V.
Determination
of
State
Emissions
Budgets
The
EPA
outlined
in
the
NPR
and
SNPR
its
proposals
regarding
a
methodology
for
setting
both
regional
and
State­
level
SO2
and
NOx
budgets.
Section
IV
explains
how
the
region
wide
budgets
were
developed.
This
section
V
describes
how
EPA
apportions
the
regionwide
emissions
reductions
 
and
the
associated
EGU
caps
 
on
a
State­
by­

State
basis,
so
that
the
affected
States
may
determine
the
necessary
controls
of
SO2
and
NOx
emissions.

In
the
NPR
and
SNPR,
EPA
proposed
annual
SO2
and
NOx
caps
for
States
contributing
to
fine
particle
nonattainment
and
separate
ozone­
season
only
caps
for
States
contributing
to
ozone
 
but
not
fine
particle
 
nonattainment.
The
EPA
is
finalizing
an
annual
cap
for
both
SO2
and
NOx
for
States
that
contribute
to
fine
particle
nonattainment.
In
addition,
EPA
is
finalizing
an
ozone­
season
only
cap
for
NOx
for
all
States
that
contribute
to
ozone
nonattainment.

States
have
several
options
for
reducing
emissions
that
significantly
contribute
to
downwind
nonattainment.
They
can
adopt
EPA's
approach
of
reducing
the
emissions
in
a
cost­
effective
manner
through
an
interstate
cap­
and­
trade
program.
This
approach
would,
by
definition,
achieve
the
required
cost­
effective
reductions.
Alternately,
States
could
achieve
all
of
the
necessary
emissions
reductions
from
EGUs,
but
choose
not
to
use
EPA's
interstate
emissions
trading
program.
In
this
case,
a
State
would
need
to
demonstrate
that
it
is
meeting
the
EGU
budgets
outlined
in
this
section.
Finally,
States
could
obtain
at
least
some
of
their
required
emissions
reductions
from
sources
other
than
EGUs.
Additional
detail
on
these
options
is
provided
in
section
VII.

A.
What
Is
the
Approach
for
Setting
State­
by­
State
Annual
Emissions
Reductions
Requirements
and
EGU
Budgets?

This
section
presents
the
final
methodologies
used
for
apportioning
regionwide
emission
reduction
requirements
or
budgets
to
the
individual
States.

In
the
CAIR
NPR,
EPA
proposed
methods
for
determining
the
SO2
and
NOx
emission
reduction
requirements
or
budgets
for
each
affected
State.
In
the
June
2004
SNPR,
EPA
proposed
corrections
and
improvements
to
the
proposals
in
the
CAIR
NPR.
In
the
August
2004
NODA,
EPA
presented
the
corrected
NOx
budgets
resulting
from
the
improvements
proposed
in
the
SNPR.

1.
SO2
Emissions
Budgets
a.
State
Annual
SO2
Emission
Budget
Methodology
As
noted
elsewhere
in
today's
preamble,
the
regionwide
annual
budget
for
2015
and
beyond
is
based
on
a
65
percent
reduction
of
title
IV
allowances
allocated
to
units
in
the
CAIR
States
for
SO2
control.
The
regionwide
annual
SO2
budget
for
the
years
2010­
2014
is
based
on
a
50
percent
reduction
from
title
IV
allocations
for
all
units
in
affected
States.

In
the
NPR
and
SNPR,
EPA
also
proposed
calculating
annual
State
SO2
budgets
based
on
each
State's
allowances
under
title
IV
of
the
1990
CAA
Amendments.
We
are
finalizing
this
proposed
approach
for
determining
State
annual
SO2
budgets.

State
annual
budgets
for
the
years
2010­
2014
(
Phase
I)

are
based
on
a
50
percent
reduction
from
title
IV
allocations
for
all
units
in
the
affected
State.
The
State
annual
budget
for
2015
and
beyond
(
Phase
II)
is
based
on
a
65
percent
reduction
of
title
IV
allowances
allocated
to
units
in
the
affected
State
for
SO2
control.

Some
commenters
criticized
EPA's
basing
State
budgets
on
title
IV
allocations
since
these
were
based
largely
on
1985­
1987
historic
heat
input
data.
Commenters
argue
that
the
initial
allocation
was
not
equitable
and
that
in
any
event,
the
electric
power
sector
has
changed
significantly.

They
conclude
that
State
budgets
should
reflect
those
differences.
Commenters
have
also
commented
that
tying
SO2
allocations
to
title
IV
also
does
not
let
States
account
for
units
that
are
exempt
from
title
IV
or
for
new
units
that
have
come
online
since
1990.

While
acknowledging
these
concerns,
EPA
believes,
for
a
number
of
reasons,
that
setting
State
budgets
according
to
title
IV
allowances
represents
a
reasonable
approach.

The
EPA
believes
that
basing
budgets
on
title
IV
allowances
is
necessary
in
order
to
ensure
the
preservation
of
a
viable
title
IV
program,
which
is
important
for
reasons
discussed
in
section
IX
of
this
preamble.
Such
reasons
include
the
desire
to
maintain
the
trust
and
confidence
that
has
developed
in
the
functioning
market
for
title
IV
allowances.
The
EPA
believes
it
is
important
not
to
undermine
such
confidence
(
which
is
an
essential
underpinning
to
a
viable
market­
based
system)
recognizing
that
it
is
a
key
to
the
success
of
a
trading
program
under
the
CAIR.

The
title
IV
program
represents
a
logical
starting
point
for
assessing
emissions
reductions
for
SO2,
since
it
is
the
current
effective
cap
on
SO2
emissions
for
Acid
Rain
units,
which
make
up
the
large
majority
of
affected
EGU
CAIR
units.
It
is
from
this
starting
emissions
cap,
that
further
CAIR
reductions
are
required.
Consequently,
EPA
proposes
State­
level
reductions
based
on
reductions
from
the
initial
allocations
of
title
IV
allowances
to
individual
units
at
sources
(
power
plants)
in
States
covered
by
the
CAIR.

The
setting
of
SO2
budgets
differs
from
the
setting
of
NOx
budgets
for
the
CAIR,
in
part,
because
of
this
difference
in
starting
points
­
since
there
is
no
existing
NOx
regional
annual
cap,
and
no
currency
for
emissions,
on
which
sources
rely.
Furthermore,
Congress,
as
part
of
title
IV
of
the
CAA,
decided
upon
the
allocations
of
title
IV
allowances
specifically
for
the
control
of
SO2,
and
not
for
NOx.

Moreover,
Congress
decided
to
allocate
title
IV
allowances
in
perpetuity,
realizing
that
the
electricity
sector
would
not
remain
static
over
this
time
period.

Congress
clearly
did
not
choose
a
policy
to
regularly
revisit
and
revise
these
allocations,
believing
that
its
allocations
methodology
for
title
IV
allowances
would
be
appropriate
for
future
time
periods.

The
EPA
realizes,
putting
aside
concerns
of
linkage
to
title
IV,
that
there
are
numerous
potential
methodologies
of
dividing
up
the
regional
budgets
among
the
States.
Also,

EPA
believes,
that
while
initial
allocations
of
State
budgets
are
important
for
distributional
reasons,
under
a
cap­
and­
trade
system,
they
would
not
impact
the
attainment
of
the
environmental
objectives
or
the
overall
cost
of
this
rule.

Each
of
the
alternate
methods
also
has
certain
shortcomings,
many
of
which
have
been
identified
by
commenters.
Basing
allowances
on
historic
emissions,
for
instance,
would
penalize
States
that
have
already
gone
through
significant
efforts
to
clean
up
their
sources.
Basing
allowances
on
heat
input
has
advantages,
but
cannot
accommodate
States
that
have
worked
to
improve
their
energy
efficiency.
Basing
allowances
on
output
would
provide
gasfired
units
with
many
more
allowances
than
they
need,
rather
than
giving
them
to
the
coal­
fired
units
that
will
be
incurring
the
greatest
costs
from
the
tighter
caps.

The
EPA
did
look
at
a
number
of
allowance
outcomes
using
alternate
potential
methods
for
allocating
SO2
allowances.
These
methods
included
allocating
on
the
basis
of
historic
emissions,
heat
input
(
with
alternatives
based
on
heat
input
from
all
fossil
generation,
and
heat
input
from
coal­
and
oil­
fired
generation
only)
and
output
(
with
alternatives
based
on
all
generation
and
all
fossil­
fired
generation).
Allocating
allowances
based
on
title
IV
yields
results
that
fall
within
a
reasonable
range
of
results
obtained
from
using
these
alternate
methodologies.
In
fact,

calculating
State
budgets
using
title
IV
allowances
yields
budgets
generally
at
or
within
the
ranges
of
budgets
calculated
using
the
other
methods
in
more
than
two­
thirds
of
the
States,
which
account
for
over
85
percent
of
the
total
heat
input
in
the
region
from
1999­
2002.
This
analysis
is
discussed
further
in
the
response
to
comments
document.

b.
Final
SO2
State
Emission
Budget
Methodology
The
EPA
is
finalizing
the
budgets
as
noted
in
the
SNPR,
adjusting
for
the
proper
inclusion
of
States
covered
under
the
final
CAIR.
The
final
State
budgets
are
included
in
Table
V­
1
below.
Details
of
the
data
and
methodology
used
to
calculate
these
budgets
are
included
in
the
accompanying
"
Regional
and
State
SO2
and
NOx
Emissions
Budgets"
Technical
Support
Document.

Table
V­
1.
Final
Annual
Electric
Generating
Units
SO2
Budgets
State
State
SO2
Budget
2010*
(
tons)
State
SO2
Budget
2015**
(
tons)
Alabama
157,582
110,307
District
of
Columbia
708
495
Florida
253,450
177,415
Georgia
213,057
149,140
Illinois
192,671
134,869
Indiana
254,599
178,219
Iowa
64,095
44,866
Kentucky
188,773
132,141
Louisiana
59,948
41,963
Maryland
70,697
49,488
Michigan
178,605
125,024
Minnesota
49,987
34,991
Mississippi
33,763
23,634
Missouri
137,214
96,050
New
York
135,139
94,597
North
Carolina
137,342
96,139
Ohio
333,520
233,464
Pennsylvania
275,990
193,193
South
Carolina
57,271
40,089
Tennessee
137,216
96,051
Texas
320,946
224,662
Virginia
63,478
44,435
West
Virginia
215,881
151,117
Wisconsin
87,264
61,085
Total
3,619,196
2,533,434
*
Annual
budget
for
SO2
tons
covered
by
allowances
for
2010­
2014.
**
Annual
budget
for
SO2
tons
covered
by
allowances
for
2015
and
thereafter.

c.
Use
of
SO2
Budgets
These
specific
levels
of
the
proposed
State
budgets
would
actually
provide
binding
statewide
caps
on
EGU
emissions
for
States
that
choose
to
control
only
EGUs
but
do
not
want
to
participate
in
the
trading
program.
For
States
choosing
to
participate
in
the
trading
program,
these
State
budgets
would
not
be
binding,
instead,
the
States'
SO2
reductions
would
be
achieved
solely
through
the
application
of
required
retirement
ratios
as
discussed
in
section
VII
of
this
preamble.
For
States
controlling
both
EGUs
and
non­

EGUs
(
or
controlling
only
non­
EGUs),
these
State
budgets
would
be
used
to
calculate
the
emissions
reductions
requirements
for
non­
EGUs
and
the
remaining
reduction
requirement
for
EGUs.
This
is
described
in
more
detail
in
the
section
VII
discussion
on
SIP
approvability.

2.
NOx
Annual
Emissions
Budgets
a.
Overview
In
this
section,
EPA
discusses
the
apportioning
of
regionwide
NOx
annual
emission
reduction
requirements
or
budgets
to
the
individual
States.
In
the
January
2004
proposal,
we
proposed
State
EGU
annual
NOx
budgets
based
on
each
State's
average
share
of
recent
historic
heat
input.

In
the
SNPR,
we
proposed
the
same
input­
based
methodology,

but
revised
the
budgets
based
on
more
complete
heat
input
data.
Also,
EPA
took
comment
on
an
alternative
methodology
that
determines
State
budgets
by
multiplying
heat
input
data
by
adjustment
factors
for
different
fuels.
In
the
August
NODA,
EPA
presented
the
corrected
annual
NOx
budgets
resulting
from
the
improved
methodology
proposed
in
the
SNPR.

b.
State
Annual
NOx
Emissions
Budget
Methodology
1.
Proposed
and
Discussed
NOx
Emission
Budget
Methodology
As
noted
elsewhere
in
today's
preamble,
EPA
determined
historical
annual
heat
input
data
for
Acid
Rain
Program
units
in
the
applicable
States
and
multiplied
by
0.15
lb/
mmBtu
(
for
2009)
and
0.125
lb/
mmBtu
(
for
2015)
to
determine
total
annual
NOx
regionwide
budgets
for
the
CAIR
region.
The
EPA
applied
these
rates
to
each
individual
State's
total
highest
annual
heat
input
for
any
year
from
1999
through
2002.
Thus,
EPA
used
the
heat
input
total
for
the
year
in
which
a
State's
total
heat
input
was
the
highest.

In
the
January
2004
proposal,
we
proposed
annual
NOx
State
budgets
for
a
28­
State
(
and
D.
C.)
region
based
on
each
jurisdiction's
average
heat
input
 
using
heat
input
data
from
Acid
Rain
Program
units
­
over
the
years
1999
through
2002.
We
summed
the
average
heat
input
from
each
of
the
applicable
jurisdictions
to
obtain
a
regional
total
average
annual
heat
input.
Then,
each
State
received
a
pro
rata
share
of
the
regional
NOx
emissions
budget
based
on
the
ratio
of
its
average
annual
heat
input
to
the
regional
total
average
annual
heat
input.

In
the
SNPR,
EPA
proposed
to
revise
its
determination
of
State
NOx
budgets
by
supplementing
Acid
Rain
Program
unit
data
with
annual
heat
input
data
from
the
U.
S.
Energy
Information
Administration
(
EIA),
for
the
non­
Acid
Rain
unit
data.
A
number
of
commenters
had
suggested
that
this
would
better
reflect
the
heat
input
of
the
units
that
will
be
controlled
under
the
CAIR,
and
EPA
agrees.

In
the
SNPR,
EPA
asked
for,
and
subsequently
received,

comments
on
determining
State
budgets
by
multiplying
heat
input
data
by
adjustment
factors
for
different
fuels.
The
factors
would
reflect
the
inherently
higher
emissions
rate
of
coal­
fired
units,
and
consequently
the
greater
burden
on
coal
units
to
control
emissions.

2.
Today's
Rule
As
noted
earlier
in
the
case
of
SO2,
EPA
recognizes
that
the
choice
of
method
in
setting
State
budgets,
with
a
given
regionwide
total
annual
budget,
makes
little
difference
in
terms
of
the
levels
of
resulting
regionwide
annual
SO2
and
NOx
emissions
reductions.
If
States
choose
to
control
EGUs
and
participate
in
the
cap­
and­
trade
program,
allowances
could
be
freely
traded,
encouraging
least­
cost
compliance
over
the
entire
region.
In
such
a
case,
the
least­
cost
outcome
would
not
depend
on
the
relative
levels
of
individual
State
budgets.

A
number
of
commenters
have
stated,
without
supporting
analysis
or
evidence,
that
budgets
based
on
heat
input,
(
and
particularly
those
that
would
use
different
fuel
factors)
do
not
encourage
efficiency.
Economic
theory
indicates
that
neither
a
heat
input,
nor
an
output­
based
approach,
if
allocated
once
and
based
on
a
historical
baseline,
would
provide
any
incentives
for
more
or
less
efficient
generation
(
changes
in
future
behavior
would
have
no
impact
on
allocations).
The
cap­
and­
trade
system
itself,
regardless
of
how
the
allowances
are
distributed,
provides
the
primary
incentive
for
more
efficient,
cleaner
generation
of
electricity.

The
EPA
is
finalizing
an
approach
of
calculating
State
budgets
through
a
fuel­
adjusted
heat­
input
basis.
State
budgets
would
be
determined
by
multiplying
historic
heat
input
data
(
summed
by
fuel)
by
different
adjustment
factors
for
the
different
fuels.
These
factors
reflect
for
each
fuel
(
coal,
gas
and
oil),
the
1999­
2002
average
emissions
by
State,
summed
for
the
CAIR
region,
divided
by
average
heat
input
by
fuel
by
State,
summed
for
the
CAIR
region.
The
resulting
adjustment
factors
from
this
calculation
are
1.0
for
coal,
0.4
for
gas
and
0.6
for
oil.
The
factors
would
reflect
the
inherently
higher
emissions
rate
of
coal­
fired
plants,
and
consequently
the
greater
burden
on
coal
plants
to
control
emissions.

Such
an
approach
provides
States
with
allowances
more
in
proportion
with
their
historical
emissions.
It
provides
for
a
more
equitable
budget
distribution
by
recognizing
that
1
States
receiving
larger
budgets
under
this
approach
are
generally
expected
to
be
those
having
to
make
the
most
reductions.
different
States
are
facing
the
reduction
requirements
with
different
starting
stocks
of
generation,
with
different
starting
emission
profiles.
1
The
fuel
burned
is
a
key
factor
in
differentiating
the
generation.

However,
this
approach
is
not
equivalent
to
an
approach
based
strictly
on
historical
emissions
(
which
would
give
fewer
allowances
to
States
which
have
already
cleaned
up
their
coal
plants).
Under
the
approach
we
are
finalizing
today,
heat
input
from
all
coal,
whether
clean
or
uncontrolled,
would
be
counted
equally
in
determining
State
budgets.
Likewise,
all
heat
input
from
gas,
whether
clean
or
uncontrolled,
from
a
steam­
gas
unit
or
from
a
combinedcycle
plant,
would
be
counted
equally
in
determining
State
budgets.

It
is
not
expected
that
this
decision
would
disadvantage
States
with
significant
gas­
fired
generation.

One
reason
is
that
the
calculation
of
the
adjusted
heat
input
for
natural
gas
generation
generally
includes
significant
historic
heat
input
and
emissions
from
older,

less
efficient
and
dirtier
steam
gas
units.
These
units'

capacity
factors
are
declining
and
are
expected
to
decline
further
over
time
as
new,
cleaner
and
more
efficient
combined­
cycle
gas
units
increase
their
generation.
2
With
a
methodology
similar
to
that
used
in
the
NOx
SIP
Call,
annual
State
NOx
budgets
would
be
set
by
using
a
base
heat
input
data,
then
adjusting
it
by
a
calculated
growth
rate
for
each
jurisdiction's
annual
EGU
heat
inputs
It
is
important
to
note
that
the
methodology
by
which
the
NOx
State
budgets
are
determined
need
not
be
used
by
individual
States
in
determining
allocations
to
specific
sources.
As
discussed
in
section
VIII
of
this
document
(
Model
Trading
Rule),
EPA
is
offering
States
the
flexibility
to
allocate
allowances
from
their
budgets
as
they
see
fit.

Finally,
EPA
discussed
in
the
January
2004
proposal,
a
methodology
used
in
the
NOx
SIP
Call
(
67
FR
21868)
that
applied
State­
specific
growth
rates
for
heat
input
in
setting
State
budgets.
2
The
EPA,
in
the
SNPR,
noted
that
it
is
not
proposing
to
use
this
method
for
the
CAIR
because
we
believe
that
other
methods
are
reasonable,
and
that
methods
involving
State­
specific
growth
rates
present
certain
challenges
due
to
the
inherent
difficulties
in
predicting
State­
specific
growth
in
heat
input
over
a
lengthy
period,

especially
for
jurisdictions
that
are
only
a
part
of
a
larger
regional
electric
power
dispatch
region.
Several
commenters
stated
their
support
for
incorporating
growth,

believing
that
not
taking
growth
into
account
would
penalize
States
with
higher
growth.
However,
a
significant
number
of
commenters
stated
their
opposition
to
using
growth
in
setting
State
budgets,
noting
the
problems
that
arose
in
the
NOx
SIP
Call.
The
EPA
believes
that
setting
budgets
using
a
heat
input
approach,
without
a
growth
adjustment,
is
fair,

would
be
simpler
and
would
involve
less
risk
of
resulting
litigation.

c.
Final
Annual
State
NOx
Emission
Budgets
The
final
annual
State
Nox
emission
budgets
following
this
method
are
included
in
Table
V­
2
below.
Details
of
the
numbers
and
methodology
used
to
calculate
these
budgets
are
included
in
the
"
Regional
and
State
SO2
and
NOx
Emissions
Budgets"
Technical
Support
Document.

Table
V­
2.
Final
Annual
Electric
Generating
Units
NOx
Budgets
State
State
NOx
Budget
2009*
(
tons)
State
NOx
Budget
2015**
(
tons)
Alabama
69,020
57,517
District
of
Columbia
144
120
Florida
99,445
82,871
Georgia
66,321
55,268
Illinois
76,230
63,525
Indiana
108,935
90,779
Iowa
32,692
27,243
Kentucky
83,205
69,337
Louisiana
35,512
29,593
Maryland
27,724
23,104
Michigan
65,304
54,420
Minnesota
31,443
26,203
Mississippi
17,807
14,839
Missouri
59,871
49,892
New
York
45,617
38,014
North
Carolina
62,183
51,819
Ohio
108,667
90,556
Pennsylvania
99,049
82,541
South
Carolina
32,662
27,219
Tennessee
50,973
42,478
Texas
181,014
150,845
Virginia
36,074
30,062
West
Virginia
74,220
61,850
Wisconsin
40,759
33,966
Total
1,504,871
1,254,061
*
Annual
budget
for
NOx
tons
covered
by
allowances
for
2009­
2014.
**
Annual
budget
for
NOx
tons
covered
by
allowances
for
2015
and
thereafter.
d.
Use
of
Annual
NOx
Budgets
These
proposed
State
budgets
would
serve
as
effective
binding
caps
on
State
emissions,
if
States
chose
to
control
only
EGUs,
but
did
not
want
to
participate
in
the
trading
program.
For
States
controlling
both
EGUs
and
non­
EGUs
(
or
controlling
only
non­
EGUs),
these
budgets
would
be
compared
to
a
baseline
level
of
emissions
to
calculate
the
emissions
reductions
requirements
for
non­
EGUs
and
the
required
caps
for
EGUs.
This
process
is
described
in
more
detail
in
the
section
VII
discussion
on
SIP
approvability.

e.
NOx
Compliance
Supplement
Pool
As
is
discussed
in
section
II,
EPA
is
establishing
a
NOx
compliance
supplement
pool
of
198,494
tons,
which
would
result
in
a
total
compliance
supplement
pool
of
approximately
200,000
tons
of
NOx
when
combined
with
EPA's
proposed
rulemaking
to
include
Delaware
and
New
Jersey.
The
EPA
is
apportioning
the
compliance
supplement
pool
to
States
based
on
the
assumption
that
a
State's
need
for
allowances
from
the
pool
is
proportional
to
the
magnitude
of
the
State's
required
emissions
reductions
(
as
calculated
using
the
State's
base
case
emissions
and
annual
NOX
budget).
The
EPA
is
apportioning
the
200,000
tons
of
NOx
on
a
pro­
rata
basis,
based
on
each
State's
share
of
the
total
emissions
reductions
requirement
for
the
region
in
2009.
This
is
consistent
with
the
methodology
used
in
the
NOx
SIP
Call.

Table
V­
3
presents
each
State's
compliance
supplement
pool.
Table
V­
3.
State
NOx
Compliance
Supplement
Pools
(
tons)

State
Base
Case
2009
Emissions
2009
State
Annual
NOX
Budget
Reduction
Requirement
Compliance
Supplement
Pool*
Alabama
132,019
69,020
62,999
10,166
District
Of
Columbia
0
144
0
0
Florida
151,094
99,445
51,649
8,335
Georgia
143,140
66,321
76,819
12,397
Illinois
146,248
76,230
70,018
11,299
Indiana
233,833
108,935
124,898
20,155
Iowa
75,934
32,692
43,242
6,978
Kentucky
175,754
83,205
92,549
14,935
Louisiana
49,460
35,512
13,948
2,251
Maryland
56,662
27,724
28,938
4,670
Michigan
117,031
65,304
51,727
8,347
Minnesota
71,896
31,443
40,453
6,528
Mississippi
36,807
17,807
19,000
3,066
Missouri
115,916
59,871
56,045
9,044
New
York
45,145
45,617
0
0
North
Carolina
59,751
62,183
0
0
Ohio
263,814
108,667
155,147
25,037
Pennsylvania
198,255
99,049
99,206
16,009
South
Carolina
48,776
32,662
16,114
2,600
Tennessee
106,398
50,973
55,425
8,944
Texas
185,798
181,014
4,784
772
Virginia
67,890
36,074
31,816
5,134
West
Virginia
179,125
74,220
104,905
16,929
Wisconsin
71,112
40,759
30,353
4,898
CAIR
Region
Subtotal
198,494
Delaware
9,389
4,166
5,223
843
New
Jersey
16,760
12,670
4,090
660
Total
199,997
*
Note:
Rounding
to
the
nearest
whole
allowance
results
in
a
total
compliance
supplement
pool
of
199,997
tons.

B.
What
Is
the
Approach
for
Setting
State­
by­
State
Emissions
Reductions
Requirements
and
EGU
Budgets
for
States
with
NOx
Ozone
Season
Reduction
Requirements?
1.
States
Subject
to
Ozone­
Season
Requirements
In
the
NPR,
EPA
proposed
that
Connecticut
contributes
significantly
to
ozone
nonattainment
in
another
State,
but
not
to
fine
particle
nonattainment.
As
a
result
of
subsequent
air
quality
modeling,
EPA
has
also
found
that
Massachusetts,
New
Jersey,
Delaware
and
Arkansas
contribute
significantly
to
ozone
nonattainment
in
another
State,
but
not
to
fine
particle
nonattainment.
In
this
final
rule,
EPA
is
establishing
a
regionwide
ozone­
season
budget
for
all
States
that
contribute
significantly
to
ozone
nonattainment
in
another
State,
regardless
of
their
contribution
to
fine
particle
nonattainment.
The
following
25
States,
plus
the
District
of
Columbia,
are
found
to
contribute
significantly
to
ozone
nonattainment:
Alabama,
Arkansas,
Connecticut,

Delaware,
Florida,
Illinois,
Indiana,
Iowa,
Kentucky,

Louisiana,
Maryland,
Massachusetts,
Michigan,
Mississippi,

Missouri,
New
Jersey,
New
York,
North
Carolina,
Ohio,

Pennsylvania,
South
Carolina,
Tennessee,
Virginia,
West
Virginia,
and
Wisconsin.

These
States
are
subject
to
an
ozone
season
NOx
cap,

which
covers
the
5
months
of
May
through
September.
The
EPA
is
calculating
the
ozone
season
cap
level
for
the
25
States
plus
the
District
of
Columbia
region
by
multiplying
the
region's
ozone
season
heat
input
by
0.15
lb/
mmBtu
for
2009
and
0.125
lb/
mmBtu
for
2015.
Heat
input
for
the
region
was
estimated
by
looking
at
reported
ozone
season
Acid
Rain
heat
inputs
for
each
State
for
the
years
1999
through
2002,

and
selecting
the
single
year
highest
heat
input
for
each
State
as
a
whole.

As
is
the
case
for
the
annual
NOx
State
Budgets,
EPA
is
finalizing
an
approach
of
calculating
ozone
season
NOx
State
budgets
through
a
fuel­
adjusted
heat
input
basis.
State
budgets
would
be
determined
by
multiplying
State­
level
average
historic
ozone­
season
heat
input
data
(
summed
by
fuel)
by
different
adjustment
factors
for
the
different
fuels
(
1.0
for
coal,
0.4
for
gas,
and
0.6
for
oil).
The
total
ozone
season
State
budgets
are
then
determined
by
calculating
each
State's
share
of
total
fuel­
adjusted
heat
input,
and
multiplying
this
share
by
the
regionwide
budget.

The
budgets
for
these
States
in
2009
and
2015
are
included
in
Table
V­
4
below.

Table
V­
4.
Final
Seasonal
Electricity
Generating
Unit
NOx
Budgets
(
tons)

State
State
NOx
Budget
2009*
State
NOx
Budget
2015**
Alabama
32,182
26,818
Arkansas
11,515
9,596
Connecticut
2,559
2,559
Delaware
2,226
1,855
District
of
Columbia
112
94
Florida
47,912
39,926
Illinois
30,701
28,981
Indiana
45,952
39,273
Iowa
14,263
11,886
Kentucky
36,045
30,587
Louisiana
17,085
14,238
Maryland
12,834
10,695
Massachusetts
7,551
6,293
Michigan
28,971
24,142
Mississippi
8,714
7,262
Missouri
26,678
22,231
New
Jersey
6,654
5,545
New
York
20,632
17,193
North
Carolina
28,392
23,660
Ohio
45,664
39,945
Pennsylvania
42,171
35,143
South
Carolina
15,249
12,707
Tennessee
22,842
19,035
Virginia
15,994
13,328
West
Virginia
26,859
26,525
Wisconsin
17,987
14,989
Total
567,744
484,506
*
Seasonal
budget
for
NOx
tons
covered
by
allowances
for
2009­
2014.
For
States
that
have
lower
EGU
budgets
under
the
NOx
SIP
Call
than
their
2009
CAIR
budget,
table
V­
4
includes
their
SIP
Call
budget.
For
Connecticut,
the
NOx
SIP
Call
budget
is
also
used
for
2015
and
beyond.
**
Seasonal
budget
for
NOx
tons
covered
by
allowances
for
2015
and
thereafter.
