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Proposed Rule

Approval and Promulgation of Implementation Plans; Connecticut; Nitrogen Oxides Budget and Allowance Trading Program

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Start Preamble

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

In September 1999, the State of Connecticut (CT) submitted a State Implementation Plan (SIP) to reduce air emissions of nitrogen oxides (NOX). The submittal responds to the EPA's regulation entitled, “Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone,” otherwise known as the “NOX SIP Call.” The submittal includes a narrative and a regulation that establish a statewide NOX budget and a NOX allowance trading program for large electricity generating and industrial sources beginning in 2003.

The Environmental Protection Agency (EPA) is proposing approval of the CT's September 1999 SIP submittal including, CT's NOX control regulation, section 22a-174-22b, “Post-2002 Nitrogen Oxides (NOX) Budget Program” and CT's SIP narrative, “Connecticut State Implementation Plan Revision to Implement the NOX SIP Call,” dated September 30, 1999. EPA is proposing to approve Connecticut's submittal for its strengthening effect pursuant to section 110 of the Clean Air Act (CAA).

DATES:

EPA must receive written comments on or before August 11, 2000.

ADDRESSES:

Comments may be mailed to David Conroy, Unit Manager, Air Quality Planning , Office of Ecosystem Protection (mail code CAQ), U.S. Environmental Protection Agency, Region I, One Congress Street, Suite 1100, Boston, MA 02114-2023. Copies of the documents relevant to this action are available for public inspection during normal business hours, by appointment at the Office Ecosystem Protection, U.S. Environmental Protection Agency, Region I, One Congress Street, 11th floor, Boston, MA 02114, and at the Bureau of Air Management, Department of Environmental Protection, State Office Building, 79 Elm Street, Hartford, CT 06106-1630.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Steven A. Rapp, (617) 918-1048 or at Rapp.Steve@EPA.GOV.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Overview

On September 30, 1999, CT submitted a package of regulatory and narrative materials in order to comply with the NOX SIP Call and strengthen its ozone SIP. EPA proposes full approval of CT's submittal.

The following table of contents describes the format for this SUPPLEMENTARY INFORMATION:

I. EPA's Action

A. What action is EPA proposing today?

B. Why is EPA proposing this action?

C. What are the general NOX SIP Call requirements?

D. What is EPA's NOX budget and allowance trading program?

E. What is the Compliance Supplement Pool?

F. What guidance did EPA use to evaluate Connecticut's submittal?

II. Connecticut's NOX Budget Program

A. What is Connecticut's NOX SIP Call submittal?

B. When did Connecticut propose and adopt the program? Start Printed Page 42901

C. When did Connecticut submit the SIP revision to EPA and when did EPA find it technically and administratively complete?

D. What is Connecticut's NOX Budget Trading Program?

E. How will Connecticut and EPA enforce the program?

F. How does Connecticut's program protect the environment?

G. What is the result of EPA's evaluation of Connecticut's program?

H. Why is EPA considering the NOX SIP Call submittals from CT, MA, and RI at the same time?

I. What other significant items relate to Connecticut's program?

J. What issues are associated with the Connecticut NOX SIP Call submittal?

III. Proposed Action

IV. Administrative Requirements

In the following questions and answers, the term “you” refers to the reader of the notice and “we” refers to the EPA.

I. EPA's Action

A. What Action Is EPA Proposing Today?

EPA is proposing approval of CT's SIP submittal, including CT's NOX control regulation, section 22a-174-22b, “Post-2002 Nitrogen Oxides (NOX) Budget Program” and the SIP narrative entitled, “Connecticut State Implementation Plan Revision to Implement the NOX SIP Call,” dated September 30, 1999. CT submitted the adopted section 22a-174-22b and the SIP narrative with a request to revise the SIP on September 30, 1999. CT submitted the regulation and narrative in order to strengthen its one-hour ozone SIP and to comply with the NOX SIP Call in each ozone season, i.e., May 1 to October 1, beginning in 2003. EPA finds that CT's submittal is fully approvable as a SIP strengthening measure for Connecticut's one-hour ground level ozone SIP and it meets the air quality objective of the NOX SIP Call requirements that EPA has published to date. EPA will take action in a separate future rulemaking on whether Connecticut's submittal meets the applicable NOX SIP Call requirements themselves.

B. Why Is EPA Proposing This Action?

EPA is proposing this action in order to:

  • Fulfill CT's and EPA's requirements under the Clean Air Act (the Act);
  • Make CT's control regulation federally-enforceable and available for credit in the SIP;
  • Make CT's SIP narrative, including the ozone season NOX budget, federally enforceable as part of the CT SIP; and
  • Give you the opportunity to submit written comments on EPA's proposed actions, as discussed in the DATES and ADDRESSES sections.

C. What Are the General NOX SIP Call Requirements?

On October 27, 1998, EPA published a final rule entitled, “Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone,” otherwise known as the “NOX SIP Call.” See 63 FR 57356. The NOX SIP Call requires 22 States and the District of Columbia [1] to meet statewide NOX emission budgets during the five month period between May 1 and October 1 in order to reduce the amount of ground level ozone that is transported across the eastern United States. The NOX SIP Call set out a schedule that required the affected states to adopt regulations by September 30, 1999 ,[2] and implement control strategies by May 1, 2003.

The NOX SIP Call allowed states the flexibility to decide which source categories to regulate in order to meet the statewide budgets. But, the SIP Call notice suggested that imposing statewide NOX emissions caps on large fossil-fuel fired industrial boilers and electricity generating units would provide a highly cost effective means for States to meet their NOX budgets. In fact, the state-specific budgets were set assuming an emission rate of 0.15 pounds NOX per million British thermal units (lb. NOX/mmBtu) at EGUs, multiplied by the projected heat input (mmBtu) from burning the quantity of fuel needed to meet the 2007 forecast for electricity demand. See 63 FR 57407. The calculation of the 2007 EGU emissions assumed that an emissions trading program would be part of an EGU control program. The NOX SIP Call state budgets also assumed on average a 30% NOX reduction from cement kilns, a 60% reduction from industrial boilers and combustion turbines, and a 90% reduction from internal combustion engines. The non-EGU control assumptions were applied at units where the heat input capacities were greater than 250 mmBtu per hour, or in cases where heat input data were not available or appropriate, at units with actual emissions greater than one ton per day.

To assist the states in their efforts to meet the SIP Call, the NOX SIP Call final rulemaking notice included a model NOX allowance trading regulation, called “NOX Budget Trading Program for State Implementation Plans,” (40 CFR Part 96), that could be used by states to develop their regulations. The NOX SIP Call notice explained that if states developed an allowance trading regulation consistent with the EPA model rule, they could participate in a regional allowance trading program that would be administered by the EPA. See 63 FR 57458-57459.

D. What Is EPA's NOX Budget and Allowance Trading Program?

EPA's model NOX budget and allowance trading rule for SIPs, 40 CFR Part 96, sets forth a NOX emissions trading program for large electric generating units (EGUs) and non-electric generating units (non-EGUs). A state can voluntarily choose to adopt EPA's model rule in order to allow sources within its borders to participate in regional allowance trading. The October 27, 1998 Federal Register notice contains a full description of the EPA's model NOX budget trading program. See 63 FR 57514-57538 and 40 CFR Part 96.

In general, air emissions trading uses market forces to reduce the overall cost of compliance for pollution sources, such as power plants, while maintaining emission reductions and environmental benefits. One type of market-based program is an emissions budget and allowance trading program, commonly referred to as a “cap and trade” program.

In an emissions budget and allowance trading program, the state or EPA sets a regulatory limit, or emissions budget, in mass emissions from a specific group of sources. The budget limits the total number of allocated allowances during a particular control period. When the budget is set at a level lower than the current emissions, the effect is to reduce the total amount of emissions during the control period. After setting the budget, the state or EPA then assigns, or allocates, allowances to the Start Printed Page 42902participating entities up to the level of the budget. Each allowance authorizes the emission of a quantity of pollutant, e.g., one ton of airborne NOX.

At the end of the control period, each source must demonstrate that its actual emissions during the control period were less than or equal to the number of available allowances it holds. Sources that reduce their emissions below their allocated allowance level may sell their extra allowances. Sources that emit more than the amount of their allocated allowance level may buy allowances from the sources with extra reductions. In this way, the budget is met in the most cost-effective manner. An example of a budget and allowance trading program is EPA's Acid Rain Program for reducing sulfur dioxide emissions.

E. What Is the Compliance Supplement Pool?

To provide additional flexibility for complying with emission control requirements associated with the NOX SIP Call, the final NOX SIP Call provided each affected state with a “compliance supplement pool.” The compliance supplement pool is a quantity of NOX allowances that may be used to cover excess emissions from sources that are unable to meet control requirements during the 2003 and 2004 ozone seasons. Allowances from the compliance supplement pool will not be valid for compliance past the 2004 ozone season. Despite disagreeing with commenters' concerns, the NOX SIP Call included these voluntary provisions to address commenters' concerns about the possible adverse effect that the control requirements might have on the reliability of the electricity supply or on other industries required to install controls as the result of a state's response to the SIP Call.

A state may issue some or all of the compliance supplement pool via two mechanisms. First, a state may issue some or all of the pool to sources with credits from implementing NOX reductions beyond all applicable requirements after September 30, 1999 but before May 1, 2003 (i.e., early reductions). In this way, sources that cannot install controls prior to May 1, 2003, can purchase other sources' early reduction credits in order to comply. Second, a state may issue some or all of the pool to sources that demonstrate a need for an extension of the May 1, 2003 compliance deadline due to undue risk to the electricity or other industrial sectors and where early reductions are not available. See 40 CFR 51.121(e)(3).

F. What Guidance Did EPA Use To Evaluate Connecticut's submittal?

EPA evaluated CT's NOX SIP Call submittal using EPA's “NOX SIP Call Checklist,” (the checklist), issued on April 9, 1999. The checklist reflects and follows the requirements of the NOX SIP Call set forth in 40 CFR 51.121 and 51.122. The checklist outlines the criteria that the EPA Regional Office used to determine the completeness and approvability of CT's submittal.

As noted in the checklist, the key elements of an approvable submittal under the NOX SIP Call are: a budget demonstration; enforceable measures for control; legal authority to implement and enforce the control measures; compliance dates and schedules; monitoring, recordkeeping, and emissions reporting; as well as elements that apply to states that choose to adopt an emissions trading rule in response to the NOX SIP Call. The checklist is available to the public on EPA's website at: http://www.epa.gov/​ttn/​otag/​sip/​related.html.

As described above, the final NOX SIP Call rule included a model NOX budget trading program regulation. See 40 CFR Part 96. EPA used the model rule to evaluate section 22a-174-22b. Additionally, EPA used the October 1998 final NOX SIP Call rulemaking notice, as well as the subsequent technical amendments to the NOX SIP Call, published in May 1999 (64 FR 26298) and March 2000 (65 FR 11222), to evaluate the approvability of CT's submittal. EPA also used § 110 of the CAA, Implementation Plans, to evaluate the approvability of CT's submittal as a revision to the SIP.

II. Connecticut's NOX Budget Program

A. What is Connecticut's NOX SIP Call Submittal?

Connecticut's September 30, 1999, SIP submittal included the following:

  • Adopted control regulations which require emission reductions beginning in 2003, i.e., section 22a-174-22b, “Post-2002 Nitrogen Oxides NOX Budget Program;”
  • A description of how the state intends to use the compliance supplement pool, i.e., as part of the control regulation;
  • A baseline inventory of NOX mass emissions from EGUs, non-EGUs, area, highway and non-road mobile sources in the year 2007 as published in the May 14, 1999, technical amendments to the NOX SIP Call, i.e., as part of the SIP narrative;
  • A 2007 projected inventory (budget) reflecting NOX reductions achieved by the state control measures contained in the submittal, i.e., as part of the SIP narrative; and
  • A commitment to meet the annual, triennial, and 2007 reporting requirements, i.e., as part of the SIP narrative.

As described above, in order to reduce NOX emissions statewide from 2003 and beyond, CT adopted section 22a-174-22b. The regulation applies to all EGUs with nameplate electricity generating capacities greater than 15 megaWatts that sell any amount of electricity as well as any non-EGU units that have a heat input capacity equal to or greater than 250 mmBtu per hour. Regarding other non-EGUs, CT has no cement kilns or internal combustion (IC) engines with emissions large enough to exceed the applicability threshold for assumed control requirements, i.e., one ton per day. So, CT's SIP submittal does not assume any additional reductions from those sources. Furthermore, you should note that CT is not relying on any reductions beyond anticipated federal measures in the mobile and area sectors.

Below is a table of the 2007 baseline and budget emission levels that Connecticut has submitted with as part of its SIP narrative.

Source category2007 Baseline NOX emissions (tons/season)2007 NOX budget emissions (tons/season)Projected reductions (tons/season)
EGUs5,6364,5641,072
Non-EGU Point5,1244,970154
Area Sources4,8214,8210
Non-Road Mobile10,73610,7360
Highway Mobile19,90219,9020
CT Total46,21944,9931,226
Start Printed Page 42903

B. When Did Connecticut Propose and Adopt the Program?

On July 12, 1999, CT published a public notice to announce the availability of the proposed section 22a-174-22b, as well as the SIP narrative that included the statewide 2007 NOX emission budget. The public notice opened a 30 day public comment period. A public hearing was held on the proposed regulation and SIP package on August 12, 1999. After modifying the proposal in response to public comment, on September 29, 1999, the final section 22a-174-22b was filed with the Secretary of State. The regulation became effective on that date.

C. When Did Connecticut Submit the SIP Revision to EPA and When Did EPA Find the Submittal Technically and Administratively Complete?

On September 30, 1999, CT DEP submitted section 22a-174-22b and the SIP narrative to EPA with a request to revise the CT SIP. On October 26, 1999, EPA sent a letter to CT deeming the SIP submittal technically and administratively complete.

D. What Is Connecticut's NOX Budget Trading Program?

In response to the NOX SIP Call, CT adopted section 22a-174-22b, “Post-2002 Nitrogen Oxides NOX Budget Program.” With section 22a-174-22b, CT established a NOX cap and allowance trading program for the ozone seasons of 2003 and beyond. CT developed the regulation in order to reduce NOX emissions and allow its sources to participate in the kind of interstate NOX allowance trading program described in § 51.121(b)(2).

Under section 22a-174-22b Connecticut allocates NOX allowances to its EGUs and large industrial units. Each NOX allowance permits a source to emit one ton of NOX during the seasonal control period. NOX allowances may be bought or sold. Unused NOX allowances may also be banked for future use, with certain limitations. For each ton of NOX emitted in a control period, EPA will remove one allowance from the source's NOX Allowance Tracking System (NATS) account. Once the allowance has been retired in this way, no one can ever use the allowance again.

Source owners will monitor their NOX emissions by using systems that meet the requirements of 40 CFR Part 75, subpart H, and report resulting data to EPA electronically. Each budget source complies with the program by demonstrating at the end of each control period that actual emissions do not exceed the amount of allowances held for that period. However, regardless of the number of allowances a source holds, it cannot emit at levels that would violate other federal or state limits, for example, reasonably available control technology (RACT), new source performance standards, or Title IV (the federal Acid Rain program).

Section 22a-174-22b differs from EPA's NOX model budget trading rule in two significant ways. Specifically, section 22a-174-22b is applicable to smaller electric generating sources than the model rule. Also, section 22a-174-22b uses a different method for allocating NOX allowances. However, section 22a-174-22b results in fewer tons being allocated to sources than would be allowed by the model rule.

Considering the differences in allowance allocation methodology between section 22a-174-22b and 40 CFR Part 96, CT's regulation cannot be considered substantively identical to 40 CFR Part 96, as described in § 51.121(p). However, section 22a-174-22b does meet the requirements of § 51.121(f) through (o) and therefore, meets the requirements of § 51.121(b)(2) for interstate allowance trading programs. In this way, EPA finds that the program is similar enough to Part 96 for CT's sources to participate in the interstate NOX allowance trading program administered by EPA. For additional information regarding EPA's evaluation of CT's NOX SIP Call submittal, the reader should refer to the document entitled, “Technical Support Document for Connecticut's NOX SIP Call Submittal,” dated May 4, 2000. Copies of the technical support document (TSD) can be obtained at either of the addresses listed in the ADDRESSES section of this notice.

Section 22a-174-22b provides for the distribution of 473 early reductions to sources that implement NOX reductions beyond applicable requirements after September 30, 1999 but before May 1, 2003. Under section 22a-174-22b, CT will only provide early reduction credits to those sources holding banked allowances that were allocated in 2000, 2001, and 2002, under CT's current NOX budget program (i.e., section 22a-174-22a). Section 22a-174-22a is CT's current SIP approved NOX budget and allowance trading program that is part of the Ozone Transport Commission's regional NOX cap and allowance trading program.

E. How Will Connecticut and EPA Enforce the Program?

Once approved into CT's SIP, both CT and EPA will be able to enforce the requirements of the NOX budget and allowance trading program in section 22a-174-22b. All of the sources subject to the NOX allowance trading program will have federally-enforceable operating permits that contain source specific requirements, such as emissions monitoring or pollution control equipment requirements. CT and EPA will be able to enforce the source specific requirements of those permits.

In order to determine compliance with the emission requirements of the program, at the end of each ozone season, CT and EPA will compare sources' allowance and emission accounts in the NOX Allowance Tracking System (NATS). To be in compliance, sources must hold a number of available allowances that meets or exceeds the number of tons of NOX emitted by that source and recorded in the Emissions Tracking System (ETS) for a particular ozone season (May 1 to October 1). For sources with excess emissions, penalties include EPA deducting three times the unit's excess emissions from the unit's allocation for the next control period.

F. How Does Connecticut's Program Protect the Environment?

Based on air quality modeling assessments performed for the NOX SIP Call, EPA believes that the NOX reductions in CT and other states subject to the SIP Call will reduce the transport of ozone starting in 2003.

Decreases of NOX emissions will also help improve the environment in several important ways. Decreases in NOX emissions will decrease acid deposition, nitrates in drinking water, excessive nitrogen loadings to aquatic and terrestrial ecosystems, and ambient concentrations of nitrogen dioxide, particulate matter and toxics. On a global scale, decreases in NOX emissions reduce greenhouse gases and stratospheric ozone depletion.

G. What Is the Result of EPA's Evaluation of Connecticut's SIP Submittal?

EPA has evaluated CT's September 30, 1999, SIP submittal and finds it fully approvable. The September 30, 1999 submittal will strengthen CT's SIP for reducing ground level ozone by providing NOX reductions beginning in 2003. The submittal also meets the air quality objectives of the NOX SIP Call. EPA finds the NOX control measures, section 22a-174-22b, as well as the SIP narrative that includes CT's 2007 NOX baseline and controlled budgets, fully approvable. EPA finds that the submittal contained the information necessary to demonstrate that CT has the legal authority to implement and enforce the control measures, as well as a Start Printed Page 42904description of how the state intends to use the compliance supplement pool. Furthermore, EPA finds that the submittal demonstrates that the compliance dates and schedules, and the monitoring, record keeping and emission reporting requirements will be met.

Although section 22a-174-22b deviates from EPA's NOX Budget Trading Model Rule, EPA finds that section 22a-174-22b is consistent with EPA's guidance and meets the air quality objectives of the NOX SIP Call, including those found in 40 CFR part 51, 51.121 and 51.122, as well as the general SIP submittal requirements of the Act, § 110, 42 U.S.C. 7401 et seq. The most significant difference between the EPA's model rule and CT's control regulation is related to the timing of the allocations to the affected sources. Under CT's NOX Budget Program, EPA will allocate NOX allowances to a general state account by April 1 of the year that is three years before the relevant control period. CT will then hold the allowances in this account until allocating to sources, which it will do by May 1 of the relevant control period. While this deviates from the timing requirements stipulated under § 51.121(p) for streamlined approval, it is approvable under § 51.121(f) through § 51.121(o) as discussed below.

CT's SIP revision does not differ from EPA's model rule (40 CFR part 96) significantly enough to prevent CT from participating in the EPA administered trading program. CT's rule allows EPA to fulfill its obligation under § 96.41 (i.e., the timing requirements for NOX allowance allocations) to both the state and its sources, and allocate to the state by April 1 of the year that is three years in advance of the relevant control period. Once EPA allocates to CT's general account, it will become the state's responsibility to allocate the allowances to its sources.

EPA continues to believe that allocating to sources three years in advance allows sources to design the compliance strategy (i.e., installing controls or buying, selling or banking allowances) that is most cost-effective for them. Decreasing sources' certainty about their future allocations and flexibility in meeting their obligations may impact their ability to comply with these requirements in the most cost-effective manner. Nevertheless, EPA believes CT's program will achieve the necessary reductions, albeit in a less cost-effective manner.

Regarding CT's SIP narrative, EPA finds that the submittal contains the required elements, including: the baseline inventory of NOX mass emissions from EGUs, non-EGUs, area, highway and non-road mobile sources in the year 2007; the 2007 projected inventory reflecting NOX reductions achieved by the state control measures contained in the submittal; and the commitment to meet the annual, triennial, and 2007 state reporting requirements. EPA further finds that CT's 2007 projected inventory, reflecting the control strategies, is approvable, meeting the air quality objectives of the NOX SIP Call.

In order to approve CT's 2007 projected inventory as meeting the air quality objectives of the NOX SIP Call, however, it is necessary to consider the adopted 2007 emission budgets and adopted NOX reducing measures in Massachusetts (MA) and Rhode Island (RI) as well. Comparing the most recent technical amendments to the NOX SIP Call budgets to the adopted and submitted NOX SIP Call related measures from the three states, you can see that the adopted measures in CT, MA, and RI will reduce more NOX from the EGU and non-EGU sectors than the NOX SIP Call notices have required.

H. Why Is EPA Considering the NOX SIP Call Submittals From CT, MA, and RI at the Same Time?

In February 1999, CT, MA, RI, and EPA signed a memorandum of understanding (i.e., “the Three State MOU”) agreeing to redistribute the EGU portions of the three states' budgets, as well as the compliance supplement pool allocations, amongst themselves. Under the Three State MOU, the combined 2007 controlled emission level and compliance supplement pool did not change for the three states, only the individual state EGU allocations and supplement pools were redistributed to provide CT with additional flexibility.

On September 15, 1999, EPA published a Notice of Proposed Rulemaking (NPR) to approve the redistribution of the three states' allocations as described in the MOU and modified by the EPA's May 1999 NOX SIP Call technical corrections.[3] See 64 FR 50036. As described in the NPR, the sum of the 2007 budgets and supplement pool allocations for the three states after redistribution is identical to the sum of the three budgets and supplement pool allocations for the states as published in the May 1999 technical corrections Federal Register notice. In other words, the total NOX reduction expected from the three states due to the SIP Call would be the same before and after the redistribution of budgets under the Three State MOU. In fact, both the May 1999 technical amendments and the September 1999 NPR required a NOX reduction of 5,491 tons by the three states each ozone season from 2007 onward and provided a combined allocation of 961 tons from the compliance supplement pool.

On March 2, 2000, EPA published additional technical amendments to the NOX SIP Call in the Federal Register (65 FR 11222). As can be seen in the tables below, the March 2, 2000 technical corrections primarily changed the highway mobile and non-EGU 2007 baselines and budgets for CT, MA, and RI. However, these changes largely cancel each other out, e.g., the 2007 highway sub-inventory baselines and budgets increased by approximately the same amount in the three states. The March 2000 technical corrections, however, did not effect the amount of reduction expected from the EGU sector. The tables below compare the 2007 baselines and budgets for each sub-inventory sector for CT, MA, and RI as published in the May 1999 and March 2000 technical amendment Federal Register notices.

CT5/99 baseline3/00 baselineChange in baseline5/99 budget3/00 budgetChange in budget
EGU5,6365,63602,6522,6520
Non-EGU5,1245,3972734,9705,216246
Area4,8214,82104,8214,8210
Nonroad10,73610,736010,73610,7360
Highway19,90219,424−47819,90219,424−478
Total46,22046,015−20543,08142,849−232
Start Printed Page 42905
MA5/99 baseline3/00 baselineChange in baseline5/99 budget3/00 budgetChange in budget
EGU16,47916,479015,14515,1461
Non-EGU11,22911,210−1910,29610,2982
Area11,04811,048011,04811,0480
Nonroad20,16620,166020,16620,1660
Highway28,64128,190−45128,64128,190−451
Total87,56387,092−47185,29684,848−448
RI5/99 baseline3/00 baselineChange in baseline5/99 budget3/00 budgetChange in budget
EGU1,0821,08209979970
Non-EGU2,0311,635−3962,0311,635−396
Area44844804484480
Nonroad2,4552,45502,4552,4550
Highway3,8793,843−363,8793,843−36
Total9,8959,463−4329,8109,378−432

The March 2000 Federal Register listed 2007 ozone season baseline emissions from CT, MA, and RI as 46,015 tons, 87,092 tons, and 9,463 tons, respectively. The March 2000 Federal Register listed the 2007 ozone season budgets for CT, MA, and RI as 42,849 tons, 84,848 tons, and 9,378 tons, and provided the three states with compliance supplement pools of 569 tons, 404 tons, and 15 tons, respectively, or a total of 988 tons. In total, the March 2000 notice required the three states to reduce their NOX emissions by 5,495 tons per ozone season beginning in 2007.

In the Fall of 1999, CT, MA, and RI all adopted and submitted SIP packages in response to the NOX SIP Call. All three states adopted and submitted NOX control regulations that rely on reductions from the EGU and large non-EGU units to achieve their emission budgets. The 2007 baseline ozone season emissions adopted by the states were 46,219 tons, 87,563 tons, and 9,895 tons, respectively, or a three state total of 143,677 tons per ozone season. The SIP packages adopted and submitted by CT, MA, and RI, included 2007 projected NOX inventories of 44,993 tons, 83,345 tons, and 9,798 tons, respectively, or a three state total of 138,136 tons per ozone season. Therefore, the total NOX reduction expected from the adopted and submitted SIP packages from CT, MA, and RI is 5,541 tons per ozone season.

As discussed above, EPA signed the Three State MOU between CT, MA, and RI. We endorse the concept that states can voluntarily join together and redistribute their NOX SIP Call budgets and compliance supplement pool allocations, provided that the total after the redistribution is less than or equal to before redistribution, and provided that the states have formalized such an agreement in an MOU or similar device to which EPA also agrees. EPA supports this concept because such a redistribution is no different than the effects of trading. For a detailed discussion of why EPA supports the concept that states can collectively redistribute their NOX SIP Call budgets, see the proposed Three State MOU notice, 64 FR 49989, September 15, 1999. Given the fact that together the three states' regulations achieve at least the same NOX reduction and allocate fewer than required compliance supplement pool allocations, EPA finds that the NOX SIP Call SIP submittals from the three states collectively meet the air quality objectives of the NOX SIP Call as published to date. In separate Federal Register notices today, EPA is also proposing approval of MA's and RI's NOX SIP Call submittals.

You can find the NOX SIP Call 2007 baselines, budgets, and compliance supplement pool allocations from the March 2000 technical amendments and the state adopted SIPs summarized in the table below.

StateSIP Call 2007 baseline (tons NOX per ozone season) as of 03/00State adopted 2007 baseline (tons NOX per ozone season)SIP call 2007 budget as of 03/00 (tons NOX per ozone season)State adopted 2007 budget (tons NOX per ozone season)SIP Call Projected reduction (tons NOX per ozone season) as of 03/00State projected reduction (tons NOX per ozone season)Compliance supplement pool state allocations as of 03/00State adopted compliance supplement pool
CT46,01546,21942,84944,9933,1661,226569473
MA87,09287,56384,84883,3452,2444,218404473
RI9,4639,8959,3789,79885971515
Total142,570143,677137,075138,1365,4955,541988961

For additional information regarding EPA's evaluation of CT's NOX SIP Call submittal, the reader should refer to the TSD available at either of the addresses listed in the ADDRESSES section of this notice.

I. What Other Significant Items Relate to Connecticut's Program?

In addition to submitting the September 30, 1999, SIP package in order to fulfill its NOX SIP Call obligation, CT submitted section 22a-174-22b as part of its one-hour ozone attainment plans for the serious and severe ozone nonattainment areas of the state. Both attainment plans rely on the NOX reductions associated with section 22a-174-22b in 2003 and beyond. EPA proposed approval of CT's attainment plans for both the serious and severe nonattainment areas on December 16, Start Printed Page 429061999. See 64 FR 70348. Approval and implementation of section 22a-174-22b strengthens CT's SIP and is necessary in order for CT to fulfill a requirement of the one-hour ozone attainment plans.

Section 22a-174-22b is also related to the Ozone Transport Commission's (OTC's) ozone season NOX budget program. On September 27, 1994, OTC adopted a Memorandum of Understanding (MOU) that committed the signatory states, including CT, to the development and proposal of a region-wide reduction in NOX emissions. The OTC agreement committed the states to one phase of NOX reductions by 1999 and another phase of reductions by 2003.

As a signatory state of the MOU, CT adopted its NOX budget and allowance trading regulation, section 22a-174-22a, on December 15, 1998. Section 22a-174-22a contained a NOX emissions budget and allowance trading system for the ozone seasons of 1999 through 2002, the period known as “OTC Phase II.” CT's phase II EGU budget is 5,866 tons per ozone season. EPA approved CT's phase II OTC NOX budget regulation on September 28, 1999. See 64 FR 52238.

Section 22a-174-22b contains a new NOX emissions budget and allowance trading program for the ozone seasons of 2003 and thereafter, the period known as “OTC phase III.” Although EPA's technical corrections and the Three State MOU described above would allow CT an EGU budget of 4,564 tons per season in 2003 and beyond, section 22a-174-22b contains an EGU ozone season budget of 4,477 tons. This is equal to the budget agreed upon by OTC for CT under phase III of the OTC program. Therefore, although the OTC MOU obligations are not federal requirements, section 22a-174-22b can be viewed as satisfying the OTC phase III program requirements as well.

J. What Issues Are Associated With Connecticut's NOX SIP Call Submittal?

On March 3, 2000, the D.C. Circuit ruled on Michigan v. EPA, affirming many aspects of the NOX SIP call and remanding certain other portions to the Agency (e.g., the definition of an EGU and the control assumptions for internal combustion engines). Due to the Court's remanding of the EGU definition and IC engine control assumptions, EPA must now recalculate the final 2007 baseline, 2007 budget, and compliance supplement allocation for each state subject to the NOX SIP Call, including CT. Those recalculated budgets are expected to be published in the next few months. However, this means that CT may be required to revisit its NOX SIP Call program due to potential forthcoming changes to the NOX SIP Call requirements. At such time as EPA publishes new emission budget requirements, CT and other NOX SIP Call subject states will be informed as to what, if any, changes are needed.

Additionally, as described above, the March 2, 2000 technical corrections changed the 2007 baselines and budgets for the highway and non-EGU sub-inventories in CT, MA, and RI. Therefore, when those states make the changes needed due to the remanded portions of the NOX SIP Call, those states will need to adopt changes to the highway and non-EGU 2007 baselines and budgets as well.

III. Proposed Action

EPA has reviewed CT's September 30, 1999, SIP submittal using the NOX SIP Call rulemaking notices and checklist. EPA has reviewed CT's control measures and projected reductions and finds them approvable. Therefore, EPA is proposing to approve section 22a-174-22b and CT's NOX SIP Call narrative at this time.

EPA is soliciting public comments on the issues discussed in this proposal or on other relevant matters. These comments will be considered before EPA takes final action. Interested parties may participate in the Federal rulemaking procedure by submitting written comments to the EPA Regional office listed in the ADDRESSES section of this action.

Nothing in this action should be construed as permitting or allowing or establishing a precedent for any future request for revision to any State implementation plan. Each request for revision to the State implementation plan shall be considered separately in light of specific technical, economic, and environmental factors and in relation to relevant statutory and regulatory requirements.

IV. Administrative Requirements

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Regional Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). For the same reason, this rule also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This rule 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, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Start List of Subjects

List of Subjects in 40 CFR Part 52

End List of Subjects Start Authority

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

End Authority Start Signature

Dated: June 21, 2000.

Mindy S. Lubber,

Regional Administrator, EPA-New England.

End Signature End Supplemental Information

Footnotes

1.  Alabama, Connecticut, District of Columbia, Delaware, Georgia, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Michigan, Missouri, North Carolina, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, Wisconsin, and West Virginia.

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2.  On May 25, 1999, the D.C. Circuit issued a partial stay of the submission of the SIP revisions required under the NOX SIP Call. The NOX SIP Call had required submission of the SIP revisions by September 30, 1999. State Petitioners challenging the NOX SIP Call moved to stay the submission schedule until April 27, 2000. The D.C. Circuit issued a stay of the SIP submission deadline pending further order of the court. Michigan v. EPA, No. 98-1497 (D.C. Cir. May 25, 1999) (order granting stay in part).

On September 30, 1999, Connecticut voluntarily submitted this revision to EPA for approval notwithstanding the court's stay of the SIP submission deadline. On March 3, 2000, the D.C. Circuit ruled on Michigan v. EPA, affirming many aspects of the SIP call and remanding certain other portions to the Agency. The court's ruling does not affect this action because it is being proposed as a SIP-strengthening measure regardless of the status of the case.

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3.  You should note that EPA took comments on the Three State MOU NPR and intends to address those comments in a future rulemaking. Therefore, we are not seeking comments on the specifics of the Three State MOU NPR at this time.

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[FR Doc. 00-17186 Filed 7-11-00; 8:45 am]

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