized account representative of a general 
account may delegate, to one or more natural persons, his or her 
authority to make an electronic submission to the Administrator 
provided for or required under this subpart.
    (iii) In order to delegate authority to a natural person to make an 
electronic submission to the Administrator in accordance with paragraph 
(c)(5)(i) or (ii) of this section, the authorized account 
representative or alternate authorized account representative, as 
appropriate, must submit to the Administrator a notice of delegation, 
in a format prescribed by the Administrator, that includes the 
following elements:
    (A) The name, address, email address, telephone number, and 
facsimile transmission number (if any) of such authorized account 
representative or alternate authorized account representative;
    (B) The name, address, email address, telephone number, and 
facsimile transmission number (if any) of each such natural person 
(referred to in this section as an ``agent'');
    (C) For each such natural person, a list of the type or types of 
electronic submissions under paragraph (c)(5)(i) or (ii) of this 
section for which authority is delegated to him or her;
    (D) The following certification statement by such authorized 
account representative or alternate authorized account representative: 
``I agree that any electronic submission to the Administrator that is 
made by an agent identified in this notice of delegation and of a type 
listed for such agent in this notice of delegation and that is made 
when I am an authorized account representative or alternate authorized 
account representative, as appropriate, and before this notice of 
delegation is

[[Page 69104]]

superseded by another notice of delegation under 40 CFR 
97.1020(c)(5)(iv) shall be deemed to be an electronic submission by 
me.''; and
    (E) The following certification statement by such authorized 
account representative or alternate authorized account representative: 
``Until this notice of delegation is superseded by another notice of 
delegation under 40 CFR 97.1020(c)(5)(iv), I agree to maintain an email 
account and to notify the Administrator immediately of any change in my 
email address unless all delegation of authority by me under 40 CFR 
97.1020(c)(5) is terminated.''.
    (iv) A notice of delegation submitted under paragraph (c)(5)(iii) 
of this section shall be effective, with regard to the authorized 
account representative or alternate authorized account representative 
identified in such notice, upon receipt of such notice by the 
Administrator and until receipt by the Administrator of a superseding 
notice of delegation submitted by such authorized account 
representative or alternate authorized account representative, as 
appropriate. The superseding notice of delegation may replace any 
previously identified agent, add a new agent, or eliminate entirely any 
delegation of authority.
    (v) Any electronic submission covered by the certification in 
paragraph (c)(5)(iii)(D) of this section and made in accordance with a 
notice of delegation effective under paragraph (c)(5)(iv) of this 
section shall be deemed to be an electronic submission by the 
authorized account representative or alternate authorized account 
representative submitting such notice of delegation.
    (vi) A notice of delegation submitted under paragraph (c)(5)(iii) 
of this section, Sec.  97.520(c)(5)(iii), or Sec.  97.820(c)(5)(iii) 
that complies with the provisions of paragraph (c)(5)(iii) of this 
section except that it contains the terms ``40 CFR 97.520(c)(5)(iv)'' 
and ``40 CFR 97.520(c)(5)'' or the terms ``40 CFR 97.820(c)(5)(iv)'' 
and ``40 CFR 97.820(c)(5)'' in place of the terms ``40 CFR 
97.1020(c)(5)(iv)'' and ``40 CFR 97.1020(c)(5)'', respectively, in the 
required certification statements will be considered a valid notice of 
delegation submitted under paragraph (c)(5)(iii) of this section, and 
the certification statements included in such notice of delegation will 
be interpreted for purposes of this subpart as if the terms ``40 CFR 
97.1020(c)(5)(iv)'' and ``40 CFR 97.1020(c)(5)'' appeared in place of 
the terms ``40 CFR 97.520(c)(5)(iv)'' and ``40 CFR 97.520(c)(5)'' or 
the terms ``40 CFR 97.820(c)(5)(iv)'' and ``40 CFR 97.820(c)(5)'', 
respectively.
    (6) Closing a general account. (i) The authorized account 
representative or alternate authorized account representative of a 
general account may submit to the Administrator a request to close the 
account. Such request shall include a correctly submitted CSAPR 
NOX Ozone Season Group 3 allowance transfer under Sec.  
97.1022 for any CSAPR NOX Ozone Season Group 3 allowances in 
the account to one or more other Allowance Management System accounts.
    (ii) If a general account has no CSAPR NOX Ozone Season 
Group 3 allowance transfers to or from the account for a 12-month 
period or longer and does not contain any CSAPR NOX Ozone 
Season Group 3 allowances, the Administrator may notify the authorized 
account representative for the account that the account will be closed 
after 30 days after the notice is sent. The account will be closed 
after the 30-day period unless, before the end of the 30-day period, 
the Administrator receives a correctly submitted CSAPR NOX 
Ozone Season Group 3 allowance transfer under Sec.  97.1022 to the 
account or a statement submitted by the authorized account 
representative or alternate authorized account representative 
demonstrating to the satisfaction of the Administrator good cause as to 
why the account should not be closed.
    (d) Account identification. The Administrator will assign a unique 
identifying number to each account established under paragraph (a), 
(b), or (c) of this section.
    (e) Responsibilities of authorized account representative and 
alternate authorized account representative. After the establishment of 
a compliance account or general account, the Administrator will accept 
or act on a submission pertaining to the account, including, but not 
limited to, submissions concerning the deduction or transfer of CSAPR 
NOX Ozone Season Group 3 allowances in the account, only if 
the submission has been made, signed, and certified in accordance with 
Sec. Sec.  97.1014(a) and 97.1018 or paragraphs (c)(2)(ii) and (c)(5) 
of this section.


Sec.  97.1021   Recordation of CSAPR NOX Ozone Season Group 3 allowance 
allocations and auction results.

    (a) By [DATE 120 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE 
IN THE Federal Register], the Administrator will record in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source in 
accordance with Sec.  97.1011(a) for the control period in 2021.
    (b) By [DATE 120 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE 
IN THE Federal Register], the Administrator will record in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source in 
accordance with Sec.  97.1011(a) for the control period in 2022, unless 
the State in which the source is located notifies the Administrator in 
writing by [DATE 90 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE IN 
THE Federal Register] of the State's intent to submit to the 
Administrator a complete SIP revision by [DATE 180 DAYS AFTER DATE OF 
PUBLICATION OF THE FINAL RULE IN THE Federal Register] meeting the 
requirements of Sec.  52.38(b)(11)(i) through (iv) of this chapter.
    (1) If, by [DATE 180 DAYS AFTER DATE OF PUBLICATION OF THE FINAL 
RULE IN THE Federal Register] the State does not submit to the 
Administrator such complete SIP revision, the Administrator will record 
by [DATE 210 DAYS AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE 
Federal Register] in each CSAPR NOX Ozone Season Group 3 
source's compliance account the CSAPR NOX Ozone Season Group 
3 allowances allocated to the CSAPR NOX Ozone Season Group 3 
units at the source in accordance with Sec.  97.1011(a) for the control 
period in 2022.
    (2) If the State submits to the Administrator by [DATE 180 DAYS 
AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE Federal Register] 
and the Administrator approves by [DATE ONE YEAR AFTER DATE OF 
PUBLICATION OF THE FINAL RULE IN THE Federal Register] such complete 
SIP revision, the Administrator will record by [DATE ONE YEAR AFTER 
DATE OF PUBLICATION OF THE FINAL RULE IN THE Federal Register] in each 
CSAPR NOX Ozone Season Group 3 source's compliance account 
the CSAPR NOX Ozone Season Group 3 allowances allocated to 
the CSAPR NOX Ozone Season Group 3 units at the source as 
provided in such approved, complete SIP revision for the control period 
in 2022.
    (3) If the State submits to the Administrator by [DATE 180 DAYS 
AFTER DATE OF PUBLICATION OF THE FINAL RULE IN THE Federal Register] 
and the Administrator does not approve by [DATE ONE YEAR AFTER DATE OF 
PUBLICATION OF

[[Page 69105]]

THE FINAL RULE IN THE Federal Register] such complete SIP revision, the 
Administrator will record by [DATE ONE YEAR AFTER DATE OF PUBLICATION 
OF THE FINAL RULE IN THE Federal Register] in each CSAPR NOX 
Ozone Season Group 3 source's compliance account the CSAPR 
NOX Ozone Season Group 3 allowances allocated to the CSAPR 
NOX Ozone Season Group 3 units at the source in accordance 
with Sec.  97.1011(a) for the control period in 2022.
    (c) By July 1, 2022, the Administrator will record in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source, or in 
each appropriate Allowance Management System account the CSAPR 
NOX Ozone Season Group 3 allowances auctioned to CSAPR 
NOX Ozone Season Group 3 units, in accordance with Sec.  
97.1011(a), or with a SIP revision approved under Sec.  52.38(b)(10), 
(12), or (13) of this chapter, for the control periods in 2023 and 
2024.
    (d) By July 1, 2023, the Administrator will record in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source, or in 
each appropriate Allowance Management System account the CSAPR 
NOX Ozone Season Group 3 allowances auctioned to CSAPR 
NOX Ozone Season Group 3 units, in accordance with Sec.  
97.1011(a), or with a SIP revision approved under Sec.  52.38(b)(10), 
(12), or (13) of this chapter, for the control periods in 2025 and 
2026.
    (e) [Reserved]
    (f) By July 1, 2024 and July 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 3 source's compliance account the CSAPR NOX Ozone 
Season Group 3 allowances allocated to the CSAPR NOX Ozone 
Season Group 3 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 3 
allowances auctioned to CSAPR NOX Ozone Season Group 3 
units, in accordance with Sec.  97.1011(a), or with a SIP revision 
approved under Sec.  52.38(b)(10), (12), or (13) of this chapter, for 
the control period in the third year after the year of the applicable 
recordation deadline under this paragraph.
    (g)(1) By [DATE 120 DAYS AFTER DATE OF PUBLICATION OF THE FINAL 
RULE IN THE Federal Register] and August 1, 2022, the Administrator 
will record in each CSAPR NOX Ozone Season Group 3 source's 
compliance account the CSAPR NOX Ozone Season Group 3 
allowances allocated to the CSAPR NOX Ozone Season Group 3 
units at the source, or in each appropriate Allowance Management System 
account the CSAPR NOX Ozone Season Group 3 allowances 
auctioned to CSAPR NOX Ozone Season Group 3 units, in 
accordance with Sec.  97.1012(a)(2) through (8) and (12), or with a SIP 
revision approved under Sec.  52.38(b)(10), (12), or (13) of this 
chapter, for the control period in the year of the applicable 
recordation deadline under this paragraph.
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 3 source's compliance account the CSAPR NOX Ozone 
Season Group 3 allowances allocated to the CSAPR NOX Ozone 
Season Group 3 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 3 
allowances auctioned to CSAPR NOX Ozone Season Group 3 
units, in accordance with Sec.  97.1012(a)(2) through (12), or with a 
SIP revision approved under Sec.  52.38(b)(10), (12), or (13) of this 
chapter, for the control period in the year before the year of the 
applicable recordation deadline under this paragraph.
    (h)(1) By [DATE 120 DAYS AFTER DATE OF PUBLICATION OF THE FINAL 
RULE IN THE Federal Register] and August 1, 2022, the Administrator 
will record in each CSAPR NOX Ozone Season Group 3 source's 
compliance account the CSAPR NOX Ozone Season Group 3 
allowances allocated to the CSAPR NOX Ozone Season Group 3 
units at the source in accordance with Sec.  97.1012(b)(2) through (8) 
and (12) for the control period in the year of the applicable 
recordation deadline under this paragraph.
    (2) By May 1, 2024 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 3 source's compliance account the CSAPR NOX Ozone 
Season Group 3 allowances allocated to the CSAPR NOX Ozone 
Season Group 3 units at the source in accordance with Sec.  
97.1012(b)(2) through (12) for the control period in the year before 
the year of the applicable recordation deadline under this paragraph.
    (i) By February 15, 2022 and February 15, 2023, the Administrator 
will record in each CSAPR NOX Ozone Season Group 3 source's 
compliance account the CSAPR NOX Ozone Season Group 3 
allowances allocated to the CSAPR NOX Ozone Season Group 3 
units at the source in accordance with Sec.  97.1012(a)(9) through (12) 
for the control period in the year before the year of the applicable 
recordation deadline under this paragraph.
    (j) By February 15, 2022 and February 15, 2023, the Administrator 
will record in each CSAPR NOX Ozone Season Group 3 source's 
compliance account the CSAPR NOX Ozone Season Group 3 
allowances allocated to the CSAPR NOX Ozone Season Group 3 
units at the source in accordance with Sec.  97.1012(b)(9) through (12) 
for the control period in the year before the year of the applicable 
recordation deadline under this paragraph.
    (k) By the date 15 days after the date on which any allocation or 
auction results, other than an allocation or auction results described 
in paragraphs (a) through (j) of this section, of CSAPR NOX 
Ozone Season Group 3 allowances to a recipient is made by or are 
submitted to the Administrator in accordance with Sec.  97.1011 or 
Sec.  97.1012 or with a SIP revision approved under Sec.  52.38(b)(10), 
(12), or (13) of this chapter, the Administrator will record such 
allocation or auction results in the appropriate Allowance Management 
System account.
    (l) When recording the allocation or auction of CSAPR 
NOX Ozone Season Group 3 allowances to a CSAPR 
NOX Ozone Season Group 3 unit or other entity in an 
Allowance Management System account, the Administrator will assign each 
CSAPR NOX Ozone Season Group 3 allowance a unique 
identification number that will include digits identifying the year of 
the control period for which the CSAPR NOX Ozone Season 
Group 3 allowance is allocated or auctioned.
    (m) Notwithstanding any other provision of this subpart, the 
Administrator will not record in any CSAPR NOX Ozone Season 
Group 3 source's compliance account any CSAPR NOX Ozone 
Season Group 3 allowances allocated to any unit at the source, and will 
not record in any other entity's general account any CSAPR 
NOX Ozone Season Group 3 allowances allocated to the entity, 
until the Administrator has completed for the source or entity the 
deductions of CSAPR NOX Ozone Season Group 2 allowances 
required under Sec.  97.811(d).


Sec.  97.1022   Submission of CSAPR NOX Ozone Season Group 3 allowance 
transfers.

    (a) An authorized account representative seeking recordation of a 
CSAPR NOX Ozone Season Group 3 allowance transfer shall 
submit the transfer to the Administrator.

[[Page 69106]]

    (b) A CSAPR NOX Ozone Season Group 3 allowance transfer 
shall be correctly submitted if:
    (1) The transfer includes the following elements, in a format 
prescribed by the Administrator:
    (i) The account numbers established by the Administrator for both 
the transferor and transferee accounts;
    (ii) The serial number of each CSAPR NOX Ozone Season 
Group 3 allowance that is in the transferor account and is to be 
transferred; and
    (iii) The name and signature of the authorized account 
representative of the transferor account and the date signed; and
    (2) When the Administrator attempts to record the transfer, the 
transferor account includes each CSAPR NOX Ozone Season 
Group 3 allowance identified by serial number in the transfer.


Sec.  97.1023   Recordation of CSAPR NOX Ozone Season Group 
3 allowance transfers.

    (a) Within 5 business days (except as provided in paragraph (b) of 
this section) of receiving a CSAPR NOX Ozone Season Group 3 
allowance transfer that is correctly submitted under Sec.  97.1022, the 
Administrator will record a CSAPR NOX Ozone Season Group 3 
allowance transfer by moving each CSAPR NOX Ozone Season 
Group 3 allowance from the transferor account to the transferee account 
as specified in the transfer.
    (b) A CSAPR NOX Ozone Season Group 3 allowance transfer 
to or from a compliance account that is submitted for recordation after 
the allowance transfer deadline for a control period and that includes 
any CSAPR NOX Ozone Season Group 3 allowances allocated or 
auctioned for any control period before such allowance transfer 
deadline will not be recorded until after the Administrator completes 
the deductions from such compliance account under Sec.  97.1024 for the 
control period immediately before such allowance transfer deadline.
    (c) Where a CSAPR NOX Ozone Season Group 3 allowance 
transfer is not correctly submitted under Sec.  97.1022, the 
Administrator will not record such transfer.
    (d) Within 5 business days of recordation of a CSAPR NOX 
Ozone Season Group 3 allowance transfer under paragraphs (a) and (b) of 
the section, the Administrator will notify the authorized account 
representatives of both the transferor and transferee accounts.
    (e) Within 10 business days of receipt of a CSAPR NOX 
Ozone Season Group 3 allowance transfer that is not correctly submitted 
under Sec.  97.1022, the Administrator will notify the authorized 
account representatives of both accounts subject to the transfer of:
    (1) A decision not to record the transfer, and
    (2) The reasons for such non-recordation.


Sec.  97.1024   Compliance with CSAPR NOX Ozone Season Group 
3 emissions limitation.

    (a) Availability for deduction for compliance. CSAPR NOX 
Ozone Season Group 3 allowances are available to be deducted for 
compliance with a source's CSAPR NOX Ozone Season Group 3 
emissions limitation for a control period in a given year only if the 
CSAPR NOX Ozone Season Group 3 allowances:
    (1) Were allocated or auctioned for such control period or a 
control period in a prior year; and
    (2) Are held in the source's compliance account as of the allowance 
transfer deadline for such control period.
    (b) Deductions for compliance. After the recordation, in accordance 
with Sec.  97.1023, of CSAPR NOX Ozone Season Group 3 
allowance transfers submitted by the allowance transfer deadline for a 
control period in a given year, the Administrator will deduct from each 
source's compliance account CSAPR NOX Ozone Season Group 3 
allowances available under paragraph (a) of this section in order to 
determine whether the source meets the CSAPR NOX Ozone 
Season Group 3 emissions limitation for such control period, as 
follows:
    (1) Until the amount of CSAPR NOX Ozone Season Group 3 
allowances deducted equals the number of tons of total NOX 
emissions from all CSAPR NOX Ozone Season Group 3 units at 
the source for such control period; or
    (2) If there are insufficient CSAPR NOX Ozone Season 
Group 3 allowances to complete the deductions in paragraph (b)(1) of 
this section, until no more CSAPR NOX Ozone Season Group 3 
allowances available under paragraph (a) of this section remain in the 
compliance account.
    (c) Selection of CSAPR NOX Ozone Season Group 3 
allowances for deduction--(1) Identification by serial number. The 
designated representative for a source may request that specific CSAPR 
NOX Ozone Season Group 3 allowances, identified by serial 
number, in the source's compliance account be deducted for emissions or 
excess emissions for a control period in a given year in accordance 
with paragraph (b) or (d) of this section. In order to be complete, 
such request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the CSAPR 
NOX Ozone Season Group 3 source and the appropriate serial 
numbers.
    (2) First-in, first-out. The Administrator will deduct CSAPR 
NOX Ozone Season Group 3 allowances under paragraph (b) or 
(d) of this section from the source's compliance account in accordance 
with a complete request under paragraph (c)(1) of this section or, in 
the absence of such request or in the case of identification of an 
insufficient amount of CSAPR NOX Ozone Season Group 3 
allowances in such request, on a first-in, first-out accounting basis 
in the following order:
    (i) Any CSAPR NOX Ozone Season Group 3 allowances that 
were recorded in the compliance account pursuant to Sec.  97.1021 and 
not transferred out of the compliance account, in the order of 
recordation; and then
    (ii) Any other CSAPR NOX Ozone Season Group 3 allowances 
that were transferred to and recorded in the compliance account 
pursuant to this subpart or that were recorded in the compliance 
account pursuant to Sec.  97.526(c) or 97.826(c), in the order of 
recordation.
    (d) Deductions for excess emissions. After making the deductions 
for compliance under paragraph (b) of this section for a control period 
in a year in which the CSAPR NOX Ozone Season Group 3 source 
has excess emissions, the Administrator will deduct from the source's 
compliance account an amount of CSAPR NOX Ozone Season Group 
3 allowances, allocated or auctioned for a control period in a prior 
year or the control period in the year of the excess emissions or in 
the immediately following year, equal to two times the number of tons 
of the source's excess emissions.
    (e) Recordation of deductions. The Administrator will record in the 
appropriate compliance account all deductions from such an account 
under paragraphs (b) and (d) of this section.


Sec.  97.1025   Compliance with CSAPR NOX Ozone Season Group 
3 assurance provisions.

    (a) Availability for deduction. CSAPR NOX Ozone Season 
Group 3 allowances are available to be deducted for compliance with the 
CSAPR NOX Ozone Season Group 3 assurance provisions for a 
control period in a given year by the owners and operators of a group 
of one or more base CSAPR NOX Ozone Season Group 3 sources 
and units in a State (and Indian country within the borders

[[Page 69107]]

of such State) only if the CSAPR NOX Ozone Season Group 3 
allowances:
    (1) Were allocated or auctioned 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 base CSAPR 
NOX Ozone Season Group 3 sources and units in such State 
(and Indian country within the borders of such State) 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 CSAPR 
NOX Ozone Season Group 3 allowances available under 
paragraph (a) of this section for compliance with the CSAPR 
NOX Ozone Season Group 3 assurance provisions for a State 
for a control period in a given year in accordance with the following 
procedures:
    (1) By June 1, 2022 and June 1, 2023 and by August 1 of each year 
thereafter, the Administrator will:
    (i) Calculate, for each State (and Indian country within the 
borders of such State), the total NOX emissions from all 
base CSAPR NOX Ozone Season Group 3 units at base CSAPR 
NOX Ozone Season Group 3 sources in the State (and Indian 
country within the borders of such State) during the control period in 
the year before the year of this calculation deadline and the amount, 
if any, by which such total NOX emissions exceed the State 
assurance level as described in Sec.  97.1006(c)(2)(iii); and
    (ii) If the calculations under paragraph (b)(1)(i) of this section 
indicate that the total NOX emissions from all CSAPR 
NOX Ozone Season Group 3 units at CSAPR NOX Ozone 
Season Group 3 sources in any State (and Indian country within the 
borders of such State) during such control period exceed the State 
assurance level for such control period, promulgate a notice of data 
availability of the results of the calculations required in paragraph 
(b)(1)(i) of this section, including separate calculations of the 
NOX emissions from each base CSAPR NOX Ozone 
Season Group 3 source.
    (2) For each notice of data availability required in paragraph 
(b)(1)(ii) of this section and for any State (and Indian country within 
the borders of such State) identified in such notice as having base 
CSAPR NOX Ozone Season Group 3 units with total 
NOX emissions exceeding the State assurance level for a 
control period in a given year, as described in Sec.  
97.1006(c)(2)(iii):
    (i) For a control period before 2023 only, by July 1 immediately 
after the promulgation of such notice, the designated representative of 
each base CSAPR NOX Ozone Season Group 3 source in each such 
State (and Indian country within the borders of such State) shall 
submit a statement, in a format prescribed by the Administrator, 
providing for each base CSAPR NOX Ozone Season Group 3 unit 
(if any) at the source that operates during, but is not allocated an 
amount of CSAPR NOX Ozone Season Group 3 allowances for, 
such control period, the unit's allowable NOX emission rate 
for such control period and, if such rate is expressed in lb per mmBtu, 
the unit's heat rate.
    (ii) The Administrator will calculate, for each such State (and 
Indian country within the borders of such State) and such control 
period and each common designated representative for such control 
period for a group of one or more base CSAPR NOX Ozone 
Season Group 3 sources and units in the State (and Indian country 
within the borders of such State), the common designated 
representative's share of the total NOX emissions from all 
base CSAPR NOX Ozone Season Group 3 units at base CSAPR 
NOX Ozone Season Group 3 sources in the State (and Indian 
country within the borders of such State), the common designated 
representative's assurance level, and the amount (if any) of CSAPR 
NOX Ozone Season Group 3 allowances that the owners and 
operators of such group of sources and units must hold in accordance 
with the calculation formula in Sec.  97.1006(c)(2)(i). For a control 
period before 2023, if the results of these calculations were not 
included in the notice of data availability required in paragraph 
(b)(1)(ii) of this section, the Administrator will promulgate a notice 
of data availability of the results of these calculations by August 1 
immediately after the promulgation of such notice. For a control period 
in 2023 or thereafter, the Administrator will include the results of 
these calculations in the notice of data availability required in 
paragraph (b)(1)(ii) of this section.
    (iii) The Administrator will provide an opportunity for submission 
of objections to the calculations referenced by the notice or notices 
of data availability required in paragraphs (b)(1)(ii) and (b)(2)(ii) 
of this section.
    (A) Objections shall be submitted by the deadline specified in such 
notice or notices and shall be limited to addressing whether the 
calculations referenced in the notice or notices are in accordance with 
Sec.  97.1006(c)(2)(iii), Sec. Sec.  97.1006(b) and 97.1030 through 
97.1035, the definitions of ``common designated representative'', 
``common designated representative's assurance level'', and ``common 
designated representative's share'' in Sec.  97.1002, and the 
calculation formula in Sec.  97.1006(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 or notices, 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) For any State (and Indian country within the borders of such 
State) referenced in each notice of data availability required in 
paragraph (b)(2)(iii)(B) of this section as having base CSAPR 
NOX Ozone Season Group 3 units with total NOX 
emissions exceeding the State assurance level for a control period in a 
given year, 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 base CSAPR 
NOX Ozone Season Group 3 sources and units in the State (and 
Indian country within the borders of such State) having a common 
designated representative for such control period and as being required 
to hold CSAPR NOX Ozone Season Group 3 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 base CSAPR NOX 
Ozone Season Group 3 sources, base CSAPR NOX Ozone Season 
Group 3 units, and State (and Indian country within the borders of such 
State) under paragraph (b)(3) of this section a total amount of CSAPR 
NOX Ozone Season Group 3 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, units 
and State (and Indian country within the borders of such State) as 
calculated by the Administrator and referenced in such notice.
    (ii) Notwithstanding the allowance-holding deadline specified in 
paragraph

[[Page 69108]]

(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.  97.1023, of CSAPR 
NOX Ozone Season Group 3 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 base CSAPR 
NOX Ozone Season Group 3 sources, base CSAPR NOX 
Ozone Season Group 3 units, and State (and Indian country within the 
borders of such State) established under paragraph (b)(3) of this 
section, the amount of CSAPR NOX Ozone Season Group 3 
allowances available under paragraph (a) of this section that the 
owners and operators are required to hold with regard to such sources, 
units, and State (and Indian country within the borders of such State) 
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 CSAPR NOX Ozone Season Group 3 allowances that 
the owners and operators are required to hold in accordance with Sec.  
97.1006(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 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 CSAPR 
NOX Ozone Season Group 3 allowances that owners and 
operators are required to hold in accordance with the calculation 
formula in Sec.  97.1006(c)(2)(i) for such control period with regard 
to the base CSAPR NOX Ozone Season Group 3 sources, base 
CSAPR NOX Ozone Season Group 3 units, and State (and Indian 
country within the borders of such State) 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) For a control period before 2023 only, if any such data are 
revised by the owners and operators of a base CSAPR NOX 
Ozone Season Group 3 source and base CSAPR NOX Ozone Season 
Group 3 unit whose designated representative submitted such data under 
paragraph (b)(2)(i) of this section, as a result of a decision in or 
settlement of litigation concerning such submission, then the 
Administrator will use the data as so revised to recalculate the 
amounts of CSAPR NOX Ozone Season Group 3 allowances that 
owners and operators are required to hold in accordance with the 
calculation formula in Sec.  97.1006(c)(2)(i) for such control period 
with regard to the base CSAPR NOX Ozone Season Group 3 
sources, base CSAPR NOX Ozone Season Group 3 units, and 
State (and Indian country within the borders of such State) involved, 
provided that such litigation was initiated no later than 30 days after 
promulgation of such notice required in paragraph (b)(2)(iii)(B) of 
this section.
    (iii) If the revised data are used to recalculate, in accordance 
with paragraphs (b)(6)(i) and (ii) of this section, the amount of CSAPR 
NOX Ozone Season Group 3 allowances that the owners and 
operators are required to hold for such control period with regard to 
the base CSAPR NOX Ozone Season Group 3 sources, base CSAPR 
NOX Ozone Season Group 3 units, and State (and Indian 
country within the borders of such State) involved--
    (A) Where the amount of CSAPR NOX Ozone Season Group 3 
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 CSAPR NOX Ozone Season 
Group 3 allowances in the assurance account established by the 
Administrator for the appropriate base CSAPR NOX Ozone 
Season Group 3 sources, base CSAPR NOX Ozone Season Group 3 
units, and State (and Indian country within the borders of such State) 
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 CSAPR 
NOX Ozone Season Group 3 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 CSAPR 
NOX Ozone Season Group 3 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 CSAPR 
NOX Ozone Season Group 3 allowances were transferred by such 
owners and operators for such control period to the assurance account 
established by the Administrator for the appropriate base CSAPR 
NOX Ozone Season Group 3 sources, base CSAPR NOX 
Ozone Season Group 3 units, and State (and Indian country within the 
borders of such State) under paragraph (b)(3) of this section, a total 
amount of the CSAPR NOX Ozone Season Group 3 allowances held 
in such assurance account equal to the amount of the decrease. If CSAPR 
NOX Ozone Season Group 3 allowances were transferred to such 
assurance account from more than one account, the amount of CSAPR 
NOX Ozone Season Group 3 allowances recorded in each such 
transferor account will be in proportion to the percentage of the total 
amount of CSAPR NOX Ozone Season Group 3 allowances 
transferred to such assurance account for such control period from such 
transferor account.
    (C) Each CSAPR NOX Ozone Season Group 3 allowance held 
under paragraph (b)(6)(iii)(A) of this section as a result of 
recalculation of requirements under the CSAPR NOX Ozone 
Season Group 3 assurance provisions for such control period must be a 
CSAPR NOX Ozone Season Group 3 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.  97.1026   Banking.

    (a) A CSAPR NOX Ozone Season Group 3 allowance may be 
banked for future use or transfer in a compliance account or a general 
account in accordance with paragraph (b) of this section.
    (b) Any CSAPR NOX Ozone Season Group 3 allowance that is 
held in a

[[Page 69109]]

compliance account or a general account will remain in such account 
unless and until the CSAPR NOX Ozone Season Group 3 
allowance is deducted or transferred under Sec.  97.1011(c), Sec.  
97.1023, Sec.  97.1024, Sec.  97.1025, Sec.  97.1027, or Sec.  97.1028.


Sec.  97.1027   Account error.

    The Administrator may, at his or her sole discretion and on his or 
her own motion, correct any error in any Allowance Management System 
account. Within 10 business days of making such correction, the 
Administrator will notify the authorized account representative for the 
account.


Sec.  97.1028   Administrator's action on submissions.

    (a) The Administrator may review and conduct independent audits 
concerning any submission under the CSAPR NOX Ozone Season 
Group 3 Trading Program and make appropriate adjustments of the 
information in the submission.
    (b) The Administrator may deduct CSAPR NOX Ozone Season 
Group 3 allowances from or transfer CSAPR NOX Ozone Season 
Group 3 allowances to a compliance account or an assurance account, 
based on the information in a submission, as adjusted under paragraph 
(a) of this section, and record such deductions and transfers.


Sec.  97.1029   [Reserved]


Sec.  97.1030   General monitoring, recordkeeping, and reporting 
requirements.

    The owners and operators, and to the extent applicable, the 
designated representative, of a CSAPR NOX Ozone Season Group 
3 unit, shall comply with the monitoring, recordkeeping, and reporting 
requirements as provided in this subpart and subpart H of part 75 of 
this chapter. For purposes of applying such requirements, the 
definitions in Sec.  97.1002 and in Sec.  72.2 of this chapter shall 
apply, the terms ``affected unit,'' ``designated representative,'' and 
``continuous emission monitoring system'' (or ``CEMS'') in part 75 of 
this chapter shall be deemed to refer to the terms ``CSAPR 
NOX Ozone Season Group 3 unit,'' ``designated 
representative,'' and ``continuous emission monitoring system'' (or 
``CEMS'') respectively as defined in Sec.  97.1002, and the term 
``newly affected unit'' shall be deemed to mean ``newly affected CSAPR 
NOX Ozone Season Group 3 unit''. The owner or operator of a 
unit that is not a CSAPR NOX Ozone Season Group 3 unit but 
that is monitored under Sec.  75.72(b)(2)(ii) of this chapter shall 
comply with the same monitoring, recordkeeping, and reporting 
requirements as a CSAPR NOX Ozone Season Group 3 unit.
    (a) Requirements for installation, certification, and data 
accounting. The owner or operator of each CSAPR NOX Ozone 
Season Group 3 unit shall:
    (1) Install all monitoring systems required under this subpart for 
monitoring NOX mass emissions and individual unit heat input 
(including all systems required to monitor NOX emission 
rate, NOX concentration, stack gas moisture content, stack 
gas flow rate, CO2 or O2 concentration, and fuel 
flow rate, as applicable, in accordance with Sec. Sec.  75.71 and 75.72 
of this chapter);
    (2) Successfully complete all certification tests required under 
Sec.  97.1031 and meet all other requirements of this subpart and part 
75 of this chapter applicable to the monitoring systems under paragraph 
(a)(1) of this section; and
    (3) Record, report, and quality-assure the data from the monitoring 
systems under paragraph (a)(1) of this section.
    (b) Compliance deadlines. Except as provided in paragraph (e) of 
this section, the owner or operator of a CSAPR NOX Ozone 
Season Group 3 unit shall meet the monitoring system certification and 
other requirements of paragraphs (a)(1) and (2) of this section on or 
before the latest of the following dates and shall record, report, and 
quality-assure the data from the monitoring systems under paragraph 
(a)(1) of this section on and after the latest of the following dates:
    (1) May 1, 2021;
    (2) 180 calendar days after the date on which the unit commences 
commercial operation; or
    (3) Where data for the unit are reported on a control period basis 
under Sec.  97.1034(d)(1)(ii)(B), and where the compliance date under 
paragraph (b)(2) of this section is not in a month from May through 
September, May 1 immediately after the compliance date under paragraph 
(b)(2) of this section.
    (4) The owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit for which construction of a new stack or flue or 
installation of add-on NOX emission controls is completed 
after the applicable deadline under paragraph (b)(1), (2), or (3) of 
this section shall meet the requirements of Sec.  75.4(e)(1) through 
(4) of this chapter, except that:
    (i) Such requirements shall apply to the monitoring systems 
required under Sec.  97.1030 through Sec.  97.1035, rather than the 
monitoring systems required under part 75 of this chapter;
    (ii) NOX emission rate, NOX concentration, 
stack gas moisture content, stack gas volumetric flow rate, and 
O2 or CO2 concentration data shall be determined 
and reported, rather than the data listed in Sec.  75.4(e)(2) of this 
chapter; and
    (iii) Any petition for another procedure under Sec.  75.4(e)(2) of 
this chapter shall be submitted under Sec.  97.1035, rather than Sec.  
75.66 of this chapter.
    (c) Reporting data. The owner or operator of a CSAPR NOX 
Ozone Season Group 3 unit that does not meet the applicable compliance 
date set forth in paragraph (b) of this section for any monitoring 
system under paragraph (a)(1) of this section shall, for each such 
monitoring system, determine, record, and report maximum potential (or, 
as appropriate, minimum potential) values for NOX 
concentration, NOX emission rate, stack gas flow rate, stack 
gas moisture content, fuel flow rate, and any other parameters required 
to determine NOX mass emissions and heat input in accordance 
with Sec.  75.31(b)(2) or (c)(3) of this chapter, section 2.4 of 
appendix D to part 75 of this chapter, or section 2.5 of appendix E to 
part 75 of this chapter, as applicable.
    (d) Prohibitions. (1) No owner or operator of a CSAPR 
NOX Ozone Season Group 3 unit shall use any alternative 
monitoring system, alternative reference method, or any other 
alternative to any requirement of this subpart without having obtained 
prior written approval in accordance with Sec.  97.1035.
    (2) No owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit shall operate the unit so as to discharge, or allow to be 
discharged, NOX to the atmosphere without accounting for all 
such NOX in accordance with the applicable provisions of 
this subpart and part 75 of this chapter.
    (3) No owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit shall disrupt the continuous emission monitoring system, 
any portion thereof, or any other approved emission monitoring method, 
and thereby avoid monitoring and recording NOX mass 
discharged into the atmosphere or heat input, except for periods of 
recertification or periods when calibration, quality assurance testing, 
or maintenance is performed in accordance with the applicable 
provisions of this subpart and part 75 of this chapter.
    (4) No owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit shall retire or permanently discontinue use of the 
continuous emission monitoring system, any component thereof, or any 
other approved monitoring system under this subpart, except under any 
one of the following circumstances:
    (i) During the period that the unit is covered by an exemption 
under Sec.  97.1005 that is in effect;

[[Page 69110]]

    (ii) The owner or operator is monitoring emissions from the unit 
with another certified monitoring system approved, in accordance with 
the applicable provisions of this subpart and part 75 of this chapter, 
by the Administrator for use at that unit that provides emission data 
for the same pollutant or parameter as the retired or discontinued 
monitoring system; or
    (iii) The designated representative submits notification of the 
date of certification testing of a replacement monitoring system for 
the retired or discontinued monitoring system in accordance with Sec.  
97.1031(d)(3)(i).
    (e) Long-term cold storage. The owner or operator of a CSAPR 
NOX Ozone Season Group 3 unit is subject to the applicable 
provisions of Sec.  75.4(d) of this chapter concerning units in long-
term cold storage.


Sec.  97.1031   Initial monitoring system certification and 
recertification procedures.

    (a) The owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit shall be exempt from the initial certification 
requirements of this section for a monitoring system under Sec.  
97.1030(a)(1) if the following conditions are met:
    (1) The monitoring system has been previously certified in 
accordance with part 75 of this chapter; and
    (2) The applicable quality-assurance and quality-control 
requirements of Sec.  75.21 of this chapter and appendices B, D, and E 
to part 75 of this chapter are fully met for the certified monitoring 
system described in paragraph (a)(1) of this section.
    (b) The recertification provisions of this section shall apply to a 
monitoring system under Sec.  97.1030(a)(1) that is exempt from initial 
certification requirements under paragraph (a) of this section.
    (c) If the Administrator has previously approved a petition under 
Sec.  75.17(a) or (b) of this chapter for apportioning the 
NOX emission rate measured in a common stack or a petition 
under Sec.  75.66 of this chapter for an alternative to a requirement 
in Sec.  75.12 or Sec.  75.17 of this chapter, the designated 
representative shall resubmit the petition to the Administrator under 
Sec.  97.1035 to determine whether the approval applies under the CSAPR 
NOX Ozone Season Group 3 Trading Program.
    (d) Except as provided in paragraph (a) of this section, the owner 
or operator of a CSAPR NOX Ozone Season Group 3 unit shall 
comply with the following initial certification and recertification 
procedures for a continuous monitoring system (i.e., a continuous 
emission monitoring system and an excepted monitoring system under 
appendices D and E to part 75 of this chapter) under Sec.  
97.1030(a)(1). The owner or operator of a unit that qualifies to use 
the low mass emissions excepted monitoring methodology under Sec.  
75.19 of this chapter or that qualifies to use an alternative 
monitoring system under subpart E of part 75 of this chapter shall 
comply with the procedures in paragraph (e) or (f) of this section 
respectively.
    (1) Requirements for initial certification. The owner or operator 
shall ensure that each continuous monitoring system under Sec.  
97.1030(a)(1) (including the automated data acquisition and handling 
system) successfully completes all of the initial certification testing 
required under Sec.  75.20 of this chapter by the applicable deadline 
in Sec.  97.1030(b). In addition, whenever the owner or operator 
installs a monitoring system to meet the requirements of this subpart 
in a location where no such monitoring system was previously installed, 
initial certification in accordance with Sec.  75.20 of this chapter is 
required.
    (2) Requirements for recertification. Whenever the owner or 
operator makes a replacement, modification, or change in any certified 
continuous emission monitoring system under Sec.  97.1030(a)(1) that 
may significantly affect the ability of the system to accurately 
measure or record NOX mass emissions or heat input rate or 
to meet the quality-assurance and quality-control requirements of Sec.  
75.21 of this chapter or appendix B to part 75 of this chapter, the 
owner or operator shall recertify the monitoring system in accordance 
with Sec.  75.20(b) of this chapter. Furthermore, whenever the owner or 
operator makes a replacement, modification, or change to the flue gas 
handling system or the unit's operation that may significantly change 
the stack flow or concentration profile, the owner or operator shall 
recertify each continuous emission monitoring system whose accuracy is 
potentially affected by the change, in accordance with Sec.  75.20(b) 
of this chapter. Examples of changes to a continuous emission 
monitoring system that require recertification include replacement of 
the analyzer, complete replacement of an existing continuous emission 
monitoring system, or change in location or orientation of the sampling 
probe or site. Any fuel flowmeter system, and any excepted 
NOX monitoring system under appendix E to part 75 of this 
chapter, under Sec.  97.1030(a)(1) are subject to the recertification 
requirements in Sec.  75.20(g)(6) of this chapter.
    (3) Approval process for initial certification and recertification. 
For initial certification of a continuous monitoring system under Sec.  
97.1030(a)(1), paragraphs (d)(3)(i) through (v) of this section apply. 
For recertifications of such monitoring systems, paragraphs (d)(3)(i) 
through (iv) of this section and the procedures in Sec.  75.20(b)(5) 
and (g)(7) of this chapter (in lieu of the procedures in paragraph 
(d)(3)(v) of this section) apply, provided that in applying paragraphs 
(d)(3)(i) through (iv) of this section, the words ``certification'' and 
``initial certification'' are replaced by the word ``recertification'' 
and the word ``certified'' is replaced by the word ``recertified''.
    (i) Notification of certification. The designated representative 
shall submit to the appropriate EPA Regional Office and the 
Administrator written notice of the dates of certification testing, in 
accordance with Sec.  97.1033.
    (ii) Certification application. The designated representative shall 
submit to the Administrator a certification application for each 
monitoring system. A complete certification application shall include 
the information specified in Sec.  75.63 of this chapter.
    (iii) Provisional certification date. The provisional certification 
date for a monitoring system shall be determined in accordance with 
Sec.  75.20(a)(3) of this chapter. A provisionally certified monitoring 
system may be used under the CSAPR NOX Ozone Season Group 3 
Trading Program for a period not to exceed 120 days after receipt by 
the Administrator of the complete certification application for the 
monitoring system under paragraph (d)(3)(ii) of this section. Data 
measured and recorded by the provisionally certified monitoring system, 
in accordance with the requirements of part 75 of this chapter, will be 
considered valid quality-assured data (retroactive to the date and time 
of provisional certification), provided that the Administrator does not 
invalidate the provisional certification by issuing a notice of 
disapproval within 120 days of the date of receipt of the complete 
certification application by the Administrator.
    (iv) Certification application approval process. The Administrator 
will issue a written notice of approval or disapproval of the 
certification application to the owner or operator within 120 days of 
receipt of the complete certification application under paragraph 
(d)(3)(ii) of this section. In the event the Administrator does not 
issue such a notice within such 120-day period, each monitoring system 
that

[[Page 69111]]

meets the applicable performance requirements of part 75 of this 
chapter and is included in the certification application will be deemed 
certified for use under the CSAPR NOX Ozone Season Group 3 
Trading Program.
    (A) Approval notice. If the certification application is complete 
and shows that each monitoring system meets the applicable performance 
requirements of part 75 of this chapter, then the Administrator will 
issue a written notice of approval of the certification application 
within 120 days of receipt.
    (B) Incomplete application notice. If the certification application 
is not complete, then the Administrator will issue a written notice of 
incompleteness that sets a reasonable date by which the designated 
representative must submit the additional information required to 
complete the certification application. If the designated 
representative does not comply with the notice of incompleteness by the 
specified date, then the Administrator may issue a notice of 
disapproval under paragraph (d)(3)(iv)(C) of this section.
    (C) Disapproval notice. If the certification application shows that 
any monitoring system does not meet the performance requirements of 
part 75 of this chapter or if the certification application is 
incomplete and the requirement for disapproval under paragraph 
(d)(3)(iv)(B) of this section is met, then the Administrator will issue 
a written notice of disapproval of the certification application. Upon 
issuance of such notice of disapproval, the provisional certification 
is invalidated by the Administrator and the data measured and recorded 
by each uncertified monitoring system shall not be considered valid 
quality-assured data beginning with the date and hour of provisional 
certification (as defined under Sec.  75.20(a)(3) of this chapter).
    (D) Audit decertification. The Administrator may issue a notice of 
disapproval of the certification status of a monitor in accordance with 
Sec.  97.1032(b).
    (v) Procedures for loss of certification. If the Administrator 
issues a notice of disapproval of a certification application under 
paragraph (d)(3)(iv)(C) of this section or a notice of disapproval of 
certification status under paragraph (d)(3)(iv)(D) of this section, 
then:
    (A) The owner or operator shall substitute the following values, 
for each disapproved monitoring system, for each hour of unit operation 
during the period of invalid data specified under Sec.  
75.20(a)(4)(iii), Sec.  75.20(g)(7), or Sec.  75.21(e) of this chapter 
and continuing until the applicable date and hour specified under Sec.  
75.20(a)(5)(i) or (g)(7) of this chapter:
    (1) For a disapproved NOX emission rate (i.e., 
NOX-diluent) system, the maximum potential NOX 
emission rate, as defined in Sec.  72.2 of this chapter.
    (2) For a disapproved NOX pollutant concentration 
monitor and disapproved flow monitor, respectively, the maximum 
potential concentration of NOX and the maximum potential 
flow rate, as defined in sections 2.1.2.1 and 2.1.4.1 of appendix A to 
part 75 of this chapter.
    (3) For a disapproved moisture monitoring system and disapproved 
diluent gas monitoring system, respectively, the minimum potential 
moisture percentage and either the maximum potential CO2 
concentration or the minimum potential O2 concentration (as 
applicable), as defined in sections 2.1.5, 2.1.3.1, and 2.1.3.2 of 
appendix A to part 75 of this chapter.
    (4) For a disapproved fuel flowmeter system, the maximum potential 
fuel flow rate, as defined in section 2.4.2.1 of appendix D to part 75 
of this chapter.
    (5) For a disapproved excepted NOX monitoring system 
under appendix E to part 75 of this chapter, the fuel-specific maximum 
potential NOX emission rate, as defined in Sec.  72.2 of 
this chapter.
    (B) The designated representative shall submit a notification of 
certification retest dates and a new certification application in 
accordance with paragraphs (d)(3)(i) and (ii) of this section.
    (C) The owner or operator shall repeat all certification tests or 
other requirements that were failed by the monitoring system, as 
indicated in the Administrator's notice of disapproval, no later than 
30 unit operating days after the date of issuance of the notice of 
disapproval.
    (e) The owner or operator of a unit qualified to use the low mass 
emissions (LME) excepted methodology under Sec.  75.19 of this chapter 
shall meet the applicable certification and recertification 
requirements in Sec. Sec.  75.19(a)(2) and 75.20(h) of this chapter. If 
the owner or operator of such a unit elects to certify a fuel flowmeter 
system for heat input determination, the owner or operator shall also 
meet the certification and recertification requirements in Sec.  
75.20(g) of this chapter.
    (f) The designated representative of each unit for which the owner 
or operator intends to use an alternative monitoring system approved by 
the Administrator under subpart E of part 75 of this chapter shall 
comply with the applicable notification and application procedures of 
Sec.  75.20(f) of this chapter.


Sec.  97.1032   Monitoring system out-of-control periods.

    (a) General provisions. Whenever any monitoring system fails to 
meet the quality-assurance and quality-control requirements or data 
validation requirements of part 75 of this chapter, data shall be 
substituted using the applicable missing data procedures in subpart D 
or subpart H of, or appendix D or appendix E to, part 75 of this 
chapter.
    (b) Audit decertification. Whenever both an audit of a monitoring 
system and a review of the initial certification or recertification 
application reveal that any monitoring system should not have been 
certified or recertified because it did not meet a particular 
performance specification or other requirement under Sec.  97.1031 or 
the applicable provisions of part 75 of this chapter, both at the time 
of the initial certification or recertification application submission 
and at the time of the audit, the Administrator will issue a notice of 
disapproval of the certification status of such monitoring system. For 
the purposes of this paragraph, an audit shall be either a field audit 
or an audit of any information submitted to the Administrator or any 
State or permitting authority. By issuing the notice of disapproval, 
the Administrator revokes prospectively the certification status of the 
monitoring system. The data measured and recorded by the monitoring 
system shall not be considered valid quality-assured data from the date 
of issuance of the notification of the revoked certification status 
until the date and time that the owner or operator completes 
subsequently approved initial certification or recertification tests 
for the monitoring system. The owner or operator shall follow the 
applicable initial certification or recertification procedures in Sec.  
97.1031 for each disapproved monitoring system.


Sec.  97.1033   Notifications concerning monitoring.

    The designated representative of a CSAPR NOX Ozone 
Season Group 3 unit shall submit written notice to the Administrator in 
accordance with Sec.  75.61 of this chapter.


Sec.  97.1034   Recordkeeping and reporting.

    (a) General provisions. The designated representative shall comply 
with all recordkeeping and reporting requirements in paragraphs (b) 
through (e) of this section, the applicable recordkeeping and reporting

[[Page 69112]]

requirements under Sec.  75.73 of this chapter, and the requirements of 
Sec.  97.1014(a).
    (b) Monitoring plans. The owner or operator of a CSAPR 
NOX Ozone Season Group 3 unit shall comply with the 
requirements of Sec.  75.73(c) and (e) of this chapter.
    (c) Certification applications. The designated representative shall 
submit an application to the Administrator within 45 days after 
completing all initial certification or recertification tests required 
under Sec.  97.1031, including the information required under Sec.  
75.63 of this chapter.
    (d) Quarterly reports. The designated representative shall submit 
quarterly reports, as follows:
    (1)(i) If a CSAPR NOX Ozone Season Group 3 unit is 
subject to the Acid Rain Program or the CSAPR NOX Annual 
Trading Program or if the owner or operator of such unit chooses to 
report on an annual basis under this subpart, then the designated 
representative shall meet the requirements of subpart H of part 75 of 
this chapter (concerning monitoring of NOX mass emissions) 
for such unit for the entire year and report the NOX mass 
emissions data and heat input data for such unit for the entire year.
    (ii) If a CSAPR NOX Ozone Season Group 3 unit is not 
subject to the Acid Rain Program or the CSAPR NOX Annual 
Trading Program, then the designated representative shall either:
    (A) Meet the requirements of subpart H of part 75 of this chapter 
for such unit for the entire year and report the NOX mass 
emissions data and heat input data for such unit for the entire year in 
accordance with paragraph (d)(1)(i) of this section; or
    (B) Meet the requirements of subpart H of part 75 of this chapter 
(including the requirements in Sec.  75.74(c) of this chapter) for such 
unit for the control period and report the NOX mass 
emissions data and heat input data (including the data described in 
Sec.  75.74(c)(6) of this chapter) for such unit only for the control 
period of each year.
    (2) The designated representative shall report the NOX 
mass emissions data and heat input data for a CSAPR NOX 
Ozone Season Group 3 unit, in an electronic quarterly report in a 
format prescribed by the Administrator, for each calendar quarter 
indicated under paragraph (d)(1) of this section beginning by the 
latest of:
    (i) The calendar quarter covering May 1, 2021, through June 30, 
2021;
    (ii) The calendar quarter corresponding to the earlier of the date 
of provisional certification or the applicable deadline for initial 
certification under Sec.  97.1030(b); or
    (iii) For a unit that reports on a control period basis under 
paragraph (d)(1)(ii)(B) of this section, if the calendar quarter under 
paragraph (d)(2)(ii) of this section does not include a month from May 
through September, the calendar quarter covering May 1 through June 30 
immediately after the calendar quarter under paragraph (d)(2)(ii) of 
this section.
    (3) The designated representative shall submit each quarterly 
report to the Administrator within 30 days after the end of the 
calendar quarter covered by the report. Quarterly reports shall be 
submitted in the manner specified in Sec.  75.73(f) of this chapter.
    (4) For CSAPR NOX Ozone Season Group 3 units that are 
also subject to the Acid Rain Program, CSAPR NOX Annual 
Trading Program, CSAPR SO2 Group 1 Trading Program, or CSAPR 
SO2 Group 2 Trading Program, quarterly reports shall include 
the applicable data and information required by subparts F through H of 
part 75 of this chapter as applicable, in addition to the 
NOX mass emission data, heat input data, and other 
information required by this subpart.
    (5) The Administrator may review and conduct independent audits of 
any quarterly report in order to determine whether the quarterly report 
meets the requirements of this subpart and part 75 of this chapter, 
including the requirement to use substitute data.
    (i) The Administrator will notify the designated representative of 
any determination that the quarterly report fails to meet any such 
requirements and specify in such notification any corrections that the 
Administrator believes are necessary to make through resubmission of 
the quarterly report and a reasonable time period within which the 
designated representative must respond. Upon request by the designated 
representative, the Administrator may specify reasonable extensions of 
such time period. Within the time period (including any such 
extensions) specified by the Administrator, the designated 
representative shall resubmit the quarterly report with the corrections 
specified by the Administrator, except to the extent the designated 
representative provides information demonstrating that a specified 
correction is not necessary because the quarterly report already meets 
the requirements of this subpart and part 75 of this chapter that are 
relevant to the specified correction.
    (ii) Any resubmission of a quarterly report shall meet the 
requirements applicable to the submission of a quarterly report under 
this subpart and part 75 of this chapter, except for the deadline set 
forth in paragraph (d)(3) of this section.
    (e) Compliance certification. The designated representative shall 
submit to the Administrator a compliance certification (in a format 
prescribed by the Administrator) in support of each quarterly report 
based on reasonable inquiry of those persons with primary 
responsibility for ensuring that all of the unit's emissions are 
correctly and fully monitored. The certification shall state that:
    (1) The monitoring data submitted were recorded in accordance with 
the applicable requirements of this subpart and part 75 of this 
chapter, including the quality assurance procedures and specifications;
    (2) For a unit with add-on NOX emission controls and for 
all hours where NOX data are substituted in accordance with 
Sec.  75.34(a)(1) of this chapter, the add-on emission controls were 
operating within the range of parameters listed in the quality 
assurance/quality control program under appendix B to part 75 of this 
chapter and the substitute data values do not systematically 
underestimate NOX emissions; and
    (3) For a unit that is reporting on a control period basis under 
paragraph (d)(1)(ii)(B) of this section, the NOX emission 
rate and NOX concentration values substituted for missing 
data under subpart D of part 75 of this chapter are calculated using 
only values from a control period and do not systematically 
underestimate NOX emissions.


Sec.  97.1035   Petitions for alternatives to monitoring, 
recordkeeping, or reporting requirements.

    (a) The designated representative of a CSAPR NOX Ozone 
Season Group 3 unit may submit a petition under Sec.  75.66 of this 
chapter to the Administrator, requesting approval to apply an 
alternative to any requirement of Sec. Sec.  97.1030 through 97.1034.
    (b) A petition submitted under paragraph (a) of this section shall 
include sufficient information for the evaluation of the petition, 
including, at a minimum, the following information:
    (1) Identification of each unit and source covered by the petition;
    (2) A detailed explanation of why the proposed alternative is being 
suggested in lieu of the requirement;
    (3) A description and diagram of any equipment and procedures used 
in the proposed alternative;

[[Page 69113]]

    (4) A demonstration that the proposed alternative is consistent 
with the purposes of the requirement for which the alternative is 
proposed and with the purposes of this subpart and part 75 of this 
chapter and that any adverse effect of approving the alternative will 
be de minimis; and
    (5) Any other relevant information that the Administrator may 
require.
    (c) Use of an alternative to any requirement referenced in 
paragraph (a) of this section is in accordance with this subpart only 
to the extent that the petition is approved in writing by the 
Administrator and that such use is in accordance with such approval.

[FR Doc. 2020-23237 Filed 10-29-20; 8:45 am]
 BILLING CODE 6560-50-P