[Federal Register Volume 90, Number 96 (Tuesday, May 20, 2025)]
[Rules and Regulations]
[Pages 21423-21434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-08964]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 97
[EPA-HQ-OAR-2025-0190; FRL-12724-01-OAR]
RIN 2060-AW78
Emissions Budget and Allowance Allocations for Indiana Under the
Revised Cross-State Air Pollution Rule Update
AGENCY: Environmental Protection Agency (EPA).
ACTION: Interim final rule; request for comment.
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SUMMARY: The Environmental Protection Agency (EPA) is taking interim
final action to adjust the Revised Cross-State Air Pollution Rule
(CSAPR) Update ``budget'' for nitrogen oxides (NOX)
emissions from Indiana electricity generating units (EGUs) during the
May-September ``ozone season'' for 2024 and subsequent years.
Relatedly, EPA is also adjusting the default unit-level allocations of
emission allowances to Indiana EGUs for 2024 and subsequent years in
accordance with the adjustments to the state emissions budget. When
originally establishing state emissions budgets and default unit-level
allocations for 2024 and subsequent years in the Revised CSAPR Update
rulemaking, EPA relied in part on announcements from EGU owners
regarding their plans to retire certain EGUs before the 2024 ozone
season. The purpose of the adjustments being made in this action is to
account for the subsequent decisions by some EGU owners to defer or
cancel the previously announced retirement plans.
DATES: This interim final rule is effective May 20, 2025. Comments on
this rule must be received on or before June 20, 2025.
ADDRESSES: You may submit comments, identified by Docket ID No. EPA-HQ-
OAR-2025-0190, at www.regulations.gov. Comments received may be posted
without change to www.regulations.gov, including any personal
information provided. For detailed instructions on sending comments,
see the ``Public Participation'' heading of the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Morgan Riedel, Clean Air and Power
Division, Office of Atmospheric Protection, Office of Air and
Radiation, U.S. Environmental Protection Agency, Mail Code 6204A, 1200
Pennsylvania Avenue NW, Washington, DC 20460; telephone number: (202)
564-1144; email address: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents:
I. General
A. Public Participation
B. Potentially Affected Entities
C. Statutory Authority
II. Background and Overview
A. The Revised CSAPR Update
B. Adjustments To Address Superseded EGU Retirement Plans
III. Adjustments to Indiana State Emissions Budget and Variability
Limit
A. Determination of Adjusted State Emissions Budget
B. Determination of Adjusted Variability Limit
IV. Adjustments to Indiana EGUs' Default Unit-Level Allowance
Allocations
A. Determination of Adjusted Allowance Allocations
B. Notice of Availability of Data on Adjusted Allowance
Allocations
V. Rulemaking Procedures and Findings of Good Cause
VI. Request for Comment
VII. 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 14192: Unleashing Prosperity Through
Deregulation
C. Paperwork Reduction Act
D. Regulatory Flexibility Act
E. Unfunded Mandates Reform Act
[[Page 21424]]
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
K. Congressional Review Act
L. Judicial Review
I. General
A. Public Participation
Submit your written comments, identified by Docket ID No. EPA-HQ-
OAR-2025-0190, at www.regulations.gov. Follow the online instructions
for submitting comments. 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 www.regulations.gov any information you
consider to be Confidential Business Information (CBI), Proprietary
Business Information (PBI), 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). Please visit www.epa.gov/dockets/commenting-epa-dockets for additional submission methods; the full EPA
public comment policy; information about CBI, PBI, or multimedia
submissions; and general guidance on making effective comments.
B. Potentially Affected Entities
This action may affect any stationary, fossil-fuel-fired boiler or
stationary, fossil-fuel-fired combustion turbine located in Indiana and
serving at any time on or after January 1, 2005, a generator with
nameplate capacity of more than 25 MWe (megawatt-electric) producing
electricity for sale. The North American Industry Classification System
(NAICS) industry group for most affected entities is NAICS code 221112,
Fossil Fuel Electric Power Generation.
This information on potentially affected entities is not intended
to be exhaustive. To determine whether your entity is affected by this
action, you should carefully examine the applicability criteria for the
CSAPR NOX Ozone Season Group 2 Trading Program found in 40
CFR 97.804. 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.
C. Statutory Authority
Statutory authority to issue the amendments finalized in this
action is provided by the same Clean Air Act (CAA) provisions that
provided authority to issue the regulations being amended: CAA section
110(a) and (c), 42 U.S.C. 7410(a) and (c) (state implementation plan
(SIP) and federal implementation plan (FIP) requirements, including
requirements for mitigation of interstate air pollution), and CAA
section 301, 42 U.S.C. 7601 (general rulemaking authority). Statutory
authority for the rulemaking procedures followed in this action is
provided by Administrative Procedure Act (APA) section 553, 5 U.S.C.
553.
II. Background and Overview
A. The Revised CSAPR Update
CAA section 110(a)(2)(D)(i)(I), also known as the ``good neighbor''
provision, requires each state's SIP to 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 . . . contribute
significantly to nonattainment in, or interfere with maintenance by,
any other State with respect to any [national ambient air quality
standard (NAAQS)].'' EPA often refers to the emissions reduction
requirements under this provision as ``good neighbor obligations'' and
submissions addressing these requirements as ``good neighbor SIPs.''
CAA section 110(c)(1) requires the EPA Administrator to promulgate a
FIP at any time within 2 years after the Administrator: (i) finds that
a state has failed to make a required SIP submission; (ii) finds a SIP
submission to be incomplete pursuant to CAA section 110(k)(1)(C); or
(iii) 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.
In March 2021, acting pursuant to CAA sections 110(a)(2)(D)(i)(I)
and 110(c)(1), EPA promulgated the Revised CSAPR Update.\1\ The rule
determined the good neighbor obligations of 12 states, including
Indiana, with respect to the 2008 ozone NAAQS and established FIP
requirements for EGUs in those states to address the states'
obligations by reducing ozone-season emissions of NOX, an
ozone precursor, starting in 2021. The NOX emissions
reduction requirements were implemented through the mechanism of an
emission allowance trading program.
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\1\ Revised Cross-State Air Pollution Rule Update for the 2008
Ozone NAAQS, 86 FR 23054 (April 30, 2021).
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In March 2023, again acting pursuant to CAA sections
110(a)(2)(D)(i)(I) and 110(c)(1), EPA promulgated the Good Neighbor
Plan.\2\ The rule determined the good neighbor obligations of 23
states, including Indiana, with respect to the 2015 ozone NAAQS and
established FIP requirements for EGUs and certain other types of
emissions sources in those states to address the states' obligations by
reducing ozone-season NOX emissions starting in 2023. The
NOX emissions reduction requirements for EGUs again were
implemented through the mechanism of an emission allowance trading
program, and EPA coordinated compliance obligations by providing that
participation of a state's EGUs in the Good Neighbor Plan's trading
program would also be deemed to satisfy the EGUs' obligations under the
Revised CSAPR Update (and in some cases, other interstate ozone
transport rules as well).\3\ Later in 2023, in response to judicial
orders partially staying a separate EPA action as to several states,
EPA promulgated two interim final rules staying Good Neighbor Plan
implementation for emissions sources in those states pending further
EPA rulemaking.\4\ As implemented for the 2023 ozone season, the Good
Neighbor Plan therefore applied in 11 states, including Indiana.
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\2\ Federal ``Good Neighbor Plan'' for the 2015 Ozone National
Ambient Air Quality Standards, 88 FR 36654 (June 5, 2023).
\3\ See id. at 36844.
\4\ Federal ``Good Neighbor Plan'' for the 2015 Ozone National
Ambient Air Quality Standards; Response to Judicial Stays of SIP
Disapproval Action for Certain States, 88 FR 49295 (July 31, 2023);
Federal ``Good Neighbor Plan'' for the 2015 Ozone National Ambient
Air Quality Standards; Response to Additional Judicial Stays of SIP
Disapproval Action for Certain States, 88 FR 67102 (September 29,
2023).
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On June 27, 2024, the Supreme Court issued a decision staying
enforcement of the Good Neighbor Plan against the stay applicants.\5\
In response, later in 2024 EPA promulgated a third interim final rule
administratively staying Good Neighbor Plan implementation starting
with the 2024 ozone season for all sources in all states where
implementation had not already been
[[Page 21425]]
stayed under the two 2023 interim final rules, pending further EPA
rulemaking.\6\
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\5\ Ohio v. EPA, 603 U.S. 279 (2024).
\6\ Federal ``Good Neighbor Plan'' for the 2015 Ozone National
Ambient Air Quality Standards; Response to Judicial Stay, 89 FR
87960 (November 6, 2024).
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In addition to staying Good Neighbor Plan implementation, the three
interim final rules also restored status quo requirements for EGUs in
states covered under earlier interstate ozone transport rules that had
been superseded by the Good Neighbor Plan, including the Revised CSAPR
Update. Thus, as of the 2024 ozone season, and for future ozone seasons
pending further EPA rulemaking, EGUs in Indiana are once again
participating in an emission allowance trading program where the
amounts of the state emissions budget for Indiana and the unit-level
allowance allocations for Indiana EGUs are the budget and allocation
amounts established specifically to address the requirements of the
Revised CSAPR Update.\7\
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\7\ As originally promulgated, the Revised CSAPR Update required
covered EGUs to participate in the CSAPR NOX Ozone Season
Group 3 Trading Program at subpart GGGGG of 40 CFR part 97. This
trading program was later modified to serve as the compliance
mechanism for EGUs in states covered by the Good Neighbor Plan.
Consequently, to stay implementation of the Good Neighbor Plan's
requirements and restore the Revised CSAPR Update's requirements
under the three interim final rules, EPA required EGUs in states
subject to the Revised CSAPR Update to instead participate in the
CSAPR NOX Ozone Season Group 2 Trading Program at subpart
EEEEE of 40 CFR part 97 with the state emissions budgets and unit-
level allowance allocations established in the Revised CSAPR Update,
using CSAPR NOX Ozone Season Expanded Group 2 allowances
for compliance. For further details of the approach taken under the
three interim final rules to restore status quo requirements
established under the Revised CSAPR Update, see 88 FR 49296-97, 88
FR 67103-04, and 89 FR 87963-64.
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B. Adjustments To Address Superseded EGU Retirement Plans
In the Revised CSAPR Update rulemaking, when determining state
emissions budgets and default unit-level allowance allocations, EPA
addressed future EGU retirements through one of two distinct
approaches. The first approach was used for EGUs whose owners had
announced planned retirement dates for the units in 2024 or later or
had not announced any planned retirement dates. For these units without
planned retirement dates before 2024, which constituted the large
majority of the EGU fleet, the eventual future retirements of the units
would have no effect on state emissions budgets. The units also would
remain eligible to receive initial allocations of allowances as
existing units for as long as the operating data for the units reported
to EPA for successive ozone seasons showed continued operation. At such
future point as one of these units might become ineligible to receive
initial allocations as an existing unit, the allowances that otherwise
would have been allocated to the unit would instead be allocated to
other units in the state. The second approach was used for EGUs whose
owners had announced planned retirement dates for the units before 2024
(provided that EPA's confirmatory research did not identify any reason
to question the announcements). For these units, EPA took the planned
retirement dates into account when determining the amounts of the state
emissions budgets for each year after the planned retirement dates,
resulting in lower budgets than would have been the case without the
retirement announcements. These units were also treated as ineligible
to receive initial allocations of allowances as existing units in any
year after their planned retirement dates.
The EGUs whose future retirements were addressed through the second
approach included several coal-fired EGUs in Indiana, including units
17 and 18 at the R.M. Schahfer power plant (plant ID 6085) and units
1SG1 and 2SG1 at the Merom power plant (plant ID 6213). Before the
Revised CSAPR Update rulemaking, the owners of these four units
announced plans to retire the units in 2023,\8\ and EPA found no reason
at the time of the rulemaking to question the announced retirement
plans. Accordingly, EPA relied on these units' planned retirement dates
in the rulemaking, which caused the Indiana state emissions budget for
the ozone seasons in 2024 and subsequent years to be lower than would
otherwise have been the case (by reducing the emissions baseline used
as a starting point for development of the emissions budget) and also
made the four units ineligible to receive initial allowance allocations
as existing units for those ozone seasons. After finalization of the
Revised CSAPR Update, these EGUs' owners (including a new owner for the
Merom power plant) deferred or canceled the units' planned
retirements,\9\ and in accordance with the owners' updated plans, in
the Good Neighbor Plan rulemaking EPA treated the four units as
operating in 2024 and 2025 for purposes of the Indiana state emissions
budgets and the initial allowance allocations to existing units.\10\
However, the stay of Good Neighbor Plan implementation necessitated a
return to the status quo, i.e., the Revised CSAPR Update's state
emissions budgets and unit-level allowance allocations, which continued
to reflect the superseded retirement plans.
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\8\ See, e.g., the planned retirement dates reported for the
four units in U.S. Energy Information Administration Form EIA-860M
for December 2020, available in the docket for this action.
\9\ See, e.g., the planned retirement dates (or lack thereof)
reported for the four units in U.S. Energy Information
Administration Form EIA-860M for December 2022, available in the
docket for this action.
\10\ Under the Good Neighbor Plan, evaluations of all units'
operating status for ozone seasons after 2025 would be administered
on a rolling basis for each successive ozone season by applying the
procedures finalized in the rulemaking to the units' most recently
reported operating data. For example, if a unit reported operation
during the 2024 ozone season, the unit would be treated as an
operating unit for purposes of the budget-setting and allowance
allocation processes administered in mid-2025 for the 2026 ozone
season.
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In this action, EPA is adjusting the Revised CSAPR Update state
emissions budget for Indiana and the unit-level allowance allocations
to Indiana EGUs for the ozone seasons in 2024 and subsequent years to
end the reliance on the superseded retirement plans for Schahfer units
17-18 and Merom units 1SG1-2SG1 and recognize the units' continued
operation. These four units are the only EGUs in any of the states
covered by the Revised CSAPR Update that were treated in the original
rulemaking as retiring before the 2024 ozone season but that actually
operated in that ozone season. The adjustments eliminate an
inconsistency between how these four units and all other pre-2020 units
that operated during the 2024 ozone season are being treated for
purposes of the state emissions budgets and unit-level allowance
allocations that apply under the Revised CSAPR Update.
The amounts of the adjustments in this action have been determined
by applying the budget-setting and allowance allocation methodologies
that were finalized in the Revised CSAPR Update rulemaking to an
updated dataset that no longer includes the superseded retirement plans
for Schahfer units 17-18 and Merom units 1SG1-2SG1. The adjusted state
emissions budget for Indiana for the ozone seasons in 2024 and
subsequent years is 11,245 tons, an increase of 1,681 tons over
Indiana's budget of 9,564 tons for these ozone seasons as originally
established in the Revised CSAPR Update rulemaking. EPA expects that
the increased emissions budget will reduce compliance costs for Indiana
EGUs, especially Schahfer units 17-18 and Merom units 1SG1-2SG1, to
which most of the additional allowances will be allocated. However, in
the broader context of the multi-state trading program, EPA expects
that the
[[Page 21426]]
additional allowances will not have a material impact on emissions or
air quality, because the total amount of allowances issued under the
trading program for each ozone season already exceeds the total
emissions of all participating EGUs and there is also a sizeable bank
of allowances carried over from previous ozone seasons. While the
additional allowances that will be issued under this action for each
ozone season represent an increase of about 17.6 percent over the
allowances that would otherwise have been issued to EGUs in Indiana,
the additional allowances represent an increase of only about 1.1
percent of the total amount of allowances available for all
participating EGUs across the set of 12 covered states to use in
meeting their 2024 compliance obligations.\11\
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\11\ Absent this action, the total amount of allowances
available for 2024 compliance would be approximately 153,844
allowances, consisting of 96,975 allowances from the 2024 emissions
budgets for the twelve covered states and 56,869 unused allowances
carried over from previous ozone seasons. With this action, the
total amount of allowances available for 2024 compliance will be
approximately 155,525 allowances. The total amount of NOX
emissions reported for the 2024 ozone season for all participating
EGUs in the 12 states covered by the Revised CSAPR Update is 84,189
tons.
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EPA is not altering or reopening any aspect of the Revised CSAPR
Update other than the data concerning the planned retirement dates for
Schahfer units 17-18 and Merom units 1SG1-2SG1. EPA notes that because
no changes are being made to EPA's determinations in the Revised CSAPR
Update regarding the emissions control strategies whose application
would address the covered states' good neighbor obligations, this
action does not constitute a change in the stringency of the Revised
CSAPR Update as finalized in the original rulemaking. Indiana's budget
remains at a level that reflects the implementation of the selected
emissions control strategies and is simply being adjusted to eliminate
the reliance on the superseded retirement plans and recognize the
continued operation of these four units.
EPA is finalizing this action's amendments to the Revised CSAPR
Update's state emissions budget and unit-level allowance allocations
for Indiana on an interim basis. After considering any comments
received in response to this document, EPA will evaluate whether
further action responding to the comments and affirming or modifying
this action's amendments would be appropriate.
III. Adjustments to Indiana State Emissions Budget and Variability
Limit
This section III. summarizes the methodology used to determine
state emissions budgets and variability limits in the Revised CSAPR
Update rulemaking and describes how the determination of Indiana's
state emissions budget for the ozone seasons in 2024 and subsequent
years and the associated variability limit change when Schahfer units
17-18 and Merom units 1SG1-2SG1 are no longer treated as retiring
before the 2024 ozone season.\12\
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\12\ For a more detailed description of the Revised CSAPR
Update's methodology for setting budgets and variability limits, see
the Revised CSAPR Update final rule preamble at 86 FR 23118-26 or
the Revised CSAPR Update final rule Ozone Transport Policy Analysis
technical support document (EPA-HQ-OAR-2020-0272-0222, March 2021)
at pp. 10-25. Both documents are available in the docket for this
action.
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A. Determination of Adjusted State Emissions Budget
In the Revised CSAPR Update, EPA established four sets of state
emissions budgets for successive ozone seasons. The first three sets of
budgets applied for the ozone seasons in 2021, 2022, and 2023,
respectively, and the fourth set of budgets applies for the ozone
seasons in 2024 and all subsequent years. The process for calculating
each state emissions budget involved three general steps. First, EPA
determined baseline amounts of NOX emissions and heat input
for each of the state's covered EGUs in the relevant ozone season
before any emissions reductions required under the Revised CSAPR
Update.\13\ Second, while holding each unit's heat input constant at
its baseline amount, EPA computed the NOX emissions
reductions that could be achieved in the relevant ozone season by
applying the Revised CSAPR Update's selected emissions control
strategies at the units where those strategies were identified as
available. Finally, EPA computed an incremental adjustment in
NOX emissions that were expected to occur from each state's
EGUs through optimization of operations within the state if operators
were incentivized by a NOX emission allowance price
commensurate with the costs of the selected emissions control
strategies.\14\ The emissions budget for each state for each ozone
season was determined as the sum of the baseline emissions amounts for
the state's covered units for that ozone season computed in the first
step minus the sum of the changes in emissions for the state's units
for that ozone season computed in the second and third steps.
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\13\ EPA also tracked the corresponding baseline amounts of
electricity generation for each ozone season, but these amounts were
not used in the calculations of state emissions budgets.
\14\ In the Revised CSAPR Update rulemaking, the emissions
reductions that were expected to be achieved through optimization of
operations within a given state were referred to as emissions
reductions from ``generation shifting'' within the state. In this
action, EPA is only adjusting the treatment of superseded retirement
plans for four EGUs and is not altering or reopening any other
aspect of the Revised CSAPR Update. EPA is not taking any position
as to how potential emissions effects of this nature should be
addressed in any other rulemaking.
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Table III.A-1 summarizes the calculation of Indiana's state
emissions budget for the ozone seasons in 2024 and subsequent years,
both as originally performed and as adjusted in this action. The
remainder of this section provides more detail on how this action's
adjustments affect the amounts computed at each of the three steps of
the budget-setting process. A spreadsheet showing the complete adjusted
calculations of Indiana's state emissions budget for 2024 and
subsequent years is available in the docket for this action.
Table III.A-1--Summary of Adjustments to Indiana's State Emissions Budget for 2024 and Subsequent Years [dagger]
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Data item (totals for all covered Adjusted Original
Indiana EGUs) amount amount Change
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A...................... Baseline heat input for 2024 ozone 329,887,869 297,077,155 32,810,713
season (mmBtu).
B...................... Baseline NOX emissions for 2024 ozone 13,942 12,232 1,709
season (tons).
C...................... NOX emissions reductions in 2024 ozone 2,404 2,404 0
season from application of selected
emissions controls (tons).
D...................... NOX emissions reductions in 2024 ozone 294 264 29
season from optimization of operations
within the state (tons)
[dagger][dagger].
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E...................... 2024 state emissions budget (tons) 11,245 9,564 1,681
[dagger][dagger][dagger].
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[dagger] Unrounded amounts used in the budget calculations have been rounded for purposes of table display.
[dagger][dagger] Row D = row A x 0.00178 lb/mmBtu (state-specific emission rate factor for Indiana, described
later in this section IV.A) / 2,000 lb/ton.
[dagger][dagger][dagger] Row E = row B - (row C + row D).
In the first step of the budget-setting process, EPA calculates the
baseline amounts for the relevant ozone season before any emissions
reductions required under the Revised CSAPR Update. In this step of the
process for the 2024 ozone season in the original rulemaking, EPA first
compiled the NOX emissions and heat input data reported for
the 2019 ozone season for all of the state's covered units and then
adjusted these reported data upward or downward as necessary to account
for previously announced changes scheduled for implementation after the
2019 ozone season and before the 2024 ozone season.\15\ The types of
announced changes taken into account included start-ups of new units,
retirements of existing units, installations of new NOX
emissions control equipment, and changes in the type of fuel combusted.
With respect to retirements, if the owner of an EGU had announced a
planned retirement date in 2024 or later, or if no retirement date had
been announced, then the EGU was not treated as retired for purposes of
the 2024 ozone season and its 2024 baseline amounts of NOX
emissions and heat input remained at the amounts reported for the unit
for the 2019 ozone season (unless an adjustment to the unit's baseline
NOX emissions was made to reflect an installation of new
NOX emissions control equipment or a change in the type of
fuel combusted). In contrast, if the owner of an EGU had announced a
planned retirement date before 2024 and if EPA's confirmatory research
did not identify any reason to question the announcement, then the EGU
was treated as retired for purposes of the 2024 ozone season and its
2024 baseline amounts of NOX emissions and heat input were
set to zero.
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\15\ EPA developed the Revised CSAPR Update's state emissions
budgets starting with 2019 data instead of 2020 data in recognition
of concerns that 2020 data might be unrepresentative because of the
unusual circumstances of the Covid-19 pandemic. See 86 FR at 23120.
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In the Revised CSAPR Update rulemaking, based on previous
announcements by the owners of Schahfer units 17-18 and Merom units
1SG1-2SG1 that the units would retire in 2023, EPA treated the units as
retired for purposes of the 2024 budget-setting process and set their
2024 baseline amounts of NOX emissions and heat input to
zero. In this action, to end reliance on the superseded retirement
plans and recognize the continued operation of the four units in 2024,
EPA is adjusting the 2024 baseline amounts of NOX emissions
and heat input for these units to the amounts reported for the units
for the 2019 ozone season. These adjustments are consistent with how
the four units were treated for purposes of determining the baseline
amounts for the 2021, 2022, and 2023 ozone seasons and are also
consistent with how other units without announced plans to retire
before 2024 were treated for purposes of determining baseline amounts
for the 2024 ozone season. The adjustments raise the total 2024
baseline heat input for Indiana units by 32,810,713 mmBtu and raise the
total 2024 baseline NOX emissions for Indiana units by 1,709
tons, as shown in rows A and B of Table III.A-1.
In the second step of the budget-setting process, EPA calculates
the emissions reductions that could be achieved in the relevant ozone
season by applying emissions control strategies at units where the
strategies have been identified as available. For the Revised CSAPR
Update, the selected emissions control strategies for coal-fired EGUs
included performance optimization of post-combustion controls (such as
selective catalytic reduction (SCR) controls or selective non-catalytic
reduction (SNCR) controls) at units where those controls have already
been installed and installation or upgrading of combustion controls
(such as low-NOX burners and overfire air) at units where
post-combustion controls have not already been installed or are not
being operated. When this step was originally performed in the Revised
CSAPR Update rulemaking, none of the selected emissions control
strategies were identified as available at Schahfer units 17-18 or
Merom units 1SG1-2SG1: the Schahfer units, which do not have post-
combustion controls, already achieve NOX emission rates
lower than the rule's target emission rate of 0.199 lb/mmBtu for
comparable units with state-of-the-art combustion controls, and the
Merom units, which have SCR controls, already achieve NOX
emission rates lower than the rule's target emission rate of 0.08 lb/
mmBtu for comparable SCR-equipped units. EPA's conclusion in the
original rulemaking that none of the selected emissions control
strategies were available at the four units for purposes of the 2021,
2022, or 2023 ozone seasons also applies in this action for purposes of
the 2024 ozone season. Accordingly, the total amount of emissions
reductions that could be achieved in 2024 by Indiana units by applying
the selected emissions control strategies is unaffected by this
action's adjustments, as shown in row C of Table III.A-1.
In the final step of the budget-setting process, EPA calculates the
incremental emissions change that is expected from optimization of
operations within the state. EPA computes these amounts by multiplying
each state's total baseline heat input for the relevant ozone season by
a state-specific NOX emission rate factor derived through an
analysis performed using the Integrated Planning Model (IPM).\16\ The
adjustments in this action do not affect the data used to derive the
emission rate factor of 0.00178 lb/mmBtu for Indiana as determined in
the Revised CSAPR Update rulemaking.\17\ However, the
[[Page 21428]]
adjustments increase Indiana's total 2024 baseline heat input relative
to the total 2024 baseline heat input used in the Revised CSAPR Update
rulemaking and therefore cause a slight adjustment in Indiana's budget,
as shown in row D of Table III.A-1.
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\16\ For a description of IPM, see the Revised CSAPR Update
final rule preamble at 86 FR 23075-76.
\17\ See Final Rule State Emission Budget Calculations and
Engineering Analytics spreadsheet (Appendix A to the Ozone Transport
Policy Analysis final rule technical support document), in the
``Generation Shifting'' worksheet at the ``Indiana'' row and the
``$1,600/ton'' column, available in the docket for this action. Each
state-specific NOX emission rate factor was calculated as
the difference between the state's average NOX emission
rate as reflected in the output of two IPM runs. The inputs to each
IPM run included each state's projected 2021 EGU fleet after
application of the selected emissions control strategies and were
generally the same except as to the assumed price of emission
allowances: the base case run used a price of $0/ton, and the
comparison run used a price of $1,600/ton, commensurate with the
cost of the selected emissions control strategies. To ensure that
the model did not attempt to reduce NOX emissions in a
given state by reducing the amount of electricity produced in that
state, the total amount of electricity produced in each state in the
comparison run was not allowed to fall below the total amount of
electricity produced in the state in the base case run.
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Taking all steps of the budget-setting process together, the
adjustments to end reliance on the superseded retirement plans for
Schahfer units 17-18 and Merom units 1SG1-2SG1 and recognize the units'
continued operation cause a net increase (after rounding adjustments)
of 1,681 tons. The adjusted Indiana state emissions budget for 2024 and
subsequent years is 11,245 tons. These amounts are shown in row E of
Table III.A-1.
B. Determination of Adjusted Variability Limit
EPA's trading programs addressing interstate pollution transport
include ``assurance provisions'' which are designed to ensure that the
emissions reductions necessary to address each state's good neighbor
obligations are achieved within that state, as required under CAA
section 110(a)(2)(D)(i)(I),\18\ while also accommodating inherent year-
to-year variability in state-level EGU operations.\19\ The assurance
provisions require certain EGUs in a state to surrender additional
allowances if the total emissions from the state's EGUs exceed an
``assurance level'' computed as the sum of the state emissions budget
plus a ``variability limit.'' \20\
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\18\ See North Carolina v. EPA, 531 F.3d 896, 906-08 (D.C. Cir.
2008).
\19\ For a more detailed description of the Revised CSAPR
Update's assurance provisions, see the Revised CSAPR Update final
rule preamble at 86 FR 23122-24.
\20\ See, e.g., 40 CFR 97.806(c)(2) and 97.825.
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In the Revised CSAPR Update rulemaking, each variability limit was
set at 21 percent of the corresponding state emissions budget.\21\ To
preserve the intended relationship between variability limits and state
emissions budgets as finalized in the original rulemaking, in this
action EPA is establishing an adjusted variability limit for Indiana
for the ozone seasons in 2024 and subsequent years. The adjusted
variability limit is 2,361 tons, which is 21 percent of the adjusted
state emissions budget of 11,245 tons.
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\21\ See 86 FR at 23123-24.
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IV. Adjustments to Indiana EGUs' Default Unit-Level Allowance
Allocations
This section IV. summarizes the methodology used to determine the
amounts of allowances allocated to Indiana EGUs from each state
emissions budget and describes how the unit-level allocations for the
ozone seasons in 2024 and subsequent years change when Schahfer units
17-18 and Merom units 1SG1-2SG1 are no longer treated as retiring
before the 2024 ozone season.\22\ This section also provides public
notice of the availability of data on the adjusted allocations to
Indiana EGUs.
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\22\ For a more detailed description of the Revised CSAPR
Update's allowance allocation methodology, see the Revised CSAPR
Update final rule preamble at 86 FR 23126-33 or the Revised CSAPR
Update final rule Allowance Allocation technical support document
(EPA-HQ-OAR-2020-0272-0199, March 2021). Both documents are
available in the docket for this action.
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A. Determination of Adjusted Allowance Allocations
EPA's process for calculating default unit-level allowance
allocations from each state emissions budget for each ozone season
under the Revised CSAPR Update involves four overall steps, parts of
which were completed during the Revised CSAPR Update rulemaking and
parts of which are completed or updated on a rolling basis for each
successive ozone season through ministerial calculations performed
according to procedures laid out in the trading program regulations.
First, EPA identifies which EGUs in a state are eligible to receive
allocations from the state emissions budget for the relevant ozone
season as ``existing'' units. Second, EPA calculates what portion of
the state emissions budget for the relevant ozone season will be
reserved in a ``new unit set-aside'' for potential allocation to any of
the state's remaining EGUs that operate during that ozone season. For
simplicity, these remaining EGUs are referred to as ``new'' units;
however, they may include not only units that have never been eligible
to receive allocations as existing units but also units that operate
after losing their previous eligibility to receive allocations as
existing units. Third, EPA calculates what initial allocations the
state's existing units will receive from the unreserved portion of the
budget for the relevant ozone season, based on the units' reported heat
input and emissions for a defined set of previous ozone seasons.
Finally, EPA calculates how the allowances in the new unit set-aside
will be allocated for the relevant ozone season, first to the state's
new units in proportion to their reported emissions during that ozone
season, and then, if all the allowances have not been allocated to new
units, to the states' existing units in proportion to their initial
allocations from the unreserved portion of the budget.
Table IV.A-1 summarizes the default unit-level allocations from
Indiana's state emissions budget to the state's EGUs for the 2024 ozone
season, both as calculated in the original rulemaking and as adjusted
in this action. The first three columns of the table, which concern the
initial allocations to existing units, also apply for the ozone seasons
in 2025 and subsequent years. The initial allocations to existing units
and the allocations from the new unit set-aside are shown separately
because this action's adjustments affect those steps of the overall
allocation process differently (also, the allocations from the new unit
set-asides for years after 2024 are not yet known). The allocations to
the individual EGUs at each power plant where changes in allocations
occur are summed to totals for that plant, except that the totals for
Schahfer units 17-18 are shown separately from other units at the
Schahfer plant. The remainder of this section provides more detail on
the four steps of the overall allocation process and the effects of
this action's adjustments at each step. A spreadsheet showing the
complete calculations of the adjusted default unit-level allocations to
Indiana EGUs for 2024 is available in the docket for this action.
[[Page 21429]]
Table IV.A-1--Summary of Adjustments to Indiana EGUs' Default Unit-Level Allowance Allocations for 2024 Shown as Plant Totals
[tons]
--------------------------------------------------------------------------------------------------------------------------------------------------------
C Change in
A Adjusted B Original initial D Adjusted E Original
initial initial allocations allocations allocations F Total change for
Plant name (ID) allocations allocations to existing from 2024 from 2024 2024
to existing to existing units new unit set- new unit set- [dagger][dagger]
units units [dagger] aside aside
--------------------------------------------------------------------------------------------------------------------------------------------------------
Merom (6213)................................................ 807 0 807 17 81 743
Schahfer (6085), units 17-18................................ 565 0 565 12 109 468
Gibson (6113)............................................... 2,169 2,104 65 47 0 112
Rockport (6166)............................................. 2,067 2,005 62 45 0 107
Petersburg (994)............................................ 858 832 26 18 0 44
Clifty Creek (983).......................................... 831 806 25 17 0 42
Cayuga (1001)............................................... 791 766 25 16 0 41
Harding Street (990)........................................ 527 511 16 11 0 27
Brown (6137)................................................ 402 390 12 8 0 20
Edwardsport (1004).......................................... 339 329 10 7 0 17
Michigan City (997)......................................... 313 304 9 6 0 15
Culley (1012)............................................... 300 292 8 6 0 14
Alcoa (6705)................................................ 263 256 7 5 0 12
Wabash River Highland (57842)............................... 136 132 4 3 0 7
Henry County (7763)......................................... 44 41 3 0 0 3
Lawrenceburg (55502)........................................ 179 179 0 4 0 4
St. Joseph (57794).......................................... 51 51 0 2 0 2
Sugar Creek (55364)......................................... 51 51 0 2 0 2
Whiting (55259)............................................. 49 49 0 1 0 1
All other (including other Schahfer units).................. 276 276 0 0 0 0
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Total................................................... 11,018 9,374 1,644 227 190 1,681
--------------------------------------------------------------------------------------------------------------------------------------------------------
[dagger] Column C = column A - column B.
[dagger][dagger] Column F = column C + (column D - column E).
In the first step of the allowance allocation process, EPA
identifies which EGUs in a state are eligible to receive allocations
from the state emissions budget for the relevant ozone season as
existing units. All eligibility evaluations for the ozone seasons in
2021 through 2024 were completed as part of the Revised CSAPR Update
rulemaking. An EGU that had reported data for at least one entire ozone
season before 2020 and that had not retired before 2021 was treated as
eligible to receive an initial allocation as an existing unit for 2021.
Units that were identified as eligible to receive initial allocations
as existing units for 2021 generally remained eligible through 2024.
The only exception is that any unit treated as retired at the
emissions-baseline development step of the budget-setting process
starting in a particular year was also treated as ineligible to receive
initial allocations as an existing unit starting in that same year.
Thus, if the owner of an EGU had announced a planned retirement date
before 2024 and if EPA's confirmatory research did not identify any
reason to question the announcement, the EGU was treated as ineligible
to receive initial allocations as an existing unit for 2024 and
subsequent years.
The Revised CSAPR Update does not provide for any changes in
eligibility from 2024 to 2025. Starting with the 2026 ozone season,
evaluations of each unit's ongoing eligibility to receive initial
allocations as an existing unit are made on a rolling basis in advance
of each successive ozone season. A unit that was identified as eligible
for 2024 generally remains eligible for subsequent years except as
otherwise indicated based on the operating data reported for the unit
for ozone seasons after 2020. Specifically, if a unit does not report
any operation during any two consecutive ozone seasons after 2020, the
unit becomes ineligible to receive initial allocations as an existing
unit starting in the fifth year after the first year of non-operation--
e.g., a unit with no reported operation during the 2021 and 2022 ozone
seasons would become ineligible to receive initial allocations as an
existing unit starting with the 2026 ozone season. This is how ongoing
eligibility to receive initial allocations as an existing unit under
the Revised CSAPR Update is evaluated for any unit for which, at the
time of the original rulemaking, the unit's owner had announced a
retirement date in 2024 or later or had not announced any retirement
date.
In the Revised CSAPR Update rulemaking, based on previous
announcements by the owners of Schahfer units 17-18 and Merom units
1SG1-2SG1 that the units would retire in 2023, EPA treated the units as
ineligible to receive initial allocations as existing units starting in
2024. In this action, to end reliance on the superseded retirement
plans and recognize the four units' continued operation in 2024, EPA is
adjusting the eligibility status identified for the four units in the
Revised CSAPR Update rulemaking so that the units remain eligible to
receive initial allocations as existing units for the ozone season in
2024. To reflect this change in status, the four units are designated
as ``operating'' instead of ``retired'' in the updated version of the
spreadsheet used to calculate the initial allocations to Indiana EGUs
in the next step of the allowance allocation process. Like other units
that are eligible to receive initial allocations as existing units for
2024, the four units will remain eligible for 2025, and starting with
the 2026 ozone season, their eligibility will be evaluated in advance
of each ozone season based on the operating data reported for the
[[Page 21430]]
units for ozone seasons after 2020.\23\ These adjustments are
consistent with how evaluations of eligibility to receive initial
allocations as existing units are made under the Revised CSAPR Update
for other units without announced plans to retire before the 2024 ozone
season.
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\23\ Because Schahfer units 17-18 and Merom units 1SG1-2SG1 have
already reported operation during each ozone season from 2021
through 2024, the units will remain eligible to receive initial
allocations as existing units under the Revised CSAPR Update through
at least 2029.
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In the second step of the allowance allocation process, EPA
calculates what portion of the state emissions budget will be reserved
in a ``new unit set-aside'' for potential allocation to any of the
state's EGUs that are not eligible to receive initial allocations as
existing EGUs and that operate during the relevant ozone season. The
amounts of the new unit set-asides for 2021 through 2024 were
calculated as part of the Revised CSAPR Update rulemaking. Each state's
new unit set-aside for these years was computed using a fixed target
percentage--in Indiana's case, 2 percent--of the state emissions budget
for the year.\24\ The Revised CSAPR Update does not provide for any
changes in the amount of any new unit set-aside from 2024 to 2025.
Starting with the 2026 ozone season, the amount of each state's new
unit set-aside is calculated on a rolling basis in advance of each
successive ozone season. The new unit set-aside for each such year
continues to include as a minimum the amount set for 2024, but if there
are any units in the state that have lost their previous eligibility to
receive initial allocations as existing units, the allowances that
would have been allocated to those units as existing units if they had
not lost their eligibility are added to the new unit set-aside.
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\24\ The final amount of the new unit set-aside for a state may
be slightly higher or lower than the target amount computed using
the fixed target percentage, because if the sum of the target amount
plus the final rounded amounts of the initial allocations to the
state's existing units differs from the state emissions budget, the
final amount of the new unit set-aside is adjusted upward or
downward from the target amount as necessary to eliminate the
difference. See the Revised CSAPR Update final rule Allowance
Allocation technical support document at 10-11.
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This action's adjustments do not include any change to the
procedures finalized in the Revised CSAPR Update for calculating the
amount of Indiana's new unit set-aside for any year. However, because
the amount of the new unit set-aside is computed using a fixed target
percentage of the state emissions budget, this action's increase to
Indiana's state emissions budget for 2024 and subsequent years causes
an increase in the amount of Indiana's new unit set-aside for 2024 and
subsequent years. Accordingly, EPA is adjusting the amount of the new
unit set-aside for 2024 (and the minimum amount of the new unit set-
aside for subsequent years) for Indiana to 227 tons, which leaves
11,018 tons as the adjusted unreserved portion of the 2024 state
emissions budget available for initial allocations to existing units.
For comparison, as originally calculated in the Revised CSAPR Update
rulemaking, the corresponding amounts of the 2024 new unit set-aside
and the unreserved portion of the 2024 state emissions budget for
Indiana were 190 tons and 9,374 tons, respectively. The adjusted and
original amounts of both the new unit set-aside and the unreserved
portion of the state emissions budget appear as totals in the final row
of Table IV.A-1.
In the third step of the allowance allocation process, EPA
calculates what initial allocations the state's existing units will
receive from the unreserved portion of the budget for the relevant
ozone season (i.e., the portion not reserved in the new unit set-
aside). In the Revised CSAPR Update rulemaking, EPA established
separate sets of initial allocations for 2021, 2022, 2023, and 2024
corresponding to the state emissions budgets established for each of
those years. To calculate the initial allocations from the state
emissions budget for a given year, EPA first computed two values for
each unit eligible to receive an initial allocation as an existing unit
for that year: a value representing the unit's historical share of
total ozone season heat input for the state,\25\ and a value
representing the unit's historical maximum ozone season NOX
emissions.\26\ EPA then allocated the allowances from the unreserved
portion of the state emissions budget for the year among the eligible
units in proportion to the units' respective historical shares of total
ozone season heat input for the state, except that each unit's
allocation was capped at its historical maximum ozone season
NOX emissions.\27\
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\25\ For each eligible unit, EPA averaged the three highest non-
zero total ozone season heat input amounts reported for the unit
over a historical lookback period. Each unit's historical share of
total ozone season heat input for the state was computed as the
average for that unit divided by the sum of the averages for all of
the state's eligible units. In performing this calculation for most
Revised CSAPR Update states, EPA used a 5-year lookback period
(2015-2019), but for Indiana, EPA used an 8-year lookback period
(2012-2019) to more closely replicate the allocation methodology
that Indiana had adopted in a SIP revision to replace EPA's default
unit-level allocation methodology under an earlier interstate
pollution transport rule.
\26\ EPA identified each eligible unit's historical maximum
ozone season NOX emissions as the maximum total
NOX emissions reported for the unit in any ozone season
from 2012 through 2019.
\27\ The allocation procedure can involve multiple rounds of
calculations in which allowances that otherwise would have been
allocated to eligible units that have reached their caps are
reallocated among the remaining eligible units that have not yet
reached their caps. For a more detailed description of this
procedure, see the Revised CSAPR Update final rule Allowance
Allocation technical support document at 8-10.
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The Revised CSAPR Update does not provide for any changes in the
amounts of initial allocations to existing units from 2024 to 2025.
Starting with the 2026 ozone season, each unit's initial allocation as
an existing unit for each successive ozone season remains the amount
established for 2024 as long as the unit remains eligible to receive
allocations as an existing unit. If a unit becomes ineligible to
receive allocations as an existing unit, the allowances that otherwise
would have been allocated to the unit for each year as an existing unit
are instead added to the new unit set-aside for the year.
In the original Revised CSAPR Update rulemaking, Schahfer units 17-
18 and Merom units 1SG1-2SG1 were treated as ineligible to receive
initial allocations as existing units in 2024, so the units were
excluded from the calculations of initial allocations for that year.
This actions' adjustments do not include any change to the procedures
finalized in the Revised CSAPR Update for calculating the amounts of
the initial allocations to Indiana EGUs as existing units, but other
changes in this action cause changes in the data used in the
calculations, thereby changing the amounts of the initial allocations
for 2024 calculated using the previously finalized procedures.
Specifically, the calculations are affected both by the shifts in
individual eligible units' historical shares of total ozone season heat
input for the state that occur when the set of eligible units is
expanded to include Schahfer units 17-18 and Merom units 1SG1-2SG1 and
also by the increase in the unreserved portion of Indiana's 2024 state
emissions budget. The combined changes not only cause initial
allocations to be provided to the four previously ineligible units but
also cause increases of about 3 percent in the initial allocations to
other units in the state whose initial allocations were not already
capped by their historical maximum ozone season NOX
emissions. The adjusted and original initial allocations to Indiana
EGUs for 2024 are summarized at the plant level in columns A and B of
Table IV.A-1. Each unit receiving an adjusted initial allocation as an
existing unit for 2024 will receive the same adjusted initial
[[Page 21431]]
allocation for 2025. Starting in 2026, each such unit will continue to
receive the same adjusted initial allocations for successive years as
long as the unit retains its eligibility to receive initial allocations
as an existing unit.
In the final step of the allowance allocation process, EPA
calculates how the allowances in the new unit set-aside will be
allocated for the relevant ozone season. EPA carries out this step on a
rolling basis for each successive ozone season during the interval
between the end of the ozone season and the later compliance deadline
when EGUs must hold allowances to cover their emissions for the ozone
season. The allowances in each new unit set-aside are allocated through
a two-round procedure. In the first round, EPA calculates allowance
allocations to the state's units that operated but were not eligible to
receive initial allocations as existing units for that ozone season.
Each such unit receives an allocation equal to the amount of its
reported emissions during that ozone season unless the sum of all such
units' reported emissions exceeds the total amount of allowances in the
new unit set-aside, in which case the units' allocations are reduced on
a pro-rata basis. If any allowances are not allocated in the first
round, EPA carries out a second round in which the remaining allowances
are allocated among the state's units that were eligible to receive
initial allocations for that ozone season in proportion to those units'
respective initial allocations.
When the allocations of allowances in the 2024 new unit set-aside
for Indiana under the Revised CSAPR Update were calculated before this
action, Schahfer units 17-18 and Merom units 1SG1-2SG1 were not
considered eligible to receive initial allocations as existing units
for the 2024 ozone season, but the units operated during the ozone
season, so they were entitled to receive first-round allocations from
the new unit set-aside. All the allowances in the new unit set-aside
were allocated to the four units in the first round, because the sum of
the four units' reported emissions for the 2024 ozone season exceeded
the total amount of allowances in the new unit set-aside and no other
Indiana units were entitled to receive first-round allocations.
Because in this action EPA is making Schahfer units 17-18 and Merom
units 1SG1-2SG1 eligible to receive initial allocations as existing
units for 2024, the units are no longer entitled to receive first-round
allocations from the 2024 new unit set-aside. Consequently, there are
no longer any Indiana units entitled to allocations from 2024 new unit
set-aside in the first round, and pursuant to the second-round
procedures, the entire amount of the 2024 new unit set-aside is being
reallocated among all the state's units that were eligible to receive
initial allocations. This action's adjustments also increase the total
amount of allowances in the new unit set-aside, as discussed earlier in
this section IV.A. The combined changes reduce the allocations from the
2024 new unit set-aside to Schahfer units 17-18 and Merom units 1SG1-
2SG1 but also produce 2024 new unit set-aside allocations to other
units in the state equal to about 2 percent of the amounts of their
initial allocations as existing units. The adjusted and original
allocations from the Indiana new unit set-aside for the 2024 ozone
season are summarized at the plant level in columns D and E of Table
IV.A-1. Allocations from the Indiana new unit set-asides for the ozone
seasons in 2025 and subsequent years will be calculated in the future,
after the end of each successive ozone season.
Taking all steps of the allowance allocation process together, for
the 2024 ozone season this action's adjustments to unit-level allowance
allocations represent large net increases in the amounts allocated to
Schahfer units 17-18 and Merom units 1SG1-2SG1 and average increases of
about 5 percent to the state's other units relative to the previously
calculated allocations. The total changes in unit-level allocations for
2024, which include both the changes in the initial allocations to
existing units and the changes in the allocations from the 2024 new
unit set-aside, are summarized at the plant level in column F of Table
IV.A-1. For 2025, the total changes in allocations include only the
changes in initial allocations to existing units shown in column C of
Table IV.A-1, because the allowances in the 2025 new unit set-aside
have not yet been allocated among the state's units.
B. Notice of Availability of Data on Adjusted Allowance Allocations
Although the default unit-level allocations under each of EPA's
trading programs addressing interstate transport are calculated
entirely using procedures finalized as part of the relevant
rulemakings, the actual amounts of the unit-level allocations are not
set forth in the trading program regulations.\28\ Rather, the
regulations provide that, in instances where EPA is responsible for
determining unit-level allocations of emission allowances,\29\ the
allowances from each state emissions budget are allocated among the
state's EGUs as provided in notices of data availability issued by the
EPA Administrator.\30\ Allocations from different portions of a given
state emissions budget may be addressed in different notices.
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\28\ The regulations for the trading program used under the
Revised CSAPR Update do include the amounts of the state emissions
budgets for each year and the initial portions of each budget
reserved in a new unit set-aside (before any incremental amounts
added to the new unit set-aside when units in the state lose their
eligibility to receive allocations as existing units). See 40 CFR
97.810(a).
\29\ EPA's regulations provide for streamlined approval of
multiple types of model SIP revisions through which states may
choose to replace EPA's default unit-level allocations with state-
determined unit-level allocations. See, e.g., 40 CFR 52.38(b)(8)-
(9). At present, no state has an approved SIP revision establishing
state-determined unit-level allowance allocations under the Revised
CSAPR Update.
\30\ See, e.g., 40 CFR 97.811(a)(1) and 97.811(b)(1)(ii)(B).
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In 2021, EPA published a notice concerning the availability of data
on the default initial allocations of allowances to existing units in
all states under the Revised CSAPR Update for the ozone seasons in 2021
and subsequent years.\31\ The 2021 notice remains the applicable notice
for purposes of (1) the default initial allocations to existing units
in states other than Indiana under the Revised CSAPR Update for all
years and (2) the default initial allocations to existing units in
Indiana under the Revised CSAPR Update for the years 2021, 2022, and
2023.\32\ This document serves as the notice of the availability of
data on the adjusted default initial allocations of allowances to
existing units in Indiana under the Revised CSAPR Update for the ozone
seasons in 2024 and subsequent years that EPA is establishing in this
action. The adjusted initial allocations are shown in an Excel
spreadsheet entitled ``Adjusted Initial Allocations of Allowances to
Indiana EGUs under the Revised CSAPR Update for 2024 and Beyond,''
which is available in the docket for this action. EPA also plans to
post the spreadsheet on the Agency's website at
[[Page 21432]]
www.epa.gov/Cross-State-Air-Pollution/csapr-allowance-allocations.
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\31\ 86 FR 26719 (May 17, 2021); see also 89 FR 87963, n.20
(providing that the 2021 notice would continue to address the
amounts of default unit-level allowance allocations to Indiana EGUs
under the third interim final rule).
\32\ For the 2023 ozone season, EGUs in some of the states
covered by 2021 notice, including Indiana, were not subject to the
trading program requirements established under the Revised CSAPR
Update but instead were subject to trading program requirements
established under the Good Neighbor Plan before implementation of
that rule was stayed. The default unit-level allowance allocations
for 2023 under the Good Neighbor Plan were addressed in a different
notice of data availability. See 88 FR 57952 (August 23, 2023).
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On April 22, 2025, EPA published a notice concerning the
availability of data on the allocations of allowances to new and
existing units in all states from the 2024 new unit set-asides under
the Revised CSAPR Update and other interstate pollution transport
rules.\33\ The April 22, 2025, notice remains the applicable notice for
purposes of (1) the 2024 new unit set-aside allocations to units under
rules other than the Revised CSAPR Update in all states and (2) the
2024 new unit set-aside allocations under the Revised CSAPR Update to
units in states other than Indiana. This document serves as the notice
of the availability of data on the adjusted allocations from the 2024
new unit set-aside under the Revised CSAPR Update to units in Indiana
that EPA is establishing in this action. The adjusted allocations are
shown in an Excel spreadsheet entitled ``Adjusted Allocations of
Allowances to Indiana EGUs from the Revised CSAPR Update NUSA for
2024,'' which is available in the docket for this action. EPA also
plans to post the spreadsheet on the Agency's website at www.epa.gov/Cross-State-Air-Pollution/csapr-compliance-year-2024-nusa-nodas.
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\33\ 90 FR 16874 (April 22, 2025).
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As discussed in Section IV.A. of this document, the adjustments
determined in this action affect the unit-level allocations of
allowances under the Revised CSAPR Update to not only Schahfer units
17-18 and Merom units 1SG1-2SG1 but also other Indiana EGUs. The
initial allocations to existing units for both 2024 and 2025 and the
allocations from the 2024 new unit set-aside as calculated before this
action have already been recorded in Indiana power plants' facility
accounts. In the case of every unit for which this action causes a
change in the total allocations for 2024 (i.e., the sum of the initial
allocations to existing units for 2024 and the allocations from the
2024 new unit set-aside) the change is an increase, as suggested by the
plant-level totals for 2024 shown in column F of Table IV.A-1. The same
is true for the changes in the initial allocations to existing units
for 2025, as suggested by the plant-level totals of such allocations
shown in column C of Table IV.A-1. EPA plans to record the incremental
allocations of 2024 and 2025 allowances in the appropriate facility
accounts as soon as practicable on or after May 20, 2025.
V. Rulemaking Procedures and Findings of Good Cause
EPA's authority for the rulemaking procedures followed in this
action is provided by APA section 553.\34\ In general, an agency
issuing a rule under the procedures in APA section 553 must provide
prior notice and an opportunity for public comment, but APA section
553(b)(B) includes an exemption from notice-and-comment requirements
``when the agency for good cause finds (and incorporates the finding
and a brief statement of reasons therefor in the rule issued) that
notice and public procedure thereon are impracticable, unnecessary, or
contrary to the public interest.'' This action is being issued as a
final rule without prior notice or opportunity for public comment
because EPA finds that the APA ``good cause'' exemption from notice-
and-comment requirements applies here. The basis for the finding of
good cause is that following notice-and-comment procedures is both
unnecessary and impracticable for this action. First, the procedures
are unnecessary because this action merely makes mechanical adjustments
to certain calculations to end the Revised CSAPR Update's previous
reliance on certain information that was later superseded:
specifically, the announcements by the owners of four Indiana EGUs that
the units would be retired before 2024. The four units' owners
subsequently changed the previously announced plans, and the units
actually operated in the 2024 ozone season. Second, the procedures are
impracticable because under the trading program regulations, the
deadline by which Indiana EGUs must hold allowances to cover their
emissions for the 2024 ozone season is June 2, 2025. It was not until
after EPA published an interim final rule in November 2024 staying Good
Neighbor Plan implementation for Indiana sources and restoring the
Revised CSAPR Update state emissions budget and unit-level allowance
allocations that the sources had certainty they were no longer
considered existing units and approached EPA about the lack of
allocations. EPA moved expeditiously to review these concerns and
quickly determined to address them through this action. If this action
was issued in the form of a proposal subject to notice-and-comment
procedures, the comment period and the time needed after the close of
the comment period to review any comments, prepare responses, and draft
and review a final rule would likely require at least 90 additional
days, extending the period before Indiana EGUs would be able to apply
the additional allowances provided under this action toward their
compliance obligations until after the compliance deadline for the 2024
ozone season.
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\34\ Under CAA section 307(d)(1)(B), EPA's revision of a FIP
under CAA section 110(c) would normally be subject to the rulemaking
procedural requirements of CAA section 307(d), including notice-and-
comment procedures, but CAA section 307(d) does not apply ``in the
case of any rule or circumstance referred to in subparagraphs (A) or
(B) of [APA section 553(b)].'' CAA section 307(d)(1).
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The regulatory revisions made in this action will take effect
immediately upon publication of the action in the Federal Register. In
general, an agency issuing a rule under APA section 553 must provide
for a period of at least 30 days between the rule's dates of
publication and effectiveness, but under APA section 553(d)(3), the
normal 30-day minimum period between a rule's dates of publication and
effectiveness does not apply ``as otherwise provided by the agency for
good cause found and published with the rule.'' EPA finds good cause to
make the regulatory revisions effective as of the action's publication
date for two reasons. First, these regulatory revisions benefit the
regulated community by clarifying the amounts of allowances that
certain Indiana EGUs will have available to meet their compliance
requirements for the 2024 ozone season. Second, making these regulatory
revisions effective less than 30 days after this action's publication
date does not conflict with the purpose of the normal requirement for a
30-day minimum period, which is ``to give affected parties a reasonable
time to adjust their behavior before the final rule takes effect.''
\35\ The regulatory revisions in this action providing additional
allowances to certain Indiana EGUs do not impose more stringent
compliance requirements on any entity or require any entity to engage
in further activities to achieve compliance beyond the activities that
would have been necessary in the absence of this action. Thus, no
affected party needs time to adjust its behavior in preparation for
these regulatory revisions.
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\35\ Omnipoint Corporation v. FCC, 78 F.3d 620, 630 (D.C. Cir.
1996).
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VI. Request for Comment
As explained in section V. of this document, EPA finds good cause
to take this interim final action without prior notice or opportunity
for public comment. However, EPA is providing an opportunity for
comment on the substance of the action and, thus, requests comment on
the amendments to the Revised CSAPR Update described in this document.
EPA is not reopening
[[Page 21433]]
for comment any provisions of the Revised CSAPR Update or 40 CFR part
97 other than the specific provisions that are expressly amended in
this interim final rule.
VII. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at 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 action is not a significant regulatory action and was
therefore not submitted to the Office of Management and Budget (OMB)
for review.
B. Executive Order 14192: Unleashing Prosperity Through Deregulation
This action is considered an Executive Order 14192 deregulatory
action. This final rule provides burden reduction by increasing the
amounts of the emissions budget and allowance allocations that apply
for one state under the regulations for an existing trading program to
reflect decisions by the owners of certain units in the state to defer
or cancel previous plans to retire the units.
C. Paperwork Reduction Act
This action does not impose any new information collection burden
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. OMB has
previously approved the information collection activities that will
apply to the entities affected by this action and has assigned OMB
control numbers 2060-0258 and 2060-0667. This action makes no changes
to the information collection activities under the previously approved
information collection requests.
D. Regulatory Flexibility Act
This action is not subject to the Regulatory Flexibility Act (RFA),
5 U.S.C. 601-612. The RFA applies only to rules subject to notice-and-
comment rulemaking requirements under APA section 553, 5 U.S.C. 553, or
any other statute. This rule is not subject to notice-and-comment
requirements because the Agency has invoked the APA ``good cause''
exemption under 5 U.S.C. 553(b)(B).
E. Unfunded Mandates Reform Act
This action does not contain an unfunded mandate as described in
the Unfunded Mandates Reform Act, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. This action imposes
no enforceable duty on any state, local, or tribal governments or the
private sector. This action simply increases the amounts of the
emissions budget and allowance allocations that apply for one state
under the regulations for an existing trading program to reflect
decisions by the owners of certain units in the state to defer or
cancel previous plans to retire the units.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government. This
action simply increases the amounts of the emissions budget and
allowance allocations that apply for one state under the regulations
for an existing trading program to reflect decisions by the owners of
certain units in the state to defer or cancel previous plans to retire
the units.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175. This action simply increases the amounts of the
emissions budget and allowance allocations that apply for one state
under the regulations for an existing trading program to reflect
decisions by the owners of certain units in the state to defer or
cancel previous plans to retire the units. Thus, Executive Order 13175
does not apply to this action.
H. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that EPA has reason to believe may disproportionately affect children,
per the definition of ``covered regulatory action'' in section 2-202 of
the Executive Order. This action is not subject to Executive Order
13045 because it implements a previously promulgated health or safety-
based federal standard. For the same reason, EPA's Policy on Children's
Health does not apply to this action.
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not subject to Executive Order 13211 because it is
not a significant regulatory action under Executive Order 12866.
J. National Technology Transfer and Advancement Act
This rulemaking does not involve technical standards.
K. Congressional Review Act
This action is subject to the Congressional Review Act (CRA), 5
U.S.C. 801-808, and EPA will submit a rule report to each House of the
Congress and to the Comptroller General of the United States. This
action is not a ``major rule'' as defined by 5 U.S.C. 804(2).
L. Judicial Review
Under CAA section 307(b)(1), petitions for judicial review of this
final action must be filed in the United States Court of Appeals for
the appropriate circuit within 60 days from the date the action is
published in the Federal Register. Filing a petition for
reconsideration by the Administrator of this final action does not
affect the finality of the action for the purposes of judicial review
or extend the time within which a petition for judicial review must be
filed and shall not postpone the effectiveness of the action.
List of Subjects in 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.
Lee Zeldin,
Administrator.
For the reasons stated in the preamble, the EPA amends part 97 of
title 40 of the Code of Federal Regulations as follows:
PART 97--FEDERAL NOX BUDGET TRADING PROGRAM, CAIR NOX AND SO2
TRADING PROGRAMS, CSAPR NOX AND SO2 TRADING PROGRAMS, AND TEXAS SO2
TRADING PROGRAM
0
1. The authority citation for part 97 continues to read as follows:
Authority: 42 U.S.C. 7401, 7403, 7410, 7426, 7491, 7601, and
7651, et seq.
[[Page 21434]]
Subpart EEEEE--CSAPR NOX Ozone Season Group 2 Trading Program
0
2. Amend Sec. 97.810 by revising paragraphs (a)(5)(iv) and (v) and
(b)(5)(ii) to read as follows:
Sec. 97.810 State NOX Ozone Season Group 2 trading budgets, new unit
set-asides, Indian country new unit set-asides, and variability limits.
(a) * * *
(5) * * *
(iv) The NOX Ozone Season Group 2 trading budget for
2024 and thereafter is 11,245 tons.
(v) The new unit set-aside for 2024 and thereafter is 227 tons.
* * * * *
(b) * * *
(5) * * *
(ii) The variability limit for Indiana for 2024 and thereafter is
2,361 tons.
* * * * *
[FR Doc. 2025-08964 Filed 5-19-25; 8:45 am]
BILLING CODE 6560-50-P