[Federal Register Volume 86, Number 82 (Friday, April 30, 2021)]
[Rules and Regulations]
[Pages 23054-23235]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05705]



[[Page 23053]]

Vol. 86

Friday,

No. 82

April 30, 2021

Part II





Environmental Protection Agency





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40 CFR Parts 51, 52, 78, et al.





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

  Federal Register / Vol. 86 , No. 82 / Friday, April 30, 2021 / Rules 
and Regulations  

[[Page 23054]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51, 52, 78, and 97

[EPA-HQ-OAR-2020-0272; FRL-10021-34-OAR]
RIN 2060-AU84


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

DATES: This final rule is effective on June 29, 2021.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-HQ-OAR-2020-0272. All documents in the docket are listed on the 
www.regulations.gov website. Although listed in the index, some 
information is not publicly available, e.g., Confidential Business 
Information or other information whose disclosure is restricted by 
statute. Certain other material, such as copyrighted material, is not 
placed on the internet and will be publicly available only in hard copy 
form. Publicly available docket materials are available electronically 
through www.regulations.gov.

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

SUPPLEMENTARY INFORMATION: 

Preamble Glossary of Terms and Abbreviations

    The following are abbreviations of terms used in the preamble.

4-step good neighbor framework 4-step framework
AEO Annual Energy Outlook
AQAT Air Quality Assessment Tool
AQM TSD Air Quality Modeling Technical Support Document
CAA or Act Clean Air Act
CAIR Clean Air Interstate Rule
CAMx Comprehensive Air Quality Model with Extensions
CBI Confidential Business Information
CEMS Continuous Emission Monitoring System(s)
CFR Code of Federal Regulations
CMDb Control Measures Database
CMV Commercial Marine Vehicle
CoST Control Strategy Tool
CRA Congressional Review Act
CSAPR Cross-State Air Pollution Rule
EGU Electric Generating Unit
EISA Energy Independence and Security Act
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
HDGHG Greenhouse Gas Emissions Standards and Fuel Efficiency 
Standards for Medium- and Heavy-Duty Engines and Vehicles
IC Internal Combustion
ICI Industrial, Commercial, and Institutional
ICR Information Collection Request
IPM Integrated Planning Model
iSIP Infrastructure State Implementation Plan
km Kilometer
lb/mmBtu Pounds per Million British Thermal Units
LEC Low Emission Combustion
LNB Low-NOX Burners
MJO Multi-Jurisdictional Organizations
mmBtu Million British Thermal Units
MOVES Motor Vehicle Emission Simulator
MSAT2 Mobile Source Air Toxic Rule
NAAQS National Ambient Air Quality Standard
NEI National Emission Inventory
NESHAP National Emission Standards for Hazardous Air Pollutants
NOX Nitrogen Oxides
NODA Notice of Data Availability
Non-EGU Non-electric Generating Unit
NSPS New Source Performance Standard
NUSA New Unit Set-Aside
OSAT/APCA Ozone Source Apportionment Technology/Anthropogenic 
Precursor Culpability Analysis
OMB Office of Management and Budget
OTC Ozone Transport Commission
OTR Ozone Transport Region
PEMS Predictive Emissions Monitoring System
PM2.5 Fine Particulate Matter
ppb Parts Per Billion
RACT Reasonably Available Control Technology
RIA Regulatory Impact Analysis
RICE Reciprocating Internal Combustion Engines
RRF Relative Response Factor
RTC Document Response to Comment Document
SCR Selective Catalytic Reduction
SIP State Implementation Plan
SMOKE Sparse Matrix Operator Kernel Emissions
SNCR Selective Non-catalytic Reduction

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SO2 Sulfur Dioxide
TIP Tribal Implementation Plan
TSD Technical Support Document
tpy Ton Per Year
ULNB Ultra-low NOX Burner
VOC Volatile Organic Compound
WRF Weather Research and Forecasting Model

Table of Contents

I. Executive Summary
    A. Purpose of Regulatory Action
    B. Summary of the Major Provisions of the Regulatory Action
    C. Costs and Benefits
II. General Information
    A. Does this action apply to me?
III. EPA's Legal Authority for the Final Rule
    A. Statutory Authority
    B. Prior Good Neighbor Rulemakings Addressing Regional Ozone
IV. Air Quality Issues Addressed and Overall Approach for the Final 
Rule
    A. The Interstate Ozone Transport Challenge
    1. Nature of Ozone and the Ozone NAAQS
    2. Ozone Transport
    3. Health and Environmental Effects
    B. Relationship Between This Regulatory Action and the 2015 
Ozone NAAQS
    C. Approach To Address the Remanded Transport Obligations for 
the 2008 Ozone NAAQS
    1. Events Affecting Application of the Good Neighbor Provision 
for the 2008 Ozone NAAQS
    2. FIP Authority for Each State Covered by the Final Rule
    3. The 4-Step Good Neighbor Framework
V. Analyzing Downwind Air Quality and Upwind-State Contributions
    A. Overview of Air Quality Modeling Platform
    B. Emission Inventories
    1. Foundation Emission Inventory Data Sets
    2. Development of Emission Inventories for EGUs
    3. Development of Emission Inventories for Non-EGU Point Sources
    4. Development of Emission Inventories for Onroad Mobile Sources
    5. Development of Emission Inventories for Commercial Marine 
Vessels
    6. Development of Emission Inventories for Other Nonroad Mobile 
Sources
    7. Development of Emission Inventories for Nonpoint Sources
    C. Air Quality Modeling To Identify Nonattainment and 
Maintenance Receptors
    D. Pollutant Transport From Upwind States
    1. Air Quality Modeling To Quantify Upwind State Contributions
    2. Application of Screening Threshold
VI. Quantifying Upwind-State NOX Reduction Potential To 
Reduce Interstate Ozone Transport for the 2008 NAAQS
    A. The Multi-Factor Test
    B. Identifying Levels of Control Stringency
    1. EGU NOX Mitigation Strategies
    2. Non-EGU NOX Mitigation Strategies
    3. Mobile Source NOX Mitigation Strategies
    C. Emission Reduction Potential of Control Stringencies
    1. EGU Emission Reduction Potential
    2. Non-EGU Emission Reduction Potential
    D. Assessing Cost, EGU and Non-EGU NOX Reductions, 
and Air Quality
    1. EGU Assessment
    2. Non-EGU Assessment
    3. Overcontrol Analysis
VII. Implementation of Emission Reductions
    A. Regulatory Requirements for EGUs
    B. Quantifying State Emissions Budgets
    C. Elements of New Trading Program
    1. Applicability
    2. State Budgets, Variability Limits, Assurance Levels, and 
Penalties
    3. Unit-Level Allocations of Emission Allowances
    4. Transitioning From Existing CSAPR NOX Ozone Season 
Group 2 Trading Program
    5. Compliance Deadlines
    6. Monitoring and Reporting
    7. Recordation of Allowances
    8. Conforming Revisions to Regulations for Existing Trading 
Programs
    D. Submitting a SIP
    1. SIP Option To Modify 2022 Allocations
    2. SIP Option To Modify Allocations in 2023 and Beyond
    3. SIP Revisions That Do Not Use the New Group 3 Trading Program
    4. No SIP Option for Additional States To Participate in the New 
Trading Program
    E. Title V Permitting
    F. Relationship to Other Emission Trading and Ozone Transport 
Programs
    1. Existing Trading Programs
    2. Title IV Interactions
    3. NOX SIP Call Interactions
VIII. Costs, Benefits, and Other Impacts of the Final Rule
IX. Summary of Changes to the Regulatory Text for the Federal 
Implementation Plans and Trading Programs
    A. Amended CSAPR Update FIP Provisions
    B. New CSAPR NOX Ozone Season Group 3 Trading Program 
Provisions
    C. Transitional Provisions
    D. Conforming Revisions, Corrections, and Clarifications to 
Existing Regulations
X. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act
    L. Determinations Under CAA Section 307(b)(1) and (d)

I. Executive Summary

    This final rule resolves the interstate transport obligations of 21 
states under the good neighbor provision of the Clean Air Act (CAA or 
the Act), CAA section 110(a)(2)(D)(i)(I), for the 2008 ozone National 
Ambient Air Quality Standards (NAAQS). The 2008 ozone NAAQS is an 8-
hour standard that was set at 75 parts per billion (ppb).\1\ The U.S. 
Environmental Protection Agency (EPA or the Agency) published the 
Cross-State Air Pollution Rule (CSAPR) Update on October 26, 2016, 
which, among other things, partially addressed the interstate transport 
of emissions from 21 states with respect to the 2008 ozone NAAQS.\2\ 
See 81 FR 74504. On December 21, 2018, EPA published the CSAPR Close-
Out Rule, which found that the CSAPR Update was a complete remedy for 
20 of those states based on air quality analysis of the year 2023.\3\
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    \1\ See 73 FR 16436 (March 27, 2008).
    \2\ In the CSAPR Update, EPA found that the finalized Tennessee 
emission budget fully addressed Tennessee's good neighbor obligation 
with respect to the 2008 ozone NAAQS. See 81 FR 74504, 74508 n. 19 
(Oct. 26, 2016).
    \3\ See 83 FR 65878 (Dec. 21, 2018).
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    On September 13, 2019, the United States Court of Appeals for the 
District of Columbia Circuit (D.C. Circuit) remanded the CSAPR Update, 
concluding that it was invalid in one respect because it unlawfully 
allowed upwind states to continue their significant contributions to 
downwind air quality problems beyond the statutory dates by which 
downwind States must demonstrate their attainment of ozone air quality 
standards. Wisconsin v. EPA, 938 F.3d 303, 318-20 (D.C. Cir. 2019) 
(Wisconsin) (per curiam); see also id. 336-37 (concluding that remand 
without vacatur was appropriate). Subsequently, on October 1, 2019, in 
a judgment order, the D.C. Circuit vacated the CSAPR Close-Out on the 
same grounds on which it had remanded without vacatur the CSAPR Update 
in Wisconsin. New York v. EPA, 781 Fed. App'x 4, 7 (D.C. Cir. 2019) 
(New York). The court found the CSAPR Close-Out inconsistent with the 
Wisconsin holding because the rule analyzed the year 2023 rather than 
2021 and failed to demonstrate that it was an impossibility to address 
significant contribution by the 2021 Serious area attainment date 
(``the next applicable attainment date''). To address the Wisconsin and 
New York decisions, EPA proposed this rule in the Federal

[[Page 23056]]

Register on October 30, 2020 to revise the CSAPR Update (85 FR 
68964).\4\
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    \4\ On July 28, 2020, the U.S. District Court for the Southern 
District of New York issued a decision establishing a deadline of 
March 15, 2021, for EPA to issue a final rule fully resolving good 
neighbor obligations under the 2008 ozone NAAQS for seven upwind 
states. New Jersey v. Wheeler, No. 1:20-cv-01425 (S.D.N.Y. July 28, 
2020).
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    In this final rule, in accordance with Wisconsin and New York, EPA 
has aligned its analysis and the implementation of emission reductions 
required to address significant contribution with the 2021 ozone 
season, which corresponds to the July 20, 2021 Serious area attainment 
date for the 2008 ozone NAAQS. EPA has further determined which 
emission reductions are impossible to achieve by the 2021 attainment 
date and whether any such additional emission reductions should be 
required beyond that date. See Wisconsin, 938 F.3d at 320; New York, 
781 Fed. App'x at 7.
    In this action on remand, EPA is not reopening any determinations, 
findings, or statutory or regulatory interpretations that are not 
required to address the Wisconsin remand, unless the Agency has 
explicitly so stated. This final action addressing the remand of the 
CSAPR Update in Wisconsin also has the effect of addressing the 
outstanding obligations that resulted from the D.C. Circuit's vacatur 
of the CSAPR Close-Out in New York. See New York, 781 Fed. App'x at 7.

A. Purpose of the Regulatory Action

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

 Table I.A-1--List of 22 Covered States for the 2008 8-Hour Ozone NAAQS
                           in the CSAPR Update
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                                  State
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 Alabama
 Arkansas
 Illinois
 Indiana
 Iowa
 Kansas
 Kentucky
 Louisiana
 Maryland
 Michigan
 Mississippi
 Missouri
 New Jersey
 New York
 Ohio
 Oklahoma
 Pennsylvania
 Tennessee
 Texas
 Virginia
 West Virginia
 Wisconsin
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    In response to the D.C. Circuit's remand of the CSAPR Update in 
Wisconsin and the court's vacatur of the CSAPR Close-Out in New York, 
this rule finds that 12 of the 22 states listed in Table I.A-1 require 
further ozone season NOX emission reductions to address the 
good neighbor provision as to the 2008 ozone NAAQS. As such, EPA is 
promulgating new or revised FIPs for these states that include new EGU 
NOX ozone season emission budgets, with implementation of 
these emission budgets beginning with the 2021 ozone season.\11\ The 12 
states for which EPA is promulgating new or revised FIPs to reduce 
interstate ozone transport as to the 2008 ozone NAAQS in this 
rulemaking are listed in Table I.A-2.
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    \11\ As discussed in section IV.C.2.c., in 2018 EPA approved a 
SIP revision for Indiana replacing the state's CSAPR Update FIP with 
equivalent state regulations. This SIP revision, like the CSAPR 
Update FIP it replaced, was partial in nature. EPA is issuing a new 
FIP rather than a revised FIP for Indiana in this action.

 Table I.A-2--List of 12 Covered States for the 2008 8-Hour Ozone NAAQS
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                                  State
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 Illinois
 Indiana
 Kentucky
 Louisiana
 Maryland
 Michigan

[[Page 23057]]

 
 New Jersey
 New York
 Ohio
 Pennsylvania
 Virginia
 West Virginia
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    The enhanced control stringency represented by the new EGU NOx 
ozone season emission budgets for these states will take effect 60 days 
after publication in the Federal Register, which corresponds to the 
effective date of the rule as a whole.\12\ This date will fall before 
the July 20, 2021, Serious area attainment date for the 2008 ozone 
NAAQS. EPA has determined that it is feasible for the EGUs subject to 
this rule to comply with the enhanced stringency of the budgets and 
that there is sufficient time before the effective date to prepare to 
meet these budgets by either undertaking the emission control measures 
EPA has identified in this action, or by taking advantage of compliance 
flexibilities available through the new interstate emissions trading 
program EPA is establishing.\13\ As explained in greater detail below, 
due to timing considerations, one aspect of EPA's selected EGU control 
stringency--installation of state-of-the-art combustion controls--will 
not take effect until the 2022 ozone season, and this is accounted for 
in EPA's budget-setting process.
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    \12\ As discussed in section VII.C.4.a, EPA is ensuring that the 
enhanced control stringency represented by the new budgets will not 
take effect until the rule's effective date by issuing supplemental 
allowances for the portion of the 2021 ozone season occurring before 
the rule's effective date.
    \13\ In general, throughout this notice, where EPA refers to 
``addressing good neighbor obligations,'' ``implementing 
reductions,'' or ``compliance feasibility'' by or in the 2021 ozone 
season (or similar formulations), this does not refer to the 
beginning of the ozone season on May 1, but rather to the effective 
date of this action, which is when the enhanced control stringency 
represented by the new EGU NOx ozone season emission budgets will 
take effect.
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    EPA is further adjusting these states' emission budgets for each 
ozone season from 2022 to 2024 to incentivize ongoing operation of 
identified emission controls to address significant contribution, until 
such time that air quality projections demonstrate resolution of the 
downwind nonattainment and/or maintenance problems for the 2008 ozone 
NAAQS. No further budget adjustments will be made after that time 
(i.e., after the 2024 ozone season). EPA is implementing the new state-
level ozone season emission budgets through a new CSAPR NOX 
Ozone Season Group 3 Trading Program. Based on EPA's assessment of 
remaining air quality issues and additional emission controls, EPA is 
further determining that these NOX emission reductions fully 
eliminate these states' significant contribution to nonattainment and 
interference with maintenance of the 2008 ozone NAAQS in other states.
    As discussed in more detail in section IV.C.2.b below, for one 
state, Kentucky, EPA is making an error correction under CAA section 
110(k)(6) of its June 2018 approval of the Commonwealth's SIP, which 
had concluded that the CSAPR Update was a complete remedy based on 
modeling of the 2023 analytic year. EPA finds that the basis for that 
conclusion was invalidated by the decisions in Wisconsin and New York. 
With finalization of this error correction and disapproval of 
Kentucky's SIP, Kentucky's good neighbor obligations are outstanding. 
In light of the Wisconsin remand of Kentucky's FIP and EPA's error 
correction, the Agency has the necessary authority to amend the CSAPR 
Update FIP for Kentucky.
    For the nine remaining states with FIPs promulgated under the CSAPR 
Update that EPA previously found partially addressed good neighbor 
obligations for the 2008 ozone NAAQS (Alabama, Arkansas, Iowa, Kansas, 
Mississippi, Missouri, Oklahoma, Texas, and Wisconsin), EPA's updated 
air quality and contributions analysis shows that these states are not 
linked to any downwind air quality problems in 2021.\14\ Therefore, EPA 
finds that the existing CSAPR Update FIPs (or the SIP revisions later 
approved to replace the CSAPR Update FIPs) for these states satisfy 
their good neighbor obligations for the 2008 ozone NAAQS.\15\ 
Consequently, EPA is not requiring additional emission reductions from 
sources in these states in this final rule.
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    \14\ EPA's use of a contribution threshold to determine, without 
further analysis of potential emission reduction opportunities, that 
certain states have no remaining good neighbor obligations with 
respect to a given NAAQS is part of the analytic approach that was 
followed in the CSAPR rulemaking and upheld by the Supreme Court. 
See EPA v. EME Homer City Generation, L.P., 572 U.S. 489, 521-22 
(2014).
    \15\ As discussed in section IV.C.2.c., in 2017 and 2019 EPA 
approved SIP revisions for Alabama and Missouri replacing the 
states' CSAPR Update FIPs with equivalent state regulations. These 
SIP revisions, like the CSAPR Update FIPs they replaced, were 
partial in nature. EPA is therefore determining in this action that 
the states' existing SIP provisions satisfy these states' good 
neighbor obligations for the 2008 ozone NAAQS.
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B. Summary of the Major Provisions of the Regulatory Action

    To reduce interstate ozone transport under the authority provided 
in CAA section 110(a)(2)(D)(i)(I), this rule further limits ozone 
season (May 1 through September 30) NOX emissions from EGUs 
in 12 states using the same framework EPA used in the CSAPR and other 
good neighbor rules (the 4-step good neighbor framework or 4-step 
framework). The 4-step good neighbor framework provides a process to 
address the requirements of the good neighbor provision for ground-
level ozone NAAQS: (1) Identifying downwind receptors that are expected 
to have problems attaining or maintaining the NAAQS; (2) determining 
which upwind states contribute to these identified problems in amounts 
sufficient to ``link'' them to the downwind air quality problems (i.e., 
here, a contribution threshold equal to or greater than 1 percent of 
the NAAQS); (3) for states linked to downwind air quality problems, 
identifying upwind emissions that significantly contribute to downwind 
nonattainment or interfere with downwind maintenance of the NAAQS; and 
(4) for states that are found to have emissions that significantly 
contribute to nonattainment or interfere with maintenance of the NAAQS 
downwind, implementing the necessary emission reductions through 
enforceable measures. In this final rule, EPA applies this 4-step 
framework to respond to the D.C. Circuit's remand in Wisconsin and to 
revise the CSAPR Update with respect to the 2008 ozone NAAQS.
    In order to apply the first step of the 4-step framework to the 
2008 ozone NAAQS, EPA performed air quality modeling coupled with 
ambient measurements in an interpolation technique to project ozone 
concentrations at air quality monitoring sites in 2021.\16\ 
(``Interpolation'' is a

[[Page 23058]]

numerical method for constructing new data points within the range of a 
discrete set of known data points, in this case the known data are the 
2016 measured-based and 2023 modeling-based ozone concentrations.) EPA 
evaluated 2021 projected ozone concentrations at individual monitoring 
sites and considered current ozone monitoring data at these sites to 
identify receptors that are anticipated to have problems attaining or 
maintaining the 2008 ozone NAAQS. Such monitoring sites are referred to 
as nonattainment and/or maintenance receptors. Based on EPA's analysis, 
the Agency identified four nonattainment and/or maintenance receptors 
in 2021 (i.e., three receptors in Connecticut and one in Texas). EPA 
received comments on its approach to identify nonattainment and/or 
maintenance receptors in 2021. A summary of these comments, as well as 
EPA's responses, can be found in section V and in the Response to 
Comments (RTC) document for this final rule.
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    \16\ The next relevant attainment date for the 2008 ozone NAAQS 
is July 20, 2021, for Serious nonattainment areas. 80 FR 12264, 
12268; 40 CFR 51.1103. As discussed in section V, historically, EPA 
has considered the full ozone season prior to the attainment as 
supplying an appropriate analytic year for assessing good neighbor 
obligations. While this would be 2020 for a July 2021 attainment 
date (which falls within the 2021 ozone season running from May 1 to 
September 30), in this circumstance, because the 2020 ozone season 
is wholly in the past, it is appropriate to focus on 2021 in order 
to address good neighbor obligations to the extent possible by the 
2021 attainment date. It would not be appropriate to select an 
analytical year that is wholly in the past, because the agency 
interprets the good neighbor provision as forward looking. See 85 FR 
at 68981; see also Wisconsin, 938 F.3d at 322. Consequently, in this 
action EPA uses the analytic year 2021.
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    To apply the second step of the framework, EPA used an air quality 
modeling-based technique to quantify the contributions in 2021 from 
upwind states to ozone concentrations at individual monitoring sites, 
as described in section V. Once quantified, EPA then evaluated these 
contributions relative to a screening threshold of 1 percent of the 
NAAQS (i.e., 0.75 ppb) for those monitoring sites identified as 
nonattainment and/or maintenance receptors in step 1. States with 
contributions that equal or exceed 1 percent of the NAAQS were 
identified as warranting further analysis for significant contribution 
to nonattainment or interference with maintenance. States with 
contributions below 1 percent of the NAAQS were considered to not 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS in downwind states. Based on EPA's updated air quality and 
contribution analysis using 2021 as the analytic year, EPA is 
determining that the following 12 states have contributions that equal 
or exceed 1 percent of the 2008 ozone NAAQS, and thereby warrant 
further analysis for significant contribution to nonattainment or 
interference with maintenance: Illinois, Indiana, Kentucky, Louisiana, 
Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, 
and West Virginia. EPA received comments on its approach to quantify 
interstate contributions and the use of a 1 percent of the NAAQS 
screening threshold. A summary of these comments, as well as EPA's 
responses, can be found in section V and in the RTC document for this 
final rule.
    At the third step of the 4-step framework, EPA applied the multi-
factor test used in the CSAPR Update, which evaluates cost, available 
emission reductions, and downwind air quality impacts to determine the 
amount of linked upwind states' emissions that ``significantly'' 
contribute to downwind nonattainment or maintenance receptors. In this 
action, EPA applied the multi-factor test to both EGU and non-EGU 
source categories and assessed potential emission reductions in all 
years for which there is a potential remaining interstate ozone 
transport problem (i.e., through 2025), in order to ensure a full 
remedy in accordance with the Wisconsin decision.
    In the proposed rule, EPA identified a control stringency that 
reflects the optimization of existing selective catalytic reduction 
(SCR) controls and installation of state-of-the-art NOX 
combustion controls at EGUs, represented by a cost of $1,600 per ton of 
NOX reduced. In this final rule, EPA is determining that 
optimization of existing selective non-catalytic reduction (SNCR) 
controls should also be included in EPA's identified EGU control 
stringency. As discussed in further detail in Section VI, EPA adjusted 
its representative cost for optimizing existing SNCR controls to $1,800 
per ton in response to comments received on the proposed rule, as well 
as further EPA review of available information. EPA views $1,600 per 
ton for optimization of existing SCR controls and installation of 
state-of-the-art NOX combustion controls and $1,800 per ton 
for optimization of existing SNCRs as comparable for policy purposes. 
In addition, other considerations beyond marginal cost and air quality 
improvement, as outlined in the section VI.D discussion of the multi-
factor test, support inclusion of emission reduction potential from 
optimization of existing SNCR controls in EPA's identified EGU control 
stringency in this rule.
    At the selected control stringency in this final rule, downwind 
ozone air quality improvements continue to be maximized relative to a 
representative marginal cost. That is, the ratio of emission reductions 
to marginal cost and the ratio of ozone improvements to marginal cost 
are maximized relative to the other control stringency levels 
evaluated. EPA finds that these cost-effective EGU NOX 
reductions will make meaningful and timely improvements in downwind 
ozone air quality to address interstate ozone transport for the 2008 
ozone NAAQS, as discussed in section VI.D.1 below. Further, this 
evaluation shows that emission budgets reflecting the optimization of 
existing SCRs and SNCRs, and installation of state-of-the-art 
NOX combustion controls at EGUs do not over-control upwind 
states' emissions relative to either the downwind air quality problems 
to which they are linked at step 1 or the 1 percent contribution 
threshold that triggers further evaluation at step 2 of the 4-step 
framework.
    EPA notes that two of these EGU emission controls (optimization of 
existing SCR controls and installation of state-of-the-art 
NOX combustion controls) were also selected in the CSAPR 
Update for the 2017 ozone season, and which at that time EPA 
characterized as only a partial remedy. For this rule, EPA extends its 
evaluation of the reduction potential from these emission controls to 
years beyond 2017 in order to assess a full remedy. EPA's updated 
analysis, as discussed in more detail in section VI, leads the Agency 
to find that these emission controls can provide additional cost-
effective emission reductions for the 2021 through 2024 ozone seasons. 
While EPA's analysis indicates that the majority of EGUs implemented 
these emission controls in response to the CSAPR Update, changes in the 
power sector since the 2017 ozone season and updated air quality and 
contribution analysis show that there is a demonstrated need to update 
the emission budgets for these 12 states to incentivize ongoing 
operation of identified emission controls to fully eliminate 
significant contribution and interference with maintenance. Likewise, 
EPA finds that many EGUs are already operating their existing SNCR 
controls to some extent but that additional cost-effective emission 
reductions for the 2021 through 2024 ozone seasons are available. Taken 
together, the emission budgets established in this final rule reflect 
EPA's identified EGU control stringency of optimization of all existing 
post-combustion controls (SCRs and SNCRs) by the 2021 ozone season, and 
the installation of state-of-the-art NOX combustion controls 
by the 2022 ozone season.
    For non-EGU industry sectors and emissions sources, EPA applied the 
step 3 multi-factor test to determine whether any emission reductions 
should be required from non-EGU sources to address significant 
contribution under the 2008 ozone NAAQS. EPA acknowledged in the 
proposed rule that its current datasets with information on emissions, 
existing controls on

[[Page 23059]]

emissions sources, emission-reduction potential, and air quality 
impacts for these sources are not as well developed as the datasets it 
has for EGUs. Nonetheless, using the best information currently 
available to the Agency, including some additional analysis conducted 
between the proposed rule and this final action, EPA is concluding that 
there are relatively fewer emission reductions available at a cost 
threshold comparable to the cost threshold selected for EGUs. In EPA's 
reasoned judgment, the Agency concludes such reductions are estimated 
to have a much smaller effect on any downwind receptor in the year by 
which EPA finds such controls could be installed. For these reasons, 
EPA is finding that limits on ozone season NOX emissions 
from non-EGU sources are not required to eliminate significant 
contribution or interference with maintenance under the 2008 ozone 
NAAQS (see section VI.D.2).
    Based on EPA's analysis at step 3, the Agency is promulgating EGU 
NOX ozone season emission budgets developed using a uniform 
control stringency of optimization of existing SCRs and SNCRs, and 
installation of state-of-the-art NOX combustion controls. 
EPA is determining that with implementation of this control stringency, 
the 12 states in Table I.A-2 will have fully addressed significant 
contribution under the good neighbor provision for the 2008 ozone 
NAAQS. EPA is aligning implementation of emission budgets with relevant 
attainment dates for the 2008 ozone NAAQS, consistent with CAA 
requirements and the D.C. Circuit's decision in Wisconsin v. EPA.\17\ 
As EPA's final 2008 Ozone NAAQS SIP Requirements Rule \18\ established 
the attainment date of July 20, 2021, for ozone nonattainment areas 
currently designated as Serious, EPA is establishing emission budgets 
and implementation of these emission budgets starting with the 2021 
ozone season as shown in Table I.B-1.\19\
---------------------------------------------------------------------------

    \17\ See 938 F.3d 303, 320 (D.C. Cir. 2019) (holding that EPA 
must align interstate transport compliance deadlines with downwind 
attainment deadlines unless EPA can demonstrate an impossibility or 
other necessity).
    \18\ 80 FR 12264, 12268; 40 CFR 51.1103.
    \19\ As discussed in section VII.C.4.a, EPA is ensuring that the 
enhanced control stringency represented by the new budgets will not 
take effect until the rule's effective date by issuing supplemental 
allowances for the portion of the 2021 ozone season occurring before 
the rule's effective date. Those supplemental allowances are not 
reflected in the 2021 Budget column in Table I.B-1.

                               Table I.B-1--EGU NOX Ozone Season Emission Budgets
                                            [Ozone Season NOX Tons] *
----------------------------------------------------------------------------------------------------------------
                      State                         2021 Budget     2022 Budget     2023 Budget     2024 Budget
----------------------------------------------------------------------------------------------------------------
Illinois........................................           9,102           9,102           8,179           8,059
Indiana.........................................          13,051          12,582          12,553           9,564
Kentucky........................................          15,300          14,051          14,051          14,051
Louisiana.......................................          14,818          14,818          14,818          14,818
Maryland........................................           1,499           1,266           1,266           1,348
Michigan........................................          12,727          12,290           9,975           9,786
New Jersey......................................           1,253           1,253           1,253           1,253
New York........................................           3,416           3,416           3,421           3,403
Ohio............................................           9,690           9,773           9,773           9,773
Pennsylvania....................................           8,379           8,373           8,373           8,373
Virginia........................................           4,516           3,897           3,980           3,663
West Virginia...................................          13,334          12,884          12,884          12,884
                                                 ---------------------------------------------------------------
    Total.......................................         107,085         103,705         100,526          96,975
----------------------------------------------------------------------------------------------------------------
* Note--The 2022 and beyond budgets incorporate the installation of state-of-the-art NOX combustion controls,
  whereas the 2021 budgets do not. Additionally, the 2024 emissions budget applies to 2024 and each year
  thereafter.

    EPA further determined which emission reductions are impossible to 
achieve by the 2021 attainment date and whether any such additional 
emission reductions should be required beyond that date.\20\ See 
Wisconsin, 938 F.3d at 320. EPA estimates that one part of the selected 
control stringency--installation of state-of-the-art NOX 
combustion controls--requires approximately one to six months depending 
on the unit. Recognizing that the final rule will become effective 
slightly after the start of the 2021 ozone season, EPA determined it is 
not possible to install state-of-the-art NOX combustion 
controls on a regional scale by the 2021 ozone season. Therefore, the 
2021 ozone season emission budgets reflect only the optimization of 
existing SCR and SNCR controls at the affected EGUs, but the emission 
budgets for the 2022 ozone season and beyond reflect both the continued 
optimization of existing SCR and SNCR controls and installation of 
state-of-the-art NOX combustion controls. Detailed 
installation-timing information for this technology is available in 
section VI.B and the EGU NOX Mitigation Strategies Final 
Rule TSD.
---------------------------------------------------------------------------

    \20\ As described in detail in sections VI.B and VI.C, some 
mitigation efforts that require the installation of significant new 
plant hardware (e.g., combustion control upgrade, selective 
catalytic reduction, and non-selective catalytic reduction) are not 
possible by the 2021 attainment date. However, EPA factored some of 
these measures (i.e., combustion controls) into its quantification 
of significant contribution starting at the later date of the start 
of the 2022 ozone season.
---------------------------------------------------------------------------

    As discussed in section VI.D.1, EPA's air quality projections 
anticipate that with the implementation of the identified control 
stringency for EGUs, downwind nonattainment and maintenance problems 
for the 2008 ozone NAAQS will persist through the 2024 ozone season. 
Therefore, EPA is adjusting emission budgets for upwind states that 
remain linked to downwind nonattainment and maintenance problems 
through the 2024 ozone season to incentivize the continued optimization 
of existing SCR and SNCR controls, and installation of state-of-the-art 
NOX combustion controls. The 2024 emission budgets will then 
continue to apply in each year thereafter.
    To apply the fourth step of the 4-step framework (i.e., 
implementation), EPA is including enforceable measures in the 
promulgated FIPs to achieve the required emission reductions in each of 
the 12 states. Specifically, the FIPs require power plants in the 12 
states to participate in a new CSAPR NOX Ozone Season Group 
3 Trading Program that largely replicates the existing CSAPR 
NOX Ozone Season Group 2 Trading

[[Page 23060]]

Program with the main differences being the geography and budget 
stringency. This final rule leaves unchanged the budget stringency of 
the existing CSAPR NOX Ozone Season Group 1 and Group 2 
trading programs for the states that remain covered by those programs.
    EPA is finalizing the proposed feature of the budget-setting 
process in which budgets are adjusted in 2022, 2023, and 2024 to 
account for future unit retirements and construction of new units that 
are known with sufficient certainty as of this final action. As 
discussed in section VII.C.3.b, in response to comments, EPA has made 
the methodology for allocating allowances to existing units in this 
final rule more consistent with the budget-setting process by 
eliminating allocations to units following their retirements in 
instances where the future retirements were scheduled in advance with 
sufficient certainty to be taken into account in the budget-setting 
process.
    As proposed, to promote compliance flexibility without relaxing the 
program stringency identified as appropriate to address states' 
obligations under CAA section 110(a)(2)(D)(i)(I), EPA is creating a 
limited initial bank of allowances for use in the new Group 3 trading 
program by converting allowances banked in 2017-2020 under the existing 
Group 2 trading program at a formula-based conversion ratio. The target 
bank amount is based on the sum of the states' ``variability limits''--
that is, the amounts by which emissions from a given state's units can 
exceed the state's emission budget before incurring a penalty surrender 
ratio. As discussed in section VII.C.4.b, in response to comments 
requesting greater certainty, in the final rule EPA has modified the 
proposed conversion ratio formula so as to yield an expected fixed 
conversion ratio of 8:1 (i.e., eight Group 2 allowances must be 
exchanged for each Group 3 allowance). Participation in the conversion 
process is mandatory for the sources in states covered by the Group 3 
trading program and, if the Group 3 sources' accounts collectively do 
not hold enough Group 2 allowances to exchange for the entire target 
bank amount, for holders of Group 2 allowances in non-source accounts 
as well.\21\
---------------------------------------------------------------------------

    \21\ Compliance accounts of sources in states that continue to 
be covered by the existing Group 2 trading program will not be 
included in the conversion process.
---------------------------------------------------------------------------

    As discussed in section VII.C.4.c, the final rule also provides a 
second opportunity for sources to create an additional limited number 
of Group 3 allowances through the voluntary conversion of additional 
Group 2 allowances at an 18:1 conversion ratio (known as a ``safety 
valve''). Any 2017-2020 Group 2 allowances that have not already been 
exchanged for Group 3 allowances through the process of creating the 
initial bank may be used to obtain additional Group 3 allowances 
through the safety valve mechanism. The availability of the starting 
bank and any additional allowances converted using this ``safety 
valve'' ensures that compliance with the rule is feasible and addresses 
any market liquidity concerns raised by commenters.
    The remainder of this preamble is organized as follows: section III 
describes EPA's legal authority for this final action; section IV 
describes the human health and environmental context, as well as EPA's 
approach for addressing interstate transport for the 2008 ozone NAAQS; 
section V describes EPA's assessment of downwind receptors of concern 
and upwind state ozone contributions to those receptors, including the 
air quality modeling platform and emission inventories that EPA used; 
section VI describes EPA's application of the multifactor test at step 
3 of the 4-step framework to EGU and non-EGU sources, quantification of 
upwind state obligations in the form of final EGU NOX 
emission budgets, and assessment of overcontrol; section VII details 
the implementation requirements including key elements of the CSAPR 
NOX Ozone Season Group 3 Trading Program and deadlines for 
compliance; section VIII describes the expected costs, benefits, and 
other impacts of this final rule; section IX discusses changes to the 
existing regulatory text; and section X discusses the statutes and 
executive orders affecting this final rule. Each section includes a 
summary of the principal comments received with respect to that topic, 
as well as EPA's responses. The Revised Cross State Air Pollution 
Update Rule--Response to Comment document (RTC), which includes a 
compilation of all comments received and EPA's responses, has been 
included in the docket for this action.

C. Costs and Benefits

    A summary of the key results of the cost-benefit analysis that was 
prepared for this final rule is presented in Table I.C-1. Table I.C-1 
presents estimates of the present values (PV) and equivalent annualized 
values (EAV), calculated using discount rates of 3 and 7 percent as 
directed by OMB's Circular A-4, of the health benefits, climate 
benefits, compliance costs, and net benefits of the final rule, in 2016 
dollars, discounted to 2021. The estimated net benefits are the 
estimated benefits minus the estimated costs of the final rule.

 Table I.C-1--Estimated Health Benefits, Climte Benefits, Compliance Costs, and Net Benefits of the Final Rule,
                                                2021 Through 2040
                                      [Millions 2016$, discounted to 2021]
----------------------------------------------------------------------------------------------------------------
                                                3% Discount rate                      7% Discount rate
----------------------------------------------------------------------------------------------------------------
Present Value:
    Health Benefits b..............  $4,800 and $37,000...................  $3,200 and $25,000.
    Climate Benefits b.............  $4,400...............................  $4,400.
    Compliance Costs c.............  $370.................................  $260.
                                    ----------------------------------------------------------------------------
        Net Benefits...............  $8,800 and $41,000...................  $7,300 and $29,000.
                                    ----------------------------------------------------------------------------
Equivalent Annualized Value:
    Health Benefits................  $320 and $2,500......................  $300 and $2,400.
    Climate Benefits...............  $290.................................  $290.
    Compliance Costs...............  $25..................................  $25.
                                    ----------------------------------------------------------------------------
        Net Benefits...............  $590 and $2,800......................  $570 and $2,700.
----------------------------------------------------------------------------------------------------------------
a Numbers may not sum due to independent rounding.

[[Page 23061]]

 
b The health benefits are associated with several point estimates and are presented at real discount rates of 3
  and 7 percent. The two benefits estimates are separated by the word ``and'' to signify that they are two
  separate estimates. The estimates do not represent lower- and upper-bound estimates and should not be summed.
  Climate benefits are based on changes (reductions) in CO2 emissions and are calculated using four different
  estimates of the social cost of carbon (SC-CO2) (model average at 2.5 percent, 3 percent, and 5 percent
  discount rates; 95th percentile at 3 percent discount rate). For the presentational purposes of this table, we
  show the climate benefits associated with the average SC-CO2 at a 3 percent discount rate, but the Agency does
  not have a single central SC-CO2 point estimate. We emphasize the importance and value of considering the
  benefits calculated using all four SC-CO2 estimates; the additional benefit estimates are presented in Table
  VIII.5 in Section VIII. As discussed in Chapter 5 of the Regulatory Impact Analysis for the Final Revised
  Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, a consideration of climate benefits calculated
  using discount rates below 3 percent, including 2 percent and lower, are also warranted when discounting
  intergenerational impacts.
cTo estimate these annualized costs, EPA uses a conventional and widely accepted approach that applies a capital
  recovery factor (CRF) multiplier to capital investments and adds that to the annual incremental operating
  expenses. Annual costs were calculated using a 4.25% real discount rate consistent with the rate used in IPM's
  objective function for cost-minimization.

    As shown in Table I.C-1, the PV of the health benefits of this 
final rule, discounted at a 3-percent discount rate, is estimated to be 
about $4,800 million and $37,000 million, with an EAV of about $320 
million and $2,500 million. At a 7-percent discount rate, the PV of the 
health benefits is estimated to be $3,200 million and $25,000 million, 
with an EAV of about $300 million and $2,400 million. The two health 
benefits estimates for each discount rate reflect alternative ozone and 
PM2.5 mortality risk estimates. The PV of the climate 
benefits of this final rule, discounted at a 3-percent rate, is 
estimated to be about $4,400 million, with an EAV of about $290 
million. The PV of the compliance costs, discounted at a 3-percent 
rate, is estimated to be about $370 million, with an EAV of about $25 
million. At a 7-percent discount rate, the PV of the compliance costs 
is estimated to be about $260 million, with an EAV of about $25 
million.

II. General Information

A. Does this action apply to me?

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

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

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
are regulated by this action. Other types of entities not listed in the 
table could also be regulated. To determine whether your EGU entity is 
regulated by this action, you should carefully examine the 
applicability criteria found in 40 CFR 97.1004, as promulgated in this 
final action. If you have questions regarding the applicability of this 
action to a particular entity, consult the person listed in the FOR 
FURTHER INFORMATION CONTACT section.

III. EPA's Legal Authority for the Final Rule

A. Statutory Authority

    The statutory authority for this final action is provided by the 
CAA as amended (42 U.S.C. 7401 et seq.). Specifically, sections 110 and 
301 of the CAA provide the primary statutory underpinnings for this 
action. The most relevant portions of CAA section 110 are subsections 
110(a)(1), 110(a)(2) (including 110(a)(2)(D)(i)(I)), 110(c)(1), and 
110(k)(6).
    CAA section 110(a)(1) provides that states must make SIP 
submissions ``within 3 years (or such shorter period as the 
Administrator may prescribe) after the promulgation of a national 
primary ambient air quality standard (or any revision thereof),'' and 
that these SIP submissions are to provide for the ``implementation, 
maintenance, and enforcement'' of such NAAQS.\22\ The statute directly 
imposes on states the duty to make these SIP submissions, and the 
requirement to make the submissions is not conditioned upon EPA taking 
any action other than promulgating a new or revised NAAQS.\23\
---------------------------------------------------------------------------

    \22\ 42 U.S.C. 7410(a)(1).
    \23\ See EPA v. EME Homer City Generation, L.P., 572 U.S. 489, 
509-10 (2014).
---------------------------------------------------------------------------

    EPA has historically referred to SIP submissions made for the 
purpose of satisfying the applicable requirements of CAA sections 
110(a)(1) and 110(a)(2) as ``infrastructure SIP'' or ``iSIP'' 
submissions. CAA section 110(a)(1) addresses the timing and general 
requirements for iSIP submissions, and CAA section 110(a)(2) provides 
more details concerning the required content of these submissions.\24\ 
It includes a list of specific elements that ``[e]ach such plan'' 
submission must address.\25\
---------------------------------------------------------------------------

    \24\ 42 U.S.C. 7410(a)(2).
    \25\ EPA's general approach to infrastructure SIP submissions is 
explained in greater detail in individual notices acting or 
proposing to act on state infrastructure SIP submissions and in 
guidance. See, e.g., Memorandum from Stephen D. Page on Guidance on 
Infrastructure State Implementation Plan (SIP) Elements under Clean 
Air Act Sections 110(a)(1) and 110(a)(2) (Sept. 13, 2013).
---------------------------------------------------------------------------

    CAA section 110(c)(1) requires the Administrator to promulgate a 
FIP at any time within two years after the Administrator: (1) Finds 
that a state has failed to make a required SIP submission; (2) finds a 
SIP submission to be incomplete pursuant to CAA section 110(k)(1)(C); 
or (3) disapproves a SIP submission. This obligation applies unless the 
state corrects the deficiency through a SIP revision that the 
Administrator approves before the FIP is promulgated.\26\
---------------------------------------------------------------------------

    \26\ 42 U.S.C. 7410(c)(1).
---------------------------------------------------------------------------

    CAA section 110(a)(2)(D)(i)(I), also known as the ``good neighbor'' 
provision, provides the primary basis for this final action.\27\ It 
requires that each state SIP include provisions sufficient to 
``prohibit[ ], consistent with the provisions of this subchapter, any 
source or other type of emissions activity within the State from 
emitting any air pollutant in amounts which will--(I) contribute 
significantly to nonattainment in, or interfere with maintenance by, 
any other State with respect to any [NAAQS].'' \28\ EPA often refers to 
the emission reduction requirements under this provision as ``good 
neighbor obligations'' and submissions addressing these requirements as 
``good neighbor SIPs.''
---------------------------------------------------------------------------

    \27\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
    \28\ Id.
---------------------------------------------------------------------------

    Once EPA promulgates a NAAQS, EPA must designate areas as being in 
``attainment'' or ``nonattainment'' of the NAAQS, or 
``unclassifiable.'' CAA section 107(d).\29\ For ozone, nonattainment is 
further split into five classifications based on the severity of the 
violation--Marginal, Moderate, Serious, Severe, or Extreme. Higher 
classifications provide states with progressively more time to attain 
while imposing progressively more stringent control requirements. See 
CAA sections 181, 182.\30\ In general, states with nonattainment areas 
classified as Moderate or higher must submit plans to EPA to bring 
these areas into

[[Page 23062]]

attainment according to the statutory schedule. CAA section 182.\31\ If 
an area fails to attain the NAAQS by the attainment date associated 
with its classification, it is ``bumped up'' to the next 
classification. CAA section 181(b).\32\
---------------------------------------------------------------------------

    \29\ 42 U.S.C. 7407(d).
    \30\ 42 U.S.C. 7511, 7511a.
    \31\ 42 U.S.C. 7511a.
    \32\ 42 U.S.C. 7511(b).
---------------------------------------------------------------------------

    Section 301(a)(1) of the CAA also gives the Administrator the 
general authority to prescribe such regulations as are necessary to 
carry out functions under the Act.\33\ Pursuant to this section, EPA 
has authority to clarify the applicability of CAA requirements and 
undertake other rulemaking action as necessary to implement CAA 
requirements. In this final rule, among other things, EPA is clarifying 
the applicability of CAA section 110(a)(2)(D)(i)(I) with respect to the 
2008 ozone NAAQS. In particular, EPA is using its authority under CAA 
sections 110 and 301 to issue new or amended FIPs to revise 
NOX ozone season emission budgets for 12 states to eliminate 
their significant contribution to nonattainment or interference with 
maintenance of the 2008 ozone NAAQS in another state, and EPA is making 
findings as to 9 additional states that the CSAPR Update FIPs (or SIP 
revisions later approved to replace those FIPs) are a complete remedy 
and need no further revision.\34\ In addition, EPA is addressing its 
obligation to respond to the D.C. Circuit's remand of the CSAPR Update 
in Wisconsin v. EPA, 938 F.3d 303, with respect to the 21 states for 
which the FIPs created by that rule were found to be only a partial 
remedy. This final rule wholly resolves the Agency's obligations on 
remand. Finally, CAA section 301 \35\ affords the Agency any additional 
authority that may be needed in order to make certain other changes to 
its regulations under 40 CFR parts 51, 52, 78, and 97, in order to 
effectuate the purposes of the Act. Such changes are discussed in 
section VII of this preamble.
---------------------------------------------------------------------------

    \33\ 42 U.S.C. 7601(a)(1).
    \34\ 42 U.S.C. 7410, 7601.
    \35\ 42 U.S.C. 7601.
---------------------------------------------------------------------------

B. Prior Good Neighbor Rulemakings Addressing Regional Ozone

    EPA has issued several rules interpreting and clarifying the 
requirements of CAA section 110(a)(2)(D)(i)(I) with respect to the 
regional transport of ozone for states in the eastern United States. 
These rules, and the associated court decisions addressing these rules, 
summarized here, provide important direction regarding the requirements 
of CAA section 110(a)(2)(D)(i)(I).
    The NOX SIP Call, promulgated in 1998, addressed the 
good neighbor provision for the 1979 1-hour ozone NAAQS.\36\ The rule 
required 22 states and the District of Columbia to amend their SIPs to 
reduce NOX emissions that contribute to ozone nonattainment 
in downwind states. EPA set ozone season NOX budgets for 
each state, and the states were given the option to participate in a 
regional trading program, known as the NOX Budget Trading 
Program.\37\ The D.C. Circuit largely upheld the NOX SIP 
Call in Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert. denied, 
532 U.S. 904 (2001).
---------------------------------------------------------------------------

    \36\ 63 FR 57356 (Oct. 27, 1998). As originally promulgated, the 
NOX SIP Call also addressed good neighbor obligations 
under the 1997 8-hour ozone NAAQS, but EPA subsequently stayed and 
later rescinded the rule's provisions with respect to that standard. 
See 84 FR 8422 (March 8, 2019).
    \37\ ``Allowance Trading,'' sometimes referred to as ``cap and 
trade,'' is an approach to reducing pollution that has been used 
successfully to protect human health and the environment. Trading 
programs have two key components: Emissions budgets (the sum of 
which provide a cap on emissions), and tradable allowances equal to 
the budgets that authorize allowance holders to emit a specific 
quantity (e.g., one ton) of the pollutant. This approach ensures 
that the environmental goal is met while the tradable allowances 
provide flexibility for individual participants to establish and 
follow their own compliance path. Because allowances can be bought 
and sold in an allowance market, these programs are often referred 
to as ``market-based.''
---------------------------------------------------------------------------

    EPA's next rule addressing the good neighbor provision, the Clean 
Air Interstate Rule (CAIR), was promulgated in 2005 and addressed both 
the 1997 fine particulate matter (PM2.5) NAAQS and 1997 
ozone NAAQS.\38\ CAIR required SIP revisions in 28 states and the 
District of Columbia to reduce emissions of sulfur dioxide 
(SO2) and/or NOX--important precursors of 
regionally transported PM2.5 (SO2 and annual 
NOX) and ozone (summer-time NOX). As in the 
NOX SIP Call, states were given the option to participate in 
regional trading programs to achieve the reductions. When EPA 
promulgated the final CAIR in 2005, EPA also issued findings that 
states nationwide had failed to submit SIPs to address the requirements 
of CAA section 110(a)(2)(D)(i) with respect to the 1997 
PM2.5 and 1997 ozone NAAQS.\39\ On March 15, 2006, EPA 
promulgated FIPs to implement the emission reductions required by 
CAIR.\40\ CAIR was remanded to EPA by the D.C. Circuit in North 
Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), modified on reh'g, 550 
F.3d 1176. For more information on the legal issues underlying CAIR and 
the D.C. Circuit's holding in North Carolina, refer to the preamble of 
the CSAPR rule.\41\
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    \38\ 70 FR 25162 (May 12, 2005).
    \39\ 70 FR 21147 (April 25, 2005).
    \40\ 71 FR 25328 (April 28, 2006).
    \41\ 76 FR 48208, 48217 (Aug. 8, 2011).
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    In 2011, EPA promulgated the CSAPR to address the issues raised by 
the remand of CAIR. The CSAPR addressed the two NAAQS at issue in CAIR 
and additionally addressed the good neighbor provision for the 2006 
PM2.5 NAAQS.\42\ The CSAPR required 28 states to reduce 
SO2 emissions, annual NOX emissions, and/or ozone 
season NOX emissions that significantly contribute to other 
states' nonattainment or interfere with other states' abilities to 
maintain these air quality standards.\43\ To align implementation with 
the applicable attainment deadlines, EPA promulgated FIPs for each of 
the 28 states covered by the CSAPR. The FIPs require EGUs in the 
covered states to participate in regional trading programs to achieve 
the necessary emission reductions. Each state can submit a good 
neighbor SIP at any time that, if approved by EPA, would replace the 
CSAPR FIP for that state.
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    \42\ 76 FR 48208.
    \43\ The CSAPR was revised by several rulemakings after its 
initial promulgation in order to revise certain states' budgets and 
to promulgate FIPs for five additional states addressing the good 
neighbor obligation for the 1997 ozone NAAQS. See 76 FR 80760 (Dec. 
27, 2011); 77 FR 10324 (Feb. 21, 2012); 77 FR 34830 (June 12, 2012).
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    The CSAPR was the subject of an adverse decision by the D.C. 
Circuit in August 2012.\44\ However, this decision was reversed in 
April 2014 by the Supreme Court, which largely upheld the rule, 
including EPA's approach to addressing interstate transport in the 
CSAPR. EPA v. EME Homer City Generation, L.P., 572 U.S. 489 (2014) (EME 
Homer City I). The rule was remanded to the D.C. Circuit to consider 
claims not addressed by the Supreme Court. Id. In July 2015 the D.C. 
Circuit generally affirmed EPA's interpretation of various statutory 
provisions and EPA's technical decisions. EME Homer City Generation, 
L.P. v. EPA, 795 F.3d 118 (2015) (EME Homer City II). However, the 
court remanded the rule without vacatur for reconsideration of EPA's 
emissions budgets for certain states, which the court found may have 
over-controlled those states' emissions with respect to the downwind 
air quality problems to which the states

[[Page 23063]]

were linked. Id. at 129-30, 138. For more information on the legal 
issues associated with the CSAPR and the Supreme Court's and D.C. 
Circuit's decisions in the EME Homer City litigation, refer to the 
preamble of the CSAPR Update.\45\
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    \44\ On August 21, 2012, the D.C. Circuit issued a decision in 
EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012), 
vacating the CSAPR. EPA sought review with the D.C. Circuit en banc 
and the D.C. Circuit declined to consider EPA's appeal en banc. EME 
Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. January 
24, 2013), ECF No. 1417012 (denying EPA's motion for rehearing en 
banc).
    \45\ 81 FR 74504, 74511 (Oct. 26, 2016).
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    In 2016, EPA promulgated the CSAPR Update to address interstate 
transport of ozone pollution with respect to the 2008 ozone NAAQS.\46\ 
The final rule updated the CSAPR ozone season NOX emissions 
budgets for 22 states to achieve cost-effective and immediately 
feasible NOX emission reductions from EGUs within those 
states.\47\ EPA aligned the analysis and implementation of the CSAPR 
Update with the 2017 ozone season in order to assist downwind states 
with timely attainment of the 2008 ozone NAAQS.\48\ The CSAPR Update 
implemented the budgets through FIPs requiring sources to participate 
in a revised CSAPR NOX ozone season trading program 
beginning with the 2017 ozone season. As under the CSAPR, each state 
could submit a good neighbor SIP at any time that, if approved by EPA, 
would replace the CSAPR Update FIP for that state. The final CSAPR 
Update also addressed the remand by the D.C. Circuit of certain states' 
CSAPR phase 2 ozone season NOX emissions budgets in EME 
Homer City II. Further details regarding the CSAPR Update are discussed 
in sections IV.C.1.a and IV.C.1.b below.
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    \46\ 81 FR 74504.
    \47\ One state, Kansas, was made newly subject to the CSAPR 
ozone season NOX requirement by the CSAPR Update. All 
other CSAPR Update states were already subject to ozone season 
NOX requirements under the CSAPR.
    \48\ 81 FR 74516. EPA's final 2008 Ozone NAAQS SIP Requirements 
Rule, 80 FR 12264, 12268 (Mar. 6, 2015), revised the attainment 
deadline for ozone nonattainment areas designated as Moderate to 
July 20, 2018. See 40 CFR 51.1103. In order to demonstrate 
attainment by this deadline, states were required to rely on design 
values calculated using ozone season data from 2015 through 2017, 
since the July 20, 2018, deadline did not afford enough time for 
measured data of the full 2018 ozone season.
---------------------------------------------------------------------------

    In December 2018, EPA promulgated the CSAPR ``Close-Out,'' which 
determined that no further enforceable reductions in emissions of 
NOX were required with respect to the 2008 ozone NAAQS for 
20 of the 22 eastern states covered by the CSAPR Update, and reflected 
that determination in revisions to the existing state-specific sections 
of the CSAPR Update regulations for those states.\49\ Further details 
on the CSAPR Close-Out are discussed in section IV.C.1.c below.
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    \49\ 83 FR 65878, 65882 (Dec. 21, 2018). After promulgating the 
CSAPR Update and before promulgating the CSAPR Close-Out, EPA 
approved a SIP from Kentucky resolving the Commonwealth's good 
neighbor obligations for the 2008 ozone NAAQS. 83 FR 33730 (July 17, 
2018). In this action, EPA is making an error correction under CAA 
section 110(k)(6) to convert this approval to a disapproval, because 
the Kentucky approval relied on the same analysis which the D.C. 
Circuit determined to be unlawful in the CSAPR Close-Out. Our action 
with respect to Kentucky is discussed in section IV.C.2.b. below.
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    The CSAPR Update and the CSAPR Close-Out were both subject to legal 
challenges in the D.C. Circuit. Wisconsin v. EPA, 938 F.3d 303 (D.C. 
Cir. 2019) (Wisconsin); New York v. EPA, 781 Fed. App'x 4 (D.C. Cir. 
2019) (New York). As discussed in greater detail in section IV.C.1.d 
below, in September 2019, the D.C. Circuit upheld the CSAPR Update in 
virtually all respects, but remanded the rule because it was partial in 
nature and did not fully eliminate upwind states' significant 
contribution to nonattainment or interference with maintenance of the 
2008 ozone NAAQS by ``the relevant downwind attainment deadlines'' in 
the CAA. Wisconsin, 938 F.3d at 313-15. In October 2019, the D.C. 
Circuit vacated the CSAPR Close-Out on the same grounds that it 
remanded the CSAPR Update in Wisconsin, specifically that the Close-Out 
rule did not address good neighbor obligations by ``the next applicable 
attainment date'' of downwind states. New York, 781 Fed. App'x at 7.

IV. Air Quality Issues Addressed and Overall Approach for the Final 
Rule

A. The Interstate Ozone Transport Challenge

    Interstate transport of NOX emissions poses significant 
challenges with respect to the 2008 ozone NAAQS in the eastern U.S. and 
thus presents a threat to public health and welfare.
1. Nature of Ozone and the Ozone NAAQS
    Ground-level ozone is not emitted directly into the air but is 
created by chemical reactions between NOX and volatile 
organic compounds (VOC) in the presence of sunlight. Emissions from 
electric utilities and industrial facilities, motor vehicles, gasoline 
vapors, and chemical solvents are some of the major sources of 
NOX and VOC.
    Because ground-level ozone formation increases with temperature and 
sunlight, ozone levels are generally higher during the summer. 
Increased temperature also increases emissions of volatile man-made and 
biogenic organics and can indirectly increase NOX emissions 
as well (e.g., increased electricity generation for air conditioning).
    The 2008 primary and secondary ozone standards are both 75 ppb as 
an 8-hour level.\50\ Specifically, the standards require that the 3-
year average of the fourth highest 24-hour maximum 8-hour average ozone 
concentration may not exceed 75 ppb as a truncated value (i.e., digits 
to right of decimal removed).\51\ In general, areas that exceed the 
ozone standard are designated as nonattainment areas, pursuant to the 
designations process under CAA section 107 and are subject to 
heightened planning requirements depending on the degree of severity of 
their nonattainment classification, see CAA sections 181, 182.
---------------------------------------------------------------------------

    \50\ 73 FR 16436 (Mar. 27, 2008).
    \51\ 40 CFR part 50, Appendix P to part 50.
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2. Ozone Transport
    Studies have established that ozone formation, atmospheric 
residence, and transport occur on a regional scale (i.e., thousands of 
kilometers) over much of the eastern U.S.\52\ While substantial 
progress has been made in reducing ozone in many areas, interstate 
ozone transport is still an important component of peak ozone 
concentrations during the summer ozone season.
---------------------------------------------------------------------------

    \52\ Bergin, M.S. et al. (2007) Regional air quality: Local and 
interstate impacts of NOX and SO2 emissions on 
ozone and fine particulate matter in the eastern United States. 
Environmental Sci & Tech. 41: 4677-4689.
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    EPA has previously concluded in the NOX SIP Call, CAIR, 
and the CSAPR that, for reducing regional-scale ozone transport, a 
NOX control strategy would be most effective. NOX 
emissions can be transported downwind as NOX or, after 
transformation in the atmosphere, as ozone. As a result of ozone 
transport, in any given location, ozone pollution levels are impacted 
by a combination of local emissions and emissions from upwind sources. 
The transport of ozone pollution across state borders compounds the 
difficulty for downwind states in meeting health-based air quality 
standards (i.e., NAAQS). Assessments of ozone, for example those 
conducted for the October 2015 Regulatory Impact Analysis of the Final 
Revisions to the National Ambient Air Quality Standards for Ground-
Level Ozone (EPA-452/R-15-007), continue to show the importance of 
NOX emissions for ozone transport. This analysis is in the 
docket for this final rule and can be also found at EPA's website at: 
https://www.epa.gov/ttnecas1/docs/20151001ria.pdf.
    Further, studies have found that EGU NOX emission 
reductions can be effective in reducing individual 8-hour peak ozone 
concentrations and in

[[Page 23064]]

reducing 8-hour peak ozone concentrations averaged across the ozone 
season. For example, a study that evaluates the effectiveness on ozone 
concentrations of EGU NOX reductions achieved under the 
NOX Budget Trading Program (i.e., the NOX SIP 
Call) shows that regulating NOX emissions in that program 
was highly effective in reducing both ozone and dry-NO3 
concentrations during the ozone season. Further, this study indicates 
that EGU emissions, which are generally released higher in the air 
column through tall stacks and are significant in quantity, may 
disproportionately contribute to long-range transport of ozone 
pollution on a per-ton basis.\53\
---------------------------------------------------------------------------

    \53\ Butler, et al., ``Response of Ozone and Nitrate to 
Stationary Source Reductions in the Eastern USA''. Atmospheric 
Environment, 2011.
---------------------------------------------------------------------------

    Previous regional ozone transport efforts, including the 
NOX SIP Call, CAIR, and the CSAPR, required ozone season 
NOX reductions from EGUs to address interstate transport of 
ozone. EPA took comment on regulating EGU NOX emissions to 
address interstate ozone transport in the notice-and-comment process 
for these rulemakings. EPA received some comments suggesting it modify 
its pollutant focus to either include VOCs in addition to 
NOX, or apply a more granular time scale. However, EPA did 
not modify its proposed approach in this final rule. These comments, as 
well as EPA's responses, are addressed in section VI.A and VII.B.
    As described in section VI, EPA's analysis finds that the power 
sector continues to be capable of making NOX reductions at 
reasonable cost that reduce interstate transport with respect to 
ground-level ozone. EGU NOX emission reductions can be made 
in the near-term under this final rule by fully operating existing EGU 
NOX post-combustion controls (i.e., SCRs and SNCRs)--
including optimizing NOX removal by existing operational 
controls and turning on and optimizing existing idled controls; 
installation of (or upgrading to) state-of-the-art NOX 
combustion controls; and shifting generation to units with lower 
NOX emission rates. Further, additional assessment reveals 
that these available EGU NOX reductions would make 
meaningful and timely improvements in ozone air quality.
    EPA also observes that significant emission reduction potential 
from EGUs is available through post-combustion control retrofits (e.g., 
new SCRs and new SNCRs). These controls reduce emissions and can have a 
meaningful air quality impact, but, in contrast to the controls 
discussed above, they are only available on a longer time frame 
(reflecting the time required to develop, construct, and install the 
technology) that exceeds the expected downwind nonattainment and 
maintenance problems for the 2008 ozone NAAQS and are estimated to have 
a higher cost.
3. Health and Environmental Effects
    Exposure to ambient ozone causes a variety of negative effects on 
human health, vegetation, and ecosystems. In humans, acute and chronic 
exposure to ozone is associated with premature mortality and a number 
of morbidity effects, such as asthma exacerbation. In ecosystems, ozone 
exposure causes visible foliar injury, decreases plant growth, and 
affects ecosystem community composition. See EPA's October 2020 
Regulatory Impact Analysis for the Proposed Revised Cross-State Air 
Pollution Rule (CSAPR) Update for the 2008 Ozone NAAQS (EPA-452/P-20-
003), in the docket for this rule and available on EPA's website at: 
https://www.epa.gov/sites/production/files/2020-10/documents/revised_csapr_update_ria_proposal.pdf, for more information on the 
human health and welfare and ecosystem effects associated with ambient 
ozone exposure.

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

    On October 1, 2015, EPA strengthened the ground-level ozone NAAQS 
to 70 ppb on an eight-hour averaging time.\54\ While reductions 
achieved by this rule may have the effect of aiding in attainment and 
maintenance of the 2015 standard, this action is taken solely with 
respect to EPA's authority to address remaining CAA good neighbor 
obligations under the 2008 ozone NAAQS. EPA and states are working 
outside of this final action to address the CAA good neighbor provision 
for the 2015 ozone NAAQS, including consideration of any necessary 
control requirements for EGU and non-EGU sources.
---------------------------------------------------------------------------

    \54\ 80 FR 65291 (Oct. 26, 2015). On December 20, 2020, EPA 
published its decision, based on the air quality criteria, to retain 
the existing 8-hour NAAQS for ozone. See https://www.epa.gov/ground-level-ozone-pollution/ozone-national-ambient-air-quality-standards-naaqs.
---------------------------------------------------------------------------

    EPA received several comments regarding the relationship of this 
rule to the 2015 ozone NAAQS and the schedule for implementation of 
good neighbor obligations related to that NAAQS. These comments are out 
of the scope of this action, which considers states' obligations under 
2008 ozone NAAQS in response to the Wisconsin remand and the New York 
vacatur. Wisconsin v. EPA, 938 F.3d 303 (D.C. Cir. 2019). New York v. 
EPA, 781 F. App'x 4 (D.C. Cir. 2019). This action does not address any 
state's obligations under the 2015 ozone NAAQS. Nonetheless, the 
emission reductions and associated improvement in ozone levels achieved 
by this action are beneficial toward reducing ozone for purposes of the 
2015 ozone NAAQS and its associated attainment planning and good 
neighbor requirements. In some cases, the reductions necessary to 
address significant contribution or interference with maintenance at 
receptors identified in this action for purposes of the 2008 ozone 
NAAQS will have the effect of incidentally improving ozone levels at 
potential receptors under the 2015 ozone NAAQS.

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

1. Events Affecting Application of the Good Neighbor Provision for the 
2008 Ozone NAAQS
    EPA is taking this action to address the remand of the CSAPR Update 
in Wisconsin v. EPA, 938 F.3d 303 (D.C. Cir. 2019). This section will 
discuss the key, relevant aspects of the CSAPR Update, the related 
CSAPR Close-Out, and the D.C. Circuit's decisions in Wisconsin and New 
York v. EPA, 781 Fed. App'x 4 (D.C. Cir. 2019) (the latter of which 
vacated the Close-out Rule based on the same reasoning as the Wisconsin 
decision remanding the Update). The basis for EPA's authority under CAA 
section 110(c) (42 U.S.C. 7410(c)) to promulgate good neighbor FIPs for 
the 21 states subject to this action on remand is discussed in sections 
III and IV.C.2.
a. The CSAPR Update
    On October 26, 2016, the CSAPR Update was published in the Federal 
Register. 81 FR 74504. The purpose of the CSAPR Update was to address 
the good neighbor provision for the 2008 ozone NAAQS, as well as 
address the remanded CSAPR obligations for the 1997 ozone NAAQS. The 
CSAPR Update required EGUs in 22 states to reduce ozone season 
NOX emissions that significantly contribute to other states' 
nonattainment or interfere with other states' abilities to maintain the 
2008 ozone NAAQS.
    To establish and implement the CSAPR Update emissions budgets, EPA 
followed the same 4-step analytic process that it used in the CSAPR, an

[[Page 23065]]

approach which reflects the evolution of the Agency's prior regional 
interstate transport rulemakings related to ozone NAAQS. The 4-step 
framework is described in more detail in sections IV.C.3 and VI.A.
    In the CSAPR Update, to evaluate the scope of the interstate ozone 
transport problem at step 1, EPA identified downwind areas that were 
expected to have problems attaining and maintaining the 2008 ozone 
NAAQS using modeling that projected air quality to a future compliance 
year. See 81 FR 74517. EPA aligned the analysis and implementation of 
the CSAPR Update with the 2017 ozone season (May 1-September 30) in 
order to assist downwind states with attainment of the 2008 ozone NAAQS 
by the 2018 Moderate area attainment date. Id. at 74516. (EPA's final 
2008 Ozone NAAQS SIP Requirements Rule established the attainment 
deadline of July 20, 2018, for ozone nonattainment areas classified as 
Moderate.\55\) Because the attainment date fell during the 2018 ozone 
season, the 2017 ozone season was the last full season from which data 
could be used to determine attainment of the NAAQS by that date.
---------------------------------------------------------------------------

    \55\ See 80 FR 12264, 12268 (Mar. 6, 2015); 40 CFR 51.1103.
---------------------------------------------------------------------------

    At step 2, EPA identified upwind states that collectively 
contribute to these identified downwind areas. In the CSAPR Update, EPA 
used a screening threshold of 1 percent of the NAAQS to identify states 
``linked'' to downwind ozone problems sufficient for further evaluation 
for significant contribution to nonattainment or interference with 
maintenance of the NAAQS under the good neighbor provision. 81 FR 
74518. This same threshold for analysis was used in the CSAPR as to the 
1997 ozone NAAQS. See 76 FR at 48237-38.
    At step 3, EPA quantified emissions from upwind states that would 
significantly contribute to nonattainment or interfere with maintenance 
by first evaluating various levels of uniform NOX control 
stringency, each represented by an estimated representative marginal 
cost per ton of NOX reduced. EPA then applied the same 
multi-factor test that was used in the CSAPR to evaluate cost, 
available emission reductions, and downwind air quality impacts to 
determine the appropriate level of uniform NOX control 
stringency that addressed the impacts of interstate transport on 
downwind nonattainment or maintenance receptors. EPA used this multi-
factor assessment to gauge the extent to which emission reductions 
could be implemented in the future compliance year (i.e., 2017) and to 
evaluate the potential for over- and under-control of upwind state 
emissions.
    Within the multi-factor test, EPA identified a ``knee in the 
curve,'' i.e., a point at which the cost-effectiveness of the emission 
reductions was maximized, so named for the discernable turning point 
observable in a multi-factor (i.e., multi-variable) curve. See 81 FR 
74550. EPA concluded that this was at the point where emissions budgets 
reflected a uniform NOX control stringency represented by an 
estimated marginal cost of $1,400 per ton (2011$) of NOX 
reduced. This cost threshold in turn represented a control strategy of 
installing or upgrading combustion controls and optimizing existing SCR 
controls. In light of this multi-factor test, EPA determined this level 
of stringency in emissions budgets represented the level at which 
incremental EGU NOX reduction potential and corresponding 
downwind ozone air quality improvements were maximized--relative to 
other control stringencies evaluated--with respect to marginal cost. 
That is, the ratio of emission reductions to marginal cost and the 
ratio of ozone improvements to marginal cost were maximized relative to 
the other levels of control stringency evaluated. EPA found that 
feasible and cost-effective EGU NOX reductions were 
available to make meaningful and timely improvements in downwind ozone 
air quality to address interstate ozone transport for the 2008 ozone 
NAAQS for the 2017 ozone season. Id. at 74508. Further, the Agency's 
evaluation showed that emissions budgets reflecting the $1,400 per ton 
cost threshold did not over-control upwind states' emissions relative 
to either the downwind air quality problems to which they were linked 
or the 1 percent contribution threshold in step 2 that triggered their 
further evaluation in step 3. Id. at 74551-52.
    At step 4, EPA finalized EGU ozone season NOX emissions 
budgets developed using uniform control stringency represented by 
$1,400 per ton. These budgets represented emissions remaining in each 
state after elimination of the amounts of emissions that EPA identified 
would significantly contribute to nonattainment or interfere with 
maintenance of the 2008 ozone NAAQS in downwind states. EPA promulgated 
FIPs requiring the covered power plants in the 22 covered states to 
participate in the CSAPR NOX Ozone Season Group 2 Trading 
Program starting in 2017.\56\
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    \56\ The NOX ozone season trading program created 
under the CSAPR was renamed the CSAPR NOX Ozone Season 
Group 1 Trading Program and now applies only to sources in Georgia. 
In the CSAPR Update, EPA found that Georgia did not contribute to 
interstate transport with respect to the 2008 ozone NAAQS, but the 
state has an ongoing ozone season NOX requirement under 
the CSAPR with respect to the 1997 ozone NAAQS.
---------------------------------------------------------------------------

b. Partial Nature of the CSAPR Update
    At the time it promulgated the CSAPR Update, EPA considered the 
FIPs to be ``partial'' and that the rule ``may not be sufficient to 
fully address these states' good neighbor obligations'' for the 2008 
ozone NAAQS for 21 of the 22 states included in that rule. 81 FR 74508, 
74521 (Oct. 26, 2016). Based on information available at the time of 
the rule's promulgation, EPA was unable to conclude that the CSAPR 
Update fully addressed most of the covered states' good neighbor 
obligations for the 2008 ozone NAAQS. Id. at 74521. Information 
available at the time indicated that, even with the CSAPR Update 
implementation, several downwind receptors were expected to continue 
having problems attaining and maintaining this NAAQS and that emissions 
from upwind states were expected to continue to contribute greater than 
or equal to 1 percent of the NAAQS to these areas during the 2017 ozone 
season. Id. at 74551-52. Further, EPA could not conclude at that time 
whether additional EGU and non-EGU reductions implemented on a longer 
timeframe than 2017 would be needed to address states' good neighbor 
obligations for this NAAQS.
    Additionally, EPA determined it was not feasible to complete an 
emissions control analysis that may otherwise have been necessary to 
evaluate full elimination of each state's significant contribution to 
nonattainment or interference with maintenance and also ensure that 
emission reductions already quantified in the rule would be achieved by 
2017. Id. at 74522. EPA was unable to fully consider both non-EGU ozone 
season NOX reductions and further EGU reductions that may 
have been achievable after 2017. Id. at 74521. See section IV.D.3 
below.
    Thus, EPA also could not make an emission reduction-based 
conclusion that the CSAPR Update would fully resolve states' good 
neighbor obligations with respect to the 2008 ozone NAAQS because the 
reductions evaluated and required by the CSAPR Update were limited in 
scope (both by technology and sector). As a result of the remaining air 
quality problems and the limitations

[[Page 23066]]

on EPA's analysis, for all but one of the 22 affected states, EPA did 
not determine in the CSAPR Update that the rule fully addressed those 
states' downwind air quality impacts under the good neighbor provision 
for the 2008 ozone NAAQS. Id. at 74521. For one state, Tennessee, EPA 
determined in the final CSAPR Update that Tennessee's emissions budget 
fully eliminated the state's significant contribution to downwind 
nonattainment and interference with maintenance of the 2008 ozone NAAQS 
because the downwind air quality problems to which the state was linked 
were projected to be resolved with implementation of the CSAPR Update. 
Id. at 74552.
c. The CSAPR Close-Out
    Following implementation of the CSAPR Update and the approval of 
Kentucky's SIP (under a court-ordered deadline),\57\ on December 21, 
2018, EPA issued the CSAPR ``Close-Out'' to address any good neighbor 
obligations that remained for the 2008 ozone NAAQS for the 20 remaining 
states in the CSAPR Update region. See 83 FR 65878 (Dec. 21, 2018). The 
CSAPR Close-Out made a determination that, based on additional 
information and analysis, the CSAPR Update fully addressed the 
remaining 20 affected states' good neighbor obligations for the 2008 
ozone NAAQS. In particular, EPA determined that 2023 was an appropriate 
future analytic year considering relevant attainment dates and the time 
EPA estimated to be necessary to implement new NOX control 
technologies at EGUs. Based on EPA's analysis of projected air quality 
in that year, EPA determined that, for the purposes of addressing good 
neighbor obligations for the 2008 ozone NAAQS, there would be no 
remaining nonattainment or maintenance receptors in the eastern U.S. As 
a result of this determination, EPA found that, with continued 
implementation of the CSAPR Update, these 20 states would no longer 
contribute significantly to nonattainment in, or interfere with 
maintenance by, any other state with respect to the 2008 ozone NAAQS. 
Id.
---------------------------------------------------------------------------

    \57\ See 83 FR 33730 (July 17, 2018) (approval of Kentucky's SIP 
for the 2008 ozone NAAQS). See section IV.C.2.b. for discussion of 
the final action regarding Kentucky in this notice.
---------------------------------------------------------------------------

d. D.C. Circuit Decisions in Wisconsin v. EPA and New York v. EPA
    The CSAPR Update was subject to petitions for judicial review, and 
the D.C. Circuit issued its opinion in Wisconsin v. EPA on September 
13, 2019. 938 F.3d 303. The D.C. Circuit upheld the CSAPR Update in all 
respects save one: The court concluded that the CSAPR Update was 
inconsistent with the CAA to the extent that it was partial in nature 
and did not fully eliminate upwind states' significant contribution to 
nonattainment or interference with maintenance of the 2008 ozone NAAQS 
by the downwind states' 2018 Moderate attainment date. Id. at 313.
    The court identified three bases for this holding: (1) The D.C. 
Circuit's prior opinion in North Carolina v. EPA, 531 F.3d 896 (2008), 
which held, in the context of CAIR, that the good neighbor provision 
requires states to eliminate significant contribution ``consistent with 
the provisions'' of Title I of the CAA, including the attainment dates 
applicable in downwind areas, 938 F.3d at 314 (citing 531 F.3d at 912); 
(2) the unreasonableness of EPA's interpretation of the phrase 
``consistent with the provisions [of Title I]'' in the good neighbor 
provision as allowing for variation from the attainment schedule in CAA 
section 181 because it would enable significant contribution from 
upwind states to continue beyond that statutory timeframe, 938 F.3d at 
315-18; and (3) the court's finding that the practical obstacles EPA 
identified regarding why it needed more time to implement a full remedy 
did not rise to the level of an ``impossibility,'' id. at 318-20. With 
respect to the third basis, the court also found EPA must make a higher 
showing of uncertainty regarding non-EGU point-source NOX 
mitigation potential before declining to regulate such sources. Id. at 
318-20.
    However, the court identified flexibilities that EPA retains in 
administering the good neighbor provision, acknowledging that EPA has 
latitude in defining which upwind contribution ``amounts'' count as 
significant and thus must be abated, permitting EPA to consider, among 
other things, the magnitude of upwind states' contributions and the 
cost associated with eliminating them. 938 F.3d at 320. The court 
further noted that, in certain circumstances, EPA can grant extensions 
of the attainment deadlines under the Act; for instance, the court 
cited CAA section 181(a)(5), which allows EPA to grant one-year 
extensions from attainment dates under certain circumstances. Id. 
Finally, the court noted that EPA can attempt to show 
``impossibility.'' Id. The court also recognized that the statutory 
command that compliance with the good neighbor provision must be 
achieved consistent with Title I might be read, upon a sufficient 
showing of necessity, to allow some deviation from downwind deadlines, 
so long as it is rooted in Title I's framework and provides a 
sufficient level of protection to downwind States. Id.
    The court in Wisconsin remanded but did not vacate the CSAPR 
Update, finding that vacatur of the rule could cause harm to public 
health and the environment or disrupt the trading program EPA had 
established and that the obligations imposed by the rule may be 
appropriate and sustained on remand. Id. at 336. The court also 
rejected petitioners' request to place EPA on a six-month schedule to 
address the remand, noting the availability of ``mandamus'' relief 
before the D.C. Circuit should EPA fail to ``modify the rule in a 
manner consistent with our opinion.'' Id. at 336-37.
    On October 1, 2019, in a judgment order, the D.C. Circuit vacated 
the CSAPR Close-Out on the same grounds that it remanded the Update in 
Wisconsin. New York v. EPA, 781 Fed. App'x 4 (D.C. Cir. 2019). Because 
the Close-Out analyzed the year 2023 rather than 2021 (``the next 
applicable attainment date'') and failed to demonstrate that it was 
impossible to address significant contribution by the 2021 attainment 
date, the court found the rule ran afoul of the Wisconsin holding. Id. 
at 7. ``As the EPA acknowledges, the Close-Out Rule `relied upon the 
same statutory interpretation of the Good Neighbor Provision' that we 
rejected in Wisconsin. Thus, the Agency's defense of the Close-Out Rule 
in these cases is foreclosed.'' Id. at 6-7 (internal citation omitted). 
The court left open the possibility that the flexibilities identified 
in Wisconsin, 938 F.3d at 320, and outlined above, may be available to 
EPA on remand. Id.
    Following Wisconsin and New York, EPA on remand must address good 
neighbor obligations for the 21 states within the CSAPR Update region 
for which the Update was only a partial remedy. As explained in the 
following section, EPA already retains FIP authority as to 20 of these 
states. In addition, EPA is taking action pursuant to CAA section 
110(k)(6) (42 U.S.C. 7410(k)(6)) to find that Kentucky's SIP was 
approved in error and is thus promulgating a FIP for Kentucky 
consistent with the obligations for the other remaining CSAPR Update 
region states.
2. FIP Authority for Each State Covered by the Final Rule
    On March 12, 2008, EPA promulgated a revision to the ozone NAAQS, 
lowering both the primary and

[[Page 23067]]

secondary standards to 75 ppb. See National Ambient Air Quality 
Standards for Ozone, Final Rule, 73 FR 16436 (March 27, 2008). 
Specifically, the standards require that an area may not exceed 0.075 
parts per million (75 ppb) using the 3-year average of the fourth 
highest 24-hour maximum 8-hour rolling average ozone concentration. 
These revisions of the NAAQS, in turn, triggered a 3-year deadline for 
states to submit SIP revisions addressing infrastructure requirements 
under CAA sections 110(a)(1) and 110(a)(2), including the good neighbor 
provision. Several events affected the timely application of the good 
neighbor provision for the 2008 ozone NAAQS, including reconsideration 
of the 2008 ozone NAAQS and legal developments pertaining to the CSAPR, 
which created uncertainty surrounding EPA's statutory interpretation 
and implementation of the good neighbor provision.\58\ Notwithstanding 
these events, EPA ultimately affirmed that states' good neighbor SIPs 
were due on March 12, 2011.
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    \58\ These events are described in detail in section IV.A.2 of 
the CSAPR Update. See 81 FR 74515.
---------------------------------------------------------------------------

a. FIP Authority for the CSAPR Update States
    EPA subsequently took several actions that triggered EPA's 
obligation under CAA section 110(c) to promulgate FIPs addressing the 
good neighbor provision for several states.\59\ First, on July 13, 
2015, EPA published a rule finding that 24 states failed to make 
complete submissions that address the requirements of section 
110(a)(2)(D)(i)(I) related to the interstate transport of pollution as 
to the 2008 ozone NAAQS. See 80 FR 39961 (effective August 12, 2015). 
This finding triggered a two-year deadline for EPA to issue FIPs to 
address the good neighbor provision for these states by August 12, 
2017. The CSAPR Update finalized FIPs for 13 of these states (Alabama, 
Arkansas, Illinois, Iowa, Kansas, Michigan, Mississippi, Missouri, 
Oklahoma, Pennsylvania, Tennessee, Virginia, and West Virginia), 
requiring their participation in a NOX trading program. EPA 
also determined in the CSAPR Update that the Agency had no further FIP 
obligation as to nine additional states identified in the finding of 
failure to submit because these states did not contribute significantly 
to nonattainment in, or interfere with maintenance by, any other state 
with respect to the 2008 ozone NAAQS. See 81 FR 74506.\60\ \61\ On June 
15, 2016, and July 20, 2016, EPA published additional rules finding 
that Maryland and New Jersey, respectively, also failed to submit 
transport SIPs for the 2008 ozone NAAQS. See 81 FR 38963 (June 15, 
2016) (New Jersey, effective July 15, 2016); 81 FR 47040 (July 20, 
2016) (Maryland, effective August 19, 2016). The finding actions 
triggered two-year deadlines for EPA to issue FIPs to address the good 
neighbor provision for Maryland by August 19, 2018, and for New Jersey 
by July 15, 2018. The CSAPR Update also finalized FIPs for these two 
states.
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    \59\ This section of the preamble focuses on SIP and FIP actions 
for those states addressed in the CSAPR Update. EPA has also acted 
on SIPs for other states not mentioned in this action. The 
memorandum, ``Proposed Action, Status of 110(a)(2)(D)(i)(I) SIPs for 
the 2008 Ozone NAAQS,'' more fully describes the good neighbor SIP 
status for the 2008 ozone NAAQS and is available in the docket for 
this rule.
    \60\ The nine states were Florida, Georgia, Maine, 
Massachusetts, Minnesota, New Hampshire, North Carolina, South 
Carolina, and Vermont. These determinations were not challenged in 
Wisconsin, and EPA is not reopening these determinations in this 
rule.
    \61\ The two remaining states addressed in the findings of 
failure to submit (California and New Mexico) were not part of the 
CSAPR Update or the CSAPR Close-Out analysis and are not addressed 
in this rule.
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    In addition to these findings, EPA finalized disapproval or partial 
disapproval actions for good neighbor SIPs submitted by Indiana, 
Kentucky, Louisiana, New York, Ohio, Texas, and Wisconsin.\62\ These 
disapprovals triggered EPA's obligation to promulgate FIPs to implement 
the requirements of the good neighbor provision for those states within 
two years of the effective date of each disapproval or, in the case of 
Kentucky, within two years of the issuance of the judgment in a 
subsequent Supreme Court decision.\63\ EPA promulgated FIPs in the 
CSAPR Update for each of these states.
---------------------------------------------------------------------------

    \62\ See the following actions: Indiana (81 FR 38957, June 15, 
2016); Kentucky (78 FR 14681, March 7, 2013); Louisiana (81 FR 
53308, August 12, 2016); New York (81 FR 58849, August 26, 2016); 
Ohio (81 FR 38957, June 15, 2016); Texas (81 FR 53284, August 12, 
2016); and Wisconsin (81 FR 53309, August 12, 2016).
    \63\ In the 2013 disapproval action for Kentucky, EPA stated 
that it had no mandatory duty to issue a FIP because of the D.C. 
Circuit's holding in EME Homer City Generation, L.P. v. EPA, 696 
F.3d 7 (D.C. Cir. 2012), that EPA cannot impose good neighbor FIPs 
without first quantifying states' obligations. See 78 FR 14681. In 
2014, the Supreme Court reversed the D.C. Circuit's holding. EPA v. 
EME Homer City Generation, L.P., 572 U.S. 489, 509-10 (2014). In 
light of the Supreme Court's decision, on review of our 2013 
disapproval action for Kentucky in the Sixth Circuit, EPA requested, 
and the court granted, a vacatur and remand of the portion of EPA's 
final action that determined that a FIP obligation was not 
triggered. See Order, Sierra Club v. EPA, No. 13-3546, ECF No. 74-1 
(6th Cir. Mar. 13, 2015). On remand, EPA determined that its FIP 
obligation as to Kentucky was triggered as of June 2, 2014, the date 
of issuance of the Supreme Court's judgment. See 81 FR 74513.
---------------------------------------------------------------------------

    As discussed in more detail above in section IV.C.1, in issuing the 
CSAPR Update, EPA could not determine that it had entirely addressed 
EPA's outstanding CAA obligations to implement the good neighbor 
provision with respect to the 2008 ozone NAAQS for 21 of 22 states 
covered by that rule. Accordingly, the CSAPR Update did not fully 
satisfy EPA's obligation under CAA section 110(c) to address the good 
neighbor provision requirements for those states by approving SIPs, 
issuing FIPs, or some combination of those two actions. EPA found that 
the CSAPR Update FIPs fully addressed the good neighbor provision for 
the 2008 ozone NAAQS only with respect to Tennessee.
b. Correction of EPA's Determination Regarding Kentucky's SIP Revision 
and Its Impact on EPA's FIP Authority for Kentucky
    After promulgating the CSAPR Update and before promulgating the 
CSAPR Close-Out, EPA approved a SIP submission from Kentucky resolving 
the Commonwealth's good neighbor obligations for the 2008 ozone NAAQS 
based on a demonstration that no further emission reductions were 
needed from Kentucky with the CSAPR Update FIP for Kentucky in place. 
See 83 FR 33730 (July 17, 2018). The action was separate from the CSAPR 
Close-Out because it was taken in response to a May 23, 2017 order from 
the U.S. District Court for the Northern District of California 
requiring EPA to take a final action fully addressing the good neighbor 
obligation for the 2008 ozone NAAQS for Kentucky by June 30, 2018.\64\ 
EPA was obligated to address the outstanding obligation by either 
approving a SIP revision submitted by Kentucky or promulgating a FIP to 
address any remaining obligation.\65\
---------------------------------------------------------------------------

    \64\ See Order, Sierra Club v. Pruitt, No. 3:15-cv-04328 (N.D. 
Cal. May 23, 2017).
    \65\ The obligation ultimately derives from EPA's 2013 action 
disapproving Kentucky's SIP addressing the 2008 ozone NAAQS on the 
basis that Kentucky relied on the CAIR program for the 2008 ozone 
NAAQS good neighbor obligation. However, as previously discussed, 
the trigger for the timing of the obligation was the 2014 issuance 
of the Supreme Court's judgment in EPA v. EME Homer City Generation, 
L.P., 572 U.S. 489 (2014). See supra note 63.
---------------------------------------------------------------------------

    On May 10, 2018, Kentucky submitted a final SIP revision to EPA, on 
which the Agency finalized approval consistent with the court-ordered 
deadline. See 83 FR 33730. The Kentucky SIP revision that EPA approved 
relied on the reductions from the CSAPR Update FIP for Kentucky and 
provided a technical analysis, including emission projections and air 
quality modeling for 2023, showing that

[[Page 23068]]

with the CSAPR Update level of reductions, the receptors to which 
Kentucky was linked were attaining and maintaining the 2008 ozone NAAQS 
in 2023. This allowed EPA to conclude that Kentucky did not have any 
further obligation for the 2008 ozone NAAQS, and EPA approved the SIP 
revision. The SIP revision from Kentucky was an analytical 
demonstration only, and it did not replace the CSAPR Update FIP; 
rather, the CSAPR Update FIP was left in place for Kentucky and was 
relied on in the state's demonstration.
    The approval relied on the same rationale and technical analysis--
including the use of a 2023 analytic year--that was eventually used for 
the other CSAPR Update FIP states in the CSAPR Close-Out. EPA's 
approval stated:

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

83 FR 33730.
    Subsequent to EPA's approval of the Kentucky SIP submission, EPA 
issued the CSAPR Close-Out, which concluded that, based on essentially 
the same analysis used for Kentucky, none of the other 20 CSAPR Update 
states had further good neighbor obligations to address the 2008 8-hour 
ozone NAAQS. In the Fall of 2019, the D.C. Circuit issued the Wisconsin 
and New York decisions remanding the CSAPR Update Rule and vacating the 
CSAPR Close-Out (see section IV.C.1.d.).
    Kentucky's CSAPR Update FIP, which Kentucky relied on (and did not 
replace) in its SIP revision, is part of the CSAPR Update remand, and 
EPA must address it in this action. Further, the D.C. Circuit's review 
of the CSAPR Close-Out found fault with, and vacated, the same 
rationale for other states that EPA had used to approve Kentucky's SIP 
submission in June 2018.
    Therefore, in light of the remand of Kentucky's CSAPR Update FIP in 
Wisconsin and vacatur of the CSAPR Close-Out in New York, EPA is 
determining in this final action that its approval of Kentucky's SIP 
revision as fully resolving the state's 2008 ozone NAAQS good neighbor 
obligations was in error. Section 110(k)(6) of the CAA (42 U.S.C. 
7410(k)(6)) gives the Administrator authority, without any further 
submission from a state, to revise certain prior actions, including 
actions to approve SIPs, upon determining that those actions were in 
error. The court's remand of the partial FIP for Kentucky in Wisconsin 
and the vacatur of EPA's conclusions for states identically situated to 
Kentucky in the CSAPR Close-Out means that EPA's approval of Kentucky's 
SIP was in error. EPA is compelled on remand to act consistently with 
the court's opinion and has reassessed Kentucky's good neighbor 
obligations under the 2008 ozone NAAQS here. In doing so, EPA's 
analysis identifies an additional emission reduction obligation for 
Kentucky. Therefore, EPA is correcting the error in Kentucky's SIP 
approval through this final rulemaking, as allowed by the CAA when a 
prior SIP approval was in error. This error correction under CAA 
section 110(k)(6) revises the approval of Kentucky's SIP to a 
disapproval and rescinds any statements that the SIP submission fully 
addresses the requirements of the good neighbor provision for the 2008 
ozone NAAQS for Kentucky. The Kentucky approval relied on the same 
analysis that the D.C. Circuit determined to be unlawful in the CSAPR 
Close-Out: It only addressed conditions in 2023, ignoring the 2021 
attainment date without a showing of impossibility or necessity in 
doing so. Kentucky's remanded partial FIP has been reassessed in this 
action, consistent with EPA's methodology to address the other 20 
states with remanded CSAPR Update FIPs, and consistent with the D.C. 
Circuit's direction in Wisconsin and New York. As discussed in greater 
detail in the sections that follow, EPA is determining that there are 
additional emission reductions that are required for Kentucky to fully 
satisfy its good neighbor obligations for the 2008 ozone NAAQS. The 
analysis on which EPA reaches this conclusion for Kentucky is the same, 
regionally consistent analytical framework on which the Agency is 
taking action for all of the other CSAPR Update states with remanded 
FIPs.
    Comment: The Agency received several comments regarding its error 
correction for Kentucky from the state and from sources in Kentucky. 
The commenters generally disagreed with EPA's use of CAA section 
110(k)(6) to correct the error in the SIP approval based on the 
Wisconsin and New York decisions. Commenters did not agree that the 
court decisions are applicable to the Kentucky action or that EPA had 
any other basis to determine that Kentucky has outstanding good 
neighbor obligations under the 2008 ozone NAAQS. Two commenters also 
argued that EPA overestimated emissions from Kentucky in the modeling 
released with the proposed rule of this action.
    Response: EPA disagrees that there is no basis to correct its error 
in approving Kentucky's SIP revision or to find that Kentucky has 
outstanding good neighbor obligations under the 2008 ozone NAAQS. 
Wisconsin and New York require the state or EPA to analyze the 
interstate impacts of Kentucky's emissions by the 2021 Serious 
attainment date. The Kentucky SIP approval is based on analysis of the 
2023 ozone season. Further, the Kentucky SIP approval relies on 
reductions achieved from Kentucky's CSAPR Update FIP, which was 
remanded by Wisconsin. The information provided by commenters on 
emissions from Kentucky was already reflected in EPA's modeling and did 
not present information with regard to Kentucky that changed EPA's 2021 
analysis, which shows Kentucky has further good neighbor obligations 
under the 2008 ozone NAAQS. Comments related to EPA's technical basis 
for concluding that Kentucky has further obligations, including 
comments regarding alleged additional emission reductions achieved by 
Kentucky sources, are addressed in the RTC document.
c. CSAPR Update SIP Revisions That Do Not Affect FIP Authority
    Subsequent to the promulgation of the CSAPR Update, EPA approved 
SIPs fully replacing the CSAPR Update FIPs for Alabama, Indiana, and 
Missouri.\66\ In those SIP approvals and consistent with the 
conclusions of the CSAPR Update, EPA found that the SIPs partially 
satisfy Alabama's, Indiana's, and Missouri's good neighbor obligations 
for the 2008 ozone NAAQS. Thus, EPA continues to have an obligation to 
fully address good neighbor requirements for the 2008 ozone NAAQS with 
respect to Alabama and Missouri, stemming from the July 13, 2015, 
findings of failure to submit, and Indiana, due to the June 15, 2016, 
disapproval of the state's good neighbor SIP. See 80 FR 39961; 81 FR 
38957. Other states have also submitted 2008 ozone NAAQS good neighbor 
SIPs or SIPs to replace their CSAPR FIPs, some of which EPA has 
approved and some

[[Page 23069]]

of which still remain pending. These circumstances do not affect the 
scope or basis for this rulemaking.
---------------------------------------------------------------------------

    \66\ See 82 FR 46674 (Oct. 6, 2017) (Alabama); 83 FR 64472 (Dec. 
17, 2018) (Indiana); 84 FR 66316 (Dec. 4, 2019) (Missouri).
---------------------------------------------------------------------------

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

                       Table IV.C-1--Actions That Activated EPA's Statutory FIP Deadlines
----------------------------------------------------------------------------------------------------------------
                                                                                                   Statutory FIP
                  State                          Type of action (Federal Register citation,          deadline
                                                             publication date)                       [dagger]
----------------------------------------------------------------------------------------------------------------
Alabama..................................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Arkansas.................................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Illinois.................................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Indiana..................................  SIP disapproval (81 FR 38957, 6/15/2016).............       7/15/2018
Iowa.....................................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Kansas...................................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Kentucky.................................  SIP disapproval (78 FR 14681, 3/7/2013)..............        6/2/2016
Louisiana................................  SIP disapproval (81 FR 53308, 8/12/2016).............       9/12/2018
Maryland.................................  Finding of Failure to Submit (81 FR 47040, 7/20/2016)       8/19/2018
Michigan.................................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Mississippi..............................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Missouri.................................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
New Jersey...............................  Finding of Failure to Submit (81 FR 38963, 6/15/2016)       7/15/2018
New York.................................  SIP disapproval (81 FR 58849, 8/26/2016).............       9/26/2018
Ohio.....................................  SIP disapproval (81 FR 38957, 6/15/2016).............       7/15/2018
Oklahoma.................................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Pennsylvania.............................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Texas....................................  SIP disapproval (81 FR 53284, 8/12/2016).............       9/12/2018
Virginia.................................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
West Virginia............................  Finding of Failure to Submit (80 FR 39961, 7/13/2015)       8/12/2017
Wisconsin................................  Partial SIP disapproval as to prong 2 (81 FR 53309, 8/      9/12/2018
                                            12/2016).
----------------------------------------------------------------------------------------------------------------
[dagger] For states other than Kentucky, the FIP deadline is two years from the effective date of the SIP
  disapproval or Finding of Failure to Submit, which generally trails the publication date by 30 days. For
  Kentucky, the FIP deadline is two years after the issuance of the Supreme Court's judgment in EPA v. EME Homer
  City Generation, L.P., 572 U.S. 489 (2014). See supra note 63.

3. The 4-Step Good Neighbor Framework
    The CSAPR and the subsequent CSAPR Update, building on EPA's prior 
methodologies in the NOX SIP Call and CAIR, established a 4-
step process to address the requirements of the good neighbor 
provision.\67\ In this final action to address the remand of the CSAPR 
Update, EPA follows the same steps. These steps are: (1) Identifying 
downwind receptors that are expected to have problems attaining or 
maintaining the NAAQS; (2) determining which upwind states contribute 
to these identified problems in amounts sufficient to ``link'' them to 
the downwind air quality problems; (3) for states linked to downwind 
air quality problems, identifying upwind emissions that significantly 
contribute to downwind nonattainment or interfere with downwind 
maintenance of the NAAQS; and (4) for states that are found to have 
emissions that significantly contribute to nonattainment or interfere 
with maintenance of the NAAQS downwind, implementing the necessary 
emission reductions through enforceable measures.
---------------------------------------------------------------------------

    \67\ See CSAPR, Final Rule, 76 FR 48208, 48248-48249 (Aug. 8, 
2011); CSAPR Update, Final Rule, 81 FR 74504, 74517-74521 (Oct. 26, 
2016).
---------------------------------------------------------------------------

    Step 1--In the CSAPR, downwind air quality problems were assessed 
using modeled future air quality concentrations for a year aligned with 
attainment deadlines for the NAAQS considered in that rulemaking. The 
assessment of future air quality conditions generally accounts for on-
the-books emission reductions and the most up-to-date forecast of 
future emissions in the absence of the transport policy being evaluated 
(i.e., base case conditions). The locations of downwind air quality 
problems are identified as those with receptors that are projected to 
be unable to attain (i.e., nonattainment receptor) or maintain (i.e., 
maintenance receptor) the NAAQS. In the CSAPR Update, EPA also 
considered current monitored air quality data to further inform the 
projected identification of downwind air quality problems. These same 
considerations are included for this final rule. EPA is not reopening 
the definition of nonattainment and maintenance receptors promulgated 
in the CSAPR Update. Further details and application of step 1 for this 
rule are described in section V.
    Step 2--The CSAPR and the CSAPR Update used a screening threshold 
of 1 percent of the NAAQS to identify upwind states that were 
``linked'' to downwind air pollution problems. States with 
contributions greater than or equal to the threshold for at least one 
downwind problem receptor (i.e., nonattainment or maintenance receptor 
identified in step 1) were identified as needing further evaluation for 
actions to address transport if their air quality was impacted.\68\ EPA 
evaluated a given state's contribution based on the average relative 
downwind impact calculated over multiple days.\69\ States whose air

[[Page 23070]]

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

    \68\ For ozone the impacts would include those from (VOC) and 
NOX, and from all sectors.
    \69\ The number of days used in calculating the average 
contribution metric has historically been determined in a manner 
that is generally consistent with EPA's recommendations for 
projecting future year ozone design values. Our ozone attainment 
demonstration modeling guidance at the time of CSAPR recommended 
using all model-predicted days above the NAAQS to calculate future 
year design values (https://www3.epa.gov/ttn/scram/guidance/guide/final-03-pm-rh-guidance.pdf). In 2014 EPA issued draft revised 
guidance that changed the recommended number of days to the top-10 
model predicted days (https://www3.epa.gov/ttn/scram/guidance/guide/Draft-O3-PM-RH-Modeling_Guidance-2014.pdf). For the CSAPR Update EPA 
transitioned to calculating design values based on this draft 
revised approach. The revised modeling guidance was finalized in 
2019 and, in this regard, EPA is calculating both the ozone design 
values and the contributions based on a top-10 day approach. U.S. 
Environmental Protection Agency, 2018. Modeling Guidance for 
Demonstrating Attainment of Air Quality Goals for Ozone, 
PM2.5, and Regional Haze, Research Triangle Park, NC. 
(https://www3.epa.gov/ttn/scram/guidance/guide/O3-PM-RH-Modeling_Guidance-2018.pdf).
---------------------------------------------------------------------------

    Step 3--For states that are linked in step 2 to downwind air 
quality problems, the CSAPR and the CSAPR Update evaluated 
NOX reductions that were available in upwind states by 
applying a uniform control stringency (represented by a cost per ton of 
NOX reduced) to entities in these states. EPA evaluated 
multiple factors, including NOX reduction potential, cost, 
and downwind air quality improvements available at several control 
stringencies in the multi-factor test. This evaluation quantified the 
magnitude of emissions that significantly contribute to nonattainment 
or interfere with maintenance of a NAAQS downwind and apportioned 
upwind responsibility among linked states, an approach upheld by the 
U.S. Supreme Court in EPA v. EME Homer City.\70\ In this action, EPA 
applies this same approach to identify NOX emission 
reductions necessary to address significant contribution for the 2008 
ozone NAAQS.
---------------------------------------------------------------------------

    \70\ EPA v. EME Homer City Generation, L.P., 572 U.S. 489 
(2014).
---------------------------------------------------------------------------

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

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

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

[[Page 23071]]

operations. The levels are therefore set by determining a ``variability 
limit,'' calculated based on an analysis of the historical level of 
variability in EGU operations.
    Thus, both the CSAPR and the CSAPR Update set assurance levels 
equal to the sum of each state's emissions budget plus its variability 
limit. The CSAPR and the CSAPR Update included assurance provisions to 
limit state emissions to levels below 121 percent of the state's ozone 
season NOx emissions budget by requiring additional allowance 
surrenders in the instance that emissions in the state exceed this 
level. This limit on the degree to which a state's emissions can exceed 
its budget is responsive to previous court decisions (see discussion in 
section VII.C.2 of this preamble) and was not part of the CSAPR Update 
aspects remanded to EPA in Wisconsin. EPA is applying the same 
variability limits and assurance provisions in this rule.\71\ 
Implementation using a trading program is further described in section 
VII.
---------------------------------------------------------------------------

    \71\ Historical heat input and NOX emissions in 
states covered by the CSAPR programs may be found in the 
``Historical CSAPR Update Emissions and Heat Input 2000 to 
2019.xlsx'' file.
---------------------------------------------------------------------------

    EPA received several comments related to its overall approach in 
this rulemaking. These comments related to the following topics: (1) 
Whether this rule remains only a partial remedy in terms of both the 
amount of emission reductions achieved and the timing of 
implementation; (2) whether any additional EGU emission reductions 
relative to the CSAPR Update are permissible in light of the CSAPR 
Update record and the scope of the D.C. Circuit's decision in 
Wisconsin; and (3) EPA's use of cost to define significant 
contribution. Other comments on EPA's overall approach in this action 
are addressed in the RTC document.
    Comment: Numerous commenters asserted that despite EPA purporting 
to fully address the covered states' good neighbor obligations, the 
rule remains only a partial solution, and allows upwind states' 
significant contribution to nonattainment and interference with 
maintenance of the 2008 ozone NAAQS to continue past the next 
attainment date. One commenter asserts that this rule will ``hinder'' 
attainment of the 2015 ozone NAAQS in downwind states. Many commenters 
claim that the rule is insufficient to ensure downwind attainment of 
the NAAQS. The commenters question EPA's application of the 4-step 
framework and disagree with the Agency's conclusions drawn from that 
analysis, particularly with respect to the EPA's determinations at step 
3 and the emissions controls adopted at step 4. Some commenters also 
challenge the legal basis for the selection of the 2021 analytic year, 
as opposed to 2020, and whether EPA has met the requirement to obtain 
reductions ``as expeditiously as practicable'' or otherwise complied 
with the holdings in Wisconsin and New York to eliminate significant 
contribution on par with the relevant downwind attainment deadlines. 
See, e.g. Wisconsin, 938 F.3d at 315. Some argue that EPA depends on 
claims of technical infeasibility or scientific uncertainty and flawed 
cost effectiveness considerations in not requiring more emission 
reductions on a shorter timeframe. Others believe the implementation 
timeframe of this rule to be a phased plan in direct conflict with 
Wisconsin and New York. One commenter concludes there is a ``mismatch'' 
between EPA's 4-step framework's multi-factor test at step 3 and the 
implementation timeframes in this rule. They also argue that EPA should 
consider the cost of RACT in downwind states when analyzing the 
maximized cost effectiveness of controls in upwind states. Several 
commenters also brought attention to the length of time between when 
2008 ozone NAAQS good neighbor SIPs were initially due and the proposed 
rule in October 2020.
    Response: This rule is a full remedy for the good neighbor 
provision for the covered upwind states for the 2008 ozone NAAQS based 
on EPA's analysis. The good neighbor provision does not obligate upwind 
states to fully resolve a downwind nonattainment or maintenance 
problem. CAA section 110(a)(2)(D)(i)(I) only requires that upwind 
states prohibit those emissions that ``contribute significantly to 
nonattainment'' or ``interfere with maintenance of the NAAQS.'' As 
such, the objective of the good neighbor provision is the elimination 
of upwind significant contribution or interference with maintenance. It 
does not require that the upwind states bear the full burden of 
bringing downwind states into attainment. Ultimate achievement of the 
NAAQS downwind is accomplished through the larger framework of the CAA, 
including under sections 110, 181, 182 and other provisions to attain 
the NAAQS. Thus, in this action, EPA must determine what amount of 
upwind contribution is significant (or interferes with maintenance) and 
require elimination of that significant contribution while avoiding 
overcontrol or undercontrol. EPA v. EME Homer City Generation, L.P., 
572 U.S. 489, 521-23 (2014).
    Further, it is not correct to say that good neighbor obligations 
can only be found to be fully addressed when there is no longer any 
remaining air quality problem at the downwind receptors. Indeed, the 
Supreme Court recognized in EME Homer City, 572 U.S. at 521-22, that 
under the framework EPA has adopted, EPA could not require a state to 
further reduce its emissions once it is at or below the 1 percent 
contribution threshold at all receptors. The aim of the good neighbor 
provision is to eliminate significant contribution to nonattainment and 
interference with maintenance, not to achieve final attainment at the 
downwind receptor. Further, in upholding EPA's approach to defining and 
allocating upwind responsibility in the CSAPR, the Court in EME Homer 
City recognized the discretion EPA has in defining what constitutes 
``significant'' contribution, and did not hold that obligations on 
upwind states must be imposed to ``maximize'' downwind attainment 
without consideration of any other factors. Accord Wisconsin, 938 F.3d 
at 320 (recognizing EPA's discretion to interpret ``significant 
contribution'').
    The comments do not establish a basis for asserting that EPA's 
approach to defining significant contribution or interference with 
maintenance is unlawful or unreasonable. They do not explain what is 
meant by ``excessive amounts of ozone pollution,'' ``excessive upwind 
contributions,'' ``sufficient emission reductions,'' or ``sufficient 
upwind reductions.'' These comments do not inform how EPA should define 
significant contribution nor do they recognize that EPA has discretion 
to define significant contribution. The D.C. Circuit first upheld the 
validity of using cost as part of the method for determining 
``significance'' in Michigan v. EPA, 213 F.3d 663, 675-79 (D.C. Cir. 
2000). The Supreme Court upheld that same approach in EPA v. EME Homer 
City Generation, L.P., 572 U.S. 489, 512-20 (2014) (``Eliminating those 
amounts that can cost[hyphen]effectively be reduced is an efficient and 
equitable solution to the allocation problem the Good Neighbor 
Provision requires the Agency to address.''). EPA applied this approach 
again in the CSAPR Update, its first action to address good neighbor 
obligations under the 2008 ozone NAAQS. And while that action only 
provided a partial remedy, no party in Wisconsin challenged as a 
general matter EPA's ability to use cost-effectiveness in determining 
and allocating upwind responsibility. Wisconsin and New York recognized 
EPA's discretion to define significant

[[Page 23072]]

contribution. Wisconsin v. EPA, 938 F.3d 303, 319-20 (D.C. Cir. 2019) 
(``EPA, though, possesses a measure of latitude in defining which 
upwind contribution `amounts' count as `significant[ ]' and thus must 
be abated.''); New York v. Envtl. Prot. Agency, 781 F. App'x 4, 7 (D.C. 
Cir. 2019) (``[I]n determining what constitutes a significant 
contribution to downwind nonattainment, the agency can consider the 
amount of upwind states' contributions and the cost of abating 
them.'').
    With respect to the timing of when such reductions must be 
achieved, EPA agrees that ``as expeditiously as practicable'' is the 
first-order statutory directive. See CAA section 181(a)(1); Wisconsin, 
938 F.3d at 313. EPA's approach in this rule, after determining 
significant contribution, implements all reductions that EPA identified 
as possible by the 2021 attainment date, and requires additional 
reductions of EGUs in later ozone seasons to the extent not possible by 
that date to fully eliminate significant contribution. In this case, 
implementing reductions any faster than the 2021 ozone season is 
impossible because 2020 is in the past. Commenters are incorrect to 
assert that EPA has unlawfully failed to require all necessary 
reductions by the 2021 attainment date. EPA has required those 
reductions that it has determined are possible by that date; EPA has 
also made a determination that additional reductions that are only 
possible after that date are nonetheless necessary to eliminate 
significant contribution or interference with maintenance, as EPA has 
interpreted those terms, and is requiring those later reductions as 
expeditiously as practicable. Achieving necessary reductions past the 
next attainment date when EPA finds it is impossible to do so 
beforehand is consistent with the statute and prior caselaw. Wisconsin 
and New York recognized these flexibilities available to EPA in 
acknowledging that for reasons of necessity or impossibility, EPA may 
deviate from the attainment schedule for downwind areas established in 
the Act. Wisconsin v. EPA, 938 F.3d 303, 320 (D.C. Cir. 2019). New York 
v. EPA, 781 F. App'x 4, 7 (D.C. Cir. 2019). Indeed, these commenters 
are not asserting that EPA lacks authority to require reductions beyond 
the attainment date, only that EPA should have required the reductions 
by that date. But these comments fail to establish a technical or 
evidentiary basis to overturn EPA's judgment that such additional 
reductions are not in fact possible by the 2021 attainment date.
    EPA disagrees that Wisconsin held that it must address good 
neighbor obligations by the full ozone season prior to the attainment 
date (i.e., here, 2020). The decision recognized that the agency must 
fully address good neighbor obligations (to the extent EPA determines 
possible) by the attainment date itself. 938 F.3d at 315. EPA's 
practice of addressing obligations by the full ozone season prior to 
the attainment date, while not mandated by statute or caselaw, 
continues to make good policy sense, because it assists downwind areas 
with improved three-year design values \72\ used in determining whether 
attainment has been achieved. However, in this instance, as one 
commenter correctly notes, reductions in 2020 are not possible since 
this rule was not proposed until after the 2020 ozone season. EPA 
nonetheless can still meet the legal mandate to achieve those 
reductions that are possible by the 2021 attainment date.
---------------------------------------------------------------------------

    \72\ The ozone design value at a particular monitoring site is 
the 3-year average of the annual fourth highest daily maximum 8-hour 
ozone concentration at that site.
---------------------------------------------------------------------------

    Further, EPA is not relying on ``scientific uncertainty'' as a 
justification for not requiring reductions earlier. As explained 
elsewhere in this record, EPA has determined the amount of time needed 
for installation and operation of various control strategies. With 
respect to the optimization of existing SNCR controls, EPA notes that 
it is requiring that strategy as reflected in the final budgets by the 
2021 attainment date, as explained in sections VI.B.1, C.1, and D.1.
    EPA defined significant contribution in this rule based on an 
assessment of control alternatives under the 4-step good neighbor 
framework's step 3 multi-factor test. EPA's determination of what 
controls to require and when they can first be implemented are based on 
EPA's technical evaluation and application of the third step multi-
factor analysis in the 4-step framework. The only ``mismatch'' that one 
commenter identified at the third step is no mismatch at all; it is 
simply the reality that some of the controls that EPA is requiring in 
this rule cannot be installed before the 2021 ozone season, and some 
controls that EPA assessed cannot be installed and operational before 
air quality problems are projected to resolve under the 2008 ozone 
NAAQS (i.e., by the 2025 ozone season). These comments have not 
explained how EPA's evaluation of control options under that test was 
arbitrary or capricious.
    The reasons for alleged past delays in implementing ozone transport 
obligations is out of the scope of this action on remand. However, EPA 
notes that the time it has taken to get reductions in place to address 
interstate ozone transport is due to multiple factors, including past 
judicial stays of major transport rules such as the NOX SIP 
Call and the CSAPR. In addition, EPA had made a determination in the 
CSAPR Close-out that it had fully addressed good neighbor obligations; 
it was not until the D.C. Circuit ruled in Wisconsin that the basis for 
this conclusion was revealed to be insufficient. The CSAPR Update has 
and continues to achieve upwind reductions for the 2008 ozone NAAQS. As 
explained elsewhere in the preamble to this action, EPA now finds it to 
be a full remedy for nine upwind states.
    Comment: Several commenters said that the CSAPR Update was already 
a complete remedy with regard to the EGU sector. One commenter 
described EPA's response to the remand as ``unreasonable'' and its re-
application of the 4-step framework as ``erroneous.'' Other commenters 
opined that EPA has no legal basis to require short-term EGU controls 
under the Wisconsin remand. In their opinion, Wisconsin found that the 
CSAPR Update fully eliminated significant contribution from EGUs, which 
they supported by quoting portions of the decision. They asserted that 
Wisconsin only authorized EPA to search for emission reductions from 
non-EGUs and to narrowly reconsider the CSAPR Update in terms of the 
statutory downwind attainment dates.
    Response: The commenters are incorrect that EPA lacks a legal basis 
to re-assess and fully address good neighbor obligations for the 
covered states under the Wisconsin remand. As an initial matter, the 
CSAPR Update was, by EPA's own admissions, a partial rule. See 81 FR at 
74521-22. The court's analysis upholding the portions of the rule in 
Wisconsin cited by these commenters was against a backdrop that the 
rule was only partial in nature. See, e.g., 938 F.3d at 327. Wisconsin 
required EPA to provide a complete remedy by the next applicable 
attainment date. This was confirmed in the New York decision vacating 
the CSAPR Close-out. The D.C. Circuit found that rule violated the 
holding in Wisconsin by failing to analyze the 2021 analytic year 
without a sufficient showing of impossibility or necessity. To the 
extent that EPA had attempted to fully address the relevant obligations 
in the CSAPR Close-Out Rule, that action has been vacated. Therefore, 
on remand, EPA not only needs to use a different analytic year to

[[Page 23073]]

inform its analysis under the 4-step framework, but it also needs to 
apply that framework in order to determine what, if any, obligations 
must be addressed, and what emission reductions must be required.
    EPA disagrees that Wisconsin prevents requiring additional 
necessary controls on EGUs. As stated in the preamble to the CSAPR 
Update, EPA did not view the CSAPR Update as necessarily fully 
eliminating significant contribution from EGUs. See 81 FR 74522. 
Wisconsin recognized that EPA anticipated ``further EGU reductions that 
are achievable after 2017'' may be necessary to completely eliminate 
significant contribution or interference with maintenance for the 2008 
ozone NAAQS. Wisconsin v. EPA, 938 F.3d 303 (D.C. Cir. 2019) (quoting 
81 FR 74522). In the present action, evaluation of a full remedy in 
accordance with Wisconsin under the 4-step framework, and particularly 
the step 3 multi-factor test, establishes that additional reductions 
from EGUs should be required in 12 of the states currently subject to 
the CSAPR Update. For nine other states, their continued obligations 
under the CSAPR Update satisfy their good neighbor obligations for the 
2008 ozone NAAQS. That same analysis shows that reductions from non-
EGUs are not justified under the same test.
    Comment: Some commenters argued that EPA's use of cost in defining 
significant contribution has no statutory basis and is contrary to 
NAAQS attainment planning caselaw and the Supreme Court's holding in 
EPA v. EME Homer City Generation, L.P., 572 U.S. 489 (2014) (``EME 
Homer City''), because it does not result in sufficient emission 
reduction for attainment and maintenance of the NAAQS. The commenter 
also said that even if EPA could use cost as a basis for defining 
significant contribution for non-attainment, the Agency could not do so 
for interference with maintenance. Another commenter described EPA's 
proposed cost threshold of $1,600 per ton as ``arbitrary'' and 
inconsistent with the CAA and EME Homer City, as this cost threshold is 
insufficient to enable downwind states reach attainment or maintenance. 
Further, commenters argued, EPA's use of cost-effectiveness as a metric 
at step 3 fails to identify what the ultimate goal should be, as cost-
effectiveness can only be used to evaluate which way to best achieve a 
goal. One commenter argued that EPA should require upwind reductions so 
long as the downwind benefit of such reductions continues to outweigh 
their cost.
    Response: The approach used here is materially the same approach 
the Agency applied in the NOX SIP Call, the CSAPR, and in 
the CSAPR Update. These comments essentially seek to relitigate EME 
Homer City, as well as the D.C. Circuit's prior opinion in Michigan v. 
EPA, 213 F.3d 663 (D.C. Cir. 2000). Contrary to the commenters' 
interpretation, EME Homer City allowed the use of cost both to define 
and to allocate upwind state responsibility. 572 U.S. 489, 518-520 
(2014) (``The Agency, tasked with choosing which among equal 
``amounts'' to eliminate, has chosen sensibly to reduce the amount 
easier, i.e., less costly, to eradicate.''). Notably, in the CSAPR 
rulemaking, EPA used cost as part of a multi-factor effectiveness 
metric in the multi-factor test to determine the ``amount'' of upwind 
contribution that is ``significant'' in a very similar manner as EPA 
did in the CSAPR Update and now here in this action on remand. See 76 
FR 48208, 48248-51 (Aug. 8, 2011). In the NOX SIP Call, EPA 
took a similar approach. See 213 F.3d at 675 (``Although the dividing 
line was a very low threshold of contribution, in the end EPA's rule 
called for termination of only a subset of each state's contribution. 
EPA decided that the 23 `significant contributors' need only reduce 
their ozone by the amount achievable with `highly cost-effective 
controls.' '') (emphasis added) (citing 63 FR at 57403).
    Commenters fail to identify why an alternative method for 
determining ``contribution'' is compelled by the statute, or that EPA's 
approach is unlawful, arbitrary, or capricious. Contrary to these 
commenters' assertion, the good neighbor provision does not contemplate 
that an upwind state's obligation can only ever be resolved once a 
downwind receptor is fully in attainment. The Supreme Court recognized 
in EME Homer City that the 1 percent contribution threshold used at 
step 2 must necessarily be a stopping point in EPA's analysis because a 
state that contributed less than that would not be assessed for 
reductions at step 3 in the first place. 572 U.S. at 521. The Supreme 
Court in EME Homer City recognized that the problem of defining 
``significant contribution'' in the context of a regional pollutant 
like ozone is inherently extremely complex. Id. at 514. The Court found 
that using cost (and specifically, a uniform cost-effectiveness 
threshold) to allocate the reduction obligation was both equitable and 
efficient. Id. at 519.
    Further, the case law on barring use of cost considerations in the 
attainment planning context cited by one commenter is inapplicable. EPA 
has discretion to interpret significant contribution, as recognized by 
Wisconsin and New York. Wisconsin v. EPA, 938 F.3d 303, 319-20 (D.C. 
Cir. 2019) (``EPA, though, possesses a measure of latitude in defining 
which upwind contribution `amounts' count as `significant[ ]' and thus 
must be abated.''). New York v. Envtl. Prot. Agency, 781 F. App'x 4, 7 
(D.C. Cir. 2019) (``[I]n determining what constitutes a significant 
contribution to downwind nonattainment, the agency can consider the 
amount of upwind states' contributions and the cost of abating 
them.'').
    The comment that cost effectiveness does not provide an adequate 
basis for EPA to select the correct level of stringency misapprehends 
the full scope of the step 3 multi-factor analysis EPA applies in the 
4-step framework. EPA's analysis at step 3 additionally considers the 
total amount of reductions to be achieved by a control stringency as 
well as the effect on air quality at downwind receptors. EPA also must 
take into consideration the minimum amount of time needed for controls 
to be installed and operational, because if an air quality problem is 
no longer present by the time controls could be operational, then there 
is no need for those controls to be required. See 572 U.S. at 521. 
Thus, it is not just the relative cost effectiveness of a control 
stringency but its ultimate effect on a downwind problem that informs 
EPA's determination of ``significance.'' \73\
---------------------------------------------------------------------------

    \73\ To some degree, these commenters may be overstating the 
relative importance of ``cost'' in EPA's step 3 analysis. EPA's 
design of cost thresholds derives from the identification of 
discrete types of NOX emission control strategies. EPA 
then identifies a representative cost-effectiveness on a per ton 
basis for that technology. In the step 3 analysis, it is not the 
cost per ton value itself that is inherently meaningful, but rather 
how that cost-effectivess value relates to other control 
stringencies, how many emission reductions may be obtained, and how 
air quality is ultimately impacted. Said differently, when EPA 
determines not to require controls at a higher cost threshold, it is 
not on grounds that they are simply ``too expensive for industry.'' 
Further, there are always inherent uncertainties in identifying a 
precise cost per ton value for any particular control stringency, 
but this in itself does not upset EPA's ability to render an overall 
policy judgment based on the step 3 factors as to the level of 
emission reductions required. As an example, EPA explains in Section 
VI.D.1 why its cost thresholds for EGU control stringencies at 
$1,600 per ton and $1,800 per ton in this action generate 
essentially the same point on a cost curve for purposes of its step 
3 analysis. In any case, EPA notes that the Agency's determination 
not to require further EGU controls than EPA identified in this 
action, and to a certain extent non-EGU controls, is based primarily 
on timing, not a determination of relative cost-effectiveness. 
Likewise, emission controls included in the emission budgets in this 
rulemaking would likely still be included even if their 
representative cost levels were somewhat higher, so long as they 
still present a compelling result in the multi-factor test taking 
timing and downwind air quality impacts into account.

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[[Page 23074]]

    The uniform control stringency selected in this rule for EGUs 
compares favorably with prior transport rulemakings in terms of cost-
effectiveness, overall cost, total reductions, and downwind benefits. 
By contrast, when EPA analyzed the best available current data on non-
EGUs for potential control, EPA's analysis showed that at a comparable 
cost level ($2,000/ton--on a weighted average basis, rather than the 
90th percentile value used as a representative marginal cost used for 
EGU SCR optimization, far fewer NOX emission reductions were 
available and their corresponding effect on downwind receptors was much 
smaller, on the order of a few hundredths of a ppb.
    Regarding the comment that EPA has failed to give independent 
effect to the requirement to prohibit emissions that interfere with 
maintenance of the NAAQS in other states (i.e., prong 2): EPA gives 
effect to prong 2 through identifying receptors that may have trouble 
attaining the NAAQS under varying air quality and meteorological 
conditions. EME Homer City upheld EPA's approach to using cost to 
determine ``amounts'' with respect to both prong 1 and 2, and this is 
settled law. EPA v. EME Homer City Generation, 572 U.S. at 518-520. 
EPA's use of the term ``significant contribution'' in its analysis at 
the third step of the 4-step framework is applied for both prongs 1 and 
2. This approach to giving effect to the ``interfere with maintenance'' 
prong has been upheld twice by the D.C. Circuit. See EME Homer City, 
795 F.3d at 136; Wisconsin, 938 F.3d at 325-27. In effect, EPA's 
determination of what level of upwind contribution constitutes 
``interference'' with a maintenance receptor is the same determination 
as what constitutes ``significant contribution'' for a nonattainment 
receptor. Nonetheless, this continues to give independent effect to 
prong 2 because EPA applies a broader definition for identifying 
maintenance receptors, which accounts for the possibility of problems 
maintaining the NAAQS under realistic potential future conditions. 
While EPA and others may occasionally use the language of 
``significance'' as a shorthand for determinations at the third step 
under both prongs 1 and 2, this does not detract from the fact that EPA 
gives prong 2 independent effect under the 4-step framework.
    EPA has explained elsewhere in the record for this action why the 
selected control stringency selected in this rule is appropriate in 
light of EPA's application of the step 3 multi-factor test of the 4-
step framework. To the extent commenters argue that EPA should have 
selected a higher cost threshold or required more reductions based on 
the technical data, those issues are addressed elsewhere in the record.

V. Analyzing Downwind Air Quality and Upwind-State Contributions

    In this section, EPA describes the air quality modeling and 
analyses performed to identify nonattainment and/or maintenance 
receptors and evaluate interstate contributions to these receptors from 
individual upwind states for the 2021 analytic year. Although the air 
quality modeling was performed using an air quality modeling platform 
that covers the contiguous 48 states, the analysis to identify 
receptors and evaluate contributions focuses on the 21 upwind states 
that are the subject of this rule with respect to the 2008 ozone NAAQS. 
In this action, EPA is not addressing the good neighbor obligations of 
any other state, nor is it addressing the obligations of any state, 
including the 21 covered by this action, with respect to the 2015 ozone 
NAAQS.
    The year 2021 was selected as the appropriate future analytic year 
for this rule because it coincides with the July 20, 2021, Serious area 
attainment date under the 2008 ozone NAAQS. In the CSAPR Update, EPA 
had aligned its analysis and implementation of emission reductions with 
the 2017 ozone season (ozone seasons run each year from May 1-September 
30) in order to assist downwind states with timely attainment of the 
2008 ozone NAAQS by the Moderate area attainment date of July 20, 2018. 
See 81 FR 74516. In order to demonstrate attainment by this deadline, 
states were required to rely on design values calculated using ozone 
season data from 2015 through 2017, since the July 20, 2018, deadline 
did not afford enough time for measured data of the full 2018 ozone 
season. Similarly, for the Serious area attainment date in 2021, states 
will rely on design values calculated using ozone season data from 2018 
through 2020. However, it is not possible to impose emission reductions 
on upwind states in the 2020 ozone season, which has already passed. 
Reductions in the 2021 ozone season will nonetheless occur in time for 
the 2021 attainment date and therefore assist downwind states in 
achieving attainment by the July 20, 2021, attainment date, in 
compliance with the Wisconsin holding. See Wisconsin, 938 F.3d at 309 
(the CSAPR Update was unlawful to the extent it allowed upwind states 
to ``continue their significant contributions to downwind air quality 
problems beyond the statutory deadlines by which downwind States must 
demonstrate their attainment of air quality standards'') (emphasis 
added). Further, EPA continues to interpret the good neighbor provision 
as forward-looking, based on Congress's use of the future-tense 
``will'' in section 110(a)(2)(D)(i), an interpretation upheld in 
Wisconsin, 938 F.3d at 322. It would be ``anomalous,'' id., for EPA to 
impose good neighbor obligations in 2021 and future years based solely 
on finding that ``significant contribution'' had existed at some time 
in the past.
    EPA has also conducted additional analysis of remaining air quality 
receptors and contribution in years beyond 2021, in order to ensure a 
complete step 3 analysis. EPA has analyzed these later years to 
determine whether any additional emission reductions that are 
impossible to obtain by the 2021 attainment date may yet be necessary 
in order to fully address significant contribution. This comports with 
the D.C. Circuit's direction in Wisconsin that implementing good 
neighbor obligations beyond the dates established for attainment may be 
justified on a proper showing of impossibility and/or necessity. See 
938 F.3d at 320. However, for purposes of EPA's initial analysis of air 
quality at step 1 of the 4-step framework, in accordance with 
Wisconsin, EPA has selected the 2021 ozone season, corresponding with 
the 2021 Serious area attainment date.
    The remainder of this section includes information on: (1) The air 
quality modeling platform used in support of this final rule with a 
focus on the base year and future year base case emission inventories, 
(2) the method for projecting design values in 2021, and (3) the 
approach for calculating ozone contributions from upwind states.\74\ 
The Agency also provides the design values for nonattainment and 
maintenance receptors and the predicted interstate contributions that 
are at or above the 1 percent of the NAAQS screening threshold. The 
2016 base period and 2021, 2023, and 2028 future design values and 
contributions for all ozone monitoring sites are provided in the docket 
for this rule. The Air Quality Modeling Technical Support Document

[[Page 23075]]

(AQM TSD) in the docket for this rule contains more detailed 
information on the air quality modeling aspects of this rule.
---------------------------------------------------------------------------

    \74\ For the 2023 and 2028 modeling used in the step 3 analysis, 
EPA followed the same method for projecting design values and 
approach for calculating contributions as described for the 2021 
analytic year.
---------------------------------------------------------------------------

A. Overview of Air Quality Modeling Platform

    EPA used the 2016-based modeling platform for the air quality 
modeling for this final rule. This modeling platform includes 2016 base 
year emissions from anthropogenic and natural sources and 2016 
meteorology. The platform also includes anthropogenic emission 
projections for 2023 and 2028. The emissions data contained in this 
platform were developed by EPA, Multi-Jurisdictional Organizations 
(MJOs), and state and local air agencies as part of the Emissions 
Inventory Collaborative Process. This process resulted in a common-use 
set of emissions data for a 2016 base year and 2023 and 2028 that can 
be leveraged by EPA and states for regulatory air quality modeling.\75\ 
The air quality modeling was performed for a modeling region (i.e., 
modeling domain) that covers the contiguous 48 states using a 
horizontal resolution of 12 x 12 km. EPA used the CAMx version 7beta6 
for air quality modeling for both the proposed rule and this final 
rule.\76\ Additional information on the 2016-based air quality modeling 
platform can be found in the AQM TSD.
---------------------------------------------------------------------------

    \75\ http://views.cira.colostate.edu/wiki/wiki/9169.
    \76\ EPA did not receive any comments on the use of CAMx version 
7beta6 for the air quality modeling for this rule.
---------------------------------------------------------------------------

B. Emission Inventories

    EPA developed emission inventories for the proposed rule, including 
emission estimates for EGUs, non-EGU point sources, stationary nonpoint 
sources, onroad mobile sources, nonroad mobile sources, wildfires, 
prescribed fires, and biogenic emissions that are not the result of 
human activities. EPA's air quality modeling relies on this 
comprehensive set of emission inventories because emissions from 
multiple source categories are needed to model ambient air quality and 
to facilitate comparison of model outputs with ambient measurements. To 
prepare the emission inventories for air quality modeling, EPA 
processed the emission inventories using the Sparse Matrix Operator 
Kernel Emissions (SMOKE) Modeling System version 4.7 to produce the 
gridded, hourly, speciated, model-ready emissions for input to the air 
quality model. Additional information on the development of the 
emission inventories and on data sets used during the emissions 
modeling process are provided in the Technical Support Document (TSD) 
``Preparation of Emissions Inventories for the 2016v1 North American 
Emissions Modeling Platform,'' hereafter known as the ``Emissions 
Modeling TSD.'' This TSD is available in the docket for this rule and 
at https://www.epa.gov/air-emissions-modeling/2016v1-platform.
1. Foundation Emission Inventory Data Sets
    Emissions data were developed that represented the year 2016 to 
support air quality modeling of a base year from which future air 
quality could be forecasted. As noted above, EPA used the Inventory 
Collaborative 2016 version 1 (2016v1) Emissions Modeling Platform, 
released in October 2019, as the primary basis for the inventories 
supporting the air quality modeling. This platform was developed 
through a national collaborative effort between EPA and state and local 
agencies along with MJOs. The original starting point for the U.S. 
portions of the 2016 inventory was the 2014 National Emissions 
Inventory (NEI), version 2 (2014NEIv2), although all of the inventory 
sectors were updated to better represent the year 2016 through the 
incorporation of 2016-specific state and local data along with 
nationally applied adjustment methods. The future base case inventories 
developed for 2023 and 2028 represent projected changes in activity 
data and predicted emission reductions from on-the-books actions, 
planned emission control installations, and promulgated federal 
measures that affect anthropogenic emissions.\77\
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    \77\ Biogenic emissions and emissions from wildfires and 
prescribed fires were held constant between 2016 and the future 
years because (1) these emissions are tied to the 2016 
meteorological conditions and (2) the focus of this rule is on the 
contribution from anthropogenic emissions to projected ozone 
nonattainment and maintenance.
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2. Development of Emission Inventories for EGUs
    Annual NOX and SO2 emissions for EGUs in the 
2016 base year inventory are based primarily on data from continuous 
emission monitoring systems (CEMS) and other monitoring systems allowed 
for use by qualifying units under 40 CFR part 75, with other EGU 
pollutants estimated using emission factors and annual heat input data 
reported to EPA. For EGUs not reporting under part 75, EPA used the 
most recent data submitted to the NEI by the states. Emissions data for 
sources that did not have data provided for the year 2016 were pulled 
forward from data submitted for 2014. The Air Emissions Reporting Rule, 
(80 FR 8787 February 19, 2015), requires that Type A point sources 
large enough to meet or exceed specific thresholds for emissions be 
reported to EPA every year, while the smaller Type B point sources must 
only be reported to EPA every three years. For more information on how 
the 2016 EGU emissions data were developed and prepared for air quality 
modeling, see the Emissions Modeling TSD.
    EPA projected future 2023 and 2028 baseline EGU emissions using the 
version 6--January 2020 reference case of the Integrated Planning Model 
(IPM).\78\ \79\ IPM, developed by ICF Consulting, is a state-of-the-
art, peer-reviewed, multi-regional, dynamic, deterministic linear 
programming model of the contiguous U.S. electric power sector. It 
provides forecasts of least cost capacity expansion, electricity 
dispatch, and emission control strategies while meeting energy demand 
and environmental, transmission, dispatch, and reliability constraints. 
EPA has used IPM for over two decades to better understand power sector 
behavior under future business-as-usual conditions and to evaluate the 
economic and emission impacts of prospective environmental policies. 
The model is designed to reflect electricity markets as accurately as 
possible. EPA uses the best available information from utilities, 
industry experts, gas and coal market experts, financial institutions, 
and government statistics as the basis for the detailed power sector 
modeling in IPM. The model documentation provides additional 
information on the assumptions discussed here as well as all other 
model assumptions and inputs.\80\
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    \78\ https://www.epa.gov/powersectormodeling.
    \79\ The 2016v1 platform released in October 2019 used the May 
2019 reference case. The January 2020 IPM reference case is a later 
version than what was originally released with 2016v1.
    \80\ Detailed information and documentation of EPA's Base Case, 
including all the underlying assumptions, data sources, and 
architecture parameters can be found on EPA's website at: 
www.epa.gov/airmarkets/powersectormodeling.
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    The IPM version 6--January 2020 reference base case accounts for 
updated federal and state environmental regulations, committed EGU 
retirements and new builds, and technology cost and performance 
assumptions as of late 2019. This projected base case accounts for the 
effects of the finalized Mercury and Air Toxics Standards rule, the 
CSAPR and the CSAPR Update, New Source Review settlements, and other 
on-the-books federal and state rules through 2019 \81\ impacting 
SO2, NOX,

[[Page 23076]]

directly emitted particulate matter, and CO2, and final 
actions EPA has taken to implement the Regional Haze Rule.
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    \81\ For any specific version of IPM there is a cutoff date 
after which it is no longer possible to incorporate updates into the 
input databases. For version 6--January reference case, that cutoff 
date was November 2019.
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    Additional 2021 EGU emissions baseline levels were developed 
through engineering analytics as an alternative approach that did not 
involve IPM. EPA developed this inventory for use in step 3 of this 
final rule, where it determines emission reduction potential and 
corresponding emission budgets. IPM includes optimization and perfect 
foresight in solving for least cost dispatch. Given that this final 
rule will likely become effective either immediately prior to or 
slightly after the start of the 2021 ozone season, EPA adopted a 
similar approach to the CSAPR Update where it relied on IPM in a 
relative way in step 3 to avoid overstating optimization and dispatch 
decisions that were not possible in the short time frame. EPA does this 
by using the difference in emission rate observed between IPM runs with 
and without the cost threshold applied, rather than using absolute 
values. In both the CSAPR Update and in this rule at step 3, EPA 
complemented that projected IPM EGU outlook with historical (e.g., 
engineering analytics) perspective based on historical data that only 
factors in known changes to the fleet. This 2021 engineering analytics 
data set is described in more detail in the Ozone Transport Policy 
Analysis Final Rule TSD.
3. Development of Emission Inventories for Non-EGU Point Sources
    The non-EGU point source emissions in the 2016 base case inventory 
match those in the 2016v1 platform. Some non-EGU point source emissions 
were based on data submitted for 2016, others were projected from 2014 
to 2016, and the emissions for remaining small sources were kept at 
2014 levels. Prior to air quality modeling, the emission inventories 
were processed into a format that is appropriate for the air quality 
model to use. Projection factors and percent reductions in this final 
rule reflect comments received as a result of the Inventory 
Collaborative development process, along with emission reductions due 
to national and local rules, control programs, plant closures, consent 
decrees, and settlements. Reductions from several Maximum Achievable 
Control Technology and National Emission Standards for Hazardous Air 
Pollutants (NESHAP) standards are included. Projection approaches for 
corn ethanol and biodiesel plants, refineries and upstream impacts 
represent requirements pursuant to the Energy Independence and Security 
Act of 2007 (EISA). Details on the development and processing of the 
non-EGU emissions inventories for 2016, 2023, and 2028 are available in 
the Emissions Modeling TSD.
    For aircraft emissions at airports, the emissions used were based 
on adjustments to emissions in the 2017 NEI (see https://www.epa.gov/air-emissions-inventories/2017-national-emissions-inventory-nei-data 
for data and a TSD). EPA developed and applied factors to adjust the 
2017 emissions to 2016, 2023, and 2028 based on activity growth 
projected by the Federal Aviation Administration Terminal Area Forecast 
\82\ system, published in 2018.
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    \82\ https://www.faa.gov/data_research/aviation/taf/.
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    Emissions at rail yards were represented as non-EGU point sources. 
The 2016 rail yard emissions are largely consistent with the 2017 NEI 
rail yard emissions. The 2016, 2023, and 2028 rail yard emissions were 
developed through the Inventory Collaborative process. The rail yard 
emissions were interpolated from the 2016 and 2023 emissions. Class I 
rail yard emissions were projected using the Energy Information 
Administration's 2019 Annual Energy Outlook (AEO) freight rail energy 
use growth rate projections for 2016, 2023, and 2028 with the fleet mix 
assumed to be constant throughout the period.
    Point source oil and gas emissions for 2016 were based on the 
2016v1 point inventory, while nonpoint oil and gas emissions were 
primarily based on a run of EPA Oil and Gas Tool for the year 2016. The 
2016 oil and gas inventories were projected to 2023 and 2028 using 
regional projection factors by product type based on AEO 2019 
projections. NOX and VOC reductions that are co-benefits to 
the NESHAP and New Source Performance Standards (NSPS) for Stationary 
Reciprocating Internal Combustion Engines (RICE) are reflected for 
select source categories. In addition, Natural Gas Turbines and Process 
Heaters NSPS NOX controls and NSPS Oil and Gas VOC controls 
are reflected for select source categories. Additional information on 
the development and modeling of the oil and gas emission inventories 
can be found in the Emissions Modeling TSD.
4. Development of Emission Inventories for Onroad Mobile Sources
    Onroad mobile sources include exhaust, evaporative, and brake and 
tire wear emissions from vehicles that drive on roads, parked vehicles, 
and vehicle refueling. Emissions from vehicles using regular gasoline, 
high ethanol gasoline, diesel fuel, and electric vehicles were 
represented, along with buses that used compressed natural gas. EPA 
developed the onroad mobile source emissions for states other than 
California using EPA's Motor Vehicle Emissions Simulator (MOVES) 2014b. 
MOVES2014b was used with inputs provided by state and local agencies, 
where available, in combination with nationally available data sets. 
Onroad emissions for the platform were developed based on emissions 
factors output from MOVES2014b run for the year 2016, coupled with 
activity data (e.g., vehicle miles traveled and vehicle populations) 
representing the year 2016. The 2016 activity data were provided by 
some state and local agencies, and the remaining activity data were 
derived from the 2014NEIv2. The onroad emissions were computed within 
SMOKE by multiplying emission factors developed using MOVES with the 
appropriate activity data. Onroad mobile source emissions for 
California were consistent with the emissions provided by the state.
    The future-year emissions for onroad mobile sources represent all 
national control programs known at the time of modeling except for the 
Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and 
Heavy-Duty Engines and Vehicles (HDGHG)--Phase 2 \83\ and the Safer 
Affordable Fuel-Efficient (SAFE) Vehicles Rule.\84\ Finalized rules 
incorporated into the onroad mobile source emissions include: Tier 3 
Standards (March 2014), the Light-Duty Greenhouse Gas Rule (March 
2013), Heavy (and Medium)-Duty Greenhouse Gas Rule (August 2011), the 
Renewable Fuel Standard (February 2010), the Light Duty Greenhouse Gas 
Rule (April 2010), the Corporate-Average Fuel Economy standards for 
2008-2011 (April 2010), the 2007 Onroad Heavy-Duty Rule (February 
2009), and the Final Mobile Source Air Toxics Rule (MSAT2) (February 
2007). Estimates of the impacts of rules that were in effect in 2016 
are included in the 2016 base year

[[Page 23077]]

emissions at a level that corresponds to the extent to which each rule 
had penetrated into the fleet and fuel supply by the year 2016. Local 
control programs such as the California LEV III program are included in 
the onroad mobile source emissions. The future year onroad emissions 
reflect projected changes to fuel properties and usage. MOVES was run 
for the years 2023 and 2028 to generate the emissions factors relevant 
to those years. Future year activity data for onroad mobile sources 
were provided by some state and local agencies, and otherwise were 
projected to 2023 and 2028 using AEO 2019-based factors. The future 
year emissions were computed within SMOKE by multiplying the future 
year emission factors developed using MOVES with the year-specific 
activity data. Additional information on the approach for generating 
the onroad mobile source emissions is available in the Emissions 
Modeling TSD.
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    \83\ The effect of the HDGHG Phase 2 rule on criteria pollutants 
is estimated in Table 5-48 of the Regulatory Impact Analysis, 
available from https://nepis.epa.gov/Exe/ZyPDF.cgi/P100P7NS.PDF?Dockey=P100P7NS.PDF.
    \84\ Information on the SAFE vehicles rule is available from 
https://www.epa.gov/regulations-emissions-vehicles-and-engines/safer-affordable-fuel-efficient-safe-vehicles-final-rule. 
Preliminary analysis by the Office of Transportation and Air Quality 
of the impact of this rule on criteria pollutants show impacts of 
less than 1 percent for VOC and no impact for NOX.
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5. Development of Emission Inventories for Commercial Marine Vessels
    The commercial marine vessel (CMV) emissions in the 2016 base case 
emission inventory for this rule were based on those in the 2017 NEI. 
Factors were then applied to adjust the 2017 NEI emissions backward to 
represent emissions for the year 2016. The CMV emissions reflect 
reductions associated with the Emissions Control Area proposal to the 
International Maritime Organization control strategy (EPA-420-F-10-041, 
August 2010); reductions of NOX, VOC, and CO emissions for 
new C3 engines that went into effect in 2011; and fuel sulfur limits 
that went into effect prior to 2016. The cumulative impacts of these 
rules through 2023 and 2028 were incorporated into the projected 
emissions for CMV sources. The CMV emissions were split into emissions 
inventories from the larger category 3 (C3) engines, and those from the 
smaller category 1 and 2 (C1C2) engines. Some minor adjustments to the 
CMV emissions were implemented following the October 2019 2016v1 
release. These updated CMV inventories were released publicly by 
February, 2020.\85\
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    \85\ See 2016emissions, 2023 emissions, and 2028 emissions under 
ftp://newftp.epa.gov/air/emismod/2016/v1/.
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6. Development of Emission Inventories for Other Nonroad Mobile Sources
    Nonroad mobile source emission inventories (other than CMV, 
locomotive, and aircraft emissions) were developed from monthly, 
county, and process level emissions output from MOVES2014b. MOVES2014b 
included important updates to nonroad engine population growth rates. 
Types of nonroad equipment include recreational vehicles, pleasure 
craft, and construction, agricultural, mining, and lawn and garden 
equipment. State-submitted emissions data for nonroad sources were used 
for California.
    EPA also ran MOVES2014b for 2023 and 2028 to prepare nonroad mobile 
emissions inventories for future years. The nonroad mobile emission 
control programs include reductions to locomotives, diesel engines, and 
recreational marine engines, along with standards for fuel sulfur 
content and evaporative emissions. A comprehensive list of control 
programs included for mobile sources is available in the Emissions 
Modeling TSD.
    Line haul locomotives are also considered a type of nonroad mobile 
source but the emissions inventories for locomotives were not developed 
using MOVES2014b. Year 2016 locomotive emissions were developed through 
the Inventory Collaborative and are mostly consistent with those in the 
2017 NEI. The projected locomotive emissions for 2023 and 2028 were 
developed by applying factors to the base year emissions using activity 
data based on 2018 AEO freight rail energy use growth rate projections 
and emission rates adjusted to account for recent historical trends.
7. Development of Emission Inventories for Nonpoint Sources
    The emissions for stationary nonpoint sources in our 2016 base case 
emission inventory are largely consistent with those in the 2014NEIv2, 
although some were adjusted to more closely reflect year 2016 using 
factors based on changes to human population from 2014 to 2016. 
Stationary nonpoint sources include evaporative sources, consumer 
products, fuel combustion that is not captured by point sources, 
agricultural livestock, agricultural fertilizer, residential wood 
combustion, fugitive dust, and oil and gas sources. For more 
information on the nonpoint sources in the 2016 base case inventory, 
see the Emissions Modeling TSD and the 2014NEIv2 TSD.
    Where states provided the Inventory Collaborative information about 
projected control measures or changes in nonpoint source emissions, 
those inputs were incorporated into the projected inventories for 2023 
and 2028. Adjustments for state fuel sulfur content rules for fuel oil 
in the Northeast were included. Projected emissions for portable fuel 
containers reflect the impact of projection factors required by the 
final MSAT2 rule and the EISA, including updates to cellulosic ethanol 
plants, ethanol transport working losses, and ethanol distribution 
vapor losses.
    For 2016, nonpoint oil and gas emissions inventories were developed 
based on a run of EPA Oil and Gas Tool for 2016. To develop the future 
year inventories, regional projection factors for nonpoint oil and gas 
sources were developed by product type based on AEO 2019 projections to 
2023 and 2028. Estimates of criteria air pollutant (CAP) co-benefit 
reductions resulting from the NESHAP for RICE and NSPS rules and Oil 
and Gas NSPS VOC controls for select source categories were included. 
Additional details on the application of these rules and projections 
for nonpoint sources are available in the Emissions Modeling TSD. EPA 
received comments on the emissions inventories used in the proposed 
rule. These comments and EPA's responses are provided below and in the 
RTC.
    Comment: EPA received comments that contend that the Agency did not 
include emission reductions from all ``on the books'' control programs 
in certain states. These commenters say that monitoring sites that were 
identified as nonattainment and/or maintenance receptors might not be 
receptors if the Agency had accounted for the impacts of all control 
programs.\86\
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    \86\ For emissions sectors other than EGUs, EPA received only a 
limited set of comments on the base year and projected emissions 
inventories. Comments on emission inventories are addressed 
elsewhere in this document and in the RTC.
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    Response: The emissions inventories used for the step 1 and step 2 
air quality modeling of 2023 and 2028 were developed through a 
collaborative process through which input from state and local agencies 
and multijurisdictional organizations was solicited and accepted. For 
point sources, the 2016 inventories were derived from state and local 
submissions to the 2016 NEI as required by the Air Emissions Reporting 
Rule see 80 FR 8787 (February 19, 2015). Any rules promulgated by 2016 
that would have impacted emissions in the year 2016 would be included 
in those inventories. EPA then accounted for known changes in those 
inventories that would occur by 2023 and 2028 using EPA projection 
methods along with stakeholder-developed information. The Midatlantic 
Regional Air Management Association (MARAMA) worked with their member 
states and Ozone Transport Commission (OTC) states to develop 
projection and control factors for the years 2023 and 2028. These 
factors were provided to EPA in May

[[Page 23078]]

2019 and reflect rules impacting nonpoint sources that were promulgated 
prior to 2019. Through the Inventory Collaborative process, the 
inventories used for modeling included the ``on the books'' control 
programs that were identified by EPA and the state and 
multijurisdictional organization (MJO) partners such as MARAMA that 
provided inputs to the collaborative inventories. Rules related to 
emissions for sources other than EGUs promulgated in 2019 or later 
following the completion of the inventories for those sources are not 
included in the modeling for this rule.
    The commenter has listed multiple pages of various state-level 
NOX and VOC control programs and regulations, promulgated 
over multiple decades. The commenter did not provide quantitative 
information or data to support their claim that EPA failed to include 
the control programs cited by the commenter in the emissions 
inventories used to support the proposed rule, what the effect would be 
had they been included or characterized differently, and whether the 
effect would have changed any of the regulatory outcomes in EPA's 
analysis. This comment is further addressed in the RTC.
    Comment: EPA received comment suggesting changes to its EGU 
emissions inventory used in its step 1 and step 2 evaluations based on 
more recent data.
    Response: EPA is not changing the emissions inventory derived from 
its IPM modeling that incorporated the latest data at the time of 
execution in January of 2020 used at step 1 and step 2 of the 4-step 
framework. However, both in the proposed rule and at final, EPA 
reaffirmed its step 1 and step 2 findings using an updated/alternative 
EGU emissions inventory from the engineering analytics tool used in 
step 3 and discussed in the Ozone Transport Policy Analysis Final Rule 
TSD. This tool reflects known changes (e.g., retirements and new 
builds) applied to historical data to estimate future year EGU 
emissions. It represents alternative EGU emissions inventory 
perspective as it does not factor in model-projected changes. Moreover, 
it incorporates the latest available data and commenter input regarding 
any fleet changes. EPA, in the proposed and final rule, uses this 
alternative inventory in conjunction with its air quality assessment 
tool (AQAT) to estimate air quality impacts and upwind state 
contributions. Both in the proposed rule and final, this alternative 
emissions inventory and subsequent AQAT sensitivity analysis led to the 
same step 1 and step 2 findings as the IPM-based EGU emissions 
inventory and related CAMx modeling results. That is, EPA has examined 
a range of EGU inventories using different future year projections and 
incorporating the latest available data and commenter input. Across 
this range of EGU emission inventory estimates, EPA reaches the same 
conclusion for step 1 and step 2 downwind receptors and upwind 
linkages. Therefore, EPA's EGU emission inventories and corresponding 
step 1 and step 2 analytic findings have been robustly examined, tested 
across a range of assumptions, and are robust to a variety of 
assumptions, including the unit updates suggested by the commenter. For 
a complete unit-by-unit inventory of all EGUs included in the future 
year baseline for the engineering analytic tool, see the Ozone 
Transport Policy Analysis Final Rule TSD; Appendix A. The data in this 
Appendix reflect future unit level operating status taking into account 
retirement and new build announcements from both commenter input and 
the latest EIA Form 860 monthly (October 2020) available.

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

    In this section the Agency describes the air quality modeling and 
analyses performed in Step 1 to identify locations where the Agency 
expects there to be nonattainment or maintenance receptors for the 2008 
8-hour ozone NAAQS in the 2021 analytic future year. Where EPA's 
analysis shows that an area or site does not fall under the definition 
of a nonattainment or maintenance receptor in 2021, that site is 
excluded from further analysis under EPA's good neighbor framework.
    In this final rule, EPA is not reopening the approach used in the 
CSAPR Update to identify nonattainment and maintenance receptors. 
Wisconsin upheld EPA's approach to identifying nonattainment and 
maintenance receptors against specific challenges. See 938 F.3d at 325-
27.\87\ As this action is taken in response to the Wisconsin remand and 
to complete the good neighbor obligations that were partially addressed 
in the CSAPR Update, it is entirely appropriate to continue to apply 
the same approach to identifying receptors to fully address the 
outstanding obligations as EPA took in partially addressing them. 
Indeed, to do otherwise would be anomalous and could lead to 
inconsistent treatment of states under the 4-step framework for 
purposes of the 2008 ozone NAAQS. However, as an aid to understanding 
EPA's approach to identifying receptors, a summary of this approach 
follows.
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    \87\ The Court's holding rested in part on the partial nature of 
the CSAPR Update, id. at 327, and rejected the remainder of the 
challenge to EPA's treatment of maintenance receptors because 
petitioners in the case failed to establish actual over-control. 
Here, EPA has also conducted a rigorous overcontrol analysis showing 
that this action does not result in overcontrol. See Ozone Policy 
Analysis Final Rule TSD for details.
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    EPA's approach gives independent effect to both the ``contribute 
significantly to nonattainment'' and the ``interfere with maintenance'' 
prongs of section 110(a)(2)(D)(i)(I), consistent with the D.C. 
Circuit's direction in North Carolina.\88\ Further, in its decision on 
the remand of the CSAPR from the Supreme Court in the EME Homer City 
case, the D.C. Circuit confirmed that EPA's approach to identifying 
maintenance receptors in the CSAPR comported with the court's prior 
instruction to give independent meaning to the ``interfere with 
maintenance'' prong in the good neighbor provision. EME Homer City II, 
795 F.3d at 136.
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    \88\ 531 F.3d at 910-911 (holding that EPA must give 
``independent significance'' to each prong of CAA section 
110(a)(2)(D)(i)(I)).
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    In the CSAPR Update, EPA identified nonattainment receptors as 
those monitoring sites that are projected to have average design values 
that exceed the NAAQS and that are also measuring nonattainment based 
on the most recent monitored design values. This approach is consistent 
with prior transport rulemakings, such as the NOX SIP Call 
and CAIR, where EPA defined nonattainment receptors as those areas that 
both currently monitor nonattainment and that EPA projects will be in 
nonattainment in the future compliance year.\89\
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    \89\ See 63 FR 57375, 57377 (October 27, 1998); 70 FR 
25241(January 14, 2005). See also North Carolina, 531 F.3d at 913-
914 (affirming as reasonable EPA's approach to defining 
nonattainment in CAIR).
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    The Agency explained in the NOX SIP Call and CAIR and 
then reaffirmed in the CSAPR Update that EPA has the most confidence in 
our projections of nonattainment for those counties that also measure 
nonattainment for the most recent period of available ambient data. EPA 
separately identified maintenance receptors as those receptors that 
would have difficulty maintaining the relevant NAAQS in a scenario that 
takes into account historical variability in air quality at that 
receptor. The variability in air quality was determined by evaluating 
the ``maximum'' future design value at each receptor based on a 
projection of the maximum measured design value

[[Page 23079]]

over the relevant period. EPA interprets the projected maximum future 
design value to be a potential future air quality outcome consistent 
with the meteorology that yielded maximum measured concentrations in 
the ambient data set analyzed for that receptor (i.e., ozone conducive 
meteorology). EPA also recognizes that previously experienced 
meteorological conditions (e.g., dominant wind direction, temperatures, 
air mass patterns) promoting ozone formation that led to maximum 
concentrations in the measured data may reoccur in the future. The 
maximum design value gives a reasonable projection of future air 
quality at the receptor under a scenario in which such conditions do, 
in fact, reoccur. The projected maximum design value is used to 
identify upwind emissions that, under those circumstances, could 
interfere with the downwind area's ability to maintain the NAAQS.
    Therefore, applying this methodology in this final rule, EPA 
assessed the magnitude of the maximum projected design value for 2021 
at each receptor in relation to the 2008 ozone NAAQS and, where such a 
value exceeds the NAAQS, EPA determined that receptor to be a 
``maintenance'' receptor for purposes of defining interference with 
maintenance, consistent with the method used in the CSAPR and upheld by 
the DC Circuit in EME Homer City II.\90\ That is, monitoring sites with 
a maximum design value that exceeds the NAAQS are projected to have a 
maintenance problem in 2021.
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    \90\ See 795 F.3d at 136.
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    Recognizing that nonattainment receptors are also, by definition, 
maintenance receptors, EPA often uses the term ``maintenance-only'' to 
refer to receptors that are not also nonattainment receptors. 
Consistent with the methodology described above, monitoring sites with 
a projected maximum design value that exceeds the NAAQS, but with a 
projected average design value that is below the NAAQS, are identified 
as maintenance-only receptors. In addition, those sites that are 
currently measuring ozone concentrations below the level of the 
applicable NAAQS, but are projected to be nonattainment based on the 
average design value and that, by definition, are projected to have a 
maximum design value above the standard are also identified as 
maintenance-only receptors.
    As described above in section V.B., EPA is using the 2016 and 2023 
base case emissions developed under the EPA/MJO/state collaborative 
project as the primary source for base year and 2023 future year 
emissions data for this final rule. Because this platform does not 
include emissions for 2021, EPA developed an interpolation technique 
based on modeling for 2023 and measured ozone data to determine ozone 
concentrations for 2021. To estimate average and maximum design values 
for 2021, EPA first performed air quality modeling for 2016 and 2023 to 
obtain design values in 2023. The 2023 design values were then coupled 
with the corresponding 2016 measured design values to estimate design 
values in 2021 using the interpolation technique described below.
    Consistent with EPA's modeling guidance, the 2016 and 2023 air 
quality modeling results were used in a ``relative'' sense to project 
design values for 2023. That is, the ratios of future year model 
predictions to base year model predictions are used to adjust ambient 
ozone design values up or down depending on the relative (percent) 
change in model predictions for each location. The modeling guidance 
recommends using measured ozone concentrations for the 5-year period 
centered on the base year as the air quality data starting point for 
future year projections. This average design value is used to dampen 
the effects of inter-annual variability in meteorology on ozone 
concentrations and to provide a reasonable projection of future air 
quality at the receptor under ``average'' conditions. In addition, the 
Agency calculated maximum design values from within the 5-year base 
period to represent conditions when meteorology is more favorable than 
average for ozone formation. Because the base year for the air quality 
modeling used in this final rule is 2016, the base period 2014-2018 
ambient ozone design value data was used in order to project average 
and maximum design values in 2023.
    The ozone predictions from the 2016 and 2023 air quality model 
simulations were used to project 2014-2018 average and maximum ozone 
design values to 2023 using an approach similar to the approach in 
EPA's guidance for attainment demonstration modeling. This guidance 
recommends using model predictions from the ``3 x 3'' array of grid 
cells \91\ surrounding the location of the monitoring site to calculate 
a Relative Response Factor (RRF) for that site.\92\ The 2014-2018 
average and maximum design values were multiplied by the RRF to project 
each of these design values to 2023. In this manner, the projected 
design values are grounded in monitored data, and not the absolute 
model-predicted 2023 concentrations. In light of comments on the Notice 
of Data Availability (82 FR 1733; January 6, 2017) and other analyses, 
EPA also projected 2023 design values based on a modified version of 
the ``3 x 3'' approach for those monitoring sites located in coastal 
areas. In this alternative approach, EPA eliminated from the RRF 
calculations the modeling data in those grid cells that are dominated 
by water (i.e., more than 50 percent of the area in the grid cell is 
water) and that do not contain a monitoring site (i.e., if a grid cell 
is more than 50 percent water but contains an air quality monitor, that 
cell would remain in the calculation). The choice of more than 50 
percent of the grid cell area as water as the criteria for identifying 
overwater grid cells is based on the treatment of land use in the 
Weather Research and Forecasting model (WRF).\93\ Specifically, in the 
WRF meteorological model those grid cells that are greater than 50 
percent overwater are treated as being 100 percent overwater. In such 
cases the meteorological conditions in the entire grid cell reflect the 
vertical mixing and winds over water, even if part of the grid cell 
also happens to be over land with land-based emissions, as can often be 
the case for coastal areas. Overlaying land-based emissions with 
overwater meteorology may be representative of conditions at coastal 
monitors during times of on-shore flow associated with synoptic 
conditions and/or sea-breeze or lake-breeze wind flows. But there may 
be other times, particularly with off-shore wind flow when vertical 
mixing of land-based emissions may be too limited due to the presence 
of overwater meteorology. Thus, for our modeling EPA calculated 2023 
projected average and maximum design values at individual monitoring 
sites based on both the ``3 x 3'' approach as well as the alternative 
approach that eliminates overwater cells in the RRF calculation

[[Page 23080]]

for near-coastal areas (i.e., ``no water'' approach).
---------------------------------------------------------------------------

    \91\ As noted above, each model grid cell is 12 x 12 km.
    \92\ The RRF represents the change in ozone based on emission 
changes at a given site. In order to calculate the RRF, EPA's 
modeling guidance recommends selecting the 10 highest ozone days in 
an ozone season at any given monitor in the base year, noting which 
of the grid cells in the 3x3 array experienced the highest ozone 
concentrations in the base year, and averaging those ten highest 
concentrations. The model is then run using the projected year 
emissions, in this case 2023, with all other model variables held 
constant. Ozone concentrations from the same ten days, in the same 
ten grid cells, are then averaged. The fractional change between the 
base year (2011 model run) averaged ozone concentrations and the 
future year (2023 model run) averaged ozone concentrations 
represents the relative response factor.
    \93\ https://www.mmm.ucar.edu/weather-research-and-forecasting-model.
---------------------------------------------------------------------------

    The 2023 average and maximum design values for both the ``3 x 3'' 
and ``no water'' approaches were then paired with the corresponding 
base period measured design values at each ozone monitoring site. 
Design values for 2021 for both approaches were calculated by linearly 
interpolating between the 2016 base period and 2023 projected 
values.\94\ The steps in the interpolation process for estimating 2021 
average and maximum design values are as follows:
---------------------------------------------------------------------------

    \94\ EPA examined the 2019 design values as a way to support the 
set of monitoring sites that were identified as receptors based on 
the 2021 interpolated design values. The outcome of this analysis 
was that each of the five receptors in 2021 had 2019 measured design 
values that exceeded the 2008 NAAQS. In addition, there are four 
other monitoring sites in the eastern U.S. that are not projected to 
be receptors in 2021, but that have 2019 design values that exceeded 
the NAAQS. Because the measured design values at these sites are 
only 1 or 2 ppb above the NAAQS, it is reasonable to assume that 
these four sites will be clean by 2021--which is consistent with the 
projections for these monitoring sites. Thus, the analysis of 2019 
measured data and 2021 projections provides confidence in the 
approach for identifying nonattainment/maintenance receptors in 
2021.
---------------------------------------------------------------------------

    (1) Calculate the ppb change in design values between the 2016 base 
period and 2023;
    (2) Divide the ppb change by 7 to calculate the ppb change per year 
over the 7-year period between 2016 and 2023;
    (3) Multiply the ppb per year value by 5 to calculate the ppb 
change in design values over the 5-year period between 2016 and 2021;
    (4) Subtract the ppb change between 2016 to 2021 from the 2016 
design values to produce the design values for 2021.
    The projected 2021 and 2023 design values using both the ``3 x 3'' 
and ``no-water'' approaches are provided in the AQM TSD.\95\ For this 
final rule, EPA is relying upon design values based on the ``no water'' 
approach for identifying nonattainment and maintenance receptors.
---------------------------------------------------------------------------

    \95\ Based on the 2021 design values, there are 129 monitoring 
sites that have different design values based on the ``3 x 3'' 
approach vs the ``no-water'' approach. For these 129 monitoring 
sites, the average difference is 0.41 ppb and the median difference 
is 0.28 ppb. The average and median percent differences between the 
``3 x 3'' and ``no-water'' design values at these 129 monitoring 
sites are 0.65 percent and 0.52 percent, respectively. Thus, there 
is not much difference in the design values between these two 
approaches.
---------------------------------------------------------------------------

    Consistent with the truncation and rounding procedures for the 8-
hour ozone NAAQS, the projected design values are truncated to integers 
in units of ppb.\96\ Therefore, projected design values that are 
greater than or equal to 76 ppb are considered to be violating the 2008 
ozone NAAQS. For those sites that are projected to be violating the 
NAAQS based on the average design values in 2021, the Agency examined 
the design values for 2019, which are the most recent certified 
measured ozone design values at the time of this action. As noted 
above, the Agency identified nonattainment receptors in this rulemaking 
as those sites that are violating the NAAQS based on current measured 
air quality and also have projected average design values of 76 ppb or 
greater. Maintenance-only receptors include both (1) those sites with 
projected average design values above the NAAQS that are currently 
measuring clean data and (2) those sites with projected average design 
values below the level of the NAAQS, but with projected maximum design 
values of 76 ppb or greater. In addition to the maintenance-only 
receptors, the 2021 ozone nonattainment receptors are also maintenance 
receptors because the maximum design values for each of these sites is 
always greater than or equal to the average design value. The 
monitoring sites that the Agency projects to be nonattainment and 
maintenance receptors for the ozone NAAQS in the 2021 base case are 
used for assessing the contribution of emissions in upwind states to 
downwind nonattainment and maintenance of ozone NAAQS as part of this 
action.
---------------------------------------------------------------------------

    \96\ 40 CFR part 50, Appendix P to Part 50--Interpretation of 
the Primary and Secondary National Ambient Air Quality Standards for 
Ozone.
---------------------------------------------------------------------------

    Table V.C-1 contains the 2014-2018 base period average and maximum 
8-hour ozone design values, the 2021 base case average and maximum 
design values,\97\ and the 2019 design values for the two sites that 
are projected to be nonattainment receptors in 2021 and the two sites 
that are projected to be maintenance-only receptors in 2021.\98\ The 
design values for all monitoring sites in the U.S. are provided in the 
docket for this rule. Additional details on the approach for projecting 
average and maximum design values are provided in the AQM TSD.
---------------------------------------------------------------------------

    \97\ The design values for 2021 in this table are based on the 
``no water'' approach.
    \98\ Using design values from the ``3 x 3'' approach does not 
change the total number of receptors in 2021. However, with the ``3 
x 3'' approach the maintenance-only receptor in New Haven County, CT 
has a projected maximum design value of 75.5 ppb and would, 
therefore, not be a receptor using this approach. In contrast, 
monitoring site 090010017 in Fairfield County, CT has projected 
average and maximum design value of 75.7 and 76.3 ppb, respectively, 
with the ``3 x 3'' approach and would, therefore, be a maintenance-
only receptor with this approach.

     Table V.C-1--Average and Maximum 2014-2018 and 2021 Base Case 8-Hour Ozone Design Values and 2019 Preliminary Design Values (ppb) at Projected
                                                        Nonattainment and Maintenance-Only Sites
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Average design  Maximum design
             Monitor ID                  State              Site            value 2014-     value 2014-   Average design  Maximum design    2019 Design
                                                                               2018            2018         value 2021      value 2021         value
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Nonattainment Receptors
--------------------------------------------------------------------------------------------------------------------------------------------------------
090013007..........................  CT            Stratford............            82.0              83            76.5            77.4              82
090019003..........................  CT            Westport.............            82.7              83            78.5            78.8              82
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Maintenance-Only Receptors
--------------------------------------------------------------------------------------------------------------------------------------------------------
090099002..........................  CT            Madison..............            79.7              82            73.9            76.1              82
482010024..........................  TX            Houston..............            79.3              81            75.5            77.1              81
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Comment: Some commenters said that EPA's interpolation method for 
determining design values in 2021 is flawed because (1) the method 
incorrectly assumes that ozone precursor emissions in all source 
sectors in all states change at an equal rate between 2016 and 2023, 
(2) linearly interpolated EGU emissions for 2021 overstate EPA's IPM-
predicted EGU emissions for 2021, and (3) the method does not account 
for the non-linear

[[Page 23081]]

response of ozone to emissions changes. These commenters say that EPA 
should have developed a 2021 specific emissions inventory or at a 
minimum developed an interpolated 2021 emission inventory and then 
rerun the photochemical model to account for the reactivity of ozone 
formation from the distribution of ozone precursor emissions. The 
commenters contend that failing to take this step, EPA has introduced 
significant uncertainty into the air quality projections of the 
proposed rule and potentially subjected multiple upwind states to 
unnecessary additional control requirements.
    Response: As an initial matter, there is no legal obligation for 
EPA to directly model the selected analytic year, here 2021, in order 
to make regulatory determinations within the 4-step good neighbor 
framework. Given the limited amount of time EPA had to complete this 
rulemaking in order to meet the court-ordered March 15 deadline, EPA 
reasonably chose to use existing air quality modeling and contribution 
information to derive an appropriately reliable projection of air 
quality conditions and contributions in 2021. The Supreme Court 
recognized in EME Homer City that it is not possible to perfectly 
account for all factors that will affect downwind air quality problems 
in a future year. Regulators, the Court noted, ``must account for the 
vagaries of the wind'' and in assigning upwind responsibility face a 
``thorny causation problem.'' 572 U.S. 489, 497, 514. EPA's ultimate 
task is not to achieve a perfect understanding of atmospheric 
conditions in some future year, but ``to quantify the amount of upwind 
gases . . . that must be reduced to enable downwind states to keep 
their levels of ozone . . . in check. Id. 497. See also EME Homer City 
Generation, L.P. v. EPA, 795 F.3d 118, 135-36 (``We will not invalidate 
EPA's predictions solely because there might be discrepancies between 
those predictions and the real world. . . . [A] model is meant to 
simplify reality in order to make it tractable.'').
    EPA continues to view the interpolation analysis presented at 
proposal as sufficiently reliable for purposes of the regulatory 
determinations made in this rulemaking. Commenters assert that it is 
possible EPA may have found certain upwind state linkages not to exist 
had EPA taken a different approach to developing its projections for 
2021. But no commenter has established an actual instance of 
overcontrol, which the courts have held must be clearly established 
through as-applied challenges. See Wisconsin, 938 F.3d at 325 (`` 
`[T]he Supreme Court has made clear . . . that the way to contest 
instances of over-control is not through generalized claims that EPA's 
methodology would lead to over-control, but rather through a 
``particularized, as-applied challenge.'' ' '') (quoting EME Homer 
City, 795 F.3d at 137).
    Nonetheless, in consideration of these comments, EPA has performed 
additional analysis, which confirms the regulatory determinations EPA 
proposed and is now finalizing. EPA was able to construct an emissions 
inventory for 2021, using available data and the same approach as EPA 
used to develop projection inventories for 2023 and 2028. Details on 
the construct of the 2021 emissions are provided in the Emissions 
Modeling TSD. There was, however, insufficient time to perform air 
quality modeling using this newly constructed 2021 inventory. Instead 
EPA used the Air Quality Assessment Tool (AQAT) to perform a 
sensitivity analysis to determine whether there would be any change in 
the outcome of this rule if the projection of 2021 air quality were 
based on projected 2021 emissions rather than EPA's interpolation 
method, as described above. In brief, AQAT uses the results of existing 
base year and future year air quality modeling as part of an 
interpolation technique to estimate ozone design values and 
contributions for analytic years that are not modeled as well as to 
analyze the air quality impacts of control scenarios in step 3 of the 
4-step transport framework. AQAT is calibrated using model simulations 
to account for the non-linearity response of ozone to emissions 
changes. As noted by the commenter, EPA's interpolation approach 
inherently assumes that the relative change in emissions between 2016 
and 2023 is the same across all states. Because this application of 
AQAT considered 2021 state level emissions on a state-by-state basis, 
the analysis accounted for any state-to-state differences in the change 
in emissions between 2016 and 2023. As part of this sensitivity 
analysis EPA coupled the 2021 emissions and 2023 model-predicted ozone 
design values and contributions to estimate design values and 
contributions in 2021. EPA also used the 2021 emissions in AQAT to 
create a more-refined interpolated 2022 emission inventory. EPA then 
used the AQAT to examine the effects of this refined 2022 emission 
inventory on ozone design values and contributions. The results 
indicate that any changes in the nonattainment or maintenance status of 
individual receptors using 2021 and 2022 projected emissions would not 
affect which upwind states significantly contribute to nonattainment 
and/or interfere with maintenance of the 2008 NAAQS in another 
state.\99\ Details on AQAT and this sensitivity analysis can be found 
in the Ozone Policy Analysis Final Rule TSD.
---------------------------------------------------------------------------

    \99\ Because EPA directly modeled 2023 and 2028, EPA relied 
solely on that modeling, and associated inventories, for its 
analysis of 2023 and later years.
---------------------------------------------------------------------------

    Comment: Other commenters claim that there is a disconnect between 
EPA's projected 2021 design values and current ozone monitoring data. 
These commenters said that EPA should give priority to monitored data 
over modeled data when evaluating which areas need transport 
obligations resolved. Specifically, one commenter performed an analysis 
to estimate 2021 design values by first estimating a fourth high 
maximum daily average 8-hour (MDA8) ozone concentration in 2021 based 
on the four-year average of the measured fourth high values during the 
period 2017 through 2020 and second, calculating the 2021 design value 
as the average of the measured fourth high value in 2019, the 
preliminary fourth high value in 2020 and the estimated fourth high 
value in 2021.\100\ Another commenter performed a statistical linear 
regression analysis of the fourth highest measured values for each of 
three time periods: 2012 through 2020, 2014 through 2020, and 2016 
through 2020 to estimate fourth highest values in 2021 that would 
result in nonattainment in 2021 at individual monitoring sites. This 
commenter said that an assessment of actual ambient monitor data, such 
as the analysis performed by this commenter, should be given as much 
weight, if not more, in identifying receptors in 2021 as the modeling-
based analysis performed by EPA. Both commenters said that the results 
of their analyses support EPA's finding that the four monitoring sites 
identified in Table V.C-1, above will be receptors in 2021. However, 
both commenters claim that the Madison, Connecticut monitoring site 
090099002 will be a nonattainment receptor, whereas EPA projects this 
site to be a maintenance-only receptor in 2021. Also, both commenters 
claim that there will be an additional 2021 nonattainment receptor at 
the Greenwich, Connecticut monitoring site 090010017. One commenter 
noted that identifying the Madison monitoring site as nonattainment 
instead of maintenance-only and the Greenwich

[[Page 23082]]

monitoring site as a receptor will not alter the outcome of EPA's 
determination of which upwind states are linked to downwind receptors 
at step 2 of the 4-step transport framework.
---------------------------------------------------------------------------

    \100\ Ozone design values and fourth high maximum daily 8-hour 
ozone concentrations for 2020 are preliminary and have not yet been 
cerified by EPA.
---------------------------------------------------------------------------

    In addition to the 2021 receptors in Connecticut, one commenter 
said that there will be two additional monitoring sites in the eastern 
U.S. that each have a chance of being a nonattainment or maintenance 
receptor in 2021. These monitoring sites are Houston-Deer Parksite 
492011039 and Dallas-Grapevine site 48439007). The other commenter said 
that their analysis shows that there will be up to four additional 
nonattainment receptors in 2021 in the eastern U.S. outside of 
Connecticut. These monitoring sites include the Chicago-Northbrook, 
Illinois monitoring site 170314201, the Michigan City, Indiana 
monitoring site 180910005, the El Paso, Texas monitoring site 
481410037, and the Dallas-Eagle Mountain Rock monitoring site 
484390075.
    Response: EPA agrees with these commenters that the four monitoring 
sites identified by EPA as receptors in Table V.C-1 will be receptors 
in 2021. EPA also agrees that there would be no change in the upwind 
states covered by this rule if the Madison, Connecticut maintenance-
only receptor is a nonattainment receptor rather than maintenance-only 
receptor. As described above, a maintenance-only receptor is a 
monitoring site that is at risk of being in nonattainment under 
meteorological conditions that are more conducive than average for 
ozone formation. Also, upwind states that are linked to maintenance-
only receptors are evaluated by EPA using the same approach as those 
upwind states linked to nonattainment receptors in EPA's analysis of 
significant contribution in step 3 of the 4-step transport framework. 
Regarding the Greenwich, Connecticut monitoring site, EPA's 
contribution data, as provided in the docket for this rule, shows that 
there would be no additional upwind states covered by this rule if this 
monitoring site was included as a receptor in 2021. That is, all the 
upwind states that are linked to this monitoring site, using a 1 
percent of the NAAQS threshold, are also linked to one or more of the 
other 2021 nonattainment and/or maintenance receptors in Connecticut 
that are identified in Table V.C-1.
    EPA disagrees with the commenters that the six additional 
monitoring sites (i.e., Chicago/Northbrook, Dallas/Eagle Mountain Rock, 
Dallas/Grapevine, El Paso, Houston/Deer Park, and Michigan City) will 
be nonattainment or maintenance receptors in 2021. First, as explained 
in the Air Quality TSD, these sites are not identified in the 
methodology EPA uses to identify nonattainment and maintenance 
receptors. These conclusions are bolstered by EPA's review of measured 
design values for the period 2012 through 2019 at each of these six 
monitoring sites (see Table V.C-2). These data show that each of these 
sites, except for the site in Michigan City, is not measuring 
nonattainment based on their 2019 design value, which are the most 
recent official design values based on state-certified data. Moreover, 
the monitoring site in El Paso has not measured a violation during this 
entire eight-year time period; the Houston/Deer Park site has not 
measured a violation in the most recent 6 years; the Dallas/Eagle 
Mountain Lake site has not measured a violation in the most recent 4 
years; the Chicago/Northbrook site has measured only 1 violation in the 
most recent 6 years; and the Dallas/Grapevine site has measured only 
one violation in the most recent 4 years. At the Michigan City site, 
there are no official measured design values in 2016, 2017, and 2018 
because there was no valid fourth high MDA8 ozone concentration in 
2016. As a result, the data at this site did not meet the criteria in 
EPA's modeling guidance for calculating valid future year design 
values. As such, EPA has not calculated projected design values nor any 
contributions for this site.

                               Table V.C-2--Ozone Design Values at Monitoring Sites Identified as Receptors by Commenters
--------------------------------------------------------------------------------------------------------------------------------------------------------
         Site ID               State              County                 Site name         2012    2013    2014    2015    2016    2017    2018    2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
170314201................  IL             Cook..................  Chicago/Northbrook....      78      77      74      68      71      72      77      74
180910005................  IN             LaPorte...............  Michigan City.........      83      83      79      68  ......  ......  ......      76
481410037................  TX             El Paso...............  El Paso...............      72      72      72      71      70      71      73      75
482011039................  TX             Harris................  Houston/Deer Park.....      84      79      72      69      67      68      71      75
484390075................  TX             Tarrant...............  Dallas/Eagle Mountain       82      81      79      76      72      71      70      73
                                                                   Lake.
484393009................  TX             Tarrant...............  Dallas/Grapevine......      86      86      80      78      75      75      76      75
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Comment: In the proposed rule EPA requested comment on applying the 
``3 x 3'' approach and the ``no water cell'' approach, described above, 
to identify modeled-grid cells for use in projecting ozone design 
values to a future year. One commenter said that both the ``3 x 3'' and 
``no water cell'' approaches are acceptable, a second commenter 
supported the use of the ``no water cell'' approach, while a third 
commenter suggested that EPA modify the ``no water cell'' approach to 
exclude from the calculation of projected design values any data from 
the grid cell containing the monitoring site, if the monitor grid cell 
is also dominated by water.
    Response: EPA has considered these comments and will continue to 
rely upon the ``no water cell'' approach used for the proposed rule to 
calculate projected design values at monitoring sites in coastal areas. 
The alternative suggested by one commenter to exclude model data from 
the grid cell containing the monitoring site, if that grid cells is 
classified as a ``water'' grid cell, ignores the modeling data for the 
location of the monitoring state which is contrary to EPA's air quality 
modeling guidance. This guidance recommends that the calculation of 
ozone relative response factors, which are used in projecting future 
year design values, include the modeled data in grid cells immediately 
surrounding the monitoring site along with the grid cell in which the 
monitor is located. For coastal monitoring sites, the grid cell in 
which the monitor is located is more likely to be representative of the 
monitor locations, than adjacent over-water grid cells. In this regard, 
the approach suggested by the commenter is too restrictive in that 
modeling data in the grid cell containing the monitoring site would 
never be used in projecting design values for that monitor.

D. Pollutant Transport From Upwind States

1. Air Quality Modeling To Quantify Upwind State Contributions
    This section documents the procedures EPA used to quantify the 
impact of emissions from specific upwind states on 2021 8-hour design 
values for the identified downwind nonattainment and maintenance

[[Page 23083]]

receptors. EPA used CAMx photochemical source apportionment modeling to 
quantify the impact of emissions in specific upwind states on downwind 
nonattainment and maintenance receptors for 8-hour ozone. CAMx employs 
enhanced source apportionment techniques that track the formation and 
transport of ozone from specific emissions sources and calculates the 
contribution of sources and precursors to ozone for individual receptor 
locations. The strength of the photochemical model source apportionment 
technique is that all modeled ozone at a given receptor location in the 
modeling domain is tracked back to specific sources of emissions and 
boundary conditions to fully characterize culpable sources.
    EPA performed nationwide, state-level ozone source apportionment 
modeling using the CAMx Ozone Source Apportionment Technology/
Anthropogenic Precursor Culpability Analysis (OSAT/APCA) technique 
\101\ to quantify the contribution of 2023 base case NOX and 
VOC emissions from all sources in each state to projected 2023 ozone 
design values at air quality monitoring sites. The CAMx OSAT/APCA model 
run was performed for the period May 1 through September 30 using the 
projected 2023 base case emissions and 2016 meteorology for this time 
period. As described below, in the source apportionment modeling the 
Agency tracked (i.e., tagged) the amount of ozone formed from 
anthropogenic emissions in each state individually as well as the 
contributions from other sources (e.g., natural emissions).
---------------------------------------------------------------------------

    \101\ As part of this technique, ozone formed from reactions 
between biogenic VOC and anthropogenic NOX or biogenic 
NOX and anthropogenic VOC are assigned to the 
anthropogenic emissions. This approach is designed to fully capture 
as part of the anthropogenic contribution the total amount of ozone 
formed from photochemical reactions that involve emissions from all 
anthropogenic sources. In this manner, ozone is assigned to the 
controllable (i.e., anthropogenic) precursors that react with non-
controllable (i.e., biogenic) precursors.
---------------------------------------------------------------------------

    To determine upwind contributions in 2021 the Agency applied the 
contributions from the 2023 modeling in a relative manner to the 2021 
ozone design values. The analytic steps in the process are as follows:
    (1) Calculate the 8-hour average contribution from each source tag 
to each monitoring site for the time period of the 8-hour daily maximum 
modeled concentrations in 2023;
    (2) Average the contributions and concentrations for each of the 
top 10 modeled ozone concentration days in 2023 \102\ and then divide 
the average contribution by the corresponding concentration to obtain a 
Relative Contribution Factor (RCF) for each monitoring site; and
---------------------------------------------------------------------------

    \102\ The number of days used in calculating the average 
contribution metric has historically been determined in a manner 
that is generally consistent with EPA's recommendations for 
projecting future year ozone design values. Our ozone attainment 
demonstration modeling guidance at the time of the CSAPR recommended 
using all model-predicted days above the NAAQS to calculate future 
year design values (https://www3.epa.gov/ttn/scram/guidance/guide/final-03-pm-rh-guidance.pdf). In 2014 EPA issued draft revised 
guidance that changed the recommended number of days to the top-10 
model predicted days (https://www3.epa.gov/ttn/scram/guidance/guide/Draft-O3-PM-RH-Modeling_Guidance-2014.pdf). For the CSAPR Update EPA 
transitioned to calculating design values based on this draft 
revised approach. The revised modeling guidance was finalized in 
2019 and, in this regard, EPA is calculating both the ozone design 
values and the contributions based on a top-10 day approach (https://www3.epa.gov/ttn/scram/guidance/guide/O3-PM-RH-Modeling_Guidance-2018.pdf).
---------------------------------------------------------------------------

    (3) Multiply the 2021 design values by the 2023 RCF at each site to 
produce the average contribution metric values in 2021.\103\ The 
resulting 2021 contributions from each tag to each monitoring site in 
the U.S. along with additional details on the source apportionment 
modeling and the procedures for calculating contributions can be found 
in the AQM TSD.
---------------------------------------------------------------------------

    \103\ The method for calculating the average contribution metric 
values in 2021 was also applied to 2023 and 2028 based on the 
projected design values and contribution modeling for each of those 
years, respectively.
---------------------------------------------------------------------------

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

Table V.D-1--Largest Contribution to Downwind 8-Hour Ozone Nonattainment
                    and Maintenance Receptors in 2021
------------------------------------------------------------------------
                                Largest downwind      Largest downwind
                                 contribution to       contribution to
        Upwind state              nonattainment       maintenance-only
                               receptors for ozone   receptors for ozone
                                      (ppb)                 (ppb)
------------------------------------------------------------------------
Alabama.....................                  0.11                  0.27

[[Page 23084]]

 
Arkansas....................                  0.18                  0.15
Illinois....................                  0.81                  0.80
Indiana.....................                  1.26                  1.08
Iowa........................                  0.17                  0.22
Kansas......................                  0.13                  0.11
Kentucky....................                  0.87                  0.79
Louisiana...................                  0.27                  4.68
Maryland....................                  1.21                  1.56
Michigan....................                  1.71                  1.62
Mississippi.................                  0.10                  0.37
Missouri....................                  0.36                  0.33
New Jersey..................                  8.62                  5.71
New York....................                 14.44                 12.54
Ohio........................                  2.55                  2.35
Oklahoma....................                  0.20                  0.14
Pennsylvania................                  6.86                  5.64
Texas.......................                  0.59                  0.36
Virginia....................                  1.30                  1.69
West Virginia...............                  1.49                  1.55
Wisconsin...................                  0.23                  0.23
------------------------------------------------------------------------

    Comment: One commenter said that the future year average 
contribution metric should be calculated using the modeled 
contributions on the same days that were used to calculate the RRFs for 
projecting future ozone design values.
    Response: EPA believes that its approach, as described above, for 
calculating the future year average contribution metric provides a more 
technically reliable estimate of contributions than the method 
suggested by the commenter. In calculating the average contribution 
metric, EPA uses modeled contributions on the 10 days in the future 
year with the highest model-predicted concentrations.\104\ In part 
because the formation of ozone from precursor emissions can be highly 
nonlinear and dependent on meteorological conditions, the response of 
ozone to emission reductions can vary from day to day. In this regard, 
the days with the highest model-predicted ozone concentrations in the 
2016 base year that are used for projecting ozone design values may not 
be among the highest ozone days in the future analytic year. In this 
situation, the calculation of the contribution metric could exclude 
days with higher concentrations in the future year in favor of lower 
future-concentration days that happened to correspond to the highest 
days in 2016. The problems with basing the calculation of future year 
average contributions on the days that were used to project design 
values are illustrated in Table V.D-2. Table V.D-2 includes the data 
for all the days that were either used to project design values and/or 
to calculate the average contribution values from each upwind state to 
a particular receptor. The data in the ``2016 Modeled'' column are the 
2016 base year MDA8 ozone concentrations and the data in the ``2023 
Modeled'' column are the MDA8 ozone concentrations in 2023. The data in 
the table are ranked based on the magnitude of the 2016 MDA8 
concentrations.\105\ Comparing the 2023 MDA8 ozone concentrations to 
the corresponding 2016 values shows that the days with the highest MDA8 
ozone concentrations in 2016 are not the same days as the highest MDA8 
ozone concentrations in 2023. Of importance, the top 10 days based on 
2016 model predictions includes five days with 2023 MDA8 ozone 
concentrations below 60 ppb. In calculating the average contribution 
metric EPA excludes from the calculation all days with future year 
modeled MDA8 concentrations below 60 ppb. Thus, using EPA's approach 
the average contribution metric in this example would be calculated 
based on daily contribution data for the top 6 MDA8 concentration days 
in 2023, because the remaining top 10 future year days are below 60 ppb 
(i.e., 05/06, 05/13, 06/08, 09/12, and 09/28). Moreover, even though 
the concentration on the sixth-highest day in 2023 is 60 ppb, the 
contribution data on this day would be excluded from the calculations 
because this day is not among the top 10 days used to project design 
values.
---------------------------------------------------------------------------

    \104\ If there are fewer than 5 days with model-predicted future 
year ozone concentrations greater than or equal to 60 ppb, then an 
average contribution metric is not calculated because. Using the 60 
ppb criteria aligns with the criteria for projecting future year 
design values, as recommended in EPA's air quality modeling 
guidance.
    \105\ Top 10 days that have modeled MDA8 ozone predictions less 
than 60 ppb are not included in the RRF calculation.

     Table V.D-2--MDA8 Ozone Concentrations in 2016 Used To Project Design Values and the 2023 Modeled MDA8
                                      Concentrations on the Same Days (ppb)
----------------------------------------------------------------------------------------------------------------
                      Date                           2016 Rank     2016 Modeled      2023 Rank     2023 Modeled
----------------------------------------------------------------------------------------------------------------
07/01...........................................               1            79.4               3            69.1
06/27...........................................               2            79.4               1            74.5
05/12...........................................               3            76.4               2            69.7

[[Page 23085]]

 
06/08...........................................               4            71.9               7            59.5
09/12...........................................               5            69.4              13            51.8
09/28...........................................               6            68.5              10            56.3
08/09...........................................               7            68.5               5            61.0
05/13...........................................               8            67.8               9            57.1
09/19...........................................               9            67.5               4            61.3
05/06...........................................              10            67.1               8            58.1
08/08...........................................              11            65.8              12            54.4
07/21...........................................              12            65.2              11            55.9
06/30...........................................              13            64.8              14            50.0
05/10...........................................              14            63.4               6            60.0
----------------------------------------------------------------------------------------------------------------

    It is obviously impossible for EPA, or anyone, to predict which 
exact days in a future year will have high ozone levels, nor does it 
make sense to analyze contribution on modeled days of low ozone 
concentration. EPA's methodology is reasonable in projecting where 
ozone problems are likely to recur in a future year and analyzing who 
is contributing to those problems under the conditions for high ozone 
formation in those locations.
    Comment: One commenter said that EPA should base the calculation of 
the future year contribution metric on days with measured exceedances 
of the NAAQS. Specifically, the comment asked EPA to examine the 2016 
measured concentrations at receptors in Connecticut to ensure that the 
contribution from Illinois to these receptors was calculated on days 
when the monitor measured exceedances.
    Response: EPA continues to believe that the future year 
contribution metric should be based on the highest ozone concentration 
days in the future year. However, as a sensitivity analysis EPA 
recalculated the average contribution from Illinois to the three 
receptors in Connecticut using the daily contributions on days with 
measured exceedances of the NAAQS, after applying the 60 ppb screening 
criteria to eliminate from the calculations those days with future year 
model-predicted MDA8 ozone concentrations below 60 ppb. The results of 
this sensitivity analysis, as provided in Table V.D-3, show that 
Illinois would contribute above the 1 percent of the NAAQS screening 
threshold to each of the three Connecticut receptors using the approach 
suggested by the commenter.

     Table V.D-3--Contributions From Illinois (ppb) to Receptors in
                               Connecticut
------------------------------------------------------------------------
                                                           Contribution
                                           Contribution      based on
                Receptor                  based on EPA's     measured
                                              method        exceedance
                                                               days
------------------------------------------------------------------------
Stratford...............................            0.69            0.98
Westport................................            0.81            0.76
Madison.................................            0.80            1.03
------------------------------------------------------------------------

2. Application of Screening Threshold
    EPA evaluated the magnitude of the contributions from each upwind 
state to downwind nonattainment and maintenance receptors. In step 2 of 
the good neighbor framework, EPA uses an air quality screening 
threshold to identify upwind states that contribute to downwind ozone 
concentrations in amounts sufficient to ``link'' them to these to 
downwind nonattainment and maintenance receptors. The contributions 
from each of the CSAPR Update states to each downwind nonattainment 
and/or maintenance receptor that were used for the step 2 evaluation 
can be found in the AQM TSD.
    As discussed above in section IV, EPA is not reopening the air 
quality screening threshold of 1 percent of the NAAQS used in the CSAPR 
Update. Therefore, as in the CSAPR Update, EPA uses an 8-hour ozone 
value for this air quality threshold of 0.75 ppb as the quantification 
of 1 percent of the 2008 ozone NAAQS.
    Comment: Several commenters said that EPA's 1 percent of the NAAQS 
threshold is too low and that, instead, a threshold of 1 ppb or 2 ppb 
should be used as the contribution screening threshold in step 2.
    Response: As noted above, the Agency is not reopening the use of 
the 1 percent threshold in this action to address the remand of the 
CSAPR Update. This action is taken in response to the Wisconsin remand 
and to complete the good neighbor obligations that were partially 
addressed in the CSAPR Update. It is entirely appropriate to continue 
to apply the same screening threshold to identifying receptors to fully 
address the outstanding obligations as EPA took in initially addressing 
them. Indeed, to do otherwise would be anomalous and pose a risk of 
inconsistent requirements for different states. While the Agency is not 
reopening the application of the 1 percent threshold in this action on 
remand, explanation for how this value was originally derived is 
available in the CSAPR rulemaking in 2011. See 76 FR 48208, 48237-38. 
Further, in the CSAPR Update, EPA re-analyzed the threshold for 
purposes of the 2008 ozone NAAQS and determined it was appropriate to 
continue to apply this threshold. EPA compared the 1 percent threshold 
to a 0.5 percent of NAAQS threshold and a 5 percent of NAAQS threshold. 
EPA found that the lower threshold did not capture appreciably more 
upwind state contribution compared to the 1 percent threshold, while 
the 5 percent threshold allowed too much upwind state contribution to 
drop out from further analysis.\106\ EPA therefore determined the 1 
percent threshold was appropriate for purposes of good neighbor 
obligations under the 2008 ozone NAAQS. This determination was not 
challenged in the Wisconsin case. Thus, EPA is applying the 1 percent 
threshold at step 2, consistent with its initial analysis of 
obligations in the CSAPR Update and without reopening its prior 
determination on this issue in that rule.
---------------------------------------------------------------------------

    \106\ See Final CSAPR Update Air Quality Modeling TSD, at 27-30 
(EPA-HQ-OAR-2015-0596-0144).
---------------------------------------------------------------------------

a. States That Contribute Below the Screening Threshold
    Of the 21 states that are the subject of this final rule, EPA has 
determined that the contributions from each of the

[[Page 23086]]

following states to nonattainment and/or maintenance-only receptors in 
the 2021 analytic year are below the threshold: Alabama, Arkansas, 
Iowa, Kansas, Mississippi, Missouri, Oklahoma, Texas, and Wisconsin. 
Because these states are considered not to contribute to projected 
downwind air quality problems, EPA is determining that the CSAPR Update 
FIPs for these states (or, in the case of Alabama and Missouri, the SIP 
revisions later approved to replace the states' CSAPR Update FIPs) are 
a complete remedy to address their significant contribution under the 
good neighbor provision for the 2008 ozone NAAQS. These states remain 
subject to the ozone season NOX emission budgets established 
in the CSAPR Update, and EPA is not reopening the determinations in the 
CSAPR Update regarding these states.\107\
---------------------------------------------------------------------------

    \107\ EPA notes that the updated modeling establishing that 
these states no longer contribute as of 2021 assumes in its baseline 
the continued implementation of the CSAPR Update budgets in these 
states.
---------------------------------------------------------------------------

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

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


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

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

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

A. The Multi-Factor Test

    This section describes EPA's methodology at step 3 of the 4-step 
framework for identifying upwind emissions that constitute 
``significant'' contribution for the states subject to this final rule. 
This analysis focuses on the 12 states linked at steps 1 and 2 of the 
framework, as identified in the sections above. Following the existing 
framework as applied in the CSAPR Update, EPA's assessment of linked 
upwind state emissions reflects analysis of uniform NOX 
emission control stringency. The analysis has been extended to include 
assessment of non-EGU sources in addition to EGU sources in the linked 
upwind states.
    Each level of uniform NOX control stringency is 
characterized by a set of pollution control measures. EPA applies a 
multi-factor test--the same multi-factor test that was used in the 
CSAPR and the CSAPR Update \108\--to evaluate increasing levels of 
uniform NOX control stringency. The multi-factor test, which 
is central to EPA's step 3 quantification of significant contribution, 
considers cost, available emission reductions, and downwind air quality 
impacts to determine the appropriate level of uniform NOX 
control stringency that addresses the impacts of interstate transport 
on downwind nonattainment or maintenance receptors. The uniform 
NOX emission control stringency, represented by marginal 
cost (or a weighted average cost in the case of EPA's non-EGU 
analysis), also serves to apportion the reduction responsibility among 
collectively contributing upwind states. This approach to quantifying 
upwind state emission-reduction obligations using uniform cost was 
reviewed by the Supreme Court in EME Homer City Generation, which held 
that using such an approach to apportion emission reduction 
responsibilities among upwind states that are collectively responsible 
for downwind air quality impacts ``is an efficient and equitable 
solution to the allocation problem the Good Neighbor Provision requires 
the Agency to address.'' 572 U.S. at 519.
---------------------------------------------------------------------------

    \108\ See CSAPR, Final Rule, 76 FR 48208 (Aug. 8, 2011).
---------------------------------------------------------------------------

    There are four stages in developing the multi-factor test: (1) 
Identify levels of uniform NOX control stringency; (2) 
evaluate potential NOX emission reductions associated with 
each identified level of uniform control stringency; (3) assess air 
quality improvements at downwind receptors for each level of uniform 
control stringency; and (4) select a level of control stringency 
considering the identified cost, available NOX emission 
reductions, and downwind air quality impacts, while also ensuring that 
emission reductions do not unnecessarily over-control relative to

[[Page 23087]]

the contribution threshold or downwind air quality.
    Comment: Some commenters suggested EPA also consider regulating 
volatile organic compounds (VOCs) as it represents another precursor to 
ozone formation. They assert EPA's failure to reduce significant 
contributions to downwind nonattainment/maintenance by reducing upwind 
VOC emissions disproportionately harms communities of color, low-income 
communities, and children, perpetuating environmental injustice.
    Response: EPA agrees that VOCs are a precursor along with 
NOX in forming ground-level ozone and that ozone formation 
chemistry can be ``NOX-limited'', where ozone production is 
primarily determined by the amount of NOX emissions or 
``VOC-limited'', where ozone production is primarily determined by the 
amount of VOC emissions.\109\ EPA also acknowledges that VOCs can 
contain toxic chemicals that affect public health. EPA's obligation in 
this action is to complete the elimination of significant contribution 
to nonattainment or interference with maintenance of NAAQS in other 
states for 12 states in the East to meet the requirements of section 
110(a)(2)(D)(i)(I) of the Act. Provisions for local NAAQS attainment 
and exposure to toxic pollutant concentrations are addressed by other 
sections of the statute. EPA and others have long regarded 
NOX to be the more significant ozone precursor in the 
context of interstate ozone transport.\110\ In response to this 
comment, EPA examined the results of the contribution modeling 
performed for this rule to identify the portion of the ozone 
contribution attributable to anthropogenic NOX emissions 
versus VOC emissions from each linked upwind state to each downwind 
receptor. Table VI.A provides the ozone contribution from each upwind 
state linked to the receptors in Connecticut along with the percent (in 
parenthesis) of the contribution that is formed under ``NOX-
limited'' photochemistry. The data show that NOX is the 
determinative precursor for over 80 percent of the total contribution 
from each upwind state to each of these receptors. In addition to the 
Connecticut receptors, ozone primarily formed from NOX 
emissions is 95 percent of the 4.58 ppb contribution from Louisiana to 
the receptor in Harris County, Texas. Therefore, EPA's review of the 
data leads to the finding that, as proposed, a focus on NOX 
emission reductions is appropriate for the purpose of addressing 
interstate ozone transport.
---------------------------------------------------------------------------

    \109\ ``Ozone Air Pollution.'' Introduction to Atmospheric 
Chemistry, by Daniel J. Jacob, Princeton University Press, 
Princeton, New Jersey, 1999, pp. 231-244.
    \110\ 81 FR 74514.

         Table VI.A.--Contribution (ppb) From Each Linked Upwind State to Receptors in Connecticut and the Percent of the Contribution From NOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
   State         Receptor          IL         IN         KY         MD         MI         NJ          NY          OH         PA         VA         WV
--------------------------------------------------------------------------------------------------------------------------------------------------------
CT.........  Stratford.......        Not       0.96       0.76       1.18       1.13       7.48  14.01 (81%)       2.27       6.53       1.25       1.41
                                  Linked      (95%)      (96%)      (90%)      (95%)      (83%)                   (95%)      (93%)      (93%)      (97%)
CT.........  Westport........       0.79       1.23       0.85       1.18       1.67       8.44  14.14 (81%)       2.50       6.72       1.27       1.45
                                   (94%)      (95%)      (96%)      (89%)      (94%)      (83%)                   (95%)      (92%)      (92%)      (96%)
CT.........  Madison.........       0.78       1.04       0.77       1.51       1.57       5.53  12.15 (86%)       2.27       5.47       1.63       1.51
                                   (95%)      (96%)      (96%)      (91%)      (95%)      (84%)                   (95%)      (92%)      (93%)      (96%)
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For both EGUs and non-EGUs, section VI.B describes the available 
NOX emission controls considered and their associated cost 
levels (in 2016$). Section VI.C discusses EPA's application of that 
information to assess emission reduction potential of the identified 
control stringencies. Finally, section VI.D describes EPA's assessment 
of associated air quality impacts and EPA's subsequent identification 
of appropriate control stringencies considering the relevant factors 
(cost, available emission reductions, and downwind air quality 
impacts). As discussed in greater detail in section VI.D, the multi-
factor test informed EPA's determination of appropriate EGU 
NOX ozone season emission budgets necessary to reduce 
emissions that significantly contribute to nonattainment or interfere 
with maintenance of the 2008 ozone NAAQS for the 2021 ozone season and 
subsequent control periods.
    This multi-factor approach is consistent with EPA's approach in the 
prior CSAPR and CSAPR Update actions. In addition, as was done in the 
CSAPR Update, EPA evaluated possible over-control by determining if an 
upwind state is linked solely to downwind air quality problems that 
could have been resolved at a lower representative cost threshold, or 
if upwind states could reduce their emissions below the 1 percent air 
quality contribution threshold at a lower representative cost 
threshold. This analysis is described in section VI.D.
    In the proposed rule, EPA identified a control stringency that 
reflects the optimization of existing SCR controls and installation of 
state-of-the-art NOX combustion controls at EGUs, with an 
estimated marginal cost of $1,600 per ton. As explained in greater 
detail in section VI.D, EPA is finalizing an EGU control stringency 
that also includes optimizing existing SNCR controls. Application of 
the multi-factor test to non-EGU sources has led EPA to conclude, as 
the Agency proposed, that emission reductions from non-EGU sources are 
not necessary to address significant contribution or interference with 
maintenance under the 2008 ozone NAAQS.

B. Identifying Levels of Control Stringency

1. EGU NOX Mitigation Strategies
    In identifying levels of uniform control stringency for EGUs, EPA 
reassessed the same NOX emission controls that it had 
analyzed in the CSAPR Update, all of which are considered to be widely 
available in this sector: (1) Fully operating existing SCR, including 
both optimizing NOX removal by existing operational SCRs and 
turning on and optimizing existing idled SCRs; (2) installing state-of-
the-art NOX combustion controls; (3) fully operating 
existing SNCRs, including both optimizing NOX removal by 
existing operational SNCRs and turning on and optimizing existing idled 
SNCRs; (4) installing new SNCRs; and (5) installing new SCRs. For the 
reasons explained in the EGU NOX Mitigation Strategies Final 
Rule TSD included in the docket for this final rule, EPA determined 
that for the regional, multi-state scale of this rulemaking, only EGU 
NOX emission controls 1 and 3 are possible for the 2021 
ozone season (fully operating existing SCRs and SNCRs). As discussed

[[Page 23088]]

in section VI.B.1.b, EPA finds that it is not possible to install 
state-of-the-art NOX combustion controls by the 2021 ozone 
season on a regional scale. EPA determined state-of-the-art 
NOX combustion controls at EGUs are available by the 
beginning of the 2022 ozone season.
a. Optimizing Existing SCRs
    Optimizing (i.e., turning on idled or improving operation of 
partially operating) existing SCRs can substantially reduce EGU 
NOX emissions quickly using investments that have already 
been made in pollution control technologies. With the promulgation of 
the CSAPR Update, most operators improved their SCR performance and 
have continued to maintain that level of improved operation. However, 
this SCR performance is not universal and some drop has been observed 
as the CSAPR Update ozone-season allowance price has declined steadily 
since 2017. For example, recent power sector data from 2019 reveal 
that, in some cases, operating units have SCR controls that have been 
idled or are operating partially, and therefore suggest that there 
remains reduction potential through optimization.\111\ EPA determined 
that optimizing all of these remaining SCRs in the 12 linked states is 
a readily available approach for EGUs to reduce NOX 
emissions.
---------------------------------------------------------------------------

    \111\ See ``Ozone Season Data 2018 vs. 2019'' and ``Coal-fired 
Characteristics and Controls'' at https://www.epa.gov/airmarkets/power-plant-data-highlights#OzoneSeason.
---------------------------------------------------------------------------

    EPA estimates a representative cost of optimizing SCR controls to 
be approximately $1,600 per ton. EPA's analysis of this emission 
control is informed by comment on the CSAPR Update proposed rule and 
updated information on operation and industrial-input costs that have 
become available since the CSAPR Update.\112\ While the costs of 
optimizing existing, operational SCRs include only variable costs, the 
cost of optimizing SCR units that are currently idled back into service 
considers both variable and fixed costs. Variable and fixed costs 
include labor, maintenance and repair, parasitic load, and ammonia or 
urea for use as a NOX reduction reagent in SCR systems. EPA 
performed an in-depth cost assessment for all coal-fired units with 
SCRs. More information about this analysis is available in the EGU 
NOX Mitigation Strategies Final Rule TSD, which is found in 
the docket for this rule. The TSD notes that, for the subset of SCRs 
that are already partially operating, the cost of optimizing is often 
much lower than the $1,600 per ton marginal cost and often under $800 
per ton.
---------------------------------------------------------------------------

    \112\ The CSAPR Update found $1,400 per ton was a level of 
uniform control stringency that represented turning on idled SCR 
controls. EPA uses the same costing methodology, but updating for 
input cost increases (e.g., urea reagent) to arrive at $1,600 per 
ton in this rule (while also updated from 2011 dollars to 2016 
dollars).
---------------------------------------------------------------------------

    EPA is using the same methodology to identify SCR performance as it 
did in the CSAPR Update. To estimate EGU NOX reduction 
potential from optimizing, EPA considers the difference between the 
non-optimized NOX emission rates and an achievable operating 
and optimized SCR NOX emission rate. To determine this rate 
in the CSAPR Update, EPA evaluated nationwide coal-fired EGU 
NOX ozone season emissions data from 2009 through 2015 and 
calculated an average NOX ozone season emission rate across 
the fleet of coal-fired EGUs with SCR for each of these seven years. 
EPA found it prudent to not consider the lowest or second-lowest ozone 
season NOX emission rates, which may reflect new SCR systems 
that have all new components (e.g., new layers of catalyst). Data from 
these new systems are not representative of ongoing achievable 
NOX emission rates considering broken-in components and 
routine maintenance schedules. To identify the potential reductions 
from SCR optimization in this final action, EPA followed the same 
methodology and incorporated the latest reported coal-fired EGU 
NOX ozone season emissions data. EPA updated the timeframe 
to include the most recent and best available operational data (i.e., 
2009 through 2019). Considering the emissions data over the full time 
period of available data results in a third-best rate of 0.08 pounds 
per million British thermal units (lb/mmBtu). EPA notes that over half 
of the SCR-controlled EGUs achieved a NOX emission rate of 
0.068 lbs/mmBtu or less over their third-best entire ozone season. 
Moreover, for the SCR-controlled coal units that EPA identified as 
having a 2019 emission rate greater than 0.08 lb/mmBtu, EPA verified 
that in prior years, the majority (approximately 95 percent) of these 
same units had demonstrated and achieved a NOX emission rate 
of 0.08 lb/mmBtu or less on a seasonal and/or monthly basis. This 
further supports EPA's determination that 0.08 lb/mmBtu reflects a 
reasonable emission rate for representing SCR optimization in 
quantifying state emission budgets as discussed in section VII.B. This 
fleet-level emission rate assumption of 0.08 lb/mmBtu for non-optimized 
units reflects, on average, what those units would achieve when 
optimized. Some of these units may achieve rates that are lower than 
0.08 lb/mmBtu, and some units may operate above that rate based on 
unit-specific configuration and dispatch patterns.
    EPA evaluated the feasibility of optimizing idled SCRs for the 2021 
ozone season. Based on industry past practice, EPA determined that 
idled controls can be restored to operation quickly (less than two 
months). This timeframe is informed by many electric utilities' 
previous long-standing practice of utilizing SCRs to reduce EGU 
NOX emission during the ozone season while putting the 
systems into protective lay-up during the non-ozone season months. For 
example, this was the long-standing practice of many EGUs that used SCR 
systems for compliance with the NOX Budget Trading Program. 
It was quite typical for SCRs to be turned off following the September 
30 end of the ozone season control period. These controls would then be 
put into protective lay-up for several months of non-use before being 
returned to operation by May 1 of the following ozone season.\113\ 
Therefore, EPA believes that optimization of existing SCRs is possible 
for the portion of the 2021 ozone season covered under this final rule.
---------------------------------------------------------------------------

    \113\ In the 22 state CSAPR Update region, 2005 EGU 
NOX emissions data suggest that 125 EGUs operated SCR 
systems in the summer ozone season while idling these controls for 
the remaining 7 non-ozone season months of the year. Units with SCR 
were identified as those with 2005 ozone season average 
NOX rates that were less than 0.12 lbs/mmBtu and 2005 
average non-ozone season NOX emission rates that exceeded 
0.12 lbs/mmBtu and where the average non-ozone season NOX 
rate was more than double the ozone season rate.
---------------------------------------------------------------------------

    The vast majority of SCR controlled units (nationwide and in the 12 
linked states) are already partially operating these controls during 
the ozone season based on historical 2019 emissions rates. EPA believes 
that this widely demonstrated seasonal behavior of turning on idled 
SCRs also supports the Agency's determination that optimizing existing 
SCR systems currently being operated to some degree within the ozone 
season, which would necessitate fewer changes to SCR operation relative 
to restarting idled systems, is also feasible for the 2021 ozone 
season. Full operation of existing SCRs that are already operating to 
some extent involves increasing reagent (i.e., ammonia or urea) flow 
rate, and maintaining and replacing catalyst to sustain higher 
NOX removal rate operations. Increasing NOX 
removal by SCR controls that are already operating can be implemented 
by procuring more reagent and catalyst. EGUs with SCR routinely procure 
reagent and catalyst as

[[Page 23089]]

part of ongoing operation and maintenance of the SCR system. In many 
cases, where EPA has identified EGUs that are operating their SCR at 
non-optimized NOX removal efficiencies, EGU data indicate 
that these units historically have achieved more efficient 
NOX removal rates. Therefore, EPA determined that optimizing 
existing SCRs currently being operated could generally be done by 
reverting back to previous operation and maintenance plans. Regarding 
full operation activities, existing SCRs that are only operating at 
partial capacity still provide functioning, maintained systems that may 
only require increased chemical reagent feed rate up to their design 
potential and catalyst maintenance for mitigating NOX 
emissions. Units must have adequate inventory of chemical reagent and 
catalyst deliveries to sustain operations. Considering that units have 
procurement programs in place for operating SCRs, this may only require 
updating the frequency of deliveries. This may be accomplished within a 
few weeks.
    Comment: EPA received comments supporting the 0.08 lb/mmBtu 
emission rate as achievable and, according to some commenters, 
conservative. Some of these commenters went on to provide their own 
analysis demonstrating that the 0.08 lb/mmBtu was achievable not only 
on average for the non-optimized fleet, but also for these individual 
units and that the resulting state emission budgets were likewise 
achievable. Some commenters suggested that the rate should be lower and 
premised on EPA using a longer historical baseline (e.g., extending 
baseline back to year 2006) and relying on the first- or second-best 
year instead of the third best year of SCR performance. In addition to 
supporting the 0.08 lb/mmBtu optimization rate as viable for 2021, 
these same commenters noted the 2021 attainment data and suggested 
implementation by 2021 was not only achievable, but necessary under 
Clean Air Act requirements and the Wisconsin directive.
    Response: As explained above, EPA chose 2009 for the start of its 
baseline period of SCR performance examination because that is the 
first year of annual compliance under the CAIR NOX program. 
The analysis focuses on the third best ozone season average rate 
because EPA believes that the first or second best rate, as discussed 
in the CSAPR Update final rule, could continue to capture 
disproportionately new SCR components and/or the onset of new 
regulatory programs and does not necessarily reflect achievable ongoing 
NOX emission rates. Therefore, EPA is finalizing analysis 
using the third best rate starting from 2009--consistent with its 
approach in the CSAPR Update.
    Comment: Other commenters suggested that EPA should apply a higher 
emission rate than 0.08 lb/mmBtu premised on considerations such as: A 
generally reduced average capacity factor for coal units in recent 
years, the age of the boiler, coal rank (bituminous or subbituminous), 
or other unit-specific considerations that make the 0.08 lb/mmBtu rate 
unattainable for a specific unit. They also suggested that EPA's 
determination of the rate should be premised on EPA using a shorter 
historical baseline (e.g., shortening the baseline to year 2013).
    Response: EPA did not find sufficient justification to apply a 
higher average emission rate than 0.08 lb/mmBtu or for shortening the 
baseline to exclude representative operational data starting in 2009. 
EPA found that some commenters were misunderstanding or misconstruing 
both EPA's assumption and implementation mechanism as a unit-level 
requirement for every SCR-controlled unit instead of a reflection of a 
fleet-wide average based on a third-best rate. The commenters' 
observation--that 0.08 lb/mmBtu may be difficult for some units to 
achieve or may not be a preferred compliance strategy for a given unit 
given its dispatch levels--does not contradict EPA's assumption, but 
rather supports its methodology and assumptions. As EPA pointed out in 
the proposed rule, ``this fleet-level emission rate assumption of 0.08 
lb/mmBtu for non-optimized units reflects, on average, what those units 
would achieve when optimized. Some of these units may achieve rates 
that are lower than 0.08 lb/mmBtu, and some units may operate above 
that rate based on unit-specific configuration and dispatch patterns.'' 
\114\ In other words, EPA is using this assumption as the average 
performance of a unit that optimizes its SCR, recognizing that 
heterogeneity within the fleet will likely lead some units to 
overperform and others to underperform this rate. Moreover, a review of 
unit-specific historical data indicates that this is a reasonable 
assumption: Not only has the group of units with SCR optimization 
potential demonstrated they can perform at or better than the 0.08 lb/
mmBtu rate on average, but 95 percent of the individual units in this 
group have met this rate on a seasonal and/or monthly basis based on 
their reported historical data.\115\ Additionally, EPA's examination of 
units with the largest emission reduction potential based on SCR 
optimization levels of 0.08 lb/mmBtu indicates the ability of units to 
improve emission rate performance. As an example, Miami Fort Unit 7 had 
considerably more hours operating at a 70 to 79 percent capacity factor 
in 2019 compared to previous years. However, Miami Fort Unit 7's ozone-
season NOX emission rate substantially increased in 2019 
compared to previous years. This runs counter to the notion that an 
increase in emission rates is purely driven by reduced capacity factor, 
as suggested by commenters. This substantial deterioration in the 
median emission rate performance is observable even when comparing 
specific hours in 2019 to specific hours in prior years when the unit 
operated in the same 70 to 79 percent capacity factor range. In fact, 
in 2019 the unit experienced notable emission rate increases from prior 
years across multiple capacity factor ranges as low as 40 percent to as 
high as 80 percent. This type of data indicates instances where the 
increase in emission rate (and emissions) is not necessitated by load 
changes but is more likely due to the erosion of the existing incentive 
to optimize controls (i.e., the ozone-season NOx allowance 
price has fallen so low that unit operators find it more economic to 
surrender additional allowances instead of continuing to operate 
pollution controls at an optimized level). This type of decline in 
emission rate performance at some SCR-controlled units is what EPA 
disincentivizes with the full remedy nature of this action.
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    \114\ 85 FR 68991.
    \115\ See ``Optimizing SCR Units With Best Historical 
NOX Rates Final'' file included in the docket for this 
rulemaking.

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[[Page 23090]]

[GRAPHIC] [TIFF OMITTED] TR30AP21.000

    EPA observed this pattern in other units identified in this 
rulemaking as having significant SCR optimization emission reduction 
potential. In the accompanying Emissions Data TSD for the supplemental 
notice that EPA recently released in a proceeding to address a 
recommendation submitted to EPA by the Ozone Transport Commission under 
CAA section 184(c), EPA noted, ``In their years with the lowest average 
ozone season NOX emission rates in this analysis, these EGUs 
had relatively low NOX emission rates at mid- and high-
operating levels; moreover, there was little variability in 
NOX emission rates at these operating levels. However, 
during the 2019 ozone season, these EGUs had higher NOX 
emission rates and greater variability in NOX emission rates 
across operating levels than in the past, particularly at mid-operating 
levels.'' \116\ That hourly data analysis, included in this docket, 
controls for operating level changes and still finds there to be 
instances across multiple SCR-controlled units in the 12-state region 
where hourly emission rates are increasing even when compared to the 
same load levels in previous years.
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    \116\ ``Analysis of Ozone Season NOX Emissions Data 
for Coal-Fired EGUs in Four Mid-Atlantic States''. EPA Clean Air 
Markets Division. December 2020. Available at https://www.epa.gov/sites/production/files/2020-12/documents/184c_emission_data_tsd.pdf.
---------------------------------------------------------------------------

    To the extent commenters have alleged that in recent years coal-
fired EGUs have declined in capacity factor and that SCR performance 
declines at those lower operating levels, EPA notes that this does not 
necessarily result in a compliance feasibility challenge. First, as 
explained elsewhere in this section, EPA believes the 0.08 rate 
assumption is achievable on a fleetwide average basis. Second, the 
implementation mechanism of a mass-based emission trading program 
eliminates any compliance feasibility concern. Even if reduced 
operation of a unit were to affect the rate-based performance of a 
unit, it would also lower emissions-producing generation from that 
unit, which in turn reduces the number of allowances the unit operator 
must hold for compliance under this emission trading program. 
Commenters have failed to establish that compliance with the mass-based 
implementation mechanism of this rule is actually unachievable. 
Further, hourly data indicate that maintaining consistent SCR 
performance at lower capacity factors is possible. For example, the 
unit-level performance data in the graph below show the emission rate 
at a plant staying relatively low (consistent with our optimization 
assumption of 0.08 lb/mmBtu) and stable across a wide range of capacity 
factors.\117\
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    \117\ EPA, Air Markets Program Data. Available at www.epa.gov/ampd.

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[[Page 23091]]

[GRAPHIC] [TIFF OMITTED] TR30AP21.001

    Comment: EPA received comment suggesting that EPA subcategorize its 
SCR optimization rate assumption by coal rank (i.e., bituminous or 
subbituminous) as the difference between the two would imply that the 
0.08 lb/mmBtu rate is not appropriate.
    Response: EPA reviewed historical data for SCR operation by coal 
rank and assessed it against its 0.08 lb/mmBtu fleet-wide average 
assumption and did not find any change necessary or appropriate. EPA 
found many instances of both SCR-controlled coal units combusting 
subbituminous coal and SCR-controlled coal units combusting bituminous 
coal (including instances in earlier years where these very same units 
that EPA is identifying as having optimization potential relative to 
their 2019 levels) operating at emission rate levels at or below the 
0.08 lb/mmBtu rate. In other words, although these units may not be 
operating at this emission rate in 2019, it is not due to coal rank as 
they have--in the vast majority of cases--met that rate in some period 
prior to 2019. In this case, the use of the average rate and the third 
best year accommodates any heterogeneity in emission rate that may stem 
from a unit's coal choice and makes 0.08 lb/mmBtu a reasonable average 
performance rate regardless of coal rank. Moreover, EPA notes that the 
covered fleet with the identified SCR optimization potential identified 
in this rule is composed of sources who have purchased and consumed 
both subbituminous and bituminous coal. The presence of both types of 
coal burning units within the region coupled with this observation that 
some units have utilized both types of coal, further support the use of 
a single fleet-wide average for purposes of estimating reduction 
potential and implementing state emission budgets--consistent with the 
CSAPR Update. This use of an average value, instead of two separate 
values is also consistent with EPA's approach in the CSAPR Update. EPA 
further examines and addresses this comment in the EGU NOX 
Mitigation Strategies Final Rule TSD.
    Comment: EPA also received comment suggesting it should deviate 
from its approach in the CSAPR Update of using a nationwide set of data 
to establish a third best year, and instead use an average from just 
the 12 covered states.
    Response: EPA reviewed the data and its methodology and evaluated 
it against its intention to identify a technology-specific 
representative emission rate for SCR optimization. In doing so, EPA did 
not identify any need to make the suggested change. EPA is interested 
in the performance potential of a technology, and a larger dataset 
provides a superior indication of that potential as opposed to a 
smaller, state-limited dataset. In both the CSAPR Update and in this 
rule, EPA appropriately relied on the largest dataset possible (i.e., 
nationwide) to derive technology performance averages that it then 
applied respectively to the CSAPR Update 22-state region and this 
rule's 12-state region. Finally, as noted above, in affirming the 
reasonableness of this approach, EPA examined the historical reported 
data (pre-2019) for the units in the 12 states with SCR optimization 
potential and found the nationwide derived average appropriate and 
consistent with demonstrated capability and performance of units within 
those states. That is, the vast majority of units for which this 
resulting emission rate assumption was being applied had demonstrated 
the ability to achieve this rate in some prior time period. This 
information is discussed further in the EGU NOx Mitigation Strategies 
Final Rule TSD in the docket.
    In the proposed rule, EPA relied on the same SCR optimization 
timing assumptions it utilized in the CSAPR Update. EPA received 
comments on the feasibility of implementing SCR optimization mitigation 
measures by the start of the 2021 ozone season.
    Comment: While many commenters supported the feasibility of 2021 
ozone-season implementation by noting the ``immediate availability'' of 
SCR optimization, those that did not focused on two concerns: (1) That 
the engineering, procurement, and other steps required for SCR 
optimization were not feasible given the anticipated 1.5 months between 
rule finalization and the start of the 2021 ozone season and (2) that 
the short implementation time frame may not allow enough time

[[Page 23092]]

for allowance trading to occur, and thus jeopardize allowance market 
liquidity and the overall that the implementation mechanism of a 
trading program.
    Response: EPA disagrees that these concerns justify a change in 
approach, as explained below, and is finalizing the same SCR 
optimization timing assumptions it proposed.
    As an initial matter, sources will have more than two months 
between the date of signature on this final action and the rule's 
effective date when the enhanced control stringency being adopted in 
this rule will take effect.\118\ Further, EPA has determined that this 
implementation schedule is achievable and necessary in order to address 
good neighbor obligations by the July 20, 2021 Serious area attainment 
date for certain downwind receptors, in accordance with the Wisconsin 
decision of the D.C. Circuit.\119\ While EPA observes that 
implementation of this control stringency is viable during the 2021 
ozone season at the unit level as described below, it also notes that 
the flexible implementation mechanism of a trading program, starting 
bank, and safety valve (as discussed in VII.C.4) obviate any unit-
specific compliance challenges raised by commenters.
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    \118\ As discussed in section VII.C.4.a, EPA is ensuring that 
the enhanced control stringency represented by the new budgets will 
not take effect until the rule's effective date by issuing 
supplemental allowances for the portion of the 2021 ozone season 
occurring before the rule's effective date.
    \119\ EPA further disagrees with these commenters to the extent 
they are suggesting that they could not have prudently taken steps 
to prepare for compliance with this control stringency by the 2021 
ozone season at least from the date of the proposed rule in October 
of 2020. See Americans for Clean Energy v. EPA, 864 F.3d 691, 721-22 
(D.C. Cir. 2017) (rejecting industry claims of insufficient time for 
compliance when proposed rule provided ``many months'' notice of the 
likely obligations established in the final rule). EPA notes that 
all reductions finalized in this rule were discussed in those 
proposed rule materials, and SCR optimization-driven reductions--
accounting for the vast majority of 2021 reductions--were proposed 
in that October notice.
---------------------------------------------------------------------------

    As indicated in the discussion and graphics above, data in the EGU 
NOX Mitigation Strategies Final Rule TSD, and in the CSAPR 
Update, there is ample evidence of units restoring their optimal 
performance within a two-month timeframe. Not only do units reactivate 
SCR performance level at the start of an ozone-season when tighter 
emission limits begin, but unit-level data also shows instances where 
sources have demonstrated the ability to quickly alter their emission 
rate within an ozone-season and even within the same day in some cases. 
Moreover, this emission control is familiar to sources and was analyzed 
and included in the CSAPR Update emission budgets finalized in 2016. 
With this experience, and notice through the October 2020 proposed 
rule, as well as over two months from final rule to effective date, the 
viability of this emission control for the 2021 ozone season is 
entirely consistent with the 2-week to 2-month timeframe that EPA 
identified as reasonable in both the CSAPR Update and the proposed 
rule. Similar to prior rules, commenters provide some unit-level 
examples where it has taken longer. Also similar to those prior rules, 
EPA does not find those unit-level examples compelling in the context 
of its fleet average assumptions and in the implementation context of a 
trading program which provides compliance alternatives in the event a 
specific unit prefers more time to implement the control stringency. As 
noted in Wisconsin, ``. . . all those anecdotes show is that 
installation can drag on when companies are unconstrained by the 
ticking clock of the law.'' 938 F.3d at 330. Commenters also provide 
logistical details for certain engineering steps (e.g., procuring 
catalyst replacement) that will not be necessary in many instances to 
improve performance at existing SCRs. The majority of emission 
reductions from units with SCRs would be available within hours (from 
turning on and fully operating those existing control devices) even in 
the absence of catalyst that is not as optimally configured or with 
reagent sprayers that have not been recently tuned as commenters 
suggest they must be. And as noted previously, a prudent EGU operator 
has had since at least the publication date of the proposed rule in 
October 2020 to take steps to prepare for compliance, such as planning 
for the necessary products to run their controls.
    EPA further disagrees with commenters' assertions that the 2021 
emission budgets are not feasible. Claiming that ultimate compliance 
with the emissions trading program is infeasible ignores the 
flexibilities of EPA's trading program implementation mechanism, 
including the starting allowance bank and the ``safety valve'' 
mechanism for accessing even more allowances. EPA uses a fleet-wide 
average assumption that non-optimized units with SCR will optimize to 
0.08 lb/mmBtu on average by 2021. EPA uses this average assumption in 
its derivation of state-emission budgets, but then implements the 
reductions through a trading program that provides sources the 
flexibility to operate at different emission rates, as they need only 
hold allowances adequate to cover their emissions for the relevant 
control period. Not every unit need implement this emission control or 
meet this rate in order to comply with the state budget under the 
trading program. For some units, the timing and rate performance will 
likely be easier to meet than estimated by EPA, creating space for 
other sources to achieve different rates on different schedules while 
collectively complying with the state emission budget. Additionally, 
while given the large amount of historical data demonstrating that 
units can operate their controls (often within hours of startup), unit 
operation (i.e., seasonal capacity factor) is another variable that 
operators can utilize to reduce seasonal emissions. In short, because 
compliance is based on seasonal emission totals, variation in emission 
rates is not on its own a barrier to meeting a seasonal total state 
emission target. In short, commenters concerned about 2021 
implementation viability largely neglected these critical aspects of 
the trading program and did not provide any comprehensive state or 
system modeling showing the 2021 implementation of the state budgets 
was not achievable when factoring in the program's trading program. 
Instead of performing this critical evaluation step, commenters most 
often limited their arguments to a hypothetical unit-specific rate 
requirement evaluation, ignoring the broader mechanisms of EPA's 
quantification and implementation of good neighbor obligations.
    EPA notes that historical emission data and program experience 
support its assumption regarding timing of these emission controls. 
Similar arguments regarding next-season implementation challenges were 
made against the CSAPR Update but were not borne out in the data as 
both unit-level and state-level emissions adjusted consistent with 
EPA's assumptions for that first season of implementation (the emission 
rate at SCR controlled units dropped by nearly half in the 2017 ozone 
season, the first ozone-season of the CSAPR Update implementation) when 
EPA examined this challenge in the context of EPA's Response to CAA 
section 126(b) petitions from Maryland and Delaware.\120\ Moreover, the 
future modeling data, as well as some commenters' own analysis, 
supported the viability of EPA's 2021 implementation. Finally, some 
utilities with a significant footprint in this region even have their 
own near-term and medium-term emission reduction goals, which, if 
realized, reflect even

[[Page 23093]]

more fleet alignment with emission reductions.121 122 For 
all of these reasons, EPA determined it was not necessary to change its 
emission control implementation timing assumptions from those utilized 
in the CSAPR Update.
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    \120\ 83 FR 50465.
    \121\ https://www.duke-energy.com/Our-Company/Environment/Global-Climate-Change.
    \122\ Proctor, Darrell. Indiana Utility Will Close Coal Units, 
Transition to Renewable. Power Magazine. November, 2018. Available 
at https://www.powermag.com/indiana-utility-will-close-coal-units-transition-to-renewables/.
---------------------------------------------------------------------------

    With regard to market liquidity concerns, EPA notes that those same 
concerns have been voiced in the lead-up to past trading programs but 
ultimately did not materialize. For example, a functioning allowance 
market formed and resulted in 100 percent compliance with the allowance 
holding requirements during the first year of implementation. See more 
discussion on this issue in section VII.C.3. EPA notes that the date by 
which sources must hold allowances to cover their emissions for the 
first control period under this final rule is June 1, 2022--more than 
14 months after the date of signature of the rule. Moreover, shortly 
after the final rule's effective date and well before the end of the 
2021 control period, the allowances allocated to most sources from both 
the state emission budgets and from the initial Group 3 bank will be 
recorded in sources' accounts and available for trading. Finally, as an 
additional measure promoting market liquidity, EPA will allow the use 
of Group 2 allowances at an 18:1 trade-in ratio to provide additional 
assurance to sources that allowances will be available, but ensuring 
that the cost of this compliance option is such that entities will take 
it only in the very unlikely event that access to such additional 
allowances proves to be necessary. The safety valve is described 
further in section VII.C.4.c., The presence of the safety valve, 
combined with the recordation of allowances from the state budgets and 
the starting bank shortly after the rule's effective date, should 
obviate any market liquidity concerns, as the number of allowances 
available for trading in the market for the first control period well 
in advance of the compliance deadline will accommodate a variety of 
compliance pathways and unit operational decisions.
b. Installing State-of-the-Art NOX Combustion Controls
    EPA estimates that the representative cost of installing state-of-
the-art combustion controls is comparable to, if not notably less than, 
the estimated cost of optimizing existing SCR (represented by $1,600 
per ton). State-of-the-art combustion controls such as low-
NOX burners (LNB) and over-fire air (OFA) can be installed 
and/or updated quickly and can substantially reduce EGU NOX 
emissions. In the 12 states linked to downwind receptors in this final 
rule, approximately 99 percent of coal-fired EGU capacity is equipped 
with some form of combustion control; however, the control 
configuration and/or corresponding emission rates at a few units 
indicate they do not currently have state-of-the-art combustion control 
technology. As discussed in EPA's response to comments below, the 
Agency has updated its NOX emission rates for upgrading 
existing combustion controls to state-of-the-art combustion control 
from the proposed rule, where EPA estimated a range of 0.139 to 0.155 
lbs/mmBtu. In this final rule, EPA is determining that NOX 
emission rates of 0.146 to 0.199 lbs/mmBtu can be achieved on average 
depending on the unit's boiler configuration,\123\ and, once installed, 
reduce NOX emissions at all times of EGU operation.
---------------------------------------------------------------------------

    \123\ Details of EPA's assessment of state-of-the-art 
NOX combustion controls are provided in the EGU 
NOX Mitigation Strategies Final Rule TSD.
---------------------------------------------------------------------------

    The feasibility of installing combustion controls was examined by 
EPA in the CSAPR where industry demonstrated the ability to install 
state-of-the-art LNB controls on a large unit (800 MW) in under six 
months when including the pre-installation phases (design, order 
placement, fabrication, and delivery).\124\ In the proposed rule, EPA 
discussed comments it had received on the CSAPR Update regarding 
installation of combustion controls from the Institute of Clean Air 
Companies.\125\ Those comments provided information on the equipment 
and typical installation time frame for new combustion controls, 
accounting for all steps, and noted it generally takes between 6-8 
months on a typical boiler--covering the time through bid evaluation 
through start-up of the technology. The deployment schedule was 
described as:

    \124\ EPA finds that, generally, the installation phase of 
state-of-the-art combustion control upgrades--on a single-unit 
basis--can be as little as four weeks to install with a scheduled 
outage (not including the pre-installation phases such as 
permitting, design, order placement, fabrication, and delivery) and 
as little as six months considering all implementation phases.
    \125\ EPA-HQ-OAR-2015-0500-0093.
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 4-8 weeks--bid evaluation and negotiation
 4-6 weeks--engineering and completion of engineering drawings
 2 weeks--drawing review and approval from user
 10-12 weeks--fabrication of equipment and shipping to end user 
site
 2-3 weeks--installation at end user site
 1 week--commissioning and start-up of technology

Given the above timeframe of approximately 6 to 8 months to complete 
combustion control installation in the region, EPA is determining that 
the installation of state-of-the-art combustion controls is a readily 
available approach for EGUs to reduce NOX emissions by the 
start of the 2022 ozone season. More details on these analyses can be 
found in the EGU NOX Mitigation Strategies Final Rule TSD.
    The cost of installing state-of-the-art combustion controls per ton 
of NOX reduced is dependent on the combustion control type 
and unit type. EPA estimates the cost per ton of state-of-the-art 
combustion controls to be $400 per ton to $1,200 per ton of 
NOX removed using a representative capacity factor of 70 
percent. See the NOX Mitigation Strategies Final Rule TSD 
for additional details.
    Comment: EPA received comment on the proposed timing, cost, and 
performance rate of combustion controls.
    Response: EPA is finalizing its proposed assumptions on the cost 
and timing for upgrading combustion controls. These assumptions are 
consistent with the CSAPR Update. They are described above and further 
discussed in the RTC document and in the EGU NOx Mitigation Strategies 
Final Rule TSD. EPA is updating its assumed performance rate for state-
of-the-art combustion controls from the proposed rule based on two 
factors. First, as commenters pointed out, EPA was in the process of 
updating these assumptions based on the latest representative-year data 
and an updated inventory of units with like controls. This update and 
corresponding emission rates were in the October 2020 NEEDS file placed 
in the docket for the proposed rule, but the data were not available in 
time to be included in EPA's proposed rule analysis. This adjustment 
raised the average emission rate assumption to 0.199 lb/mmBtu for 
combustion controls on dry bottom wall fired units and 0.146 lb/mmBtu 
for tangentially fired units. Additionally, commenters provided 
detailed analysis of how other unit considerations, such as coal rank, 
can result in large deviations from what has been historically 
demonstrated with this combustion control technology. Based

[[Page 23094]]

on these comments and EPA's review of historical performance data for 
tangentially-fired units by coal rank with state-of-the-art combustion 
controls, EPA determined it was appropriate to use the 0.199 lb/mmBtu 
rate for both tangentially and wall-fired units in this final rule. As 
noted by commenters, many of the likely impacted units burn bituminous 
coal, and the 0.146 lb/mmBtu nationwide average for tangentially-fired 
(inclusive of subbituminous units) appeared to be below the 
demonstrated emission rate of state-of-the-art combustion controls for 
bituminous coal units of this boiler type. EPA notes that its analysis 
of illustrative units indicates the costs are often lower than the 
$1,600 per ton level EPA assumes in this rule. Similarly, the 
pervasiveness of this technology (i.e., 99 percent of units have some 
form of combustion controls) in response to previous EPA actions 
indicates the wide spread cost-effectiveness of this control and 
therefore its inclusion in the final EGU NOx emission budgets beginning 
in the 2022 ozone season (noting that the trading program gives units 
flexibility in compliance options to accommodate their specific 
circumstances).
c. Optimizing Already Operating SNCRs or Turning on Idled Existing 
SNCRs
    Optimizing already operating SNCRs or turning on idled existing 
SNCRs can also reduce EGU NOX emissions quickly, using 
investments in pollution control technologies that have already been 
made. Compared to no post-combustion controls on a unit, SNCRs can 
achieve a 25 percent reduction on average in EGU NOX 
emissions (with sufficient reagent). They are less capital intensive 
but less efficient at NOx removal than SCRs. These controls are in use 
to some degree across the U.S. power sector. In the 12 states 
identified in this final rule, approximately 14 percent of coal-fired 
EGU capacity is equipped with SNCR. Recent power sector data suggest 
that, in some cases, SNCR controls have been operating less in 2019 
relative to performance in prior years.\126\
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    \126\ See ``Ozone Season Data 2018 vs. 2019'' and ``Coal-fired 
Characteristics and Controls'' at https://www.epa.gov/airmarkets/power-plant-data-highlights#OzoneSeason.
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    In the proposed rule, EPA determined that optimizing already 
operating SNCRs or turning on idled SNCRs is an available approach for 
EGUs to reduce NOX emissions, has similar implementation 
timing to restarting idled SCR controls (less than two months for a 
given unit), and therefore could be done in time for the 2021 ozone 
season. EPA is finalizing its proposed determination that this emission 
control technology can be implemented in the 2021 ozone season. As 
explained in section VI.D.1 below, EPA is including optimization of 
existing SNCRs in its selected EGU control stringency. Thus, EPA 
provides further discussion here confirming the implementation timing 
of this emission control technology.
    First, as noted with respect to SCR optimization, this rule will 
have an effective date over two months from the date of signature. In 
light of EPA's timing estimates of roughly 0.5 to 2 months for EGU 
operators to optimize their controls, this timing provides sufficient 
advance notice for operators of SNCR-equipped units to undertake any 
preparatory activities that may be needed prior to the effective date 
of the rule, and the onset of the increased stringency represented by 
the new emission budgets. Furthermore, because the emission reduction 
obligation is implemented through a mass-based trading program, these 
sources (and all others in the newly established Group 3 trading 
program) have abundant flexibility to choose other means of complying 
with their emission budget. Finally, as explained in section VII.C.4.d, 
EPA is providing a safety valve allowing access to additional 
allowances usable in the Group 3 trading program (through exchange of 
banked 2017-2020 Group 2 allowances at an 18:1 conversion ratio). As 
the amount of additional Group 3 allowances made available through the 
safety valve mechanism exceeds the effect on the emission budgets of 
including the optimization of existing SNCR controls several times 
over, there is no basis to believe that there will be compliance 
difficulty for any covered units.
    In the proposed rule, EPA estimated a representative cost of 
approximately $3,900 per ton for turning on and fully operating idled 
SNCRs. For existing SNCRs that have been idled, unit operators may need 
to restart payment of some fixed and variable operating costs 
associated with these controls. Fixed and variable costs include labor, 
maintenance and repair, parasitic load, and ammonia or urea. The 
majority of the total fixed and variable operating costs for SNCR is 
related to the cost of the reagent used (e.g., ammonia or urea) and the 
resulting cost per ton of NOX reduction is sensitive to the 
NOX rate of the unit prior to SNCR operation. EPA is 
finalizing its adjusted representative cost of $1,800 per ton as 
described in the response to comments below, but applies the same 
performance, and timing assumptions for SNCRs that are idled as in the 
proposed rule.
    Comment: Commenters observed that many SNCRs are already operating 
over the past several years (in an environment with an allowance price 
signal much lower than the $3,900 per ton threshold that EPA proposed 
represented turning on and optimizing idled controls). This observation 
suggests that the representative cost for this technology to optimize 
is likely less than estimated by EPA in the proposed rule when these 
operating patterns are accounted for.
    Response: First, EPA examined the portion of the fleet with SNCR 
optimization potential and determined that the majority of units were 
already partially operating their controls. Therefore, EPA revisited 
the cost for SNCR optimization for units that are partially operating 
their controls. At proposal, EPA had noted a representative cost of 
$1,800 per ton for SNCR-controlled unit to optimize their controls if 
that control was already on and partially operating reflecting the cost 
of adding more reagent. This is similar to its analysis for SCR 
optimization that revealed an $800 per ton cost for SCR optimization at 
units with partially operating controls (as opposed to $1,600 per ton 
at units with idled SCR controls). EPA revisited this assessment of 
SNCR optimization cost at units with partially operating controls and 
found $1,800 per ton to still be a representative cost.\127\ Therefore, 
given the majority of the SNCR-controlled fleet with identified 
optimization potential was already partially operating their controls 
based on 2019 historical data, EPA determined that $1,800 per ton (as 
opposed to the $3,900 per ton cost estimated in the proposed rule for 
turning on idled SNCRs) was a more representative cost for the 
mitigation strategy in this rulemakng. The representative cost of 
optimizing SNCR that is already partially operating excludes the fixed 
operating and maintenance (FOM) cost associated with starting up an 
idled SNCR control. For more details on this assessment, refer to the 
EGU NOX Mitigation Strategies Final Rule TSD in the docket 
for this rule. This adjustment in the expected cost of implementing 
this emission control has factored into EPA's determination to include 
optimization of existing SNCRs in its selected control stringency as

[[Page 23095]]

discussed in more detail in section VI.D.1.
---------------------------------------------------------------------------

    \127\ See 
``EGU_SCR_and_SNCR_costs_Revised_CSAPR_Proposal.xlsx''file, Summary 
Page cell E19. Available in the docket for this rulemaking at 
proposal at EPA-HQ-OAR-2020-0272-0006.
---------------------------------------------------------------------------

d. Installing New SNCRs
    EPA is finalizing its determination not to include installation of 
new SNCRs in its selected control stringency in this rule. The amount 
of time needed to retrofit an EGU with new SNCR extends beyond the 2021 
Serious area attainment date. However, similar to SCR retrofits 
discussed in section VI.B.1.e, and consistent with the Wisconsin 
decision, EPA evaluated potential emission reductions and associated 
costs from this emission control technology, and assessed the impacts 
and need for this emission control at the earliest point in time when 
post combustion control installation could be achieved. SNCR 
installations, while generally having shorter project timeframes (i.e., 
as little as 16 months (including pre-contract award steps) for an 
individual power plant installing controls on more than one boiler), 
share similar implementation steps with and also need to account for 
the same regional factors as SCR installations.\128\ One recent example 
of installation timing took over a year--SNCR installation at the 
Jeffrey power plant (Kansas) was in the planning phase in 2013 but not 
in service until 2015.\129\ Therefore, EPA is determining that at least 
16 months would be needed to complete all necessary steps of SNCR 
development and installation at the EGUs not currently equipped with 
SNCRs in the 12 states linked to downwind receptors in this final rule. 
EPA discusses the timing of SNCR and SCR post-combustion retrofits 
together and in more detail in section VI.C.1.
---------------------------------------------------------------------------

    \128\ A month-by-month evaluation of SNCR installation is 
discussed in EPA's ``Engineering and Economic Factors Affecting the 
Installation of Control Technologies for Multipollutant Strategies'' 
in EPA's NOX Mitigation Strategies Final Rule TSD. As 
noted in the proposed rule, the analysis in this exhibit estimates 
the installation period from contract award as within a 10-13-month 
timeframe. The exhibit also indicates a 16-month timeframe from 
start to finish, inclusive of pre-contract award steps of the 
engineering assessment of technologies and bid request development. 
The timeframe cited for installation of SNCR at an individual source 
in this final action is consistent with this more complete timeframe 
estimated by the analysis in the exhibit.
    \129\ 2013 EIA Form 860, Schedule 6, Environmental Control 
Equipment.
---------------------------------------------------------------------------

    SNCR technology provides owners a relatively less capital-intensive 
option for reducing NOX emissions compared to SCR 
technology, albeit at the expense of higher operating costs on a per-
ton basis and less total emission reduction potential. EPA examined the 
remaining nationwide coal-fired fleet that lack SNCR or other 
NOX post-combustion control to estimate a representative 
cost of SNCR installation on a dollar per ton basis. Costs were 
estimated using the operating and unit characteristics specific to this 
fleet. As described in the EGU NOX Mitigation Strategies 
Final Rule TSD, EPA estimated that $5,800 per ton reflects a 
representative cost level at which they are available for a majority of 
the uncontrolled fleet.
    Comment: EPA received some comments on timing and performance 
assumptions of this technology that largely focused on the decision to 
couple timing considerations for reduction evaluation purposes of SCR 
and SNCR retrofits together.
    Response: EPA used the same cost, performance, and timing 
assumptions for this technology as it used in the proposed rule. EPA 
evaluates new retrofit technologies (i.e., SCR and SNCR) timing in 
tandem at step 3, and therefore it addresses this timing component in 
section VI.C.1. Remaining comments on SNCR performance potential are 
addressed in the RTC Document and in the EGU NOx Mitigation Strategies 
Final Rule TSD.
e. Installing New SCRs
    The amount of time needed to retrofit an EGU with new SCR extends 
beyond the 2021 Serious area attainment date. However, similar to SNCR 
retrofits discussed above, and consistent with the Wisconsin decision, 
EPA evaluated potential emission reductions and associated costs from 
this control technology, as well as the impacts and need for this 
emissions control strategy, at the earliest point in time when their 
installation could be achieved. The amount of time to retrofit EGUs 
with new SCR varies between approximately 2 and 4 years depending on 
site-specific engineering considerations and on the number of 
installations being considered. In prior actions, EPA has noted 39-48 
months as appropriate for regionwide actions when EPA is evaluating 
multiple installations at multiple locations.\130\
---------------------------------------------------------------------------

    \130\ Final Report: Engineering and Economic Factors Affecting 
the Installation of Control Technologies for Multipollutant 
Strategies, EPA- 600/R-02/073 (Oct. 2002), available at https://nepis.epa.gov/Adobe/PDF/P1001G0O.pdf.
---------------------------------------------------------------------------

    The Agency examined the cost for retrofitting a unit with new SCR 
technology, which typically attains controlled NOX rates of 
0.07 lbs/mmBtu or less. Based on the characteristics of the remaining 
nationwide coal fleet that does not have a post-combustion control 
retrofit, EPA estimated that for unit and performance characteristics 
representative of that subgroup, $9,600 per ton reflects a 
representative cost level at which the SCR retrofit technology was 
typically available for the majority of these sources.
    Comment: EPA received comments on the cost and performance of this 
technology, as well as comment on its timing assumption (as part of the 
collective timing assumptions in step 3).
    Response: For this final rule's analyses, EPA used the same cost, 
performance, and timing assumptions that it used for this technology in 
the proposed rule. For more details on this assessment, refer to the 
EGU NOX Mitigation Strategies Final Rule TSD in the docket 
for this final rule and the RTC Document. Section VI.C.1 presents 
comments and EPA responses on the timing assumptions for installation 
of new SCRs.
f. Generation Shifting.
    Finally, EPA evaluates emission reduction potential from generation 
shifting across the representative dollar per ton levels estimated for 
the other emission controls considered above. Shifting generation to 
lower NOX-emitting or zero-emitting EGUs occurs in response 
to economic factors (including regulatory signals such as pollution 
control costs). As the cost of emitting NOX increases, it 
becomes increasingly cost-effective for units with lower NOX 
rates to increase generation, while units with higher NOX 
rates reduce generation. Because the cost of generation is unit-
specific, this generation shifting occurs incrementally on a continuum. 
Consequently, there is more generation shifting at higher cost 
NOX-control levels. It is reasonable for EPA to quantify and 
include the emission reduction potential from generation shifting at 
cost levels that are representative of the emission control 
technologies evaluated in the multi-factor analysis. Including emission 
reductions from generation shifting is important, ensuring that other 
cost-effective reductions (e.g., fully operating controls) can be 
expected to occur in a competitive electricity marketplace where 
generation shifting will inevitably occur in response to pollution 
control requirements. Generation shifting treatment and results are 
discussed in greater detail in the EGU NOX Mitigation 
Strategies Final Rule TSD.
    In general, when EPA estimates emission reduction potential from 
generation shifting, EPA finds small amounts of generation shifting to 
existing lower NOX-emitting or zero-emitting units could 
occur consistent with the near-term implementation timing for this 
final rule. As a proxy for

[[Page 23096]]

limiting the amount of generation shifting that is feasible for the 
near-term ozone seasons, EPA limits its assessment to shifting 
generation to other EGUs within the same state. EPA believes that 
limiting its evaluation of shifting generation (which EPA sometimes 
refers to as re-dispatch) to the amount that could occur within the 
state represents a conservatively small amount of generation-shifting 
because it does not capture further potential emission reductions that 
would occur if generation was shifted more broadly among units in 
different states within the interconnected electricity grid.
    Comment: Commenters suggested that EPA should have included 
additional reductions from generation shifting beyond those levels that 
are commensurate with the emission controls identified. Commenters note 
that the statutory command is to eliminate significant contribution to 
downwind nonattainment or maintenance problems, 42 U.S.C. 
7410(a)(2)(D)(i)(I), not merely to create a strong enough incentive 
that sources will likely install certain control technology. Because 
generation shifting is an independent measure that EGUs have widely 
deployed to reduce NOX emissions, EPA has no basis for 
evaluating only the emission reductions that result from a 
NOX price that matches--but goes no further than--the 
estimated representative NOX control costs of other emission 
control technologies assessed.
    Response: EPA is finalizing the same approach to generation 
shifting that it proposed and that it included in the CSAPR Update. 
This rule's approach to capturing emission reduction potential from 
generation shifting in the state's emission budgets focuses on 
preserving the incentive for combustion and post-combustion controls to 
operate. Factoring generation shifting into the state emissions budgets 
helps promote an allowance price that will incentivize these controls 
to operate.
    EPA recognizes that looking at higher levels of reductions purely 
through generation shifting is possible, assuming the availability for 
dispatch of lower or zero emitting generation assets that could 
substitute for the higher emitting EGUs. Shifting to such generators 
that are already in existence and operating at capacity factors that 
allow for some increase in their generation is the most economically 
efficient form of generation shifting, assuming other considerations 
such as availability, cost, reliability, and other factors are 
accounted for. Even greater shifting of generation to lower or zero 
emitting assets may be considered with the construction of new assets, 
although cost, timing, and economic considerations are generally of a 
greater magnitude and complexity in this context. Sophisticated power 
sector modeling tools, such as EPA's Integrated Planning Model (IPM) 
platform, can provide realistic and reliable assessments of the degree 
of generation shifting that may be accomplished at different cost 
levels. Indeed, in the Regulatory Impact Analysis for the proposed rule 
and for this final rule, EPA assessed a less-stringent control 
alternative for EGUs at the $500 per ton level, which was based solely 
on generation shifting rather than any at-the-source control 
technology. In general, EPA continues to stand by its discussion of its 
legal authority for and the technical viability of generation shifting 
as a method of emission reduction under the good neighbor provision, as 
set forth in the final CSAPR Update rule. See especially 81 FR 74504, 
74545-47; see also CSAPR Update Response to Comment Document at 546-550 
(legal authority); id. 528-533 (technical feasibility). (EPA had no 
occasion and did not reopen this portion of the CSAPR Update in this 
action on remand.)
    Nonetheless, while generation shifting as a stand-alone strategy 
for emission reductions is available for both states' and EPA's 
consideration in the context of good neighbor SIPs or FIPs, EPA 
maintains the position discussed in the proposed rule for this action 
that further generation shifting than is captured by the methodology of 
the proposed rulemaking is unnecessary in the context of the resolution 
of good neighbor obligations for the 2008 ozone NAAQS in this action. 
The remaining timeframe for addressing upwind contribution to downwind 
nonattainment and maintenance receptors is through the 2024 ozone 
season, as downwind air quality problems for the 2008 ozone NAAQS are 
projected to be resolved by the 2025 ozone season. In EPA's judgment, 
the capital intensive nature of new builds and the likely multi-year 
timeframe necessary for the permitting and construction of new units 
make generation shifting to new generating resources, beyond those 
already planned and included in the baseline, not possible before 
downwind receptors are already resolved. With respect to generation 
shifting to existing generation resources with excess capacity, again, 
this rule already incorporates a certain amount of such generation 
shifting at cost levels representative of the other control 
technologies selected to quantify the state emission budgets in this 
rule. EPA believes that this degree of emission reduction through 
generation shifting is appropriate to include under the step 3 multi-
factor analysis for the circumstances and compliance timetable 
currently presented by the 2008 ozone NAAQS, particularly the finding 
that downwind receptors will be resolved under this NAAQS by the 2025 
ozone season.
    Comment: Other commenters suggest that EPA should not factor in any 
generation shifting based reductions into state emission budgets, 
noting that EPA rejected the use of generation shifting in rescinding 
the Clean Power Plan and should do the same here in establishing 
emission reduction obligations under the good neighbor provision of 
section 110 of the Clean Air Act. According to these commenters, the 
emission budgets should be based on cost-effective emission reduction 
strategies that reflect technologies that can be implemented within the 
affected source's fence line.
    Response: EPA notes again that its treatment of generation shifting 
here is consistent with both the CSAPR Update and the CSAPR, and the 
statute. Moreover, this comment incorrectly conflates the question of 
statutory authority under section 111 of the Act, the authority at 
issue in the Clean Power Plan and its repeal and subsequent litigation, 
with the question of statutory authority under section 110. As EPA 
explained in the CSAPR Update:

    The good neighbor provision requires state and federal plans 
implementing its requirements to ``prohibit[ ] . . . any source or 
other type of emissions activity within the State from emitting any 
air pollutant in amounts which will'' significantly contribute to 
nonattainment or interfere with maintenance of the NAAQS in any 
other state. CAA section 110(a)(2)(D)(i)(I) (emphasis added). The 
EPA's consideration of the potential for generation shifting in 
developing state budgets is consistent with this statutory 
requirement. First, contrary to the commenters' contention, the 
statute does not limit the EPA's authority under the good neighbor 
provision to basing regulation only to control strategies for 
individual sources. The statute authorizes the state or EPA in 
promulgating a plan to prohibit emissions from ``any source or other 
type of emissions activity within the State'' that contributes (as 
determined by EPA) to the interstate transport problem with respect 
to a particular NAAQS. This broad statutory language shows that 
Congress was directing the states and the EPA to address a wide 
range of entities and activities that may be responsible for 
downwind emissions. However, this provision is silent as to the type 
of emission reduction measures that the states and the EPA may 
consider in establishing emission

[[Page 23097]]

reduction requirements, and it does not limit those measures to 
individual source controls. The EPA reasonably interprets this 
provision to authorize consideration of a wide range of measures to 
reduce emissions from sources, which is consistent with the broad 
scope of this provision, as noted immediately above.

81 FR 74545.\131\
---------------------------------------------------------------------------

    \131\ EPA also noted in the CSAPR Update, ``Interpreting the 
Good Neighbor Provision to be sufficiently broad to authorize 
reliance on generation shifting is also consistent with the 
legislative history for the 1970 CAA Amendments. The Senate Report 
stated that to achieve the NAAQS, `[g]reater use of natural gas for 
electric power generation may be required,' S. Rep. No. 91-1196 at 
2.'' 81 FR 74545 n.141.
---------------------------------------------------------------------------

    Finally, EPA notes that its interpretation of section 111 of the 
Act as unambiguously precluding the use of generation shifting as a 
``best system of emission reduction'' under that provision was recently 
rejected by the D.C. Circuit. American Lung Association v. EPA, No. 19-
1140 (D.C. Cir. Jan. 19, 2021). The court there also rejected arguments 
that generation shifting in the Clean Power Plan runs afoul of the 
federalism doctrine, slip op. 92 (``Interstate air pollution is not an 
area of traditional state regulation. And federalism concerns do not 
bar the United States government from addressing areas of Federal 
concern just because its actions have incidental effects on areas of 
state power.'') (emphasis in original) (citing FERC v. EPSA, 136 S. Ct. 
760, 775-778 (2016)), or conflicts with FERC's authority, id. 95 n.12 
(``The effects of environmental regulations on the power grid do not 
amount to power regulation statutorily reserved to FERC.''). In this 
rule, as in prior transport rules, EPA has established emission budgets 
that capture a certain degree of generation shifting that is modeled to 
occur as an economical response by the power sector to a particular 
cost threshold associated with at-the-plant control technologies. EPA 
has not mandated or ordered any particular degree of generation 
shifting to occur or that it occurs in a particular way. Further, this 
action is related solely to air pollution, in this case NOX 
as an ozone-precursor, and does not affect or purport to regulate any 
particular type of generation or achieve any type of generation mix, 
except as related to those NOX emissions. Cf. id. 88 (``The 
Clean Power Plan was aimed not at regulating the grid, but squarely and 
solely at controlling air pollution--a task at the heart of the EPA's 
mandate.''). The budgets here simply reflect an expectation that the 
power sector can and will take advantage of the compliance flexibility 
of a mass-based emission trading program to shift generation when it is 
economical to do so in response to an environmental mandate.
    Finally, EPA solicited comment on whether other ozone-season 
NOX mitigation technologies should be considered. EPA 
invited comments on the cost and performance of the above listed 
technologies and any other potential mitigation technologies. For 
example, in January of 2020 the New York Department of Environmental 
Conservation adopted a rule to limit emissions from combustion turbines 
that operate as peaking units. EPA has not historically considered 
NOX mitigation technologies for these sources in its 
rulemakings, such as the CSAPR and the CSAPR Update, but invited 
comment on their appropriateness for this rulemaking. Separately, 
location and high emission rates of grid-connected municipal solid 
waste combustors, generally not covered under EPA's transport rules 
given their small size and differing purpose, have also led some 
stakeholders to suggest mitigation measures be considered for those 
sources.
    Comment: EPA received comments calling on the Agency to reduce 
NOX from peaking units and municipal waste combustors and 
claimed that the agency's focus in its proposed rule on the suite of 
EGU emission controls above failed to address large sources of 
NOX emissions that are relatively close to the Connecticut 
receptors. Some of these commenters go one step further and say not 
only should EPA regulate these sources, but that EPA should only 
require emission reductions from local sources in place of reductions 
from larger emitting sources upwind.
    Response: EPA is finalizing its evaluation of the same suite of 
emission controls as in the proposed rule. EPA notes that several 
states close to, or that have, nonattainment or maintenance receptors 
are already taking some of these measures. For example, New York 
finalized the state regulation mentioned above and New Jersey notes in 
their comment that the measures documented in New Jersey's Good 
Neighbor SIP include controls for sources such as behind-the-meter 
distributed generation/demand response (DG/DR) electric generators and 
municipal waste combustors. Even with these local measures, 
nonattainment and maintenance receptors persist in the region with 
demonstrable upwind state contribution, and thus the presence of these 
initiatives does not absolve upwind states and sources from the 
responsibility of addressing their significant contribution.\132\ In 
the proposed rule, EPA inquired whether these additional emission 
controls should be considered in addition to, not in place of, the 
other proposed controls. EPA did not receive determinative evidence 
that (1) there were meaningful, upwind reductions from these emission 
controls that are not already being addressed by state rules, or (2) 
that any further reductions could be implemented in a timeframe 
consistent with the remaining nonattainment and maintenance receptors 
that resolve after 2024. EPA notes the New York rule referenced above 
was finalized in early 2020, but its control measures will phase in 
during the 2023-2025 period. Therefore, EPA is not finalizing any 
additional reductions from new control measures at these sources in 
this final rule, but, pending further analysis, doing so may be 
appropriate in a future context (e.g., under a different NAAQS). 
Finally, EPA notes to the extent that any of the sources meet the 
applicability requirements and are covered in the Group 3 trading 
program under this rulemaking, they would have an incentive to reduce 
emissions consistent with the ozone NOX allowance price. 
Moreover, as identified in the discussion the EGU NOX 
Mitigation Final Rule TSD, a significant number of units with this 
technology are located in states with rules addressing those sources.
---------------------------------------------------------------------------

    \132\ For instance, despite these measures, EPA does not agree 
with comments from New Jersey that there is therefore no basis for 
including New Jersey in the Group 3 trading program in this action. 
New Jersey is projected to remain linked to the Connecticut 
receptors well above the 1 percent threshold.
---------------------------------------------------------------------------

2. Non-EGU NOX Mitigation Strategies
    EPA has not regulated emissions from non-EGU sources as part of its 
regional transport rulemakings since the 1998 NOX SIP Call. 
In Wisconsin, the DC Circuit held that EPA must, on remand, implement a 
full remedy by the next attainment date (2021 for this final rule), or 
as soon as possible thereafter on a showing of impossibility, to 
achieve necessary reductions by that date. 938 F.3d at 320. The court 
also directed the Agency to address non-EGU sources, unless ``the 
scientific uncertainty is so profound that it precludes EPA from making 
a reasoned judgment.'' Id. at 318-20 (quoting Massachusetts v. EPA, 549 
U.S. 497, 534 (2007)). The DC Circuit found that the practical 
obstacles EPA identified with respect to its evaluation of non-EGUs in 
the CSAPR Update did not rise to the level of an ``impossibility,'' id. 
The court also found that EPA must make a higher

[[Page 23098]]

showing of uncertainty regarding non-EGU point-source NOX 
mitigation potential before declining to regulate such sources on the 
basis of ``uncertainty.'' Id. Thus, in the proposed rule, EPA extended 
its analysis to include all major stationary source sectors in the 
linked upwind states, including non-EGU emissions sources in various 
industry sectors. As discussed in section V, of the 22 states 
originally included in the CSAPR Update, EPA has determined that 12 
states warrant analysis at step 3 for significant contribution to 
downwind nonattainment and/or maintenance receptors for the 2008 ozone 
NAAQS. Therefore, the Agency focused its step 3 assessment on non-EGU 
sources in these 12 states. For these sources, EPA retained its focus 
on NOX as the most effective precursor pollutant for 
addressing interstate ozone transport at a regional scale. See 82 FR 
51238, 51248 (Nov. 3, 2017) (citing 76 FR 48222) and 63 FR 57381.
    The remainder of this section summarizes the analysis EPA conducted 
in the proposed rule. EPA is finalizing this analysis using the best 
available current data, largely as proposed, and determines on the 
basis of this analysis that emission reductions from non-EGU sources/
units in the 12 states are not needed to eliminate their significant 
contribution to nonattainment or interference with maintenance in any 
other state. EPA made some minor updates to its analysis of non-EGU 
emission reduction potential, and these changes did not affect its 
overall conclusion that reductions are not warranted under the step 3 
multi-factor test. EPA responds to significant comments on its 
assessment of non-EGU emission reduction potential at the end of the 
relevant section below, and addresses remaining comments on potential 
non-EGU emission reductions in the RTC document located in the docket 
for this action.
    For non-EGU sources, there are many types of emissions sources or 
units that emit NOX and many control technologies or 
combinations of control technologies for these sources or units. As 
such, there are many approaches to assessing emission reduction 
potential from non-EGU emission sources or units. In this final rule, 
EPA applied the multi-factor test used for EGUs in an effort to 
determine an appropriate stringency level for non-EGU sources/units in 
linked upwind states. EPA identified available control technologies and 
estimated their costs and potential emission reductions. The Agency 
considered the information it has regarding control technology 
implementation timeframes, including information on such timeframes 
provided by commenters on the proposed rule, to determine potential air 
quality impacts in relevant future years.
    To identify levels of control for non-EGU sources/units, EPA used 
the Control Strategy Tool (CoST),\133\ the Control Measures Database 
(CMDb), and the projected 2023 inventory from the 2016v1 modeling 
platform. EPA assessed potential emission reductions associated with 
applying controls to emissions units with 150 tons per year (tpy) or 
more of pre-control NOX emissions in 2023, which is an 
emissions threshold that represents a comparable unit size to 25 MW for 
EGUs used in prior interstate transport rulemakings. To derive this 
emissions threshold, EPA used emissions expected from an average 25 MW 
EGU unit operating at a median heat rate, emission rate, and capacity 
factor for a coal-fired unit.\134\ In CoST, the Agency used the maximum 
emission reduction strategy\135\ to estimate the largest quantity of 
potential emission reductions from each emissions source or unit 
located in the 12 upwind states linked to downwind receptors in this 
final rule. Eleven of the 12 upwind states had sources/units with 150 
tpy or more of pre-control NOX emissions in 2023; the 
projected 2023 emissions inventory did not include non-EGU point 
sources/units in New Jersey with pre-control NOx emissions greater than 
150 tpy for which CoST had applicable control measures.\136\
---------------------------------------------------------------------------

    \133\ Further information on CoST can be found at the following 
link: https://www.epa.gov/economic-and-cost-analysis-air-pollution-regulations/cost-analysis-modelstools-air-pollution.
    \134\ For additional details on calculating the 150 tpy 
emissions threshold, please see the section titled Background for 
Determining Source Size/Threshold for Non-EGU Emissions Sources in 
the memorandum titled Assessing Non-EGU Emission Reduction 
Potential, available in the docket for this rule.
    \135\ The maximum emission reduction algorithm assigns to each 
source the single measure (if a measure is available for the source) 
that provides the maximum reduction to the target pollutant, 
regardless of cost. For more information, see the CoST User's Guide 
available at the following link: https://www.cmascenter.org/cost/documentation/3.5/CoST%20User's%20Guide/.
    \136\ Total NOx emissions at the facility level in this analysis 
are likely much larger than NOx emissions at the emissions source/
unit level, and facilities often have several individual emissions 
units. In New Jersey there are facilities with total NOx emissions 
greater than 150 tpy. EPA did not, however, identify any individual 
emissions units at those facilities with pre-control NOx emissions 
greater than 150 tpy for which CoST had applicable control measures.
---------------------------------------------------------------------------

    For the 12 linked states, EPA categorized the CoST results for 
control technologies that comprise approximately 92 percent of the 
total estimated potential emission reductions from the non-EGU sources/
units with 150 tpy or more of NOX emissions in these states; 
\137\ those technologies and related emissions sources/units are 
summarized in Table VI.B.2-1 below. In tranche one before further 
refinement and verification, the number of emissions units CoST applied 
SCR to was 51 and the number of emissions units CoST applied SNCR to 
was 23. The estimated emission reductions from those control 
applications were 12,724 ozone season tons. In tranche two, before 
further refinement and verification, the number of emissions units to 
which CoST applied layered combustion (a type of combustion control 
technology) was 49, the number of emissions units to which CoST applied 
NSCR \138\ or layered combustion was 65, and the number of emissions 
units to which CoST applied ultra-low NOx burner and SCR was 56. The 
estimated emission reductions from those control applications were 
17,283 ozone season tons. EPA then calculated a weighted average cost 
per ton (in 2016$) for estimated potential reductions associated with 
each control technology and plotted the weighted average cost per ton 
values. From the resulting curve, EPA identified a clear break point 
that defined two tranches of potential emission reduction, as shown in 
Table VI.B.2-1. For additional details on the curve and the potential 
emission reductions in tranches one and two, please see the memorandum 
titled Assessing Non-EGU Emission Reduction Potential, available in the 
docket for this rule.
---------------------------------------------------------------------------

    \137\ CoST applied a few additional controls that are not 
commonly used and did not result in significant additional emission 
reductions. Ten different control technology applications make up 
the remaining 8 percent of the control technology applications. 
Compared to the five technologies EPA assessed further, these ten 
control technology applications do not, individually or 
collectively, have the potential to result in significant additional 
emission reductions. For additional details, see the technical 
memorandum titled Assessing Non-EGU Emission Reduction Potential and 
the Excel workbook titled Control Summary--Max Emission Reduction 
$10k 150 tpy cutoff 12 States Updated Modeling--No Replace--05-18-
2020.xlsx in the docket for this rule.
    \138\ NSCR is non-selective catalytic reduction, a control 
technology applicable to rich-burn natural gas-fired internal 
combustion (IC) engines.

[[Page 23099]]



                Table VI.B.2-1--Details on Tranches One and Two of Potential Emission Reductions
----------------------------------------------------------------------------------------------------------------
                                                                             Weighted average
                 Tranche                  Technologies/industry sectors or   cost (2016$ per   Cost range (2016$
                                                    source groups                  ton)             per ton)
----------------------------------------------------------------------------------------------------------------
Tranche One.............................  SCR/Glass Manufacturing, IC                   2,000     \139\ 64-5,700
                                           Engines.
                                          SNCR/Cement Manufacturing.......
Tranche Two.............................  Layered Combustion/Lean Burn IC         5,000-6,600        1,400-9,700
                                           Engines.
                                          NSCR or Layered Combustion/
                                           Industrial Rich Burn Natural
                                           Gas IC Engines.
                                          Ultra-low NOX Burner and SCR/
                                           Industrial Boilers.
----------------------------------------------------------------------------------------------------------------

    Given the large number of emissions units in one or more industry 
sectors that could require control installation, EPA does not have 
detailed information on the time needed to install all of the control 
technologies identified in Table VI.B.2-1. Any installation timing 
estimates would need to reflect the time needed to install controls 
across a potentially large number of sources, the time needed to have 
appropriate NOX monitoring installed, the time needed to 
raise the necessary financing, and other steps in the permitting, 
construction and procurement processes. EPA previously examined the 
time necessary to install some of the controls indicated in Table 
VI.B.2-1 for different industries in the 2016 Final Technical Support 
Document (TSD) for the Final Cross-State Air Pollution Rule for the 
2008 Ozone NAAQS, Assessment of Non-EGU NOX Emission 
Controls, Cost of Controls, and Time for Compliance Final TSD (``CSAPR 
Update Non-EGU TSD''), which is discussed in section VI.C.2. EPA 
expects that the controls for glass furnaces and cement kilns would 
take at least 2 years to install on a sector-wide basis across the 12-
state region affected by this final rule. Information available to the 
Agency, including information provided by commenters, does not 
establish that implementation of NOX control technologies 
for non-EGU emission sources/units could take place in less than 2 
years. Therefore, EPA has determined that the 2023 ozone season is the 
earliest ozone season by which these non-EGU controls could be 
installed. EPA thus concludes that no NOX controls for non-
EGUs included in this cost analysis can be installed by the 2021 ozone 
season. Additional information on installation times for non-EGU 
NOX controls can be found in section VI.C.
---------------------------------------------------------------------------

    \139\ For the emissions unit estimated to generate emission 
reductions at $64 per ton, the emissions and cost estimates were 
incorrect. The 2023 projected emissions for the unit were 
significantly overestimated as a result of a growth factor EPA 
received for these emissions from a multi-jurisdictional partner 
organization. Further, the equation used to estimate the cost was 
mis-specified in CoST, and the true cost is likely on the order of 
$800 per ton. However, these emission reductions were still 
assessed, as discussed in section VI.C.2 below.
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3. Mobile Source NOX Mitigation Strategies
    Under a variety of CAA programs, EPA has established federal 
emissions and fuel quality standards that reduce emissions from cars, 
trucks, buses, nonroad engines and equipment, locomotives, marine 
vessels, and aircraft (i.e., ``mobile sources''). Because states are 
generally preempted from regulating new vehicles and engines with 
certain exceptions (see generally CAA sections 209, 177), mobile source 
emissions are primarily controlled through EPA's federal programs. EPA 
has been regulating mobile source emissions since it was established as 
a federal agency in 1970, and all mobile source sectors are currently 
subject to NOX emissions standards. EPA factors these 
standards and associated emission reductions into its baseline air 
quality assessment in good neighbor rulemaking, including in this 
action. Such reductions are an important reason for the historical and 
long-running trend of improving air quality in the United States. These 
trends help explain why the overall number of receptors and severity of 
ozone nonattainment problems under the 2008 ozone NAAQS continues to 
decline. Such data are factored into EPA's analysis at steps 1 and 2 of 
the 4-step framework. As a result of this long history, NOX 
emissions from onroad and nonroad mobile sources have substantially 
decreased (73 percent and 57 percent since 2002, for onroad and 
nonroad, respectively) \140\ and are predicted to continue to decrease 
into the future as newer vehicles and engines that are subject to the 
most recent, stringent standards replace older vehicles and 
engines.\141\
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    \140\ U.S. EPA. Our Nation's Air: Status and Trends Through 
2019. https://gispub.epa.gov/air/trendsreport/2020/#home.
    \141\ National Emissions Inventory Collaborative (2019). 2016v1 
Emissions Modeling Platform. Retrieved from http://views.cira.colostate.edu/wiki/wiki/10202.
---------------------------------------------------------------------------

    For example, in 2014 EPA promulgated new, more stringent emissions 
and fuel standards for light-duty passenger cars and trucks.\142\ The 
fuel standards took effect in 2017, and the vehicle standards are 
phasing in between 2017 and 2025. Other EPA actions that are continuing 
to reduce NOX emissions include the Heavy-Duty Engine and 
Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements 
(66 FR 5002; January 18, 2001); the Clean Air Nonroad Diesel Rule (69 
FR 38957; June 29, 2004); the Locomotive and Marine Rule (73 FR 25098; 
May 6, 2008); the Marine Spark-Ignition and Small Spark-Ignition Engine 
Rule (73 FR 59034; October 8, 2008); the New Marine Compression-
Ignition Engines at or Above 30 Liters per Cylinder Rule (75 FR 22895; 
April 30, 2010); and the Aircraft and Aircraft Engine Emissions 
Standards (77 FR 36342; June 18, 2012).
---------------------------------------------------------------------------

    \142\ Control of Air Pollution from Motor Vehicles: Tier 3 Motor 
Vehicle Emission and Fuel Standards, 79 FR 23414 (April 28, 2014).
---------------------------------------------------------------------------

    EPA is currently developing a new regulatory effort to reduce 
NOX and other pollution from heavy-duty trucks (known as the 
Cleaner Trucks Initiative), as described in the January 21, 2020, 
Advance Notice of Proposed Rulemaking (85 FR 3306). Heavy-duty vehicles 
are the largest contributor to mobile source emissions of 
NOX and will be one of the largest mobile source 
contributors to ozone in 2025.\143\ Reducing heavy-duty vehicle 
emissions nationally would improve air quality where the trucks are 
operating as well as downwind. As required by CAA section 202(a)(3)(A) 
of the Act, EPA will be proposing NOX emission standards 
that ``reflect the greatest degree of emission reduction achievable 
through the application of technology which the Administrator 
determines will be available for the model year to which such standards 
apply, giving appropriate consideration to cost, energy, and safety 
factors associated with the application of such technology.'' Section 
202(a)(3)(C)

[[Page 23100]]

requires that standards apply for no less than 3 model years and apply 
no earlier than 4 years after promulgation.
---------------------------------------------------------------------------

    \143\ Zawacki et al, 2018. Mobile source contributions to 
ambient ozone and particulate matter in 2025. Atmospheric 
Environment. Vol 188, pg 129-141. Available online: https://doi.org/10.1016/j.atmosenv.2018.04.057.
---------------------------------------------------------------------------

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

C. Emission Reduction Potential of Control Stringencies

1. EGU Emission Reduction Potential
    For EGUs, as discussed in section VI.A, the multi-factor test 
considers increasing levels of uniform control stringency in 
combination with consideration of total NOX reduction 
potential and corresponding air quality improvements. EPA evaluated EGU 
NOX emission controls that are widely available (described 
previously in section VI.B.1), that were assessed in previous rules to 
address ozone transport, and that have been incorporated into state 
requirements to address ozone nonattainment.
    The tables below summarize the emission reduction potentials (in 
absolute ozone season tons) from these emission controls across the 12-
state region. Table VI.C.1-2 focuses on near-term mitigation emission 
controls while Table VI.C.1-3 includes emission controls with extended 
time frames for implementation.

                       Table VI.C.1-2--EGU Ozone-Season Emission Reduction Potential--2021
----------------------------------------------------------------------------------------------------------------
                                                             Reduction potential (tons) for varying levels of
                                                                           technology inclusion
                                       Baseline 2021 OS --------------------------------------------------------
                State                        NOX                                                    SCR/SNCR
                                                          SCR optimization   SCR optimization    optimization +
                                                                              + LNB upgrade       LNB upgrade
----------------------------------------------------------------------------------------------------------------
Illinois............................              9,368                171                171                267
Indiana.............................             15,856              2,771              2,771              2,805
Kentucky............................             15,588                282              1,531              1,538
Louisiana...........................             15,476                 87                 87                658
Maryland............................              1,501                  1                  1                  1
Michigan............................             13,898              1,166              1,284              1,288
New Jersey..........................              1,346                 92                 92                 92
New York............................              3,469                 53                 53                 53
Ohio................................             15,829              6,140              6,140              6,140
Pennsylvania........................             11,896              3,517              3,517              3,517
Virginia............................              4,664                 50                320                380
West Virginia.......................             15,165              1,479              1,960              2,281
                                     ---------------------------------------------------------------------------
    Total...........................            124,057             15,809             17,927             19,021
----------------------------------------------------------------------------------------------------------------
* EPA shows reduction potential from state-of-the-art LNB upgrade as a near-term reduction emission control but
  explains in sections VI.B and VI.D that this reduction potential would not be implemented until 2022. Sum of
  state values may vary slightly from total due to rounding.


                       Table VI.C.1-3--EGU Ozone-Season Emission Reduction Potential--2025
----------------------------------------------------------------------------------------------------------------
                                                    Reduction potential (tons) for varying levels of technology
                                                                            inclusion*
                                                 ---------------------------------------------------------------
                                                                                     SCR/SNCR        SCR/SNCR
              State                Baseline 2025                                  optimization +  optimization +
                                      OS NOX            SCR          SCR/SNCR      LNB upgrade +   LNB upgrade +
                                                  optimization +  optimization +  SNCR  retrofit  SCR retrofit +
                                                    LNB upgrade     LNB upgrade    +  generation    generation
                                                                                     shifting        shifting
----------------------------------------------------------------------------------------------------------------
Illinois........................           8,281             138             233           1,053           1,401
Indiana.........................          12,232           2,648           2,668           3,309           3,802
Kentucky........................          14,551           1,199           1,205           2,755           5,022
Louisiana.......................          15,476              87             659           1,098           2,854
Maryland........................           1,350               2               2             181             181
Michigan........................          11,009           1,205           1,209           2,331           3,656
New Jersey......................           1,346              92              92              89              89
New York........................           3,456              53              53             159             159
Ohio............................          15,927           6,155           6,155           6,284           6,706
Pennsylvania....................          11,896           3,523           3,523           3,975           4,045
Virginia........................           4,162             323             367             417             850
West Virginia...................          15,165           1,960           2,281           2,328           4,597
                                 -------------------------------------------------------------------------------

[[Page 23101]]

 
    Total.......................         114,850          17,384          18,448          23,978          33,363
----------------------------------------------------------------------------------------------------------------
* Both tables VI.C.1-2 and VI.C.1-3 include limited generation shifting (reflecting that which would occur at
  the price level consistent with control operation). It does not factor in generation shifting reduction
  potential that may be attributable to incremental new builds or incremental retirements. Sum of state values
  may vary slightly from total due to rounding.

    Comment: Some commenters suggested that the emission reduction 
estimates for an identified technology needed to be updated based on 
new or updated data.
    Response: EPA has updated the total emission reduction potential 
for each technology based on information provided by commenters. 
Further details are provided in the RTC Document included in the 
docket, the EGU NOx Mitigation Strategies Final Rule TSD, and in the 
Ozone Transport Policy Analysis Final Rule TSD. In summary, comments 
containing new data, information, or analysis that resulted in changes 
to the values in the tables above included information on (1) shared 
stack emissions apportionment, (2) updated information and data on 
retirements and new builds, (3) updated information and data on 
combustion control performance, and (4) and updated information on SNCR 
optimization cost. In the first three instances, the resulting impact 
was a change in the inventory of units with identified emission 
reduction potential (and therefore overall emission reduction potential 
from that category). For instance, multiple commenters provided EPA 
with data on shared stack emissions apportionment not readily available 
in unit-level data reported to EPA. In some cases where stack data are 
measured and reported, and that stack is shared by two units (one with 
an SCR and one without), the apportionment method of those reported 
stack emissions for reporting purposes is heat input-based and 
therefore may not reflect the unit-level operation of the control at 
that unit, even when that control is operating. In other words, it may 
have apportioned those stack emissions (e.g., 10 tons) as 5 tons to 
each unit, while the actual operation is 9 tons from the uncontrolled 
unit and 1 ton from the controlled unit. This can give the appearance 
of a controlled unit emitting above the optimized rate, when in fact it 
is already operating below the 0.08 lb/mmBtu threshold. Similar to the 
CSAPR Update, EPA incorporated the information from this comment and 
new data into this final rule, and EPA has adjusted the Agency's 
inventory of units that may have SCR reduction potential accordingly. 
Likewise, EPA received some updated information on unit-level 
retirement status such as changes to the retirement status of the 
Colver Power Plant in Pennsylvania and the Pleasants Power Station in 
West Virginia. As these units are no longer retiring, their retirement 
is not factored into the step 3 baseline or resulting state emission 
budgets. Similarly, EPA also incorporated comments and new data 
regarding new units expected to come online and retiring units expected 
to go offline after 2019 but prior to 2024 ozone season.\144\ Also, as 
noted above, EPA updated its performance rate assumption for LNB 
controls based on updated data and comments, resulting in less emission 
reduction potential from this technology category. Finally, the 
emission reduction levels associated with SNCR optimization were 
updated to be consistent with the representative cost (and commensurate 
generation shifting-based reductions) adjustments discussed above.
---------------------------------------------------------------------------

    \144\ EPA relied on unit-level data from the proposal, commenter 
data, and the latest EIA Form 860m (October 2020) available at the 
time of the final rule analysis.
---------------------------------------------------------------------------

    Comment: Some commenters asserted that EPA should change its timing 
assumptions for post-combustion control retrofits by parsing out 
different timing assumptions for SNCR and SCR retrofits. They claim 
that doing so would result in more emission reductions available 
starting in earlier years (e.g., 2023) given that SNCR retrofit 
technology could be installed by that year.
    Response: EPA is finalizing the same timing assumptions that it 
proposed for the installation of post-combustion controls. As discussed 
in section VI.B.1.e and noted in prior actions, EPA generally views 39-
48 months as an appropriate implementation timeframe for regionwide 
installation of new post-combustion control technologies when EPA is 
evaluating multiple installations at multiple locations. As discussed 
further below, this is primarily based on SCR retrofit rather than 
SNCR. The period from finalization of this rule until the start of the 
2024 ozone-season would allow less than 39 months for post combustion 
controls to be regionally installed and operating. The 2025 ozone 
season represents a period approximately 48 months after finalization 
of this rule and reflects a more demonstrably possible window for 
making retrofits on a regional scale. Therefore, EPA finds that 2025 is 
the earliest ozone season by which new SNCR or SCR may be installed 
across multiple EGUs on a regional basis.
    Installing new SCR or SNCR controls for EGUs generally involves the 
following steps: Conducting an engineering review of the facility to 
determine suitability and project scope; advertising and awarding a 
procurement contract; obtaining a construction permit; installing the 
control technology; testing the control technology; and obtaining or 
modifying an operating permit. These timeframes are intended to 
accommodate a plant's need to conduct an engineering assessment of the 
possible NOX mitigation technologies necessary to then 
develop and send a bid request to potential suppliers. Control 
specifications are variable based on individual plant configuration and 
operating details (e.g., operating temperatures, location restrictions, 
and ash loads). Before making potential large capital investments, 
plants need to complete these careful reviews of their system to inform 
and develop the control design they request. They then need to solicit 
bids, review bid submissions, and award a procurement

[[Page 23102]]

contract--all before construction can begin.
    Scheduled curtailment, or planned outage, for pollution control 
installation would also be necessary to complete SCR or SNCR projects 
on a regional scale. Given that peak demand and rule compliance would 
both fall in the ozone season, sources would likely need to schedule 
installation projects for the ``shoulder'' seasons (i.e., the spring 
and/or fall seasons), when electricity demand is lower than in the 
summer, reserves are higher, and ozone season compliance requirements 
are not in effect. If multiple units were under the same timeline to 
complete the retrofit projects as soon as feasible from an engineering 
perspective, this could lead to bottlenecks of scheduled outages as 
each unit attempts to start and finish its installation in roughly the 
same compressed time period. Thus, any compliance timeframe that would 
assume installation of new SCR or SNCR controls should be developed to 
reasonably encompass multiple shoulder seasons to accommodate 
scheduling of curtailment for control installation purposes and better 
accommodate the regional nature of the program.\145\
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    \145\ The workforce disruption experienced at the onset of the 
COVID-19 pandemic has resulted in a backlog of scheduled outages for 
power plant maintenance. According to Genscape, PJM (a regional 
transmission organization covering a substantial portion of the EGUs 
affected by this rule) observed a shortfall of more than a quarter 
of planned outages for power plant maintenance in the spring 2020 
shoulder season. Finn, Pat; Szumloz, Zach; Gordon, Elliot. Impacts 
of the Coronavirus on the PJM Power Market, Taking a Closer Look at 
Demand, Supply, Energy Prices, and Congestion. Genscape, A Wood 
Mackenzie Business. April 2020.
---------------------------------------------------------------------------

    Finally, the time lag observed between the planning phase and in-
service date of SCR operations in certain cases also illustrates that 
site-specific conditions can lead to installation times of four years 
or longer--even for individual power plants. For instance, SCR projects 
for units at the Ottumwa power plant (Iowa), Columbia power plant 
(Wisconsin), and Oakley power plant (California) were all in the 
planning phase in 2014. By 2016, these projects were under construction 
with estimated in-service dates of 2018.\146\ Further, large-scale 
projects also illustrate that timelines can extend beyond the general 
estimate for a single power plant when the project is part of a larger, 
multifaceted air pollution reduction goal. For instance, the Big Bend 
power plant in Florida completed a multifaceted project that involved 
adding SCRs to all four units as well as converting furnaces, over-fire 
air changes, and making windbox modifications, during which a decade 
elapsed between the initial planning stages and completion.\147\
---------------------------------------------------------------------------

    \146\ 2014 EIA Form 860. Schedule 6. Environmental Control 
Equipment.
    \147\ Big Bend's Multi-Unit SCR Retrofit. Power Magazine. March 
1, 2010. Available at http://www.powermag.com/big-bends-multi-unit-scr-retrofit/.
---------------------------------------------------------------------------

    EPA notes that differences between these control technologies exist 
with respect to the potential viability of achieving cost-effective, 
regional NOX reductions from EGUs. SCR controls generally 
achieve greater EGU NOX reduction efficiency (up to 90 
percent) than SNCR controls (25 percent). EPA observes that for the 
remaining uncontrolled coal fleet in the 12 states, SCRs are, on 
average, more expensive on a cost per ton basis. However, the analysis 
in the EGU NOX Mitigation Strategies Final Rule TSD notes 
that the cost range varies widely for units depending on inlet 
NOX rate and capacity factor. Therefore, for some units, it 
is possible that SCR retrofit costs are lower than SNCR costs on a cost 
per ton basis. Moreover, there are a host of other market and policy 
drivers that may lead a specific unit to prefer an SCR retrofit over an 
SNCR retrofit. As a result, EPA finds it is reasonable to allow 
sufficient time for EGU operators to select installation of SCR in 
response to a multi-state emission control program whose emission 
budgets would reflect emission reductions from new post-combustion 
controls. Therefore, EPA is using an SCR-inclusive planning and 
installation schedule to represent new post-combustion retrofit 
potential on a regional basis (be it SNCR or SCR as determined by 
individual EGU owners under our flexible market-based emission trading 
program).
    Furthermore, SNCR installation at an individual source would render 
later installation of an SCR less cost-effective, because such a unit 
would have already expended some unrecoverable capital on the less-
effective pollution control technology. As a result, it would be 
counterproductive to assume EGUs should install the less effective SNCR 
control technology to address a short-run air quality concern under an 
older and less stringent NAAQS when it may later prove necessary to 
require the more effective SCR control technology to address longer-run 
air quality concerns under a more stringent NAAQS for the same 
pollutant. Considering these factors, EPA finds it is appropriate to 
give particular weight to the timeframe required for implementation of 
SCR across the region as compared to SNCR to allow sources the 
flexibility to make the most efficient post-combustion control 
investment. Historically, units have chosen to retrofit with higher 
performing SCR at a much greater rate than they have chosen SNCR. For 
SCR, the total time associated with project development is estimated to 
be up to 39 months for an individual power plant installing controls on 
more than one boiler. However, more time is needed when considering 
installation timing for new SCR controls regionally. EPA has previously 
determined that a minimum of 48 months (four years) is a reasonable 
time period to allow to complete all necessary steps of SCR projects at 
EGUs on a regional scale. This timeframe would allow for regional 
implementation of these controls (i.e., at multiple power plants with 
multiple boilers) considering the necessary stages of post-combustion 
control project planning, shepherding of labor and material supply, 
installation, coordination of outages, testing, and operation.\148\
---------------------------------------------------------------------------

    \148\ Final Report: Engineering and Economic Factors Affecting 
the Installation of Control Technologies for Multipollutant 
Strategies, EPA-- 600/R-02/073 (Oct. 2002), available at https://nepis.epa.gov/Adobe/PDF/P1001G0O.pdf.
---------------------------------------------------------------------------

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

[[Page 23103]]

[GRAPHIC] [TIFF OMITTED] TR30AP21.002

    Comment: EPA received comment on the timing assumptions regarding 
SCR and SNCR retrofit. Commenters noted that EPA should require SNCR 
installation as it can be installed in as little as 16 months, and that 
EPA's reliance on SCR timing to justify not considering SNCR is not 
reasonable given that EPA is not considering SCR installation. 
Moreover, the commenter also suggested that if these controls are not 
available on a region-wide level by the start of 2024, that EPA should 
still include them for a limited number of units (e.g., 30 percent of 
the unretrofitted fleet) as the Clean Air Act requires that upwind 
states limit emissions ``as expeditiously as practicable.''
    Response: EPA believes its proposed collective timing assumptions 
for post-combustion control retrofit are practicable given that the 
preferable capital-intensive investment retrofit decision would be 
highly unit-specific and subject to a unit's compliance strategy 
choices with respect to multiple regulatory requirements. For the 
reasons described above, EPA believes that separating the post-
combustion retrofit timing consideration would create a framework that 
potentially inhibits greater emission reductions from technologies like 
SCR that may be both preferable to the unit's operator and beneficial 
to overall emission reductions. While the commenter observed that SCR 
installation is not included as part of EPA's proposed control 
stringency, states and EPA may consider requiring this emission control 
technology to address good neighbor obligations or other attainment 
planning requirements for the 2015 ozone NAAQS or other CAA programs. 
Therefore, while the commenter suggests that the exclusion of new SCR 
installations from the control stringency selected for this rule should 
result in the decoupling of SNCR and SCR for timing considerations, EPA 
observes that the broader regulatory context potentially presents 
situations where a better performing emission reduction technology is 
the preferred retrofit choice. If EPA were to ignore the observation 
that this post-combustion retrofit technology decision is a binary 
choice, as these technologies substitute for rather than complement one 
another, it would potentially eliminate or make more costly the 
eventual decision to implement a better performing SCR technology by 
implementing on a schedule that did not allow for that compliance 
strategy.
    With regard to the suggestion that, if it is not possible to 
require all non-retrofitted units to install new controls, EPA should 
at least require some units to retrofit with SNCR and SCR, EPA observed 
that doing so would result in making selective choices about which 
linked upwind states should face more stringent requirements and would 
upset the uniform control stringency scheme allowing for ``equitable 
and efficient'' implementation of good neighbor obligations. EME Homer 
City, 572 U.S. at 519. In addition, it would necessitate far greater 
unit-level analysis, which would likely have prevented EPA from 
finalizing a rule in time to implement reductions for the 2021 ozone 
season.
2. Non-EGU Emission Reduction Potential
    EPA performed a similar analysis of reduction potential for the 
non-EGU mitigation technologies identified, as discussed in section 
VI.B.2 of this notice. EPA's assessment of emission reduction potential 
from the controls in the tranches reflects ongoing uncertainty 
resulting from the quality of the current information available to the 
Agency. This uncertainty has been addressed to some extent through 
further research conducted since the proposed rule. Because information 
for existing controls on non-EGU emissions sources is missing in the 
2016 base year inventory for some states and incomplete for some 
sources, EPA went through a process in the proposed rule to further 
verify existing control information and refine the NOX 
emission reduction potential estimated by CoST, the CMDb, and the 2023 
projected inventory. In the proposed rule EPA focused its verification 
and refinement efforts on those upwind states with the largest 
estimated potential air quality impacts from potential non-EGU emission 
reductions. Since the proposed rule, EPA extended its verification and 
refinement efforts to several additional linked states.
    In the proposed rule, EPA identified two tranches of controls for 
non-EGU emissions sources/units associated with two levels of weighted 
average cost per ton. EPA assumed that the potential reductions in 
tranche one were likely cost-effective because tranche one's weighted 
average cost of $2,000 per ton is similar to the identified control 
stringency for EGUs represented by

[[Page 23104]]

$1,800 per ton (see section VI.D.1). The additional steps EPA took, 
discussed in more detail below, included:
     Looked at potential emission reductions in tranche one 
that were estimated to cost less than $2,000 per ton; and
     For those potential reductions in tranche one that were 
estimated to cost less than $2,000 per ton, reviewed online facility 
permits and industrial trade literature to verify and determine if the 
estimated emission reductions may be actual, achievable emission 
reductions or if the estimated emission reductions are associated with 
emissions units that are already controlled.
    EPA focused its verification and refinement efforts on those upwind 
states with the largest estimated potential air quality impacts from 
potential non-EGU emission reductions. Specifically, EPA used an 
estimate of 0.02 ppb as a threshold for air quality improvement that 
may be obtained from reductions from non-EGU emissions sources in each 
state to better target its efforts to verify and refine the potential 
estimated non-EGU NOX emission reductions. The Agency 
explained that it was not applying a 0.02 ppb impact threshold as a 
step in the step 3 multi-factor test. Rather, the threshold allowed the 
Agency to better target its efforts toward the potentially effective 
states for non-EGU NOX emission reductions. Based on this, 
the states for which the Agency verified existing control information 
and refined the NOX emission reduction estimates in the 
proposed rule included: Indiana, New York, Ohio, Pennsylvania, and West 
Virginia. For additional discussion on the air quality impacts by 
state, see the section titled Air Quality Impacts from Potential Non-
EGU Emissions Reductions in the technical memorandum titled Assessing 
Non-EGU Emission Reduction Potential in the docket for this rule. In 
this final rule, EPA extended its verification process to additional 
linked states, including Maryland, Michigan, and Virginia.\149\
---------------------------------------------------------------------------

    \149\ The verification efforts did not include New Jersey, 
Illinois, and Kentucky. For New Jersey, the projected 2023 emissions 
inventory did not include non-EGU point sources/units with pre-
control NOX emissions greater than 150 tpy for which the 
Agency had applicable control measures; as such, there were no 
potential NOX emission reductions to verify. For 
Illinois, EPA did not review the potential controls for emissions 
sources/units because their permits were not available online. 
(However, as discussed below, EPA assumed all of the potential 
emission reductions estimated by CoST from units in Illinois were 
considered available.) For Kentucky EPA did not review the potential 
controls because CoST did not identify applicable control measures 
for any emissions sources/units in the state; as such, there were no 
potential NOX emission reductions to verify. Louisiana 
was not assessed because the receptor to which it is linked is 
projected to resolve by the 2023 ozone seaon, which is the earliest 
ozone season EPA finds non-EGU emission reductions may become 
available.
---------------------------------------------------------------------------

    As noted above to focus the set of non-EGU emissions sources/units 
in the linked upwind states (Indiana, Maryland, Michigan, New York, 
Ohio, Pennsylvania, Virginia, and West Virginia) for which EPA could 
verify existing control information and refine the NOX 
emission reduction estimates, the Agency assumed that the potential 
reductions in tranche one were likely cost-effective because tranche 
one's weighted average cost of $2,000 per ton is similar to the 
identified control stringency for EGUs represented by up to $1,800 per 
ton (see section VI.D.1).
    In the proposed rule, EPA found in Indiana, New York, Ohio, and 
Pennsylvania, that the estimated emission reductions in tranche one 
that cost less than $2,000 per ton were 6,346 ozone season tons. Note 
that no potential emission reductions at a cost of less than $2,000 per 
ton were identified in West Virginia because CoST originally estimated 
control costs for two IC engines in West Virginia inappropriately, and 
CoST did not identify likely cost-effective controls for any other non-
EGU emissions units in the state. EPA removed the two IC engines in 
West Virginia from further consideration because the corrected 
potential cost was greater than $2,000 per ton.
    In reviewing the potential controls in tranche one that were 
estimated to cost less than $2,000 per ton for Indiana, New York, 
Pennsylvania, and Ohio, EPA found that these reductions were from SCR 
applied to glass furnaces and SNCR applied to cement kilns. In addition 
in this final rule, EPA found in Maryland, Michigan, and Virginia the 
estimated emission reductions in tranche one that cost less than $2,000 
per ton are 664 ozone season tons. These estimated reductions were also 
from glass furnaces and cement kilns. The total estimated emission 
reductions in tranche one in Indiana, Maryland, Michigan, New York, 
Pennsylvania, Ohio, and Virginia that cost less than $2,000 per ton are 
7,010 ozone season tons.
    Next, to verify the information on the application of these 
controls and estimated emission reductions, EPA reviewed facilities' 
online title V permits and industrial trade literature for the likely 
cost-effective emission reductions associated with SCR applied to glass 
furnaces and SNCR applied to cement kilns. In the proposed rule, EPA 
determined that of the 20 emissions units in Indiana, New York, 
Pennsylvania, and Ohio included in the cost analysis, source permits 
identified that 10 units (i) already have controls and monitors 
(primarily CEMS), (ii) are installing controls and CEMS or 
consolidating operations in the next few years as a result of recent 
consent decrees issued as part of EPA's New Source Review Air 
Enforcement Initiative, (iii) have shut down, or (iv) are planning to 
shut down by 2023. These 10 units account for approximately 34 percent 
of estimated potential emissions reductions from Pennsylvania, New 
York, Ohio, and Indiana in tranche 1 that cost <$2,000 per ton. The 
results of the online permit review and review of industrial trade 
literature, summarized in Table VI.C.2-1 below, suggested that 
approximately 14 percent of the CoST-estimated potential emission 
reductions in these four states may be possible to achieve.
---------------------------------------------------------------------------

    \150\ In the memorandum titled Assessing Non-EGU Emission 
Reduction Potential, the section titled Conclusions of Verification 
and Review of Controls on Non-EGU Sources in Four States and 
Potential Emissions Reductions includes a discussion related to the 
underlying uncertainty in these estimates of emission reductions. 
Approximately 51 percent of the estimated emission reductions are 
associated with only one emissions unit at a facility in 
Pennsylvania. In the 2023 projected inventory, the pre-control 
emissions are significantly higher than what appears in the 
Pennsylvania Air Emissions Report for this facility and 
significantly higher than any other glass furnace in this analysis. 
The projected inventory does not show a control on any unit at this 
facility, even though a review of the permit indicates that one unit 
does have a control.

                             Table VI.C.2-1--Status of Potential Emission Reductions
----------------------------------------------------------------------------------------------------------------
                                                                     Number of
                                                                     emissions        OS tons       Percent of
                                                                       units                           total
----------------------------------------------------------------------------------------------------------------
Shutdowns.......................................................               4             824              13
Lehigh Cement--Kiln Replacements................................               3             366               6
NEI Discrepancy/Uncertain \150\.................................               1           3,286              51

[[Page 23105]]

 
Already Controlled/Uncertain....................................               5             967              15
Possible Emission Reductions....................................               7             903              14
                                                                 -----------------------------------------------
    Total.......................................................              20           6,346
----------------------------------------------------------------------------------------------------------------

    In EPA's analysis for this final rule, the online permit review for 
Maryland, Michigan, and Virginia identified approximately 62 ozone 
season tons out of the estimated 664 ozone season tons that are from 
sources/units already controlled, leaving an estimated 602 ozone season 
tons of likely cost-effective emission reductions from these states. 
For additional details on the review of online permits and industrial 
trade literature, please see the memorandum titled Assessing Non-EGU 
Emission Reduction Potential, available in the docket for this rule.
    EPA previously examined the time necessary to install the controls 
indicated in the table above (with details on the technology tranches) 
for different industries. The 2016 CSAPR Update Non-EGU TSD provided 
preliminary estimates of installation times for a variety of 
NOX control technologies applied to a large number of 
sources in non-EGU industry sectors.\151\ For virtually all 
NOX controls applied to cement manufacturing and glass 
manufacturing, information on installation times was not available to 
provide an estimate, and the installation time for these controls was 
``uncertain.'' There was an exception for SNCR applied to cement kilns; 
however, the installation time estimate of 42-51 weeks listed in the 
CSAPR Update Non-EGU TSD does not account for implementation across 
multiple sources, the time needed to have NOX monitoring 
installed, and other steps in the permitting and construction 
processes.
---------------------------------------------------------------------------

    \151\ The CSAPR Update Non-EGU TSD is available on EPA's website 
at the following link: https://www.epa.gov/airmarkets/assessment-non-egu-NOX-emission-controls-cost-controls-and-time-compliance-final-tsd.
---------------------------------------------------------------------------

    To improve upon information from the CSAPR Update Non-EGU TSD on 
installation times for SCR on glass furnaces and SNCR on cement kilns, 
EPA reviewed information from permitting actions and a consent decree. 
For two glass manufacturing facilities that installed SCR on glass 
furnaces, from the time of permit application to the time of SCR 
operation was approximately 19 months for one facility and is currently 
at least 20 months for another facility.\152\ These installation times 
do not reflect time needed for pre-construction design and engineering, 
financing, and factors associated with scaling up construction services 
for multiple installations at several emissions units. With respect to 
cement kilns, an April 2013 consent decree between EPA and CEMEX, Inc. 
required installation of SNCR at a kiln within 450 days, or 
approximately 15 months, of the effective date of the consent decree. 
Similarly, this installation time does not reflect time associated with 
scaling up construction services for multiple control installations at 
several emissions units.
---------------------------------------------------------------------------

    \152\ Cardinal FG Company submitted a permit application to the 
Wisconsin Department of Natural Resources (WIDNR) to construct an 
SCR in December 2017 at a facility in Portage, Wisconsin. The SCR 
was expected to be ready for testing in mid-July 2019. In addition, 
Cardinal FG Company submitted a permit application to the WIDNR to 
construct an SCR in January 2019 at a facility in Menomonie, 
Wisconsin. The SCR is currently not operational.
---------------------------------------------------------------------------

    This information and EPA's general experience indicate that a two-
year installation timeframe for a rule requiring installation of new 
control technologies across a variety of emissions sources in several 
industry sectors on a regional basis is a relatively fast installation 
timeframe. A shorter installation timeframe of approximately one year 
(i.e., in time for the 2022 ozone season) would raise significant 
challenges for sources, suppliers, contractors, and other economic 
actors, potentially including customers relying on the products or 
services supplied by the regulated sources.\153\
---------------------------------------------------------------------------

    \153\ EPA notes that in several places, the CAA itself indicates 
a general congressional expectation that the retrofit of emissions 
controls onto existing sources across diverse industry sectors and 
at a regional or national scale may take at least several years. For 
instance, under CAA section 112(i)(3), Congress allowed for up to 
three years for compliance with control requirements in national 
rules for hazardous air pollutants for existing sources. And under 
CAA section 169A(g)(4), Congress established up to five years for 
the installation of best available retrofit technology (BART) for 
over two-dozen source categories. While these provisions also call 
for installation ``as expeditiously as practicable,'' EPA notes that 
both of these timeframes are longer than the two-year estimate EPA 
uses in this rulemaking.
---------------------------------------------------------------------------

    Thus, for this rule, EPA estimates that these controls for glass 
furnaces and cement kilns would take at least 2 years to install on a 
sector-wide basis across the 12-state region. Therefore, based on the 
information currently available, EPA in its reasoned judgment finds 
that the 2023 ozone season is the earliest ozone season by which these 
non-EGU controls could be installed.

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

    To determine the emissions that are significantly contributing to 
nonattainment or interfering with maintenance, EPA applied the multi-
factor test to EGUs and non-EGUs separately, considering for each the 
relationship of cost, available emission reductions, and downwind air 
quality impacts. Specifically, EPA determined the appropriate level of 
uniform NOX control stringency that addresses the impacts of 
interstate transport on downwind nonattainment or maintenance 
receptors. EPA also evaluated possible over-control by determining if 
an upwind state is linked solely to downwind air quality problems that 
could have been resolved at a lower cost threshold, or if an upwind 
state could have reduced its emissions below the 1 percent air quality 
contribution threshold at a lower cost threshold.
1. EGU Assessment
    For EGUs, EPA examined the emission reduction potential associated 
with each EGU emission control technology (presented in section VI.C.1) 
and its impact on the air quality at downwind receptors. Specifically, 
EPA identified the projected air quality improvement relative to the 
base case, as well as whether the air quality improvements are 
sufficient to shift the status of receptors from nonattainment to 
maintenance or from maintenance to clean. Combining these air quality 
factors, cost, and emission reductions, EPA identified a control 
stringency for EGUs that maximizes the air quality improvement from 
emission controls available in the timeframe for which air quality 
problems at downwind receptors

[[Page 23106]]

persist. This control stringency reflects the optimization of existing 
SCR controls and installation of state-of-the-art NOX 
combustion controls, which are widely available at a representative 
marginal cost of $1,600 per ton. It also includes the optimization of 
existing SNCR controls at sources that are already partially operating 
these controls, which becomes widely available as a mitigation 
technology at $1,800 per ton. EPA's evaluation also shows that emission 
budgets reflecting the operation of these existing post combustion 
controls and combustion control upgrades do not over-control upwind 
states' emissions relative to either the downwind air quality problems 
to which they are linked at step 1 or the 1 percent contribution 
threshold that triggers further evaluation at step 2 of the 4-step 
framework for the 2008 ozone NAAQS. To assess downwind air quality 
impacts for each nonattainment and maintenance receptor identified in 
section V.C, EPA evaluated the air quality change at that receptor 
expected from the progressively more stringent upwind EGU control 
stringencies that were available for that time period. This assessment 
provides the downwind ozone improvements for consideration and provides 
air quality data that is used to evaluate potential over-control.
    To assess the air quality impacts of the various control 
stringencies at downwind receptors, EPA evaluated changes resulting 
from the emission reductions associated with the identified emission 
controls in each of the upwind states, as well as corresponding 
reductions of similar stringency in the downwind state containing the 
receptor they are linked to. By applying these emission controls to the 
state containing the receptor, EPA assumes that the downwind state will 
implement (if it has not already) an emissions control stringency for 
its sources that is comparable to the upwind control stringency 
identified here. Consequently, EPA explicitly ensures that it is 
accounting for the downwind state's share of a nonattainment or 
maintenance problem (which is a part of the overcontrol 
evaluation).\154\
---------------------------------------------------------------------------

    \154\ This step is irrelevant in the analysis for the 
Connecticut receptors because that state shows no EGU reduction 
potential from the EGU control optimization or retrofit technologies 
identified given its already low-emitting fleet.
---------------------------------------------------------------------------

    For states that were not linked to that receptor, the air quality 
change at that receptor was evaluated assuming emissions equal to the 
engineering analytics base case emission level. This method holds each 
upwind state responsible for its share of the specific downwind 
problems to which it is linked. For states that are not linked to that 
receptor (even if they are linked to a different receptor), EPA assumes 
that they are not making emission reductions beyond those in the base 
case to that receptor. In practice, because these states, by 
definition, do not impact such receptors above the contribution 
threshold, the changes in emissions have little to no effect on the 
non-linked receptor. Furthermore, if EPA were to explicitly consider 
these reductions within the framework, it would introduce 
interdependency into the solution for significant contribution. The 
state-and-receptor-specific definition of significant contribution 
would devolve into a simultaneous regional action, where particular 
states would have to either ``go first'' or where non-linked states 
would shoulder burdens to receptors to which they are not linked while 
other linked states would do less. In any case, EPA has verified that 
even if it were to account for non-linked state reductions under the 
selected control stringency, the changes in concentrations at the 
receptors are so small that they do not affect the attainment or 
maintenance status of any receptor.
    For this assessment, EPA used an ozone air quality assessment tool 
(ozone AQAT) to estimate downwind changes in ozone concentrations 
related to upwind changes in emission levels. EPA used this tool to 
analyze the years for which downwind nonattainment and maintenance 
problems persist for the 2008 ozone NAAQS. Under the base case, EPA 
projects that such air quality problems persist through 2025. 
Therefore, EPA focused its assessment on the years 2021 through 2025.
    This tool is similar to the AQAT tool used in the CSAPR Update to 
evaluate changes in ozone concentrations. The ozone AQAT uses 
simplifying assumptions regarding the relationship between each state's 
change in NOX emissions and the corresponding change in 
ozone concentrations at nonattainment and maintenance receptors to 
which that state is linked. This method is calibrated using two CAMx 
air quality modeling scenarios that fully account for the non-linear 
relationship between emissions and air quality associated with 
atmospheric chemistry. The two CAMx modeling scenarios are the 2016fh1 
base year and the 2023fh1 future year scenarios for the 2021 time 
period. For the 2024 and 2025 AQAT simulations, the two CAMx modeling 
scenarios are the 2023fh1 future year and the 2028fh1 scenario. See the 
Ozone Transport Policy Analysis Final Rule TSD for additional details.
    For each EGU emission control technology, EPA first evaluated the 
magnitude of the change in ozone concentrations at the nonattainment 
and maintenance receptors for each relevant year. EPA next evaluated 
whether the estimated change in concentration would resolve the 
receptor's nonattainment or maintenance concern by lowering the average 
or maximum design values below 76 ppb, respectively. For a complete set 
of estimates, see the Ozone Transport Policy Analysis Final Rule TSD or 
the ozone AQAT excel file.
    In 2021, there are two nonattainment receptors and two maintenance 
receptors (see section V.C for details). Table VI.D.1-1 summarizes the 
results of EPA's evaluation of air quality improvements in 2021 at 
these receptors using AQAT. EPA evaluated the air quality improvements 
at the four receptors for the three EGU emission control technologies 
that are available in the near-term. EPA determined that the average 
air quality improvement at the four receptors relative to the 
engineering analytics base case was 0.16 ppb for optimization of 
existing SCRs and LNB upgrades, and 0.17 ppb when also including 
optimization of existing SNCRs. EPA determined that the Westport 
receptor (090019003) remains nonattainment and the Houston receptor 
(482010024) remains maintenance across these control stringencies, 
while the Stratford receptor (090013007) switches from nonattainment to 
maintenance with the optimization of existing SCRs and LNB upgrades 
(i.e., its average DV becomes clean but its maximum DV remains above 
the NAAQS). Lastly, the New Haven receptor has all nonattainment and 
maintenance resolved in the engineering analytics base case. For more 
information about how this assessment was performed and the results of 
the analysis for each receptor, refer to the Ozone Transport Policy 
Analysis Final Rule TSD and to the Ozone AQAT included in the docket 
for this rule.

[[Page 23107]]



                                       Table VI.D.1-1--Air Quality Improvements at the Four Receptors in 2021 From Near-Term Emission Control Technologies
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Baseline           SCR          SCR/SNCR        Baseline           SCR          SCR/SNCR
                                                                                                 ---------------- optimization +  optimization + ---------------- optimization +  optimization +
                                                                                                                    LNB upgrade     LNB upgrade                     LNB upgrade     LNB upgrade
              Monitor ID #                           State                      County              Average DV   --------------------------------                -------------------------------
                                                                                                       (ppb)        Average DV      Average DV     Max DV (ppb)
                                                                                                                       (ppb)           (ppb)                       Max DV (ppb)    Max DV (ppb)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
90013007................................  Connecticut...............  Fairfield.................           76.13           75.93           75.93           77.05           76.85           76.85
90019003................................  Connecticut...............  Fairfield.................           78.27           78.12           78.12           78.58           78.43           78.42
90099002................................  Connecticut...............  New Haven.................           73.59           73.38           73.37           75.74           75.53           75.52
482010024...............................  Texas.....................  Harris....................           75.62           75.51           75.50           77.25           77.15           77.13
-------------------------------------------------------------------------------------------------
Average AQ Improvement Relative to Base (ppb)...................................................            0.00            0.16            0.17
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Figure 1 illustrates the air quality improvement relative to the 
estimated representative cost associated with the previously identified 
near-term emission control technologies. This graph shows improving air 
quality at the downwind receptors as emission control technologies are 
assumed to be implemented. In this final rule, EPA has adjusted this 
graph to reflect a revised estimated representative cost of $1,800 per 
ton for optimization of already operating SNCRs (which, as explained in 
section VI.B.1, EPA has adjusted from a value of $3,900 per ton in the 
proposed rule, which reflected turning on idled SNCRs). In the proposed 
rule, the SNCR cost extended the right terminus of the solid line out 
to $3,900 per ton and showed a ``knee-in-the-curve'' pattern. As noted 
by commenters, a ``knee-in-the-curve'' is not on its own a 
justification for not requiring reductions beyond that point in the 
cost curve. Even though EPA did not solely rely on this factor in the 
proposed rule, it notes that this inflection point is greatly 
diminished and there a less discernable knee when the SNCR optimization 
cost is updated to reflect $1,800 per ton. In fact, as explained below, 
EPA does not view the now very slight difference in cost thresholds 
between $1,600 per ton and $1,800 per ton as significant, and together, 
EPA views them as comparable in terms of the relationship of available 
emission reductions to air quality improvement.
    The graph in Figure 1 to Section VI.D.1 highlights that the 
majority of emission reduction potential and air quality improvement 
occurs from optimization of existing SCRs, with some additional 
reductions from installation of state-of-the-art combustion control at 
the same cost threshold. At the slightly higher cost threshold of 
$1,800 per ton, there is some additional air quality improvement from 
optimization of existing SNCRs. Taken together, this level of control 
stringency in emission budgets represents the level at which 
incremental EGU NOX reduction potential and corresponding 
downwind ozone air quality improvements are maximized with respect to 
identified near-term emission control technologies. While the more 
stringent emission budget levels (e.g., emission budgets reflecting the 
inclusion of optimization of existing SNCRs) yield a relatively small 
amount of incremental emission reductions and fewer air quality 
improvements, they still demonstrate meaningful air quality 
improvement. Further, after consideration of comments and examining 
cost data, EPA has identified additional compelling reasons favoring 
the inclusion of optimization of SNCR controls in the context of this 
full remedy rulemaking, discussed below. This evaluation shows that EGU 
NOX reductions for each of the near-term emission control 
technologies are available at reasonable cost and that these reductions 
can provide improvements in downwind ozone concentrations at the 
identified nonattainment and maintenance receptors.

[[Page 23108]]

[GRAPHIC] [TIFF OMITTED] TR30AP21.003

    EPA finds that the control stringency that reflects optimization of 
existing SCRs and SNCRs, and installation of state-of-the-art 
combustion controls results in a substantial number of emission 
reductions totaling nearly 19,000 tons (approximately 16 percent of the 
baseline level), resulting in all downwind air quality problems for the 
2008 ozone NAAQS being resolved after 2024 (one year earlier than the 
base case).\155\ There are also projected changes in receptor status 
(from projected nonattainment to maintenance-only) for the Stratford 
and Westport receptors (the first in 2021, the second in 2024). In 
addition, the Houston receptor changes from maintenance to attainment 
in 2023. In 2021, the average level of improvement in ozone 
concentrations at all four of the receptors is 0.17 ppb.
---------------------------------------------------------------------------

    \155\ EPA is not obligated to fully resolve downwind 
nonattainment and maintenance issues through the good neighbor 
provision, as some commenters assert. EPA considers the changes in 
receptor status in this analysis informative in the context of the 
step 3 multi-factor test. However, that does not mean EPA agrees 
that good neighbor obligations may only be considered fully 
addressed when all downwind receptors have reached attainment.
---------------------------------------------------------------------------

    Including optimization of existing SNCRs yields incremental 
emission reductions of approximately 1,200 tons as there are fewer 
sources with this emission control technology. As noted in the proposed 
rule, a small portion of the coal fleet had this technology in place 
(14 percent), and of that small portion, many units with these SNCR 
controls had emission rates of 0.13 lb/mmBtu or less (many operating 
less than 0.1 lb/mmBtu), suggesting they were already optimizing their 
SNCRs. Analysis using the AQAT tool suggests that optimization of 
existing SNCRs has an average air quality improvement of 0.01 ppb. 
While having no further impact on receptors' classification status, it 
does deliver additional improvement at the problematic receptors.
    Given the small portion of the EGU fleet with existing SNCRs in the 
12 linked states, the limited number of additional reductions, and the 
relatively higher cost for this emission control technology, EPA had 
proposed to determine that the potential emission reductions associated 
with optimizing existing SNCRs not be required to eliminate significant 
contribution from the 12 linked states under the 2008 ozone NAAQS. 
Based on comments EPA received and outlined below, along with 
subsequent review of cost data and additional considerations, EPA is 
including emission reduction potential from this emission control 
technology in the state emission budgets for this final rule.
    Comment: Commenters suggested that reductions from optimizing 
existing SNCRs should be included in the final rule consistent with 
Clean Air Act requirements and the full remedy nature of this action. 
These commenters noted that EPA's touchstone metric in the step 3 
multi-factor analysis of ``maximizing'' air quality improvement 
relative to representative marginal cost was not a sufficient reason to 
exclude these reductions. They suggest it is eminently ``reasonable'' 
to require EGUs to operate all existing controls, for which they have 
already made significant capital expenditures to purchase and install. 
These commenters argued that the reductions, even if small, still 
delivered air quality improvement in a meaningful timeframe at downwind 
receptors linked to upwind contribution. The same commenters also noted 
that these emission control technologies may cost less than EPA 
suggested in the proposed rule because most of the SNCRs are already 
operating to some degree at a much lower allowance price incentive.

[[Page 23109]]

    Response: EPA is including SNCR optimization in its EGU control 
stringency in this final rule. EPA examined both its methodology and 
its cost assumptions and determined it was appropriate to include SNCR 
optimization-driven reductions in identifying significant contribution. 
EPA concludes that most of these units are already operating and, in 
most cases, would not incur the additional FOM cost associated with 
$3,900 per ton estimate included in the proposed rule, and reductions 
were likely significantly less expensive, consistent with the 
commenters' observation that a broad set of units appeared to be 
incentivized to operate these controls under the CSAPR NOX 
Ozone Season Group 2 Trading Program (which applied control stringency 
levels with a representative cost of $1,400 per ton). This technology 
inclusion was further supported by the observation that most SNCR-
controlled units already appear to be operating at lower rates compared 
with their higher historical emission rates (indicating partial 
operation) even with the current allowance price substantially under 
$1,800 per ton.
    There are additional considerations unique to EGUs with existing 
SNCRs that EPA has determined support including their optimization as 
part of EPA's identified control stringency, such as:
     These controls are already installed and available for 
operation on these units;
     they are on average already partially operating, but not 
necessarily optimized;
     the reductions are available in the near-term (during 
ozone seasons when the problematic receptors are projected to persist), 
including by the 2021 Serious area attainment date;
     these sources are already covered under the existing CSAPR 
NOX Ozone Season Group 2 Trading Program and thus have the 
monitoring, reporting, recordkeeping, and all other necessary elements 
of compliance with the trading program already in place;
     the overall compliance burden and total cost is relatively 
low, and the incremental cost of operating the technology is not 
capital intensive.
    Indeed, when comparing units of similar size and operation, the 
absolute annual cost of operating SNCR controls in total dollar terms 
is often comparable to or less than the cost of operating SCR controls. 
However, the significantly lower NOX removal efficiency for 
existing SNCRs (20 to 25 percent) compared to existing SCRs (60 to 90 
percent) results in a higher cost-per-ton estimate.
    Another consideration that weighs heavily in favor of including the 
optimization of existing SNCRs as part of EPA's identified control 
stringency is that emission budgets are set using historical data as a 
starting point, thus capturing the emission reductions achieved by the 
EGUs already optimizing their SNCR controls. In other words, state 
emission budgets assume these units are to continue optimizing those 
controls. At the same time, EPA's proposed approach would have 
implicitly allowed EGUs not fully operating their SNCRs to continue to 
not do so, avoiding the associated cost, and reaping a competitive 
advantage over those EGUs who, in fully operating their controls, are 
acting in a more environmentally responsible manner. EPA views this 
treatment of higher emitting units to be problematic, when the number 
of EGUs already optimizing their SNCR controls underscores the cost-
effectiveness and feasibility of this control measure. Further, as 
proposed, EPA is including optimization of existing SCRs in its 
identified control stringency. SCRs are more capital-intensive 
investments with much better environmental performance. If EPA failed 
to include optimization of existing SNCRs in its identified control 
stringency in this action, EGUs that chose SNCRs, which is a less 
effective form of emission control, would be allowed to continue not 
operating that control. Considerations of effective and equitable 
environmental policy strongly weigh against allowing such a result and 
the perverse incentives it would tend to foster.
    These factors, coupled with EPA's final rule cost evaluation, leads 
the Agency to include optimization of existing SNCRs as part of its 
identified control stringency. As such, EPA is determining that the 
full operation of all existing post-combustion controls (both SCRs and 
SNCRs) and state-of-the-art combustion control upgrades from units 
constitute the Agency's identified control stringency for EGUs and the 
associated emision reductions are reflected in the new emission budgets 
in this final rule. This determination for EGUs is the result of the 
assessment of the multiple factors and considerations listed above 
rather than any single factor.
    Finally, EPA is determining to not incorporate any additional 
generation shifting associated with optimization of existing SNCRs, as 
its updated costs are commensurate with levels of generation shifting 
already associated with the optimization of existing SCRs reflected in 
the new state emission budgets. In the proposed rule, EPA identified 
1,700 tons of emission reductions from generation shifting associated 
with optimization of existing SNCRs at a representative cost of $3,900 
per ton. Because EPA is determining that $3,900 per ton is not the cost 
associated with optimizing these partially operating SNCR controls, the 
Agency is not including that 1,700 tons of generation shifting 
reduction potential in the state emission budgets in this final rule. 
Therefore, the emission reductions associated with optimization of 
existing SNCRs are approximately 1,200 tons for the 12-state region.
    Comment: Some commenters suggest that EPA examine higher cost 
thresholds consistent with downwind state RACT requirements.
    Response: EPA first notes that it is including all identified EGU 
emission controls that are possible to implement during the period 
during which the upwind state remains linked to a downwind 
nonattainment or maintenance receptor. While EPA believes the 
stringency of downwind emission requirements can be useful information 
in evaluating which control stringencies should be considered upwind, 
it is--on its own--not dispositive of what that upwind stringency 
should be. As demonstrated through EPA's air quality modeling, the air 
quality impact (generally expressed in ppb of ambient ozone 
concentration at a downwind receptor) of a ton of emissions reduced 
varies by geography, with areas where the receptor is located generally 
having a much higher ppb per ton of emissions impact. Therefore, the 
home state where a receptor is located may generate much greater 
environmental and public health benefit from a ton of emissions reduced 
in that state than in an upwind state. In many cases, that may merit a 
different level of stringency for the home state. However, EPA does 
view the EGU control stringency it is implementing in this final rule 
as largely consistent with those EGU emission controls covered by RACT 
requirements in downwind states (e.g., optimize existing controls and 
upgrade to state-of-the-art combustion controls). While installation of 
new post-combustion controls (SCR or SNCR) may also qualify for RACT, 
EPA's analysis is that such controls could not be operational on a 
fleetwide scale before all downwind receptors are projected to resolve. 
Controls associated with the selected EGU control stringency are 
implementable by the 2021 ozone season (or in the case of upgraded or 
new combustion controls, by the 2022 ozone season; see the discussion 
in section VI.C and in the EGU NOX Mitigation Strategies 
Final

[[Page 23110]]

Rule TSD for details). Thus, as to the 2021 and 2022 ozone seasons 
these are the only emision controls for EGUs that EPA is assessing for 
this timeframe because they are the only ones that are possible. See 
Wisconsin, 938 F.3d at 320.
    As discussed above in section VI.C, EPA estimates that the time 
necessary to install new SNCR or new SCR controls (represented by 
$5,800 per ton and $9,600 per ton cost) on a regional basis across 
multiple EGUs is approximately 39 to 48 months. While a single new SNCR 
may be installed within 16 months, for the reasons explained in section 
VI.C.1, a time frame that encompasses the ability for a unit to make a 
unit-specific choice of what post-combustion control (SCR or SNCR) is 
best for its configuration and future operating plans is appropriate. 
Therefore, EPA considers the timing estimates for SNCR and SCR 
together, and the 39-48 month time frame for SCR installation (with its 
superior NOx control efficiency) is the most appropriate time period to 
use for assessing post-combustion controls. Assuming a final rule in 
the spring of 2021, this means that these controls could not be 
operational by the 2024 ozone season, and therefore the reduction 
potential is not available until the 2025 ozone season. According to 
EPA's air quality assessment, there are no remaining air quality 
receptors in 2025 assuming the control stringency identified in this 
final rule for EGUs is already in place in the 12 linked states. It is 
not necessary to require emission controls that can only be operational 
at a point in time when EPA's projections demonstrate there is no 
remaining interstate transport problem for the 2008 Ozone NAAQS.
    EPA requested comment on its proposed determination that new post-
combustion controls (SCR or SNCR) are not possible to implement on a 
regional basis by the start of the 2024 ozone season), and if evidence 
established such controls were possible, how EPA might apply its step 3 
multi-factor analysis in that circumstances. EPA received comments on 
this topic and addresses the timing assumptions in Section VI.C.1. 
Moreover, the Appendix to the Ozone Transport Policy Analysis Final 
Rule TSD further discusses how, even if the controls were available on 
an earlier time scale, the multi-factor assessment would not 
necessarily indicate their inclusion in this rule.
2. Non-EGU Assessment
    The Agency used CoST and the 2023 projected emissions inventory to 
identify uncontrolled emissions sources or units and applied controls 
to emissions units with 150 tpy or more of pre-control NOX 
emissions, which is an emissions threshold that represents a comparable 
unit size to 25 MW for EGUs. EPA categorized the CoST results by the 
control technologies, calculated a weighted average cost per ton (in 
2016$) for emission reductions associated with each technology, and 
identified two tranches of potential reductions based on estimated cost 
effectiveness (for details see section VI.B.2). EPA took a series of 
steps to further verify and refine the NOX emission 
reduction potential estimated by CoST, the CMDb, and the 2023 projected 
inventory and found that the cost-effective emission reductions in 
tranche one were from SCR applied to glass furnaces and SNCR applied to 
cement kilns. These controls could likely take 2-4 years to install. 
Therefore, at the time of this final rule, EPA is concluding that the 
2023 ozone season is the earliest ozone season by which these non-EGU 
controls could be installed (for details see section VI.C.2).
    Using 2023 as the potential earliest date by which controls for 
glass furnaces and cement kilns can be installed, EPA assessed whether 
these emission controls should be required at step 3 under its multi-
factor test.\156\ EPA estimated that across the 11 states linked to the 
remaining receptor in Connecticut in 2023 (Westport), the available 
emission reductions from tranche one at less than $2,000 per ton are 
1,505 ozone season tons.\157\
---------------------------------------------------------------------------

    \156\ Louisiana is excluded from this analysis because the 
Houston, Texas receptor to which it is linked is projected to be 
neither a nonattainment nor a maintenance receptor by the 2023 ozone 
season based on the CAMx modeling with IPM emissions. In addition, 
New Jersey is not included because there were no potential 
NOX emission reductions from New Jersey because the 
projected 2023 emissions inventory did not include non-EGU point 
sources/units in New Jersey with pre-control NOX 
emissions greater than 150 tpy for which the Agency had applicable 
control measures.
    \157\ The 1,505 ozone season tons is a total of 903 tons from 
Table VI.C.2.1 and 602 ozone season tons from the remaining 5 states 
(Michigan, Illinois, Kentucky, Virginia, and Maryland). Details on 
the 903 ozone season tons are discussed in Section VI.C.2 above. As 
noted earlier in this section, for Kentucky EPA did not review the 
potential controls because CoST did not identify applicable control 
measures for any emissions sources/units in the state. In addition, 
EPA did not conduct an online permit review for Illinois non-EGU 
sources/units because their permits were not available online. The 
602 ozone season tons reflect the review of emissions units in 
Michigan, Virginia, and Maryland, as well as all of the tons CoST 
estimated for Illinois but that were not verified or reviewed.
---------------------------------------------------------------------------

    Using AQAT, EPA assessed whether this level of emission reductions 
would have a meaningful effect on the Connecticut receptor. EPA 
determined that the improvement in air quality at this receptor from 
these emission reductions is 0.03 ppb. This potential air quality 
improvement is about an order of magnitude less than the air quality 
improvement EPA expects to obtain from the emission controls identified 
in its selected control stringency for EGUs in 2023, which, at a 
representative cost of $1,800 per ton,\158\ is estimated to improve air 
quality at the remaining Connecticut receptor by 0.28 ppb. These air 
quality improvements and representative costs support the Agency's 
position, consistent with its proposed rule, that requiring these non-
EGU controls is not warranted under EPA's step 3 multi-factor analysis.
---------------------------------------------------------------------------

    \158\ EPA notes that the cost per ton value used in the non-EGU 
assessment was a weighted average cost per ton, whereas the cost/ton 
value used in the EGU SCR optimization assessment was a 90th 
percentile cost. In other words, the threshold EPA used for 
evaluating non-EGU emissions sources/units represents a relatively 
higher, or more stringent, cost/ton threshold value for considering 
potential controls compared to EGUs than the dollar value alone 
suggests.
---------------------------------------------------------------------------

    Based on this assessment, the Agency determines under the multi-
factor test that even the likely most cost-effective reductions from 
non-EGU sources (i.e., those below $2,000 per ton in tranche one) do 
not rise to the level of ``significance'' that would justify mandating 
them under the good neighbor provision for the 2008 ozone NAAQS.\159\ 
In the proposed rule, EPA encouraged stakeholder comments on the 
analysis with respect to the tranche one non-EGU control strategies.
---------------------------------------------------------------------------

    \159\ EPA's analysis in this final rule allows the Agency to 
reach the conclusion that emission reductions are not required from 
these emissions sources in order to resolve good neighbor 
obligations for the 2008 ozone NAAQS. EPA's assessment of emission 
reduction potential from non-EGU sources for this rulemaking is not 
intended to imply that a similar conclusion would be reached in the 
context of a different NAAQS.
---------------------------------------------------------------------------

    Comment: One commenter suggested that EPA should consider SCR as a 
control technology for cement plants. The commenter stated that SCR has 
been used at cement kilns across the globe and that a cement plant in 
Joppa, Illinois has successfully demonstrated its use with a reported 
80 percent removal rate for NOX, while a plant in 
Midlothian, Texas, has obtained a permit to install SCR units on its 
kilns.
    Response: The Agency appreciates the information from the commenter 
about SCR controls on cement kilns. However, what the comment does not 
consider is the time it has taken to install controls at the two plants 
cited. The SCR installation at the Joppa, IL plant took approximately 6 
years to install. The SCR at the Midlothian, TX cement plant is 
currently not operating, to the best of EPA's knowledge. Cost and 
testing

[[Page 23111]]

concerns have led to slow acceptance of SCR at cement kilns in the 
United States. The examples provided suggest the time to install these 
SCRs is much longer than downwind air quality problems are projected to 
persist for the 2008 ozone NAAQS.
    EPA estimates that the 2023 ozone season is the earliest ozone 
season by which the 111 identified non-EGU emissions units in tranche 
two could be retrofitted or have controls installed. In tranche two, 
the weighted average cost of the estimated emission reductions from 
non-EGU emissions sources ranges from $5,000 to $6,600 per ton. Across 
the 11 states linked to the remaining receptor in Connecticut in 2023 
(Westport), the Agency identified approximately 11,100 tons of 
potential ozone season emission reductions by applying layered 
combustion, NSCR (non-selective catalytic reduction) or layered 
combustion, and ultra-low NOX burners in combination with 
SCR to 111 emissions units in the oil and gas industry and several 
manufacturing industries. Since the proposed rule, EPA verified 
existing control information and refined the NOX emission 
reduction estimates for emissions sources/units in tranche two. Of the 
approximately 11,100 tons of potential ozone season emission 
reductions, EPA determined that approximately 10 percent of those 
estimated reductions are from sources/units already controlled. In the 
proposed rule EPA sought comment on the feasibility of further 
controlling NOX from IC engines and large ICI boilers, 
including optimizing combustion and installing ultra-low NOX 
burners.
    EPA's assessment is that, with implementation of the new emission 
budgets for EGUs reflecting the Agency's selected control stringency 
(see section VI.D.1.), there will no longer be any downwind receptors 
in 2025 with respect to the 2008 ozone NAAQS. Focusing then on whether 
there are any non-EGU NOX emission reductions available to 
address significant contribution under the step 3 multi-factor test in 
either the 2023 or 2024 ozone seasons, based on its assessment EPA is 
concluding that any such potentially available reductions would not be 
justified. EPA's assessment determined that there is a relatively 
smaller quantity of NOX reductions that may be available 
from the non-EGU control strategies in tranches one and two in these 
years, across the 11 states linked to the remaining receptor. These 
control strategies are estimated to have a limited impact on further 
improving air quality at this receptor for this rulemaking. As shown in 
the Ozone Policy Analysis Final Rule TSD, the incremental effects of 
emission reductions from non-EGUs do not affect the status of any of 
the four receptors in any of the relevant years compared with EPA's EGU 
control stringency. For more information, refer to the Ozone Transport 
Policy Analysis Final Rule TSD. EPA therefore is concluding that no 
emission reductions from non-EGU sources are necessary to eliminate 
significant contribution under the good neighbor provision for the 2008 
ozone NAAQS.
    EPA solicited comment on its analysis, and whether, based on 
updated or more complete information, there may be grounds to find non-
EGU emission reductions are necessary to address significant 
contribution for the 2008 ozone NAAQS.
    Comment: EPA received several comments in response to this request. 
Some commenters tended to agree that with more complete information, 
further analysis would not find it necessary to further control 
emissions from non-EGU sources in this rule. A group of industry trade 
associations stated that without highly cost-effective options to 
reduce emissions from non-EGU emissions sources/units, the estimated 
reductions did not rise to the level of significance to mandate 
controls. Another commenter stated that the most appropriate mechanisms 
to consider whether further limits on NOX emissions from 
industry boilers, furnaces and other emission sources are cost-
effective are the existing NSR/PSD, NSPS, and RACT programs. This 
commenter stated that there is no need to apply additional programs on 
top of existing programs, or to circumvent existing programs, that are 
designed to address the issue of cost-effective emissions controls.
    Another commenter stated that EPA should direct states to submit 
revisions to their SIPs because the SIP planning process is the best 
platform for the identification of potential NOX emission 
reductions at the local level that may be necessary in non-EGU industry 
sectors. State and local air pollution control agencies have access to 
the detailed emissions inventory data from sources and emissions units 
in non-EGU industry sectors. With this data, states can assess whether 
additional emission reductions are necessary at the local level from 
non-EGU industry sectors.
    Lastly, other commenters disagreed and stated that EPA lacks 
statutory authority to exclude non-EGU emissions sources from the 
coverage of the good neighbor provision, which extends to ``any source 
or other type of emissions activity'' that significantly contributes to 
downwind nonattainment or interferes with downwind maintenance.
    Response: EPA stated in the proposed rule that it understands the 
methodology employed in its assessment was one approach to assessing 
emission reduction potential from non-EGU emissions sources or units 
and to determining an appropriate control stringency level for non-EGU 
sources. EPA also provided details on determining the 150 tpy emissions 
threshold in the section titled Background for Determining Source Size/
Threshold for Non-EGU Emissions Sources in the memorandum titled 
Assessing Non-EGU Emission Reduction Potential. Based on EPA's analysis 
for this final rule and considering comments received, EPA determined 
that its analysis presents a credible analytical foundation on which to 
conclude that new emission controls on non-EGU sources are not required 
from the linked upwind states in order to address significant 
contribution or interference with maintenance of the 2008 ozone NAAQS.
    Comment: The Agency received a number of comments on its step 3 
analysis to determine whether any emission reductions should be 
required from non-EGU sources/units to address significant contribution 
under the 2008 ozone NAAQS. These comments covered a variety of issues 
related to the assessment of emission reduction potential from non-EGU 
sources/units. Environmental organizations and downwind states 
submitted comments that focused on the Agency's determination that 
further emission reductions would not need to be required from non-EGU 
sources/units. These comments emphasized that the assessment of non-EGU 
emission reductions was improperly limited to (a) Controls that would 
cost $2,000 per ton of emission reductions and (b) a narrow set of 
potential source types or emissions units. There were also several 
comments on EPA's decision to analyze emissions units of 150 tpy and 
larger for the non-EGU analysis. Commenters stated that previous 
transport rule makings analyzed emission units of 100 tpy and greater.
    There were also several comments on the legal requirements to 
evaluate and include emission reductions from non-EGU emissions 
sources/units in the rule. The comments emphasized both the 
impossibility threshold from recent court decisions and data 
availability. One commenter said that a refusal to include non-EGU 
emission reductions in the rule would represent an abdication of 
statutory responsibility. Several comments expressed frustration

[[Page 23112]]

that the Agency has claimed data uncertainty issues in interstate 
transport rulemakings for years and that should no longer be a viable 
reason to exclude non-EGU emissions sources/units. The commenters 
stated that this is backed up by the decision in Wisconsin.
    Finally, a number of stakeholders from industry associations and 
upwind states submitted comments stating they agreed with the proposed 
decision not to include emission reductions from non-EGU emissions 
sources/units in this rule. The commenters recognized the data 
limitations faced by the Agency, saying that additional emission 
reductions from this sector are not necessary to meet obligations under 
the good neighbor provisions. All of these groups provided limited 
additional information beyond what the Agency possessed and came to the 
same conclusions with regard to emission reductions from non-EGU 
sources/units. A point made in several comments was that emission 
reductions would not be able to be achieved before the 2023 ozone 
season due to the timing it would take to install and make operational 
the emission control devices.
    Response: EPA disagrees that the assessment of non-EGU emission 
reduction potential was unnecessarily limited by carving out large 
numbers of potential sources, controls, and locations. Using the best 
information currently available to the Agency, EPA extended its 
emission reduction and air quality analyses beyond EGUs to include many 
major stationary source sectors in the linked upwind states, including 
non-EGU emissions sources in various industry sectors (see Table 2 in 
the September 1, 2020 document titled Assessing Non-EGU Emission 
Reduction Potential for a summary). In the analyses, we determined that 
emissions reductions from non-EGU sources will have a relatively small 
effect on any downwind receptor in the year by which such controls 
could likely be installed and do not rise to the level of 
``significance'' that would justify mandating them under the good 
neighbor provision for the 2008 ozone NAAQS. Further, in the September 
1, 2020 memorandum, EPA included a discussion of the assessment for 
determining an appropriate emissions size threshold comparable to those 
EGUs included in this and previous transport rulemakings.
    In addition, EPA disagrees that the use of a $1,600/ton EGU 
threshold as a roughly equivalent threshold to assess non-EGU controls 
is inappropriate. We note that the $2,000/ton threshold value used for 
assessing non-EGU controls provides a rough equivalence with the 
threshold value and analysis for EGUs. The $2,000/ton threshold value 
is a weighted average of control costs, while EPA's cost threshold for 
EGUs is based on a 90th percentile metric. A 90th percentile metric 
provides a higher cost threshold for assessing potential controls than 
a weighted average cost. In other words, the $2,000/ton threshold EPA 
used for evaluating non-EGU emissions sources/units represents a 
relatively lower cost/ton threshold value for considering potential 
controls.
    EPA also believes that its determination with respect to emissions 
reductions from non-EGU sources in this action is not premised on 
``uncertainty,'' or lack of information, but rather a finding based on 
the analysis of tranche 1 and tranche 2 controls that those non-EGU 
emission controls that could be potentially available at a cost-
effectiveness comparable to EGU controls do not produce sufficient 
total emission reductions or downwind air quality impacts to be 
justified under EPA's step 3 multi-factor analysis. The emissions 
control strategy EPA assessed for non-EGU emissions sources across all 
twelve states did not generate sufficient air quality improvements to 
justify requiring.
    Additional responses to these comments are provided in the RTC 
Document included in the docket.
    EPA also requested comment on a number of questions related to 
specific control technologies on non-EGU emissions sources the Agency 
evaluated, and in particular sought feedback and data from stakeholders 
with relevant expertise or knowledge. Recognizing the limitations and 
uncertainties in the existing data EPA used in the assessment of non-
EGU emission reductions in the proposed rule, EPA requested comment to 
assist in substantiating whether the assessment is fully supportable 
based on additional information and analyses not currently available to 
the Agency.
    Comment: One industry association (National Lime Association) 
prepared a cost estimate using publicly available information from the 
EPA Control Cost Manual Worksheet and generic public emission factors 
from EPA Standard AP-42. The industry-specific report demonstrated: (a) 
The industry could not possibly achieve any meaningful reductions in 
NOx emissions by the 2021 ozone season to eliminate ``significant'' 
contribution under the 2008 ozone NAAQS; and (b) even considering the 
most favorable application of retrofit SNCR control in the industry, 
installation of such controls could not be considered ``cost-
effective'' in the context of this rule. Another trade association 
stated that obtaining information on NOx emissions units, much less 
sector-specific information on NOx emission units for purposes of the 
multi-factor test, would be exceedingly challenging based on available 
state and local air authority emission inventories and potentially 
proprietary technology and site-specific cost information.
    Another commenter provided unit-specific information prepared for 
four-factor analyses for recent Regional Haze SIPs for several units in 
the iron and steel industry. Lastly, another commenter stated that 
developing a more complete non-EGU inventory is an essential task for 
EPA. EPA should continue to develop its non-EGU inventory for two 
purposes: (i) If the New York metropolitan area does not attain the 
2008 ozone NAAQS in 2024, as EPA projects, additional emission 
reductions throughout the region may be necessary, and (ii) EPA is 
statutorily mandated to act on states' Good Neighbor SIPs for the more 
stringent 2015 ozone NAAQS now or in the coming months. The commenter 
concluded that EPA may ultimately need to issue FIPs in instances of 
SIP disapprovals and emission reductions beyond the EGU sector will 
likely be required for the New York metropolitan area to attain the 
2015 ozone NAAQS. The commenter concluded that because of the 
complexity of non-EGU operations and control options, EPA should engage 
with states and affected industries to ensure an accurate inventory and 
control analysis.
    Response: EPA agrees that securing sufficient, detailed sector- and 
unit-specific information for NOx emission units and related costs to 
use for the multi-factor test has been difficult.
    In the proposed rule, to help inform further technical review and 
comments, the following Excel workbooks were available in the docket 
and referenced in the memorandum titled Assessing Non-EGU Emission 
Reduction Potential: (i) For a summary of the CoST run results CoST 
Control Strategy--Max Reduction $10k 150 tpy cutoff 12 States Updated 
Modeling--No Replace--07-23-2020, and (ii) for summaries of emission 
reductions by control technologies, Control Summary--Max Reduction $10k 
150 tpy cutoff 12 States Updated Modeling--No Replace--05-18-2020. Note 
that the CoST Control Strategy--Max Reduction $10k 150 tpy cutoff 12 
States Updated Modeling--No Replace--07-23-2020 Excel workbook includes 
a READ ME worksheet that provides details on the parameters used for 
the CoST run.

[[Page 23113]]

    To improve the underlying data used in an assessment of emission 
reduction potential from non-EGU sources, EPA requested comments on: 
(i) The existing assessment of emission reduction potential from glass 
furnaces and cement kilns; and (ii) emission reduction potential from 
other control strategies or measures on a variety of emissions sources 
in several industry sectors.
    Comment: EPA received limited comments on the existing assessment 
of emission reduction potential from glass furnaces and cement kilns. A 
commenter noted that EPA incorrectly identified two cement kilns as 
eligible for SNCR installation in its analysis. Through a 2017 consent 
decree with EPA and the Department of Justice, SNCR was not feasible 
for one of the kilns because of the current configuration of the 
equipment. For the second kiln, SNCR was already installed because a 
different configuration allowed for the control installation.
    Response: EPA appreciates the submittal of this information.
    Comment: EPA received several comments regarding emission reduction 
potential from other control strategies or measures on a variety of 
emissions sources in several industry sectors. A few commenters 
indicated that a 2017 OTC paper titled White Paper on Control 
Technologies and OTC State Regulations for Nitrogen Oxides (NO) 
Emissions from Eight Source Categories reflects appropriate control 
strategies, identifies emission limits and regulations for eight source 
categories, and details information for four of the 12 states 
identified as significantly contributing to downwind areas with 
attainment or maintenance issues for the 2008 ozone NAAQS.
    Other commenters cited a 2009 OTC paper that analyzed the cost of 
installing NOX controls on ICI boilers. The paper concluded 
that key variables that impact cost analyses include boiler type, 
boiler firing type, type of fuel combusted, type of emission control, 
uncontrolled emission rate, controlled emission rate, capital cost of 
control equipment, financial costs, unit capacity factor (hours/year), 
flue gas flow rates and temperatures, and commodity prices. The 
analysis found that NOX control costs for non-EGU emissions 
sources are highly variable and site-specific and the cost per ton of 
NOX removed from several control technologies reviewed was 
significantly above the proposed rule representative cost of the 
selected EGU control stringency ($1,600 per ton).
    Response: EPA appreciates the references provided regarding the 
assessment of non-EGU emissions sources/units. Non-EGU emissions 
sources/units are diverse, making them challenging to analyze. 
Nonetheless, EPA's determination with respect to emission reductions 
from non-EGU sources in this action is not premised on ``uncertainty,'' 
or lack of information. Rather, EPA's finding is based on the analysis 
of tranche one and tranche two controls. EPA determined that those non-
EGU emission controls that could be potentially available at a cost-
effectiveness comparable to EGU controls do not produce sufficient 
total emission reductions or downwind air quality impacts that would 
justify requiring them under EPA's step 3 multi-factor analysis.
    EPA requested comment on the aspects of the assessment presented 
above of emission reduction potential from the glass and cement 
manufacturing sectors. The Agency did not receive any comments directly 
addressing this that were independent of the other comments.
    In addition, EPA requested comment on the following:
     Other than glass and cement manufacturing, are there other 
sectors or sources that could achieve potentially cost-effective 
emission reductions? What are those sectors or sources? What control 
technologies achieve the reductions? What are cost estimates and 
installation times for those control technologies?
     Are there other sectors where cost effective emission 
reductions could be obtained by, in lieu of installing controls, 
replacing older, higher emitting equipment with newer equipment?
     Are there sectors or sources where cost effective emission 
reductions could be obtained by switching from coal-fired units to 
natural gas-fired units?
     For non-EGU sources without emissions monitors, what would 
CEMS cost to install and operate? How long would CEMS take to program 
and install? Are monitoring techniques other than CEMS, such as 
predictive emissions monitoring systems (PEMS), sufficient for certain 
non-EGU facilities that would not be brought into a trading program? If 
so, for what types of non-EGU facilities, and under what circumstances, 
would PEMS be sufficient? What would be the cost to install and operate 
monitoring techniques other than CEMS?
    Comment: EPA received several comments in response to this set of 
questions. Two industry association commenters indicated that where 
feasible, facilities have already largely replaced or repowered boilers 
to comply with several other EPA rules (e.g., boiler MACT, Regional 
Haze Rule, and 1-hour SO2 NAAQS). With respect to fuel 
switching for boilers, one industry association stated that many of 
their members undertook fuel switching as a compliance strategy for the 
boiler MACT. Another commenter cautioned that EPA should consider other 
factors when evaluating the time necessary to retrofit add-on controls, 
including the availability of the specialized trades that are needed to 
complete the retrofit installation of low NOx burners and Clean Air Act 
permitting obligations, which increase the time needed for a retrofit.
    With respect to installation timing and the cost of CEMS, three 
trade associations provided the following estimates:

 Installation Timing

     28 weeks (7 months)--delivery time for a CEMS shelter with 
pre-installed analyzers and other equipment is about 24 weeks; 
installation time and programming would take about another 4 weeks.
     16-24 weeks (4-6 months)--CEMS installation would likely 
take 4 to 6 months if a facility was currently ready to start. However, 
this timeline does not take into account the time required to obtain 
capital approval, issue an RFP, engage a consultant, and make any 
necessary structural modifications to the stack if it cannot 
accommodate CEMS.

 Cost

     $500,000-cost will depend on whether the stack is designed 
to accommodate a CEMS. If a stack is designed to support a 
NOX CEMS, the cost to install, program, and certify the 
NOX CEMS could be $500,000. Ongoing operation and 
maintenance costs are likely around $150,000 per year.
     $300,000--$400,000--capital cost for the equipment 
(assuming a single boiler installation) is approximately $300,000 to 
$400,000 (2016$). Actual costs at a given facility will vary and will 
depend on factors including the availability of space and the location 
of the CEMS air-conditioned shelter.
    Additionally, one commenter stated that a rigorous PEMS, if a 
feasible alternative, would be more expensive than a CEMS. While 
another commenter stated that PEMS have proven to be very reliable and 
significantly less expensive to operate and maintain than CEMS. The 
commenter observed that PEMS minimize the up-front capital costs, as 
well as the on-going cost of operation, maintenance, and quality 
assurance.
    Response: EPA thanks for the commenters for this information.
    EPA requested comments on the feasibility of further controlling 
NOX

[[Page 23114]]

from large ICI boilers and IC engines, including optimizing combustion 
and installing low NOX burners.
    Comment: EPA received several comments in response to this request. 
One commenter stated that EPA should pursue requiring additional 
NOX controls on IC engines and large ICI boilers, including 
optimizing combustion and installing ultra-low NOX burners 
and offered no specific supporting information. An industry association 
stated that most of their members' boilers are already equipped with 
low NOX burners. The members' experiences with the retrofit 
installation of low NOX burners on existing boilers are that 
the reductions achieved vary from boiler to boiler as a function of: 
(a) The existing configuration of the boiler, (b) the boiler fuel, and 
(c) the day-to-day operation of the boiler to meet the demands for 
thermal energy from the end-use processes or customers.
    Another industry association noted that recent Regional Haze Rule-
related analyses for forest products industry boilers indicated that 
the cost of installing additional controls (LNB/FGR, SNCR, or SCR 
retrofits) is generally more than $5,000/ton, based on representative 
actual emissions. The commenter stated that if EPA were to determine 
that NOX controls on ICI boilers should be required, no new 
controls could be implemented by the 2021 ozone season and it would be 
difficult to implement controls before 2024. Facilities would need a 
minimum of four years to implement controls after promulgation of any 
requirement to do so because the process to undertake a retrofitting 
project is complex, involving design, engineering, permitting, 
procurement, and installation. The commenter stated that since the 
start of the COVID-19 pandemic, the time necessary to implement 
construction projects has increased considerably.
    Additionally, two energy companies offered their experiences with 
modifying IC engines. One energy company indicated that after the 
modification it took three to five years to get engine performance back 
to previous levels. The same energy company stated that as operations 
evolve, where feasible, they will install newer engines, or turbines, 
at natural gas compressor and storage sites. A second energy company 
has already replaced some older uncontrolled IC engines with new, 
state-of-the art low NOX compressor engines and/or 
combustion turbines within its fleet, intending to operate the newer IC 
engines preferentially over the older units. They stated that 
regulating IC engines at compressor stations will not result in 
significant reductions in actual NOX emissions, and they do 
not believe it is cost-effective.
    Response: EPA thanks the commenters for this information.
    EPA requested comment on whether EPA should require that large non-
EGU boilers and turbines--as defined in the NOX SIP call as 
boilers and turbines with heat inputs greater than 250 Million British 
Thermal Units (mmBtu) per hour or with NOX emissions greater 
than 1 ton per ozone season day \160\--within the 12 states employ 
controls that achieve emission reductions greater than or equal to what 
can be achieved through the installation of low NOX burners.
---------------------------------------------------------------------------

    \160\ Note that the 250 mmBTU/hr for ICI boilers and turbines is 
equivalent to 25 MW heat input for an EGU. The tonnage per source 
was 1 ton per ozone season day, and because controls on non-EGUs 
operate year-round, the emissions would be 365 tons per year.
---------------------------------------------------------------------------

    Comment: EPA received a few comments in response to this request. 
One industry association stated that there is no justification for a 
requirement for large industrial boilers within the 12 states covered 
by this rule to employ controls that achieve emission reductions 
greater than or equal to what can be achieved through the installation 
of low NOX burners. Such a requirement could be infeasible 
for certain types of boilers without a significant capital investment 
and could increase CO emissions above allowable levels. The commenter 
suggested that these types of requirements are better implemented 
through the New Source Review (NSR) permitting process where a site-
specific analysis is required. Another commenter stated that such a 
requirement could require very significant capital investment for 
retrofitting certain types of existing boilers and may not be feasible 
for certain types of boilers.
    Response: EPA thanks for the commenters for this information.
    EPA requested comment on (i) the magnitude of the emission 
reductions that could be achieved by requiring that large non-EGU 
boilers and turbines install controls that achieve emission reductions 
greater than or equal to what could be achieved through the 
installation of low NOX burners, (ii) the prevalence of 
these or better NOX controls already in place on this 
equipment in these 12 states, and (iii) the time it typically takes to 
install such controls. EPA did not receive any comments in direct 
response to this comment solicitation.
    As mentioned in the discussion above on emission reductions from 
the EGU sector, EPA understands that it is generally possible to 
install LNB on EGU boilers fairly quickly and that these burners can 
significantly reduce NOX emissions. EPA notes that in the 
original interstate transport rule, the NOX SIP call, the 
Agency concluded that controls on large, non-EGU boilers and turbines 
were cost effective and allowed states to include those emissions 
sources in their budgets as a means of providing additional 
opportunities to reduce state-wide NOX emissions in a cost-
effective manner.\161\
---------------------------------------------------------------------------

    \161\ See 63 FR 57402 (October 27, 1998).
---------------------------------------------------------------------------

    Also, five of the 12 states that are subject to this rulemaking are 
within the Ozone Transport Region (OTR)--Maryland, New Jersey, New 
York, Pennsylvania, and Virginia. As member states of the OTR, these 
five states are required to implement reasonably available control 
technology (RACT) state-wide on major sources of emissions.\162\ It is 
likely that NOX controls, such as low NOX 
burners, are already in wide-spread use on large non-EGU boilers and 
turbines within these five states. However, such controls may not be as 
widely used in states outside of the OTR. Therefore, the Agency also 
solicited comments on the following:
---------------------------------------------------------------------------

    \162\ One exception to the requirement of state-wide RACT within 
the OTR is for Virginia. Only the Northeast portion of the state is 
included within the OTR and only facilities within that portion of 
the state are subject to RACT.
---------------------------------------------------------------------------

     How effective are ultra-low NOX burners or low 
NOX burners in controlling NOX emissions from ICI 
boilers?
     Are they generally considered part of the process or add-
on controls? If they are part of a process, how could EPA estimate the 
cost associated with changing the process to accommodate ultra-low 
NOX burners and low NOX burners?
     What are the costs (capital and annual) for these as add-
on control technologies on ICI boilers?
     What are the earliest possible installation times for 
these control technologies on ICI boilers? EPA believes it is generally 
possible to install low NOX burners on EGU boilers 
relatively quickly and that low NOX burners can 
significantly reduce NOX emissions. EPA solicited comment on 
whether this is also true for large non-EGU ICI boilers.
     Do some of the emissions units included in the summary 
already have either add-on controls or controls that are part of a 
process? If so, what control is on the unit and what is the control 
device (or removal) efficiency?
     Natural gas compressor stations are the largest 
NOX-emitting non-EGU

[[Page 23115]]

sector \163\ affecting the 12 states that are the subject of this final 
rule, and many of these facilities are powered by decades-old, 
uncontrolled IC engines. Should emission reductions be sought from the 
IC engines at these stations, either through installing controls, 
upgrading equipment, or other means?
---------------------------------------------------------------------------

    \163\ Based on data from the 2017 NEI database.
---------------------------------------------------------------------------

     How effective is low emission combustion in controlling 
NOX from IC engines?
     What is the cost (capital and annual) for low emission 
combustion on IC engines?
     What is the earliest possible installation time for low 
emission combustion on IC engines? In lieu of installing controls, is 
replacing older, higher emitting equipment with newer equipment a cost-
effective way to reduce emissions from IC engines?
     Do some of the emissions units included in the summary 
already have either add-on controls or controls that are part of a 
process? If so, what control is on the unit and what is the control 
device (or removal) efficiency?
    The Agency encouraged stakeholders with particular expertise, such 
as source owners and operators, state agencies, trade associations, and 
knowledgeable non-governmental organizations, to evaluate the 
information available in the docket and presented above and provide 
updates, corrections, and other information as may assist in improving 
EPA's ability to more accurately assess non-EGU emission control 
strategies relevant to addressing interstate ozone transport.
    Comment: EPA received relatively few comments directly in response 
to this request. One NGO cited EPA's 2016 Final Technical Support 
Document (TSD) for the Final Cross-State Air Pollution Rule for the 
2008 Ozone NAAQS, Assessment of Non-EGU NOX Emission Controls, Cost of 
Controls, and Time for Compliance Final TSD with information on 
controls and costs for IC engines. Another comment encouraged the 
Agency to pursue controlling NOX from ICI boilers and IC 
engines, including optimizing combustion and installing low 
NOX burners.
    Response: EPA notes that the 2016 Final Technical Support Document 
(TSD) for the Final Cross-State Air Pollution Rule for the 2008 Ozone 
NAAQS, Assessment of Non-EGU NOX Emission Controls, Cost of Controls, 
and Time for Compliance Final TSD was prepared for the purpose of 
presenting and seeking comment on the then currently available 
information on emissions and control measures for sources of 
NOX other than EGUs; it was not prepared for use in 
conducting a rigorous regulatory analysis under the step 3 multi-factor 
test, nor for establishing specific emissions limits.
3. Overcontrol Analysis
    As part of the air quality analysis using the Ozone AQAT, EPA 
evaluated potential over-control with respect to whether (1) the 
expected ozone improvements would be greater than necessary to resolve 
the downwind ozone pollution problem (i.e., beyond what is necessary to 
resolve all nonattainment and maintenance problems to which an upwind 
state is linked) or (2) the expected ozone improvements would reduce 
the upwind state's ozone contributions below the screening threshold 
(i.e., 1 percent of the NAAQS; 0.75 ppb).
    In EME Homer City, the Supreme Court held that EPA cannot 
``require[ ] an upwind State to reduce emissions by more than the 
amount necessary to achieve attainment in every downwind State to which 
it is linked.'' 572 U.S. at 521. On remand from the Supreme Court, the 
D.C. Circuit held that this means that EPA might overstep its authority 
``when those downwind locations would achieve attainment even if less 
stringent emissions limits were imposed on the upwind States linked to 
those locations.'' EME Homer City II, 795 F.3d at 127. The D.C. Circuit 
qualified this statement by noting that this ``does not mean that every 
such upwind State would then be entitled to less stringent emission 
limits. Some of those upwind States may still be subject to the more 
stringent emissions limits so as not to cause other downwind locations 
to which those States are linked to fall into nonattainment.'' Id. at 
14-15. As the Supreme Court explained, ``while EPA has a statutory duty 
to avoid over-control, the Agency also has a statutory obligation to 
avoid `under-control,' i.e., to maximize achievement of attainment 
downwind.'' 572 U.S. at 523. The Court noted that ``a degree of 
imprecision is inevitable in tackling the problem of interstate air 
pollution'' and that incidental over-control may be unavoidable. Id. 
``Required to balance the possibilities of under-control and over-
control, EPA must have leeway in fulfilling its statutory mandate.'' 
Id.\164\
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    \164\ Although the Court described over-control as going beyond 
what is needed to address ``nonattainment'' problems, EPA interprets 
this holding as not impacting its approach to defining and 
addressing both nonattainment and maintenance receptors. In 
particular, EPA continues to interpret the Good Neighbor provision 
as requiring it to give independent effect to the ``interfere with 
maintenance'' prong. Accord Wisconsin, 938 F.3d at 325-27.
---------------------------------------------------------------------------

    Consistent with these instructions from the Supreme Court and the 
D.C. Circuit, EPA first evaluated whether reductions resulting from the 
emission budgets for EGUs in 2021 and 2022 can be anticipated to 
resolve any downwind nonattainment or maintenance problems. As 
discussed in Section VI.D.1, the proposed control stringency 
(represented by a $1,600 per ton cost threshold) was adjusted to a 
control stringency that includes optimization of existing SNCRs 
(represented by a $1,800 per ton cost threshold) in this final rule. 
This assessment shows that the emission budgets reflecting $1,800 per 
ton would change the status of one of the two nonattainment receptors 
(first shifting the Stratford monitor to a maintenance-only receptor in 
2021 and then shifting that monitor to attainment in 2022). However, no 
other nonattainment or maintenance problems would be resolved in 2021 
or 2022. EPA determined that none of the 11 states are solely linked to 
the Stratford receptor that is resolved at the $1,800 per ton level of 
control stringency in 2022.
    Reductions resulting from the $1,800 per ton emission budgets for 
EGUs would shift the Houston receptor in Harris County, Texas, from 
maintenance to attainment in 2023. These emission reductions would also 
shift the last remaining nonattainment receptor (the Westport receptor 
in Fairfield, Connecticut) to a maintenance-only receptor in 2024. No 
nonattainment or maintenance receptors would remain after 2024.
    Next, EPA evaluated the potential for over-control with respect to 
the 1 percent of the NAAQS threshold applied in this final rulemaking 
at step 2 of the good neighbor framework for the $1,800 per ton cost 
threshold level for each year downwind nonattainment and maintenance 
problems persist (i.e., 2021 through 2024). Specifically, EPA evaluated 
whether the emission levels would reduce upwind EGU emissions to a 
level where the contribution from any of the 12 upwind states would be 
below the 1 percent threshold that linked the upwind state to the 
downwind receptors. EPA finds that under the $1,800 per ton EGU cost 
threshold level for 2021 to 2024 emission levels, all 12 states that 
contributed greater than or equal to the 1 percent threshold in the 
base case continued to contribute greater than or equal to 1 percent of 
the NAAQS to at least one remaining downwind nonattainment or 
maintenance receptor for as long as that receptor remained in 
nonattainment or maintenance. For more information about this 
assessment, refer to the

[[Page 23116]]

Ozone Transport Policy Analysis Final Rule TSD and the Ozone AQAT.
    Since emission reductions resulting from the $1,800 per ton 
emission budgets for EGUs are not projected to result in the expected 
ozone improvements: (1) Being greater than necessary to resolve the 
downwind ozone pollution problem (i.e., beyond what is necessary to 
resolve all nonattainment and maintenance problems to which an upwind 
state is linked) or (2) reducing the upwind state's ozone contributions 
below the screening threshold (i.e., 1 percent of the NAAQS; 0.75 ppb), 
EPA finds that the $1,800 control strategy does not result in 
overcontrol.
    Based on the multi-factor test applied to both EGU and non-EGU 
sources and subsequent assessment of overcontrol, EPA finds that the 
emission reductions associated with the $1,800 per ton control 
stringency for EGUs constitute elimination of significant contribution 
and interference with maintenance without overcontrol from the 12 
linked upwind states. Therefore, as discussed in section VII, EPA is 
establishing emission budgets for EGUs in the 12 linked states that 
reflect the remaining allowable emissions after the emission reductions 
associated with the $1,800 per ton control stringency have been 
achieved. For additional comments and responses and details about the 
test and the overcontrol analysis, see the RTC and Ozone Transport 
Policy Analysis Final Rule TSD.

VII. Implementation of Emission Reductions

A. Regulatory Requirements for EGUs

    The CSAPR established a seasonal NOX trading program for 
states determined in that rulemaking to have good neighbor obligations 
with respect to the 1997 ozone NAAQS. The CSAPR Update established a 
new seasonal NOX trading program for 22 states determined to 
have good neighbor obligations with respect to the 2008 ozone NAAQS--
the CSAPR NOX Ozone Season Group 2 Trading Program--and 
renamed the seasonal NOX trading program established in the 
CSAPR, which now covers only Georgia, the CSAPR NOX Ozone 
Season Group 1 Trading Program.\165\ Each of these trading programs for 
seasonal NOX emissions established state-level budgets for 
EGUs and allowed affected sources within each state to use, trade, or 
bank allowances within the same trading group for compliance. In the 
CSAPR NOX Ozone Season Group 1 and Group 2 trading programs, 
sources are required to retire one Group 1 or Group 2 allowance, 
respectively, for each ton of NOX emitted during a given 
ozone season. EPA is using the same regional trading approach, with 
modifications to reflect updated budgets, trading groups, and certain 
additional revisions, as the compliance remedy implemented through the 
FIPs to address interstate transport for the states having further good 
neighbor obligations with respect to the 2008 ozone NAAQS in this rule.
---------------------------------------------------------------------------

    \165\ For states that were determined in the CSAPR Update to 
still have good neighbor obligations with respect to the 1997 ozone 
NAAQS in addition to the 2008 ozone NAAQS, participation in the 
Group 2 trading program replaced participation in the Group 1 
trading program as the FIP remedy for such states' obligations with 
respect to the 1997 NAAQS. See 81 FR 74509.
---------------------------------------------------------------------------

    Of the 22 states currently covered by the CSAPR NOX 
Ozone Season Group 2 Trading Program, EPA is establishing revised 
budgets for 12 states, as explained below. Therefore, EPA is creating 
an additional geographic group and trading program comprised of these 
12 upwind states with remaining linkages to downwind air quality 
problems in 2021. This new group, Group 3, will be covered by a new 
CSAPR NOX Ozone Season Group 3 Trading Program. Aside from 
the removal of the 12 covered states from the current Group 2 trading 
program, this rule leaves unchanged the budget stringency and geography 
of the existing CSAPR NOX Ozone Season Group 1 and Group 2 
trading programs.
    EPA is using the existing CSAPR NOX ozone season 
allowance trading system framework, established in the CSAPR for Group 
1 and used again in the CSAPR Update for Group 2, to implement the 
emission reductions identified and quantified in the FIPs for this 
rule. The new Group 3 trading program is being codified at 40 CFR part 
97, subpart GGGGG. As with the existing CSAPR trading programs, 
emissions monitoring and reporting will be performed according to the 
provisions of 40 CFR part 75, and decisions of the Administrator under 
the program will be subject to the administrative appeal procedures in 
40 CFR part 78.
    Comment: EPA received several comments suggesting that Louisiana 
not be included in the Group 3 trading program. Commenters suggested 
that EPA has no basis for including Louisiana in the Group 3 trading 
program because its linkage geography (i.e., to a receptor in Texas) is 
separate from the 11 remaining Group 3 states which have linkages to 
receptors in Connecticut. Several commenters also raised the 
possibility of under-control in the 12-state trading program should EPA 
allow trading of emission allowances between Louisiana and the 
remaining 11 states.
    Response: EPA disagrees with comments that Louisiana should not be 
included in the Group 3 trading program. All covered states in the 
Group 3 trading program, regardless of the downwind monitors to which 
they are linked, are subject to emission budgets established based on 
the same set of emission control measures applied at the same levels of 
stringency. In similar circumstances in earlier rulemakings to address 
the good neighbor provision, EPA has routinely included states in a 
common trading program based on a uniform level of control stringency, 
not based on whether the states were all found to be linked to the same 
downwind receptors. For example, the states required to participate in 
the Group 2 trading program under the CSAPR Update included one state 
linked only to downwind receptors in Connecticut, two states linked 
only to downwind receptors in Michigan, and two states linked only to 
downwind receptors in Texas, as well as other states linked to downwind 
receptors in multiple states. See 81 FR 74538 tbls. V.E-2 and V.E-3.
    Moreover, all states subject to the new Group 3 trading program 
will be required to comply with the assurance provisions in this final 
action. The assurance provisions ensure that emissions within a covered 
state do not exceed that state's emission reduction obligations (see 
section VII.C.2.). The assurance provisions, and associated variability 
limits, impose an additional allowance surrender requirement when a 
state's emissions exceed its budget for a given control period by 21 
percent. The additional allowance surrender requirement associated with 
the assurance provisions provides an incentive for sources within a 
state to comply with the emission budgets for a given control period, 
while accounting for the inherent variability in operations and 
emissions from one year to the next. By limiting the degree to which 
any state's emissions exceed that state's emissions budget, the 
assurance provisions reduce concerns that a state covered by the new 
Group 3 trading program would be able to routinely rely on surplus 
allowances purchased from another state in the trading program in a 
different geographic region (or in the same geographic region) instead 
of reducing emissions within the state. Establishing assurance levels 
with compliance penalties responds to and complies with the D.C. 
Circuit's holding in North Carolina requiring EPA to ensure that 
sources in each state meet their good neighbor obligations while

[[Page 23117]]

still taking advantage of the benefits of an interstate trading 
program. See 531 F.3d at 908. See also 81 FR 74566-67.
    Comment: Some commenters asserted that implementation of emission 
reductions through a state-level, seasonal emissions budget program 
with trading flexibilities is not sufficient to ensure that reductions 
are realized on high ozone days when they are most needed. These 
commenters suggested that EPA replace or supplement its emission 
trading program with unit-specific emission rate requirements applied 
on a shorter time scale (e.g., daily). Commenters assert that existing 
controls must be maintained and operated in accordance with good 
pollution control practices whenever feasible. Commenters assert that 
shorter-term NOX emission rate limits must ensure that SCRs 
are operated in accordance with good pollution control practices at all 
times the units are operating. They suggest that short-term limits are 
necessary to prevent units from turning controls off intermittently on 
days with high ozone in order to harvest additional power that would 
otherwise be used for control operation.
    Response: EPA is finalizing the implementation of required emission 
reductions through the same ozone season trading program structure 
successfully used in prior CSAPR rules, CAIR, and the NOX 
Budget Trading Program associated with the 1998 NOX SIP 
Call. These trading programs have been demonstrated to be highly 
effective at achieving emission reductions. For instance, as discussed 
in greater detail below, EPA has previously demonstrated that in the 
first CSAPR Update compliance period (i.e., the 2017 ozone season), the 
budget drove sources, nearly uniformly, to operate their controls for 
that control period.\166\ EPA acknowledges that without adjustments in 
budget stringency to ensure continued operation of the selected control 
strategy (or equivalent reductions), this analysis may not hold in 
later years of a trading program should a sufficient bank of allowances 
develop that the price signal for continued control operation is 
weakened. However, EPA has addressed that concern in this rule by 
making downward adjustments in the budgets to account for known fleet 
changes. Early in the implementation of the CSAPR Update in 2017, when 
emission budgets were binding and allowance prices were higher, EPA 
conducted an analysis on how effectively units were operating their 
SCRs (1) in response to a trading program implementation measure and 
(2) on High Electricity Demand Days (HEDD). This analysis was done in 
the context of responding to petitions from Maryland and Delaware under 
CAA section 126(b) petition.\167\ With this rule in place as of 2021, 
the situation will be comparable and the analysis of 2017 data provides 
a good indication of how EPA anticipates sources with post-combustion 
controls will respond to a trading program implementation measure 
designed to be a full remedy. Moreover, EPA performed the same analysis 
using 2019 data and continues to find that units operate their SCRs on 
HEDD as described below.
---------------------------------------------------------------------------

    \166\ Discussion of Short-term Emission Limits (EPA-HQ-OAR-2018-
0295-0026), available in the docket for this action.
    \167\ 83 FR 50444 (October 5, 2018).
---------------------------------------------------------------------------

    In the Maryland/Delaware CAA section 126(b) action, EPA examined 
the complete set of 2017 ozone-season data and did not find evidence of 
sources regularly idling controls on high ozone days when subject to a 
sufficiently stringent budget.\168\ EPA found that, based on 2017 
emissions data reflecting implementation of the CSAPR Update, 261 of 
274 units had ozone-season emission rates below 0.20 lb/mmBtu, 
indicating they were likely operating their post-combustion controls 
through most of the ozone season. On average, the 274 units were 
operating at an average emission rate of approximately 0.088 lb/
mmBtu.\169\ Consequently, EPA found that on average, SCR-controlled 
units were operating their SCRs throughout the season and that the 
petitioner's assertion of the likelihood of trading programs leading to 
widespread idling of controls was not borne out in the most recently 
available data. In years following 2017, EPA has seen the seasonal 
emission rates of some SCR-controlled units increase, while the vast 
majority continue to operate and optimize their controls. As noted 
above, this is attributable to the partial nature of the CSAPR Update 
and consequently that program not being configured to account for fleet 
changes after 2017. Nonetheless, EPA's analysis of 2017 data shows that 
the CSAPR Update regional trading program and other EPA regional 
trading programs have driven significant reductions and can provide 
continued incentive for control operation in a full-remedy context, so 
long as the budget is sufficiently stringent.
---------------------------------------------------------------------------

    \168\ Discussion of Short-term Emission Limits (EPA-HQ-OAR-2018-
0295-0026).
    \169\ 83 FR at 50466.
---------------------------------------------------------------------------

    EPA has revisited the aforementioned examinations of SCR 
performance rates using 2019 hourly NOX emissions data in 
place of 2017 data. While there was an increased frequency and number 
of units turning off their controls in 2019, EPA again found that this 
did not happen during the hours with the highest generation.\170\ As 
was shown in the analysis conducted for the Maryland/Delaware action, 
and confirmed based on 2019 analysis, SCR-controlled units generally 
operated with lower emission rates during high generation hours, 
suggesting SCRs generally were in better operating condition--not 
worse, let alone idling--during those days/hours. In other words, EPA 
compared NOX rates for EGUs for hours with high energy 
demand and compared them with seasonal average NOX rates and 
found very little difference, just as it had observed in the 2017 data. 
Thus, the data do not support the notion of wide-spread reduction of 
SCR operation on high demand days. Moreover, the auxiliary power used 
for control operation is small--typically less than one percent of the 
generation at the facility--and it is, therefore, unlikely that sources 
would cease operation of controls for such a limited energy savings. 
Instead, the previous analysis indicated that increases in total 
emissions on days with high generation are generally the result of 
additional units that do not normally operate coming online to satisfy 
increased energy demand and units that do regularly operate increasing 
hourly utilization, rather than reduced functioning of control 
equipment. In this action, the Agency concludes that while short-term 
limits and a regional trading budgets are not necessarily mutually 
exclusive and could complement each other (and do in fact complement 
each other since many states already have established emission rate 
requirements for their EGUs through other control programs such as 
RACT), in this specific instance, where the Agency is addressing 
regional air quality issues with regionally uniform levels of control 
through the flexibilities afforded by a mass-based trading program, 
specific unit-level control requirements, particularly short-term 
emissions limits, are not necessary, so long as the mass-based budget 
is sufficiently stringent. This rule addresses the need for 
sufficiently stringent budgets through budget adjustments in each year 
through 2024

[[Page 23118]]

to ensure that stringency levels account for known future changes in 
the fleet.
---------------------------------------------------------------------------

    \170\ See Units_Cycling_SCR_2017_and_2019.xlsx for a description 
of the units cycling in 2017 and 2019 and 
NOXRateOfSCRunitsDuringHighRegionalDemand_2017_and_2019.xls for the 
analysis of unit rates on HEDD.
---------------------------------------------------------------------------

    Further, EPA finds there to be environmental benefits associated 
with a mass-based trading program that controls units' total amounts of 
emissions. This creates an incentive structure resulting in lower-
emitting sources tending to operate more than dirtier units. Moreover, 
EPA's implementation program provides--through an allowance price--an 
incentive to optimize emissions performance as much as possible. This 
approach not only encourages units to achieve the rates assumed in the 
budget-setting process, but to perform at even better rates where 
better performance can be achieved at a cost lower than the allowance 
price. By contrast, an implementation mechanism that provides a unit-
specific emission rate would not incentivize the unit to perform better 
than its rate requirement. Thus, the trading program encourages 
controls to not only operate on high electric demand days, but it could 
provide a unit additional incentive (through its allowance price) to 
outperform an equivalent ermission rate assumption implemented through 
a unit-specific rate requirement.
    Finally, as other commenters pointed out, unit-specific short-term 
emission rates pose significant implementation and rulemaking 
challenges, because there are more unit-specific characteristics that 
must be taken into account to arrive at unit-specific rate 
requirements. In establishing a trading program, EPA is better able to 
rely with confidence on fleet averages used for calculating state 
budgets. Were EPA to choose to implement a unit-specific emissions rate 
regime for implementation, the compliance flexibility afforded by 
emissions trading would not be available and it would not be possible 
to rely on fleet average information to the same extent for purposes of 
establishing appropriate levels of control stringency. EPA would likely 
be unable to establish such requirements or mandate them in time to 
meet the 2021 Serious area attainment date.

B. Quantifying State Emissions Budgets

    EPA is quantifying state emission budgets consistent with the 
approach used in the CSAPR Update. However, given Wisconsin's direction 
to implement a full remedy, EPA must address upwind emission reduction 
potential beyond the initial year for which it is establishing emission 
budgets. Whereas in the partial-remedy context of the CSAPR Update, EPA 
established budgets based only on its assessment of the 2017 analytic 
year and noted it would revisit future years at a later date, in this 
action EPA is simultaneously looking at budgets for all relevant future 
years to comply with the full-remedy directive. Consequently, for the 
Group 3 states EPA is quantifying specific budgets in each year to 
ensure that EGUs continue to be incentivized to implement the full 
extent of EPA's selected control stringency while linkages to downwind 
nonattainment and maintenance receptors remain unresolved. In effect, 
by doing this, EPA is accounting for scheduled fleet turnover after the 
first-year budget. For instance, if State X's budget was 100 tons in 
2021, but there are 10 tons of emissions from a unit scheduled to 
retire at the end of the year and 5 tons expected from a new unit 
coming online, then the state emission budget for 2022 will reflect 
these scheduled changes by establishing a budget of 100 tons--(10 tons 
-5 tons) = 95 tons for the subsequent year. This adjustment in 
methodology reflects the need to anticipate and respond to scheduled 
fleet turnover in the power sector in ensuring that the control 
stringency selected to eliminate significant contribution remains 
incentivized. Based on the Agency's experience implementing prior good 
neighbor trading programs, setting emissions budgets that do not 
account for planned retirements in subsequent years can lead to an 
erosion in the allowance price signal and hence a reduced incentive to 
take the mitigation measures identified in EPA's significant 
contribution determination (e.g., optimize SCRs). EPA's air quality 
projections demonstrate that even with a $1,800 per ton EGU control 
stringency, the Group 3 states continue to contribute above the 1 
percent of the NAAQS threshold to at least one receptor whose 
nonattainment and maintenance concerns persist through the 2024 ozone 
season (with the exception of Louisiana, as discussed in more detail 
below). As such, and in order to implement a full remedy as required 
under the Wisconsin decision, EPA is determining that it is necessary 
to design a step 4 implementation framework that effectively ensures 
the continued optimization of existing SCR and SNCR controls and the 
incentive to install or upgrade combustion controls for so long as 
downwind nonattainment and maintenance concerns persist. Therefore, for 
all Group 3 states except Louisiana, the emission budget setting 
process described below applies to each year from 2021 through 2024, 
with the budgets held constant from 2024 onwards. For Louisiana, the 
emission budget setting process applies to 2021 and 2022 only, with the 
budget held constant from 2022 onwards, as the Houston receptor to 
which Louisiana is linked is projected to be resolved by the 2023 ozone 
season.
    EPA is not increasing the stringency of the program over these 
years in the sense of requiring any further emission reductions than 
the control stringency represented by $1,800 per ton achieves. Rather, 
these budget adjustments account for pre-existing, on-going changes in 
the EGU sector, which if not accounted for, could significantly weaken 
the incentive to optimize existing SCR and SNCR controls and install or 
upgrade combustion controls. By determining emissions budgets for a 
given emissions control across a range of years (e.g., 2021-2024), EPA 
is able to best reflect the realization of that technology in any given 
year. For instance, a unit may be scheduled to retire (independent of 
any environmental regulation) in 2023. Therefore, the same $1,800 per 
ton uniform control stringency (i.e., SCR and SNCR optimization, and 
combustion control installation or upgrade) will produce a different 
state emissions level (i.e., budget) in 2021 and 2024 due to this 
change in fleet composition. Having the emissions estimated for each 
year allows EPA to best ensure the reductions available from the 
identified control stringency continue to be achieved to eliminate that 
state's significant contribution. This type of phased implementation 
preserves the intended control stringency of the rule and is consistent 
with the direction under the Wisconsin decision to promulgate a full-
remedy rule. In prior trading programs, commenters observed that the 
program's static emission budgets quickly fell behind the rapid pace of 
change in the power sector fleet. As this occurs, a large allowance 
bank builds and the price of allowances falls below the price in the 
initial years. For example, the price of CSAPR Update Group 2 
allowances started out at levels near $800 per ton in 2017 and provided 
a strong signal for the mitigation technology identified in the 
significant contribution determination. However, in subsequent years as 
the fleet of covered EGUs changed, the price of those allowances 
declined to less than $70 per ton in July 2020.\171\ Stakeholders have 
pointed out that these low prices could allow for some backsliding of 
the emission control technologies (e.g., reduced incentive to operate 
SCR

[[Page 23119]]

controls) that were initially determined to be cost-effective and 
required to eliminate significant contribution. At the same time that 
the incentive for EPA's selected control stringency weakens, EPA's data 
show that downwind air quality receptors continue to persist at step 1, 
and the overall level of anthropogenic emissions from an upwind state 
continues to contribute to those receptors above the contribution 
threshold at step 2. Under these conditions, a legal basis exists 
within EPA's 4-step framework to undertake measures that ensure EGUs 
continue to implement EPA's selected control stringency. Stated 
differently, EPA is confident that it is well within its statutory 
authority under CAA section 110(a)(2)(D)(i)(I) to impose on each 
covered EGU in a linked upwind state an emission limit that is 
enforceable and permanent, reflective of the control stringency EPA has 
determined is needed to eliminate significant contribution from that 
state. EPA's approach in this rule better incentivizes the selected 
control stringency while retaining the flexible compliance benefits of 
an interstate-trading approach to implementation.\172\
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    \171\ Data from S&P Global Market Intelligence.
    \172\ EPA continues to believe in the value of an interstate 
trading program for implementation of good neighbor obligations for 
EGUs. Through trading, the ultimate choice of compliance strategy is 
left to EGU owners and operators. EPA is not imposing an enforceable 
mandate that each EGU with an existing SCR or SNCR, or ability to 
install or upgrade combustion controls undertake the control 
stringency represented by the $1,800 per ton threshold. Sources have 
maximum flexibility to undertake compliance strategies that meet 
their specific operational and planning needs.
---------------------------------------------------------------------------

    In summary, in order to implement a full remedy, EPA is 
implementing ozone season budgets for each year that reflect ongoing 
incentivization of the emission reduction measures identified in this 
rule, with a final budget being implemented in 2024 (the last year EPA 
projects downwind receptors to remain unresolved) and then held 
constant for each year thereafter. EPA requested comment on this 
approach and is finalizing the same approach that it proposed.
    Comment: EPA received comment noting some stakeholders' strong 
support for the issuance of NOX emissions budgets that were 
updated each ozone season to account for fleet changes. Commenters also 
claimed that failing to do so would raise concerns that, as the cost of 
allowances falls, units would be incentivized to buy cheaper allowances 
rather than optimize controls. They note this dynamic would undercut 
the purpose of the trading program, and EPA's efforts to address this 
issue by adjusting the NOX emissions budgets each ozone 
season in response to fleet changes are necessary to avoid such an 
outcome. They conclude it is a fair and equitable practice that ensures 
continued optimization of emissions controls. EPA also received comment 
opposing this methodology, generally for the stated reasons that (1) 
the methodology differs from past EPA methodology, (2) EPA's budget 
methodology should allow for other existing sources to replace the 
retiring generation by assuming a corresponding replacement or even 
increase in emissions, (3) some of the scheduled future retirements are 
uncertain, and (4) reducing budgets based on retirements but continuing 
to allocate allowances to those retiring units penalizes the non-
retiring units by reducing their allocation in a manner 
disproportionate to their needs.
    Response: EPA determined that in order to fulfill the Wisconsin 
directive to implement a full remedy, these phased budgets are 
necessary to ensure an incentive for existing controls to continue to 
operate. Not including such a mechanism in a full-remedy approach would 
lead to the possibility highlighted in EPA's proposed rule and some 
comments, and supported by historical data, where the incentive to 
operate controls decreases over time with fleet turnover, even though 
upwind states remain linked to downwind receptors. If EPA did not 
include such a phase-down mechanism in budgets accounting for fleet 
turnover, then the other alternative to ensure a full remedy would be 
unit-specific emission rate requirements (as the only alternative to 
continue to incentivize existing controls to operate). EPA notes that 
the some of the commenters who oppose the phase-down mechanism which 
preserves the trading program's effectiveness across time also support 
EPA's trading program as the preferred implementation mechanism 
relative to unit-specific emission rate requirements and even 
explicitly oppose unit-specific emission rate requirements in some 
cases. However, the continued reliance on a trading program for full-
remedy policy solutions requires this mechanism to ensure the program's 
effectiveness remains robust in the context of scheduled fleet 
turnover.
    With regard to comments that this approach is different than EPA's 
past approaches, EPA notes that this approach is not unprecedented or 
inconsistent with past EPA programs. In the first CSAPR rule, EPA 
implemented phase 1 and phase 2 NOX budgets for states, 
which tightened over time even as the rule stringency remained constant 
for that pollutant. In the CSAPR Update, EPA examined only 2017 for its 
partial remedy and noted it would revisit future years to see if 
additional reductions were necessary when implementing a full remedy. 
This rule achieves that full remedy.
    Comment: Some commenters suggested that EPA should assume increased 
generation from existing units (beyond recent historical data and 
beyond baseline levels) as some of these units retire, thus offsetting 
some of the emission reductions.
    Response: EPA first notes that it does include emissions and 
additional generation from additional new sources that are under 
construction and/or that have received their permit approvals. This 
new-unit generation offsets the amount of retiring generation in EPA's 
baseline at the regional level. Second, EPA notes that in both the 
proposed and the final rule it evaluated the assumed fossil generation 
from covered sources within its future year baseline (after factoring 
in retiring fossil generation) relative to historical trends and 
continues to find that its assumed future level of fossil fuel-fired 
generation is well within the trend observed over the past four years. 
In other words, whereas fossil generation from the covered fleet in 
these 12 states has been declining at approximately 2 percent on 
average over the past four years, EPA's future year baseline contains 
fossil generation well within this historical trend (i.e., continued 
decline at less than 2 percent). Moreover, EPA's assumption that 
existing, higher-emitting sources will, on average, not raise their 
generation levels in the future is consistent not only with historical 
trends, but also with both modeling outlooks for future generation from 
these EGUs as well as announced plans to replace retiring fossil 
generation with non-fossil sources. For many of these scheduled 
retirements, utilities not only have broad plans stating their 
intention to replace higher-emitting fossil sources with lower emitting 
sources, but already have those plans for replacement generation, such 
as renewable technologies, underway.173 174
---------------------------------------------------------------------------

    \173\ ``Coal retirements in Indiana could be hastened by 2.6GW 
of wind, solar and energy storage''. Available at https://www.energy-storage.news/news/coal-retirements-in-indiana-could-be-hastened-by-2.6gw-of-wind-solar-and-en#.
    \174\ ``Duke Vows to Triple Renewable Capacity, Reach Net-Zero 
Emissions by 2030''. Utility Dive, October 2020. Available at. 
https://www.utilitydive.com/news/duke-vows-to-double-renewables-capacity-reach-net-zero-methane-emissions-b/586791/.
---------------------------------------------------------------------------

    Comment: Some stakeholders note the uncertainty of some scheduled 
retirements, and the potential for them

[[Page 23120]]

to be possibly altered pending information from regulatory entities.
    Response: With regard to commenters noting that some retirements 
are uncertain and therefore should not be factored into EPA future 
baseline and budget estimates, EPA notes it is using the best available 
data at the time of the final rule and that no retirement plans 
included in the final rule were contradicted by commenter data 
submitted on the proposed rule. EPA relies on a compilation of data 
from DOE EIA Form 860 where facilities report their future retirement 
plans and on the information included in its NEEDS database. This 
information is considered to be highly reliable, real-world information 
that provides EPA with the high confidence that such retirements will 
in fact occur. Indeed, in response to commenters' suggestions to factor 
in yet additional potential retirements, EPA has declined to do so 
where the intention to retire a unit is not abundantly supported by 
utility-reported information. Despite this conservative approach to 
identifying known fleet changes, if a unit's future retirement status 
ultimately does not materialize on the scheduled date, EPA observes 
that such an unexpected departure from the currently available evidence 
would still not contradict its future state-level and region-level 
estimates. EPA's approach of using historical data and incorporation 
only of announced fleet changes in estimating its future baseline means 
that its future year baseline generation and retirement outlook for 
higher emitting sources is likely conservative, as EPA does not assume 
any retirements beyond those that are announced. In other words, there 
are more likely to be additional future EGU retirements that 
materialize post-rule signature that impact the 2021-2024 timeframe 
than there are to be announced retirement plans that are subsequently 
unwound. The analytic tools and information resources used in any 
estimation of state and regional future EGU emission totals inherently 
have some discrepancies between what is projected for the future and 
how the future unfolds--particularly at the unit level. But those 
potential unit-level discrepancies, inherent in the enterprise of 
prediction, would at most impact emissions both ways and do not, on 
their own, undermine EPA's aggregate state and regional estimates. 
Additionally, as noted elsewhere, EPA's use of a market-based program, 
a starting bank of converted allowances, availability of additional 
converted allowances through the ``safety valve'' mechanism, and 
variability limits are all features that will readily accommodate 
whatever small discrepancies there may be between EPA's projection of 
the EGU fleet and actual fleet conditions in any of the relevant future 
years. Therefore, EPA's resulting state emission budgets are robust to 
the inherent uncertainty in future year baseline conditions.
    Finally, with regard to comments concerning the impacts of the 
successive year emissions budget changes' on unit-level allocations for 
non-retiring units, EPA considers this not to be a budget-setting 
issue, but rather a question of how to allocate allowances within the 
budget. Thus, this topic is addressed in section VII.C.3.
    EPA's emissions budget methodology and formula for establishing 
Group 3 budgets are described in detail in the Ozone Transport Policy 
Analysis Final Rule TSD and summarized below.
    For determining emission budgets, EPA generally used historical 
ozone season data from the 2019 ozone season, the most recent data 
whose representativeness was not called into question by the unusual 
circumstances of the Covid-19 pandemic. This is similar to its approach 
in the CSAPR Update where EPA began with 2015 data (the most recent 
year at the time). As in the CSAPR Update, EPA combined historical data 
with IPM data to determine emission budgets. The budget setting process 
has three primary steps:
    (1) Determine a future year baseline--Start with the latest 
reported historical unit-level data (e.g., 2019), and adjust any unit 
data where a retirement or new build is known to occur by the baseline 
year. This results in a future year (e.g., 2021) baseline for emissions 
budget purposes.\175\
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    \175\ EPA used 2019 historical data in the proposed rule because 
that was the latest available at that time. EPA took comment on 
using 2020 ozone-season data at the final rule as that data became 
available in November of 2020, and discusses that topic later in 
this section.
---------------------------------------------------------------------------

    (2) Factor in additional emission controls for the selected control 
stringency (e.g., $1,800 per ton)--For the unit-level emission control 
technologies identified in this control stringency, adjust the baseline 
unit-level emissions and emission rates. For example, if an SCR-
controlled unit had a baseline greater than 0.08 lb/mmBtu, its rate and 
corresponding emissions would be adjusted down to levels reflecting its 
operation at 0.08 lb/mmBtu.
    (3) Incorporate generation shifting--Use IPM in a relative way to 
capture the reductions expected from generation shifting at a given $ 
per ton level that reflects control optimization (constrained to 
within-state shifting).
    By using historical unit and state-level NOX emission 
rates, heat input, and emissions data at step 1 of the budget setting 
process, EPA is grounding its budgets in the most recent representative 
historical operation for the covered units.\176\ This data set is a 
reasonable starting point for the budget setting process as it reflects 
the latest data reported by affected facilities under 40 CFR part 75. 
The reporting requirements include quality control measures, 
verification measures, and instrumentation to best record and report 
the data. In addition, the designated representatives of EGU sources 
are required to attest to the accuracy and completeness of the data. In 
step 1 of the budget setting process, EPA first adjusted the 2019 
ozone-season data to reflect committed fleet changes under a baseline 
scenario (i.e., announced and confirmed retirements, new builds, and 
retrofits that have already occurred). For example, if a unit emitted 
in 2019, but retired in 2020, its 2019 emissions would not be included 
in the 2021 estimate. For units that had no known changes, the 2021 
emissions assumption was the actual reported data from 2019 at this 
first step of adjusting the baseline. EPA also included known new units 
and scheduled retrofits in this manner. Using this method, EPA arrived 
at a baseline emission, heat input, and emission rate estimate for each 
unit for a future year (e.g., 2021), and then was able to aggregate 
those unit-level estimates to state-level totals. These state-level 
totals constituted the state's baseline from an engineering analytics 
perspective. The ozone-season state-level emissions, heat input, and 
emissions rates for covered sources under a baseline scenario were 
determined for each future year examined (2021 through 2024). Because 
2024 is the last ozone season for which EPA projects continued 
contribution to any downwind receptors, 2024 is the last year for which 
EPA is making an adjustment to emission budgets.
---------------------------------------------------------------------------

    \176\ EPA notes that historical state-level ozone season EGU 
NOX emission rates are publicly available and quality 
assured data. They are monitored using CEMS or other methodologies 
allowed for use by qualifying units under 40 CFR part 75 and are 
reported to EPA directly by power sector sources.
---------------------------------------------------------------------------

    For step 2 of the emissions budget setting process, EPA examined 
how the baseline emissions and emission rates would change under 
different control stringencies for EGUs. For instance, under the SCR 
optimization scenario, if a unit was not operating its SCR at 0.08 lb/
mmBtu or lower in the baseline, EPA

[[Page 23121]]

lowered that unit's assumed emission rate to 0.08 lb/mmBtu and 
calculated the impact on the unit's and state's emission rate and 
emissions. Note, the heat input is held constant for the unit in the 
process, reflecting the same level of unit operation compared to 
historical 2019 data. An improved emission rate is then applied to this 
heat input, reflecting control optimization. In this manner, the state-
level baseline totals from step 1 reflecting known baseline changes 
were adjusted to reflect the additional application of the assumed 
control technology at a given control stringency.
    Finally, at step 3 of the emissions budget setting process, EPA 
used IPM to capture any generation shifting at a given control 
stringency necessary for the majority of the respective emission 
control technology to operate. EPA explains how it accounts for 
generation shifting in more detail in in section VI.B and in the Ozone 
Transport Policy Analysis Final Rule TSD. In this rule, as a proxy for 
the near-term reductions required by 2021, EPA has constrained 
generation shifting to occur only within-state.
    EPA requested comment on the approach described above, as well as 
alternatives discussed in the budget-setting TSD. Specifically, EPA 
requested comment on its consideration of using 2020 data in place of 
2019 data as the most recent historical data set to inform final rule 
budgets. Although the reduction potential associated with the selected 
control stringency described in section VI would likely not change 
substantially with that data set, the baseline values calculated in 
step 1 of the emissions budget setting process may change significantly 
and possibly result in lower or higher state-level emission budgets.
    Comment: EPA received comment highlighting the unique impact of the 
Covid-19 pandemic on 2020 emissions and generation data due to changes 
in market conditions that may not be representative in subsequent years 
(e.g., changes in net generation, time-of-day impacts on demand, and 
natural gas prices). Commenters cautioned against relying on 2020 data 
for informing step 3 analysis in this rule.
    Response: EPA is finalizing, as proposed and consistent with these 
comments, the continued use of 2019 EGU data as the latest, most 
representative historical year for informing the Agency's step 3 
analysis. EPA examined the unique Covid-related impacts on the power 
sector and energy market data. It observed significant changes for some 
variables where the change appeared to be specific to the 2020 dataset 
and pandemic-related conditions, and therefore not representative of 
future power sector operations or market conditions. These included 
changes in natural gas prices, the demand profiles for electricity 
(which influence what units generate at different parts of the day), 
and overall electricity demand. This was further borne out by comparing 
quarterly year-over-year data which revealed that changes in Q4 2020 
data relative to Q4 2019 data were not as pronounced as changes in Q2 
2020 data relative to Q2 2019 data, indicating the temporary status of 
some of changes observed in the 2020 ozone season. For instance, Q2 
2020 NOX emissions were down 20 percent year-over-year, but 
Q4 2020 NOX emissions were down only 9 percent year-over-
year. EPA provides additional detail in the RTC document on its 
consideration of 2019 and 2020 data as the most recent historical 
representative year of the power sector. Had EPA utilized 2020 data as 
the starting point for its future year baseline in Engineering 
Analytics, it likely would have been incorporating some 2020-fleet 
operational changes (and corresponding emission levels) unique to the 
pandemic year instead of fleet changes expected to endure into post-
2020 years. As also explained in the RTC document, while EPA did 
continue to use 2019 as the starting historical data set, it recognized 
commenters' observations that New York and Virginia were differently 
situated in that their emissions were higher in 2020 than 2019 (whereas 
all other states were lower, at least partially attributable to Covid 
impacts). Additionally, reflecting the 2020 fleet dynamics in the 
future year baseline for New York helps capture some of the dynamics 
related to the retirement of one unit at the Indian Point nuclear 
facility as pointed out by the commenter. To account for these atypical 
circumstances, EPA incorporated upward adjustments to its future year 
baseline values for New York and Virginia that reflected the 
incremental changes in heat input, generation, and emissions for 2020 
relative to 2019.
    Comment: Some commenters suggested EPA use a multi-year historical 
baseline for its step 3 analysis on the theory that this would provide 
a more robust set of historical data and a more representative baseline 
for the power sector.
    Response: EPA is finalizing use of the same single-year historical 
baseline approach it used in the proposed rule. This approach is 
similar to the CSAPR Update, where EPA also relied on a single-year 
historical baseline to inform its step 3 approach. EPA's interest in a 
historical data set to inform this part of the analysis is to capture 
the current status of the power sector (i.e., incorporating the latest 
new builds, retirements, and unit operation in response to current 
regulations and market conditions). Incorporating prior years through a 
multi-year historical baseline would dilute, rather than strengthen, 
the methodology's ability to capture the most representative 
perspective of the current power sector. It would in effect include 
units that no longer exist, market conditions that have since evolved, 
and a regulatory landscape that has likewise since changed. It would 
diminish the effect of newer generation resources that have come online 
which reflect the impacts of the latest changes in technology 
performance and cost levels. EPA finds that, particularly at the state 
and regional level, the most recent year data is a better 
representation and basis for future year baselines rather than 
incorporating older data. In other applications, where the purpose is 
not forward looking, but rather distribution-based and unit-level 
focused, lengthier historical baselines have more value. See additional 
response to this comment in the State Emission Budgets section of the 
RTC document.

C. Elements of New Trading Program

    To implement the updated emissions budgets developed according to 
the process described in section VII.B, EPA is requiring EGUs in each 
of the 12 covered states to participate in a new CSAPR NOX 
Ozone Season Group 3 Trading Program. The provisions of the new ``Group 
3'' trading program are largely identical to the provisions of the 
``Group 2'' trading program in which affected EGUs in the 12 covered 
states participated from 2017 through 2020. The principal differences 
between the Group 2 and Group 3 trading programs are the differences in 
state budgets and geography established in this rule to address the 
covered states' remaining obligations under CAA section 
110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS. One other 
difference, which EPA is adopting in response to comments, concerns the 
determination of which units are eligible to receive allocations of 
allowances for use in the new Group 3 trading program as ``existing 
units'' under EPA's default allocation methodology. Specifically, 
certain units with scheduled future retirement dates will not receive 
allocations as existing units for use in the Group 3 trading program 
starting with the first control period for which the units' scheduled

[[Page 23122]]

retirements are reflected in adjustments to the state emission budgets. 
This aspect of implementation of the Group 3 trading program is 
discussed in section VII.C.3.b.
    The proposed rule included several provisions designed to address 
the transition from the Group 2 trading program to the Group 3 trading 
program. The provisions for allocation of supplemental allowances to 
ensure that the enhanced control stringency established in this action 
applies only after the rule's effective date are finalized as proposed. 
The provisions concerning creation of an initial bank of Group 3 
allowances in exchange for banked 2017-2020 Group 2 allowances at a 
formula-based conversion ratio and the provisions concerning the recall 
of certain previously recorded 2021-2024 Group 2 allowances are 
finalized with certain modifications adopted after consideration of 
comments. Also, in response to comments, the final rule includes 
transitional provisions establishing a ``safety valve'' mechanism under 
which sources may obtain additional Group 3 allowances in exchange for 
additional 2017-2020 Group 2 allowances at a higher conversion ratio. 
All of these transitional provisions are discussed in section VII.C.4.
    The only other differences between the new Group 3 trading program 
regulations and the Group 2 trading program regulations that applied 
for emissions through the 2020 control periods are a small number of 
corrections and administrative simplifications that have no effect on 
program stringency; EPA is eliminating these differences by making the 
same corrections and simplifications to the regulations for the Group 2 
trading program and the other existing CSAPR trading programs starting 
with the 2021 control periods.\177\ In this section, the Agency 
discusses major elements of the new Group 3 trading program, with 
emphasis on the elements that differ from the previous provisions of 
the Group 2 trading program as well as the provisions specifically 
designed to address the transition from the Group 2 trading program to 
the Group 3 trading program.
---------------------------------------------------------------------------

    \177\ The corrections and simplifications generally apply to 
each of the five existing CSAPR trading programs at subparts AAAAA 
through EEEEE of 40 CFR part 97, and a subset also apply to the 
Texas SO2 Trading Program at subpart FFFFF of 40 CFR part 
97. The specific corrections and simplifications are described as 
applied to the new Group 3 trading program in sections VII.C.1. 
through VII.C.7. The same changes as applied to the existing 
programs are discussed in section VII.C.8.
---------------------------------------------------------------------------

1. Applicability
    In this rule, EPA is using the same EGU applicability provisions in 
the new Group 3 trading program as in the existing Group 2 trading 
program and the other CSAPR trading programs, without change. Under the 
general CSAPR applicability provisions, a covered unit is any 
stationary fossil-fuel-fired boiler or combustion turbine serving at 
any time on or after January 1, 2005, a generator with nameplate 
capacity exceeding 25 MW, which is producing electricity for sale, with 
the exception of certain cogeneration units and solid waste 
incineration units.
2. State Budgets, Variability Limits, Assurance Levels, and Penalties
    EPA is establishing revised state budgets for EGU emissions of 
ozone season NOX for the 12 ``Group 3'' states subject to 
new or amended FIPs in this final rule in order to fully address these 
states' significant contribution with respect to the 2008 ozone NAAQS. 
The budgets have been established according to the process described in 
section VII.B. As discussed in that section, for each of the covered 
states, separate budgets are established for the three individual years 
2021, 2022, and 2023, and then for 2024 and beyond.\178\ Portions of 
the updated NOX ozone season emission budgets are reserved 
as updated new unit set-asides and Indian country new unit set-asides 
for the same control periods, as further described in section 
VII.C.3.a. The amounts of the state emissions budgets for 2021, 2022, 
2023, and 2024 and beyond are shown in tables VII.C.2-1, VII.C.2-2, 
VII.C.2-3, and VII.C.2-4.
---------------------------------------------------------------------------

    \178\ See section VII.C.4.a. for a discussion of transitional 
provisions included in this final rule to ensure that the increased 
stringency of the new emission budgets being established for the 
2021 control period will apply only after the rule's effective date, 
even though the new Group 3 trading program will be implemented as 
of the start of the 2021 ozone season on May 1, 2021.
---------------------------------------------------------------------------

    Similar to the previous requirements to hold Group 2 allowances 
sufficient to cover their NOX emissions in each control 
period from 2017 through 2020, sources in states covered by the new 
Group 3 trading program will be required to hold new Group 3 allowances 
sufficient to cover their NOX emissions in each control 
period in 2021 and thereafter. For Group 3 states that were found in 
the CSAPR Update to still have good neighbor obligations with respect 
to the 1997 ozone NAAQS, EPA is determining that participation of the 
state's EGUs in the more stringent Group 3 trading program will satisfy 
those obligations.\179\
---------------------------------------------------------------------------

    \179\ Out of the 12 states included in the Group 3 trading 
program, Illinois, Indiana, Kentucky, and Louisiana were found in 
the CSAPR Update to still have good neighbor obligations with 
respect to the 1997 ozone NAAQS. See 81 FR 74509 n.21 (November 21, 
2016).
---------------------------------------------------------------------------

    In the CSAPR and the CSAPR Update, EPA developed assurance 
provisions, including variability limits and assurance levels (with 
associated compliance penalties), to ensure that each state will meet 
its pollution control and emission reduction obligations and to 
accommodate inherent year-to-year variability in state-level EGU 
operations. Establishing assurance levels with compliance penalties 
responds to the D.C. Circuit's holding in North Carolina requiring EPA 
to ensure within the context of an interstate trading program that 
sources in each state are required to eliminate emissions that 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS in another state.\180\
---------------------------------------------------------------------------

    \180\ 531 F.3d at 908.
---------------------------------------------------------------------------

    Like the emission budgets promulgated in the CSAPR and the CSAPR 
Update, the revised emission budgets promulgated in this rule reflect 
EGU operations in an ``average year.'' However, year-to-year 
variability in EGU operations occurs due to the interconnected nature 
of the power sector, changing weather patterns, changes in electricity 
demand, or disruptions in electricity supply from other units or from 
the transmission grid. Recognizing this, the trading program provisions 
finalized in the CSAPR and CSAPR Update rulemakings include variability 
limits, which define the amount by which an individual state's 
emissions may exceed the level of its budget in a given year to account 
for variability in EGU operations. A state's budget plus its 
variability limit equals the state's assurance level, which acts as a 
cap on the state's NOX emissions during a given control 
period (in this rulemaking, the relevant control period is the May-
September ozone season). The new CSAPR NOX Ozone Season 
Group 3 Trading Program provisions established for affected sources in 
the 12 states subject to the new trading program under this final rule 
contain equivalent assurance provisions to the prior CSAPR and CSAPR 
Update trading programs.
    The variability limits ensure that the trading program can 
accommodate the inherent variability in the power sector while ensuring 
that each state eliminates the amount of emissions within the state, in 
a given control period, that must be eliminated to meet

[[Page 23123]]

the statutory mandate of CAA section 110(a)(2)(D)(i)(I). Moreover, the 
structure of the trading program, which achieves required emission 
reductions through limits on the total numbers of allowances allocated, 
assurance provisions, and penalty mechanisms, ensures that the 
variability limits only allow the amount of temporal and geographic 
shifting of emissions that is likely to result from the inherent 
variability in power generation, and not from decisions to avoid or 
delay the optimization or installation of necessary controls.
    To establish the variability limits in the CSAPR, EPA analyzed 
historical state-level heat input variability as a proxy for emissions 
variability, assuming constant emission rates. See 76 FR 48265. The 
variability limits for ozone season NOX in both the CSAPR 
and the CSAPR Update were calculated as 21 percent of each state's 
budget, and these variability limits for the NOX ozone 
season trading programs were then codified in 40 CFR 97.510 and 40 CFR 
97.810, along with the respective state budgets. For this final rule, 
EPA is retaining variability limits for the 12 Group 3 states covered 
by this rule calculated as 21 percent of each state's revised 
budget.\181\
---------------------------------------------------------------------------

    \181\ See section VII.C.4.a. for a discussion of transitional 
provisions included in the final rule to ensure that the increased 
stringency of the new budgets will apply only after the rule's 
effective date, even though the new Group 3 trading program will be 
implemented as of the start of the 2021 ozone season on May 1, 2021. 
The supplemental allowances and assurance level adjustments that are 
being provided for the 2021 control period in accordance with those 
transitional provisions are not reflected in the amounts shown in 
Table VII.C.2-1.

Table VII.C.2-1--CSAPR NOX Ozone Season Group 3 State Budgets, Variability Limits, and Assurance Levels for 2021
                                                       182
----------------------------------------------------------------------------------------------------------------
                                                                     Emissions      Variability      Assurance
                              State                                budget (tons)   limit (tons)    level (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................................................           9,102           1,911          11,013
Indiana.........................................................          13,051           2,741          15,792
Kentucky........................................................          15,300           3,213          18,513
Louisiana.......................................................          14,818           3,112          17,930
Maryland........................................................           1,499             315           1,814
Michigan........................................................          12,727           2,673          15,400
New Jersey......................................................           1,253             263           1,516
New York........................................................           3,416             717           4,133
Ohio............................................................           9,690           2,035          11,725
Pennsylvania....................................................           8,379           1,760          10,139
Virginia........................................................           4,516             948           5,464
West Virginia...................................................          13,334           2,800          16,134
----------------------------------------------------------------------------------------------------------------

     
---------------------------------------------------------------------------

    \182\ The state-level emission budget calculations pertaining to 
Tables VII.C.2-1 through VII.C.2-4 are described in section VII.B, 
and in greater detail in the Ozone Transport Policy Analysis Final 
Rule TSD. Budget calculations and underlying data are also available 
in Appendix A of that TSD.

Table VII.C.2-2--CSAPR NOX Ozone Season Group 3 State Budgets, Variability Limits, and Assurance Levels for 2022
----------------------------------------------------------------------------------------------------------------
                                                                     Emissions      Variability      Assurance
                              State                                budget (tons)   limit (tons)    level (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................................................           9,102           1,911          11,013
Indiana.........................................................          12,582           2,642          15,224
Kentucky........................................................          14,051           2,951          17,002
Louisiana.......................................................          14,818           3,112          17,930
Maryland........................................................           1,266             266           1,532
Michigan........................................................          12,290           2,581          14,871
New Jersey......................................................           1,253             263           1,516
New York........................................................           3,416             717           4,133
Ohio............................................................           9,773           2,052          11,825
Pennsylvania....................................................           8,373           1,758          10,131
Virginia........................................................           3,897             818           4,715
West Virginia...................................................          12,884           2,706          15,590
----------------------------------------------------------------------------------------------------------------


Table VII.C.2-3--CSAPR NOX Ozone Season Group 3 State Budgets, Variability Limits, and Assurance Levels for 2023
----------------------------------------------------------------------------------------------------------------
                                                                     Emissions      Variability      Assurance
                              State                                budget (tons)   limit (tons)    level (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................................................           8,179           1,718           9,897
Indiana.........................................................          12,553           2,636          15,189
Kentucky........................................................          14,051           2,951          17,002
Louisiana.......................................................          14,818           3,112          17,930

[[Page 23124]]

 
Maryland........................................................           1,266             266           1,532
Michigan........................................................           9,975           2,095          12,070
New Jersey......................................................           1,253             263           1,516
New York........................................................           3,421             718           4,139
Ohio............................................................           9,773           2,052          11,825
Pennsylvania....................................................           8,373           1,758          10,131
Virginia........................................................           3,980             836           4,816
West Virginia...................................................          12,884           2,706          15,590
----------------------------------------------------------------------------------------------------------------


Table VII.C.2-4--CSAPR NOX Ozone Season Group 3 State Budgets, Variability Limits, and Assurance Levels for 2024
                                                   and Beyond
----------------------------------------------------------------------------------------------------------------
                                                                     Emissions      Variability      Assurance
                              State                                budget (tons)   limit (tons)    level (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................................................           8,059           1,692           9,751
Indiana.........................................................           9,564           2,008          11,572
Kentucky........................................................          14,051           2,951          17,002
Louisiana.......................................................          14,818           3,112          17,930
Maryland........................................................           1,348             283           1,631
Michigan........................................................           9,786           2,055          11,841
New Jersey......................................................           1,253             263           1,516
New York........................................................           3,403             715           4,118
Ohio............................................................           9,773           2,052          11,825
Pennsylvania....................................................           8,373           1,758          10,131
Virginia........................................................           3,663             769           4,432
West Virginia...................................................          12,884           2,706          15,590
----------------------------------------------------------------------------------------------------------------

    The assurance provisions include penalties that are triggered in 
the event that the covered sources' emissions in a given state, as a 
whole, exceed the state's assurance level. The CSAPR and the CSAPR 
Update provided that, when the emissions from EGUs in a state exceed 
that state's assurance level in a given year, particular sources within 
that state will be assessed a 3-to-1 allowance surrender on emissions 
exceeding the assurance level. Specifically, each excess ton above a 
given state's assurance level must be met with one allowance, per 
standard compliance, and two additional allowances to satisfy the 
penalty. The penalty was designed to deter state-level emissions from 
exceeding assurance levels. In both the CSAPR and the CSAPR Update, the 
assurance provisions were designed to account for variability in the 
electricity sector while ensuring that the necessary emission 
reductions occur within each covered state, consistent with the court's 
holding in North Carolina, 531 F.3d at 908. If EGU emissions in a given 
state do not exceed that state's assurance level, no penalties are 
incurred by any source.
    To assess the penalty under the assurance provisions, EPA is 
following the same methodology finalized in the CSAPR Update. See 81 FR 
74567. In that methodology, EPA evaluates whether any state's total EGU 
emissions in a control period exceeded the state's assurance level, and 
if so, EPA then determines which groups of units in the state 
represented by a ``common designated representative'' emitted in excess 
of the common designated representative's share of the state assurance 
level and, therefore, will be subject to the allowance surrender 
requirement described above. Thus, penalties under the assurance 
provisions are triggered for the group of sources represented by a 
common designated representative when two conditions are met: (1) The 
group of sources and units with a common designated representative are 
located in a state where the total state EGU emissions for a control 
period exceed the state assurance level; and (2) that group with the 
common designated representative had emissions exceeding the respective 
common designated representative's share of the state assurance level. 
EPA is establishing assurance provisions for the CSAPR NOX 
Ozone Season Group 3 Trading Program that are equivalent to the 
assurance provisions in the CSAPR NOX Ozone Season Group 2 
Trading Program.
    In this final rule, EPA is simplifying the procedures for 
administering the assurance provisions, as compared to the analogous 
provisions included in the existing CSAPR trading programs for control 
periods before 2021.\183\ The simplifications are made possible by the 
revisions to the process for allocating allowances from the new unit 
set-asides that are discussed in section VII.C.3.c. The same 
simplifications are also being implemented in the existing CSAPR 
trading programs, as discussed in section VII.C.8. These 
simplifications concern the procedures for determining the portion of 
the state's assurance level to be assigned to each common designated 
representative. Specifically, certain provisions of these procedures as 
previously implemented in the existing CSAPR trading programs were 
designed to address circumstances where a new unit operates but has no 
allowance allocation determined for it. Administration of these 
provisions

[[Page 23125]]

required EPA to issue a notice to collect information needed solely for 
this purpose that is not otherwise required to be reported to EPA. 
Because the revised new unit set-aside (``NUSA'') allocation procedures 
eliminate the possibility that a new unit would not have an allowance 
allocation determined for it, EPA is eliminating the provisions for 
issuance of the related extra notice. EPA also is extending the date as 
of which a common designated representative is determined under both 
the new Group 3 trading program and the existing CSAPR trading programs 
from April 1 of the year following the control period to July 1 so as 
to preserve the relationship of those dates to the allowance transfer 
deadline, which is being extended from March 1 of the year following 
the control period to June 1.\184\ Further discussion of these changes 
from the current provisions in the existing trading programs is 
provided in section VII.C.8.
---------------------------------------------------------------------------

    \183\ EPA proposed and requested comment on implementing the 
simplified assurance provisions as of the 2023 and 2021 control 
periods, respectively. No comments were received, and EPA is 
clarifying the regulations by implementing the simplified provisions 
as of the 2021 control period. For further discussion, see section 
VII.C.8.b.
    \184\ As discussed in section VII.C.8., in order to minimize 
unnecessary differences between the CSAPR trading programs and the 
similarly structured Texas SO2 Trading Program, EPA is 
also revising the date for determination of a common designated 
representative under the Texas SO2 Trading Program.
---------------------------------------------------------------------------

    Comment: EPA received several comments concerning the achievability 
of state emissions budgets in 2021 that highlighted the quick 
implementation timeframe and suggesting that such a timeframe would not 
allow enough times for a liquid allowance market to form and thus 
inhibit sources' ability to obtain the allowances that they need for 
compliance.
    Response: As an initial matter, EPA observes that in 25 years of 
promulgating and administering trading programs for NOX and 
SO2 as mechanisms to address acid precipitation or 
interstate transport of air pollution, the Agency has never encountered 
a single instance where a source was unable to comply with the 
requirements of any of these trading programs because of an inability 
to find allowances available for purchase. Almost all of the sources 
that will participate in the trading program established under this 
final rule have previously participated in some of these other trading 
programs and therefore are, or should be, fully aware that under every 
such trading program, a functioning allowance market has developed. 
Nevertheless, some commenters assert that in the trading program 
established under this specific final rule--where the emission 
reductions required for the first control period are set at levels 
designed to be achievable without installation of any new controls by 
any source--for the first time ever, either no industry participants 
will be willing to take actions that would create surplus allowances or 
all industry participants will refuse to sell such surplus allowances 
at any price. The comments fly in the face of 25 years of evidence and 
common experience, not to mention principles of economics and market 
participants' self-interest. EPA views the comments as unsupported and 
speculative to the point of irrationality.
    EPA first addresses the viability of 2021 implementation for the 
emission reductions required under this rule in detail in section VI. B 
above. With regard to the specific market liquidity concerns expressed 
here, EPA notes that those same concerns have been voiced in the lead-
up to past CSAPR trading programs and have never materialized. Instead, 
a functioning allowance market has always formed and resulted in 100 
percent compliance with the allowance holding requirements for the 
first control period (and subsequent control periods). As described in 
this section, under the new trading program sources are not required to 
hold (and subsequently surrender) any allowances for compliance 
purposes until June 1, 2022--well after the end of the 2021 ozone 
season. In the current CSAPR Update ozone season programs, EPA observes 
that most trades occur near or after end of the ozone season. 
Therefore, the approximately two months between final rule promulgation 
and the start of the compliance period is in no way a limit on the time 
sources have to buy and sell allowances for that compliance period. 
Rather, sources will have eight months after the end of the control 
period in which to engage in any necessary or desired allowance market 
transactions. The total quantity of allowances usable for the 2021 
control periods from state emission budgets and from the initial Group 
3 bank (discussed in section VII.C.4.b) will be known before the start 
of the 2021 control period, and EPA expects that almost all such 
allowances will be recorded in sources' compliance accounts well before 
the end of the 2021 control period, ensuring that there will be no 
logistical impediments to such transactions. Moreover, in many cases, 
units that may have the need to procure allowances will also have 
associated units under common ownership elsewhere in the fleet that 
hold a surplus of allowances In this case, it is only a matter of 
intra-owner allowance movement needed to align allowancing holdings 
with allowance surrender obligations, and the need for accessing a 
broader allowance market is mooted.
    Further, the level of the budgets, in addition to the initial Group 
3 bank, should obviate any market liquidity concerns as the number of 
allowances on the market for the first year will accommodate a variety 
of compliance pathways and unit operational decisions. Moreover, the 
experience of the CSAPR programs reveals that the allowance price is 
highest in the first compliance period, creating an incentive for all 
sources to implement achievable emission reductions and for sources 
with surplus of allowances to sell them while allowance prices are 
highest, generating the conditions for a robust market to form--further 
promoting market liquidity. While EPA strongly disagrees, based on 
previous program implementation and forward-looking analysis, that 
there is any risk of market illiquidity, the Agency is creating an 
additional ``safety valve'' in this final rule due to the near-term 
implementation timetable. Consistent with commenters' suggestions, EPA 
will allow the one-time conversion of Group 2 allowances at an 18:1 
ratio to provide additional assurance to sources that allowances will 
be available, but ensuring that the cost of this compliance option is 
such that entities will utilize it only in the very unlikely event that 
access to such additional allowances proves to be necessary. The safety 
valve is described further in section VII.C.4.c.
    Comment: EPA received several comments concerning the proposed 
variability limits and associated assurance levels for the states in 
the Group 3 trading program. Some commenters suggested that EPA should 
eliminate or tighten variability limits for the Group 3 trading 
program. One commenter justified these changes by observing that the 
Group 2 trading program established under the CSAPR Update had excess 
availability of allowances and low allowance prices.
    One commenter suggested that EPA eliminate variability limits for 
the Group 3 trading program on the basis that the variability limits 
and associated assurance levels as proposed do not result in the 
elimination of downwind non-attainment by the end of 2021. This 
commenter stated that EPA failed to provide a full explanation in the 
proposed action as to why the 21 percent variability limit used in the 
trading programs for ozone season NOX established in the 
CSAPR and the CSAPR Update was still applicable in the new Group 3 
trading program. The commenter stated there is no justification for EPA 
to increase the budget amounts due to variability in

[[Page 23126]]

EGU fleet operation if EPA is correct in its assessment that the 
proposed NOX mass emission budget levels are representative 
of near-term achievable NOX emission control obligations 
based on historical EGU fleet operation. The commenter stated that 
increasing budgets by 21 percent to arrive at an assurance level 
permits an upwind state's EGU fleet to emit NOX mass 
emissions more than the levels necessary to meet the given state's 
obligation to downwind areas. The commenter further states a belief 
that EPA is misapplying the concept of EGU fleet operational 
variability to permit a state's EGU fleet to emit NOX mass 
emissions at levels that may negatively impact the health and welfare 
of downwind populations.
    Response: EPA disagrees with the commenters and is retaining the 
variability limits and associated assurance levels as reflected in both 
the CSAPR and the CSAPR Update. EPA believes a variability limit of 21 
percent continues to be appropriate for states in the Group 3 trading 
program. The assertion that state budgets are increased by 21 percent 
in response to the variability limit is incorrect. Rather, as described 
in the CSAPR, the CSAPR Update, and reiterated in this final action, 
the variability limits reflect expected year-to-year or season-to-
season variability in demand for electricity, and therefore, 
variability in the use of fuel and in emissions. While a given state 
may emit up to the assurance level (i.e., that state's budget plus the 
21 percent variability limit) during years with adverse meteorology and 
atypical levels of electricity demand, allowances banked from prior 
control periods may then be used for compliance obligations. However, 
the total number of allowances issued for each control period in the 
Group 3 trading program is equal to the sum of the Group 3 states' 
emission budgets, not the sum of the Group 3 states' assurance levels. 
Although EPA is also creating an initial bank of allowances in an 
amount equal to the sum of the states' variability limits for the 2022 
control period (see section VII.C.4.b), creation of the bank is a one-
time event and does not represent a 21 percent increase in the state 
emission budgets established for each control period.
    With regard to the comment that EPA has not sufficiently justified 
reusing in the Group 3 trading program the same 21 percent variability 
limits used in the trading programs for ozone season NOX 
established in the CSAPR and the CSAPR Update, EPA disagrees that 
updating these limits is necessary. The original variability analysis 
performed in the CSAPR rulemaking considered data for 26 states 
(including all 12 Group 3 states) and reflected over a decade of 
operational variability (from 2000 through 2010), producing relatively 
robust standard deviation estimates. EPA would not necessarily view 
changes of a few percent above or below the previously identified 
variability level of 21 percent from an updated analysis as significant 
enough to require establishment of different variability limits in the 
Group 3 trading program. Nevertheless, in response to the comment, EPA 
has performed an updated variability analysis for the 12 Group 3 states 
reflecting data for all control periods from 2000 to 2019. The updated 
analysis again results in a variability estimate of 21 percent. EPA 
also considered shorter time periods for the updated analysis and found 
that the resulting variability estimates are not especially sensitive 
to the particular time period analyzed. Accordingly, EPA concludes that 
it is reasonable to finalize the variability limits for the Group 3 
trading program at the level of 21 percent as proposed.\185\
---------------------------------------------------------------------------

    \185\ For details on the original variability analysis for 26 
states over the 2000-2010 period, including a description of the 
methodology, see the Power Sector Variability Final Rule TSD from 
the CSAPR (EPA-HQ-OAR-2009-0491-4454). For the updated variability 
analysis for the 12 Group 3 states for the 2000-2019 period, see the 
Excel file ``Historical Variability in Heat Input 2000 to 
2019.xls.'' Both documents are available in the docket for this 
final rule.
---------------------------------------------------------------------------

3. Unit-Level Allocations of Emissions Allowances
    For states participating in the CSAPR Group 3 trading program, EPA 
is issuing CSAPR NOX Ozone Season Group 3 allowances to be 
used for compliance beginning with the 2021 ozone season. This section 
explains the default process by which EPA is allocating total amounts 
of these allowances equal to each state's budget amount existing units 
and new units in the state. Section VII.C.3.a describes the 
determination of the portions of each state's budget that will be set 
aside for potential allocation to new units in the state and in any 
Indian country within the state's borders. Section VII.C.3.b discusses 
the methodology used to allocate shares of each state's budget not 
reserved in a set-aside to the existing units in the state, including 
in some cases to units that have ceased operations. Sections VII.C.3.c 
and VII.C.3.d discuss the process for allocating the allowances in the 
new unit set-asides and Indian country new unit set-asides, 
respectively, to individual units.
    As under both the CSAPR and the CSAPR Update, states have several 
options under this final rulemaking to submit SIP revisions which, if 
approved, may result in the replacement of EPA's default allocations 
with state-determined allocations for the 2022 control period and 
beyond. The provisions described in this section do not prevent any 
state from employing an alternative allocation methodology for control 
periods after 2021 through a SIP submission. See section VII.D. for 
details on the development of approvable SIP submissions.
a. Set-Asides of Portions of State Budgets for New Units
    As part of the default allocation process that will apply where a 
state does not employ an alternative allocation process pursuant to an 
approved SIP revision, EPA is promulgating allocations to a new unit 
set-aside for each state equal to a minimum of 2 percent of the total 
state budget, plus the projected amount of emissions from planned units 
in that state. For example, if planned units in a state are projected 
to emit 3 percent of the state's NOX ozone season emission 
budget, then the new unit set-aside for the state would be set at 5 
percent, which is the sum of the minimum 2 percent set-aside plus an 
additional 3 percent for planned units. As further discussed in section 
VII.C.3.d., for the three Group 3 states with Indian country within 
their borders (Louisiana, Michigan, and New York), EPA is reserving 5 
percent of the minimum 2 percent new unit set-aside, or 0.1 percent of 
the total state budget, for any new units in Indian country within the 
borders of state,\186\ with no additional amount to address planned 
units in Indian country.\187\ This is the same approach previously used 
to establish the amounts of new unit set-asides and Indian country new 
unit set-asides for all the CSAPR and CSAPR Update trading programs. 
See, e.g., 76 FR 48292 (August 8, 2011). Note that New York has set its 
NUSA percentage within its approved SIP for the existing Group 2 
trading program to 5 percent of the state emission budget without 
consideration of planned units; therefore, this NUSA percentage is used

[[Page 23127]]

for New York. As described in greater detail in sections VII.C.3.c and 
VII.C.3.d, new units are eligible to receive allocations from a new 
unit set-aside or Indian country new unit set-aside starting with the 
first year they are subject to the allowance-holding requirements of 
this rule. If the allowances in the NUSA for a state or the Indian 
country NUSA for Indian country within the borders of a state are not 
allocated to new units, the allowances are redistributed to existing 
units in the state before each compliance deadline.
---------------------------------------------------------------------------

    \186\ In the CSAPR rulemaking, based on analysis of a set of 
states that includes all the proposed Group 3 states in this action, 
EPA determined that among the states analyzed, in the state for 
which Indian country represented the largest share of the total area 
within the state's borders, that share was 5 percent. See 76 FR 
48293 (December 27, 2011). EPA adopted the same 5 percent figure in 
the CSAPR Update. See 81 FR 74565-66 (May 27, 2016).
    \187\ According to the information available to EPA, there are 
currently no planned units in Indian country within the borders of 
any Group 3 state.
---------------------------------------------------------------------------

    The process described above for determining the portions of each 
state budget that will be set aside for potential allocation to new 
units is unchanged from the process described in the proposed rule. EPA 
received no comments concerning the portions of the emission budgets 
established under the new Group 3 trading program that would be set 
aside for this purpose. One commenter suggested that the amounts of the 
new unit set-asides should be increased by adding allowances from the 
existing Group 2 trading program that would have been allocated to 
retired units under that program. EPA is not implementing this 
suggestion and responds more fully to the comment in section VII.C.4.b.
    Because the budgets under the Group 3 trading program vary across 
control periods, the amounts of the default new unit set-asides and 
Indian country new unit set-asides also vary. The amounts for each 
state for 2021 through 2023 and for 2024 and beyond are set forth in 
tables VII.C.3-1 through VII.C.3-4.\188\
---------------------------------------------------------------------------

    \188\ See section VII.C.4.a. for a discussion of transitional 
provisions included in the final rule to ensure that the increased 
stringency of the new budgets will apply only after the rule's 
effective date, even though the new Group 3 trading program will be 
implemented as of the start of the 2021 ozone season on May 1, 2021. 
The supplemental allowances that are being provided for the 2021 
control period in accordance with those transitional provisions are 
not reflected in the emission budget amounts shown in Table VII.C.3-
1.

           Table VII.C.3-1--CSAPR NOX Ozone Season Group 3 New Unit Set-Aside (NUSA) Amounts for 2021
----------------------------------------------------------------------------------------------------------------
                                                                                  New unit  set-
                                                  New unit  set-  Total new unit   aside amount   Indian country
              State                  Emission      aside amount      set-aside     for new units   new unit set-
                                  budgets (tons)     (percent)    amount for new   not in Indian   aside amount
                                                                   units (tons)   country (tons)      (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................           9,102               3             265             265  ..............
Indiana.........................          13,051               2             262             262  ..............
Kentucky........................          15,300               2             309             309  ..............
Louisiana.......................          14,818               3             445             430              15
Maryland........................           1,499               9             135             135  ..............
Michigan........................          12,727               4             513             500              13
New Jersey......................           1,253               2              27              27  ..............
New York........................           3,416               5             171             168               3
Ohio............................           9,690               3             291             291  ..............
Pennsylvania....................           8,379               4             335             335  ..............
Virginia........................           4,516               4             185             185  ..............
West Virginia...................          13,334               2             266             266  ..............
----------------------------------------------------------------------------------------------------------------


           Table VII.C.3-2--CSAPR NOX Ozone Season Group 3 New Unit Set-Aside (NUSA) Amounts for 2022
----------------------------------------------------------------------------------------------------------------
                                                                                  New unit  set-
                                                  New unit  set-  Total new unit   aside  amount  Indian country
              State                  Emission      aside  amount     set-aside    for  new units  new unit  set-
                                  budgets (tons)     (percent)    amount for new   not in Indian   aside amount
                                                                   units (tons)   country (tons)      (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................           9,102               3             265             265  ..............
Indiana.........................          12,582               2             254             254  ..............
Kentucky........................          14,051               2             283             283  ..............
Louisiana.......................          14,818               3             445             430              15
Maryland........................           1,266               9             115             115  ..............
Michigan........................          12,290               4             494             482              12
New Jersey......................           1,253               2              27              27  ..............
New York........................           3,416               5             171             168               3
Ohio............................           9,773               3             290             290  ..............
Pennsylvania....................           8,373               4             339             339  ..............
Virginia........................           3,897               4             161             161  ..............
West Virginia...................          12,884               2             261             261  ..............
----------------------------------------------------------------------------------------------------------------


[[Page 23128]]


           Table VII.C.3-3--CSAPR NOX Ozone Season Group 3 New Unit Set-Aside (NUSA) Amounts for 2023
----------------------------------------------------------------------------------------------------------------
                                                                                  New unit  set-
                                                  New unit  set-  Total new unit   aside  amount  Indian country
              State                  Emission      aside  amount     set-aside     for new units   new unit set-
                                  budgets (tons)     (percent)    amount for new   not in Indian   aside amount
                                                                   units (tons)   country (tons)      (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................           8,179               3             248             248  ..............
Indiana.........................          12,553               2             249             249  ..............
Kentucky........................          14,051               2             283             283  ..............
Louisiana.......................          14,818               3             445             430              15
Maryland........................           1,266               9             115             115  ..............
Michigan........................           9,975               4             398             388              10
New Jersey......................           1,253               2              27              27  ..............
New York........................           3,421               5             171             168               3
Ohio............................           9,773               3             290             290  ..............
Pennsylvania....................           8,373               4             339             339  ..............
Virginia........................           3,980               4             166             166  ..............
West Virginia...................          12,884               2             261             261  ..............
----------------------------------------------------------------------------------------------------------------


      Table VII.C.3-4--CSAPR NOX Ozone Season Group 3 New Unit Set-Aside (NUSA) Amounts for 2024 and Beyond
----------------------------------------------------------------------------------------------------------------
                                                                                  New unit  set-
                                                  New unit  set-  Total new unit   aside amount   Indian country
              State                  Emission      aside amount      set-aside     for new units  new unit  set-
                                  budgets (tons)     (percent)    amount for new   not in Indian   aside amount
                                                                   units (tons)   country (tons)      (tons)
----------------------------------------------------------------------------------------------------------------
Illinois........................           8,059               3             244             244  ..............
Indiana.........................           9,564               2             190             190  ..............
Kentucky........................          14,051               2             283             283  ..............
Louisiana.......................          14,818               3             445             430              15
Maryland........................           1,348               9             122             122  ..............
Michigan........................           9,786               4             392             382              10
New Jersey......................           1,253               2              27              27  ..............
New York........................           3,403               5             170             167               3
Ohio............................           9,773               3             290             290  ..............
Pennsylvania....................           8,373               4             339             339  ..............
Virginia........................           3,663               4             150             150  ..............
West Virginia...................          12,884               2             261             261  ..............
----------------------------------------------------------------------------------------------------------------

b. Allocations to Existing Units, Including Units That Cease Operation
    The portion of a state budget remaining after the portions reserved 
for new units have been set aside is allocated among the existing units 
in the state. EPA in this action is generally allocating allowances to 
existing units in the Group 3 states following the same methodology for 
allowance allocation that was used in the CSAPR Update, which relies on 
historical heat input data and historical emissions data for each 
eligible existing unit in the state. See 81 FR 74564-65. For the new 
Group 3 trading program, EPA is applying this methodology using 
historical data through 2019. In response to comments, EPA is also 
making one change to the approach used to determine which existing 
units are eligible to receive allocations for a given control period, 
specifically by excluding certain units with scheduled future 
retirements from receiving allocations for control periods after the 
years in which the scheduled retirements are reflected in adjustments 
to the respective states' emission budgets. For the amounts of the 
allocations to existing units, see the TSD ``Unit Level Allocations and 
Underlying Data for the Revised CSAPR Update for the 2008 Ozone 
NAAQS,'' in the docket for this final rule. Note that this final rule 
addresses allocations of only the newly created CSAPR NOX 
Ozone Season Group 3 allowances issued under and used for compliance in 
the Group 3 trading program. EPA is not changing allocations of 
allowances used in the CSAPR NOX Ozone Season Group 1 or 
Group 2, NOX Annual, or SO2 Group 1 or Group 2 
trading programs and is not reopening the previously established 
default allocations under these programs.
    For the purpose of allocations, the CSAPR considered an ``existing 
unit'' to be a unit that commenced commercial operation prior to 
January 1, 2010, and the CSAPR Update considered an ``existing unit'' 
to be a unit that commenced commercial operation prior to January 1, 
2015. For the 12 states subject to new or amended FIPs in this 
rulemaking, EPA is considering an ``existing unit'' for purposes of the 
Group 3 trading program to be a unit that commenced commercial 
operation prior to January 1, 2019 (although only existing units that 
did not cease operation before January 1, 2021 will be eligible to 
receive allocations of Group 3 allowances as existing units). This 
change will allow units commencing commercial operation between 2015 
and 2019 to be directly allocated allowances from each state's budget 
as existing units and will allow the full amounts of the new unit set-
asides and Indian country new unit set-asides to be available for any 
future new units

[[Page 23129]]

locating in covered states or Indian country. Using data available at 
the time of the proposed rule's development, EPA identified which units 
in the proposed Group 3 states that currently submit quarterly 
emissions reports to EPA appear to be eligible or ineligible to receive 
allowance allocations as existing units; \189\ for this final rule, EPA 
has updated the lists of units with the most recent data. EPA is not 
reconsidering which units are ``existing units'' for purposes of any 
other CSAPR trading program. Sources in most of the Group 3 states also 
participate in the CSAPR NOX Annual and SO2 Group 
1 trading programs, for which an ``existing unit'' is a unit that 
commenced commercial operation before January 1, 2010. Thus, a unit 
that is located in one of these states and that commenced commercial 
operation between January 1, 2010, and January 1, 2019, would be 
considered an ``existing unit'' for purposes of default allowance 
allocations under the Group 3 trading program but would continue to be 
considered a ``new unit'' for purposes of default allowance allocations 
under the CSAPR NOX Annual and SO2 Group 1 
trading programs.
---------------------------------------------------------------------------

    \189\ See ``CSAPR NOX OS Group 3--Unit Level 
Allocations and Underlying Data.xls'', available in the docket.
---------------------------------------------------------------------------

    As noted earlier in this section, in response to comments EPA is 
finalizing a change from the allocation methodology used in the 
existing CSAPR trading programs with respect to which existing units 
are eligible to receive allocations from the budget for a given control 
period following retirement. Specifically, in cases where, before 
finalization of this rule, a unit was scheduled to retire with 
sufficient certainty for the retirement to be taken into account in 
EPA's process in this rule for setting the emission budgets for the 
state where the unit is located, EPA is not providing allocations of 
allowances to the unit as an existing unit from the budget for any 
control period starting with the first control period for which the 
state's emission budget has been adjusted to reflect the unit's 
scheduled retirement. This approach to determining eligibility to 
receive allocations as an existing unit does not apply to other units 
that may cease operations but whose upcoming retirements were not 
scheduled as of finalization of this action with sufficient certainty 
to be reflected in the process for setting the emission budgets. These 
other units would continue to receive allowance allocations as existing 
units for five control periods of non-operation, consistent with the 
allocation methodology used in the existing CSAPR trading programs. EPA 
provides additional discussion of these aspects of the allocation 
methodology in the responses to comments at the end of this section. 
The criteria that EPA has applied to determine whether a unit's 
scheduled retirement is sufficiently certain to serve as a basis for 
adjusting emission budgets and unit-level allocations are discussed in 
section VII.B and in the Ozone Transport Policy Analysis Final Rule 
TSD.
    EPA is applying the default methodology finalized in the CSAPR 
Update for allocating emission allowances to existing units, updated to 
use more recent historical data. This methodology allocates allowances 
to each unit based on the unit's share of the state's heat input, 
limited by the unit's maximum historical emissions. As discussed in the 
CSAPR Update, see 81 FR 74563-65, EPA finds this allowance allocation 
approach to be fuel-neutral, control-neutral, transparent, based on 
reliable data, and similar to allocation methodologies previously used 
in the CSAPR, the NOX SIP Call, and the Acid Rain 
Program.\190\ EPA is therefore continuing the application of this 
default methodology for allocating allowances to existing sources in 
this final rule.
---------------------------------------------------------------------------

    \190\ See 40 CFR parts 72-78.
---------------------------------------------------------------------------

    This final rule uses the average of the three highest years of heat 
input data out of the most recent five-year period that is considered 
representative to establish the heat input baseline for each unit.\191\ 
These heat input data are used to calculate each unit's proportion of 
state-level heat input (the average of the unit's three highest non-
zero years of heat input divided by the total of such averages for all 
eligible units within the given state). In general, EPA applies this 
proportion to the total amount of existing unit allowances to be 
allocated to quantify unit-level allocations. However, EPA also 
constrains each unit's allocation so as not to exceed the unit's 
maximum historical baseline emissions, calculated as the highest year 
of emissions out of the most recent eight-year period that is 
considered representative.\192\ In other words, if the allocation that 
a unit would receive from the emission budget for its state based 
solely on consideration of the unit's share of the state-level heat 
input exceeds that unit's maximum historical baseline emissions, the 
unit's allocation is capped at its maximum historical baseline 
emissions and the excess allowances are instead allocated to other 
units in the state whose allocations do not exceed their respective 
maximum historical baseline emissions, again in proportion to those 
other units' shares of the state-level heat input. Like the proposed 
rule, this final rulemaking uses 2015-2019 heat input data and 2012-
2019 emissions data for purposes of computing unit-level allocations. 
Although EPA proposed to update the data used in this action to include 
2016-2020 heat input data and 2013-2020 emission data, most comments 
received on this topic opposed the use of 2020 data as potentially 
unrepresentative because of changes in economic conditions related to 
the COVID-19 pandemic. EPA is persuaded that in the unusual 
circumstance of the pandemic, 2020 data have the potential to be less 
representative for at least some units than data from earlier control 
periods, and accordingly EPA is not updating the periods of the data 
used in the allocation calculations for the final rule to include 2020 
data.
---------------------------------------------------------------------------

    \191\ As described in the Unit Level Allowance Allocations TSD 
and done in prior CSAPR actions, the allocation method uses a five-
year baseline in order to improve representation of a unit's normal 
operating conditions. Using the three highest, non-zero ozone season 
heat input values within the five-year baseline reduces the 
likelihood that any particular single year's operations (which might 
not be representative due to outages or other unusual events) 
determine a unit's allocation.
    \192\ EPA's allocation methodology also considers whether unit-
level allocations should be limited because they would otherwise 
exceed emission levels that are permissible under the terms of 
consent decrees. However, in this instance EPA's analysis indicates 
that consideration of consent decree limits does not alter the unit-
level allocations.
---------------------------------------------------------------------------

    Under the CSAPR Update, if, at the time the rule was finalized, a 
state had already submitted a SIP revision addressing the allocation of 
CSAPR NOX ozone season allowances among the units in the 
state, and if the SIP submission's allocation provisions could be 
applied to an updated budget, EPA applied the state's preferred 
allocation methodology to determine the allocation of allowances among 
that state's units under the final CSAPR Update. Two of the Group 3 
states (Indiana and New York) have such methodologies for allocating 
CSAPR NOX Ozone Season Group 2 allowances among their units. 
As under the CSAPR Update, in this final rule EPA is carrying out the 
intent of these SIPs by establishing initial allowance allocations to 
existing units under the FIPs for these two states using the allocation 
methodologies already adopted by the states. EPA received no comments 
opposing this approach to establishing the default allocation 
methodologies for these states. EPA

[[Page 23130]]

notes that, consistent with the approach taken for other states, when 
applying these states' allocation methodologies, the set of units 
deemed eligible to receive allocations for each control period as 
existing units is updated to eliminate any units whose scheduled 
retirements were considered sufficiently certain to be reflected in the 
budget-setting process with respect to that control period.
    Comment: EPA received a comment suggesting modifications to the 
proposed methodology for calculating allowance allocations in the event 
that a unit has fewer than three years of operating history for use in 
calculating allocations. The commenter suggests that EPA either revise 
the allocation methodology for existing units so as to recompute 
existing unit-level allocations for each ozone season through 2024 to 
take account of additional years of heat input data for units in this 
situation or else allow units in this situation to receive allocations 
from new unit set-asides to the extent that their allocations as 
existing units are less than their actual emissions.
    Response: EPA disagrees that the revisions to the allocation 
approach suggested by the commenter are needed in order to effectuate a 
reasonable allocation of allowances among all of the units in a given 
state. The suggested revisions would require promulgating new 
allocation methodologies for either all existing units or all new units 
that would differ from the allocation methodologies used in all of the 
existing CSAPR trading programs and that would change the allocation to 
the commenter's unit by at most one allowance for the 2021 control 
period. EPA notes that any state may submit SIP revisions to replace 
EPA's default allocations with state-determined allocations if the 
state would prefer that allowances be allocated differently among the 
state's units.
    Comment: Commenters expressed diverse views on questions concerning 
allocations of allowances to units with unscheduled future retirements, 
ranging from recommendations that EPA end such allocations immediately 
upon a unit's retirement to recommendations that EPA continue 
allocations to retired units indefinitely.
    Response: With respect to units with unscheduled future 
retirements, EPA proposed to provide allocations of allowances 
according to the methodology used in the existing CSAPR trading 
programs. Under this methodology, when a unit ceases operation for two 
consecutive control periods, it continues to receive allocations for 
five control periods starting with the first control period of non-
operation. After the fifth control period, allowances that would 
otherwise have been allocated to the unit for future control periods 
are instead directed to the state's new unit set-aside for each control 
period, and if the unit happens to resume operation in a future control 
period, it is eligible to receive allocations only as a ``new'' unit 
from the new unit set-aside for that control period. The rationale for 
continuing to make allocations to sources that have ceased operations 
for five control periods, rather than ending allocations immediately or 
extending the allocations indefinitely, is to balance two concerns. The 
first concern, which tends to suggest reallocating allowances more 
quickly, is to ensure that allowances are available for new units as 
the generating fleet evolves. The second concern, which tends to 
suggest reallocating allowances less quickly, is to ensure that the 
program's allowance allocation provisions do not distort a unit owner's 
incentives to pursue what would otherwise be the most economic 
compliance strategy. Such distortion could occur if a predicted 
immediate loss of allowance allocations upon closure would give the 
owner of an otherwise uneconomic unit an incentive to keep the unit in 
operation just to receive allowance allocations.
    None of the comments recommending a change to the approach for 
allocating allowances to units with unscheduled future retirements 
advocate allocating the allowances to other units instead. Rather, all 
of these comments appear to either explicitly or implicitly incorporate 
an assumption that the recommended change in allocations to the units 
with unscheduled future retirements would be accompanied by a 
corresponding change in the total number of allowances made available 
collectively to all units in the state under the Group 3 trading 
program. In other words, the comments recommending earlier 
discontinuation of allocations to retired units are actually advocating 
for reduced emission budgets implemented through the mechanism of 
reduced allocations to retired units, while the comments recommending 
more extended allocations to retired units are actually advocating for 
increased emission budgets implemented through the mechanism of 
increased allocations to retired units. EPA was unable to identify any 
comments advocating for changes in the methodology establishing the 
allocations to units with unscheduled retirements that were not 
effectively comments advocating for changes in the amounts of the 
emission budgets, which EPA considers a different issue. Comments on 
the amounts of the emission budgets are addressed elsewhere.
    Comment: EPA received several comments regarding the question of 
when to treat a unit with an unscheduled future retirement as retired 
for purposes of triggering the count of the five control periods for 
which the unit would continue to receive allocations. One comment 
suggested that EPA begin counting the five control periods following 
the unit's announced retirement date rather than when the unit has 
ceased operating for two consecutive control periods. Other comments 
suggested that EPA evaluate non-operation on the basis of full calendar 
years rather than on the basis of control periods (i.e., the ozone 
season portions of calendar years).
    Response: EPA disagrees with these comments. With respect to the 
suggestion to wait for a retirement announcement even if a unit has 
ceased operation for two control periods, EPA sees no reason to also 
wait for a retirement announcement before taking observed information 
about a unit's actual non-operation into account for purposes of 
determining allowance allocations. With respect to the suggestion that 
EPA evaluate non-operation over full calendar years instead of control 
periods, EPA has followed the approach of considering a unit's non-
operation during the relevant control period for each trading program--
in other words, the calendar year for annual programs and the ozone 
season for seasonal NOX programs--in all of the existing 
CSAPR trading programs since 2015 without encountering any problems. 
Commenters have not identified any new issues with the existing 
procedures that would justify establishing different procedures for the 
new Group 3 trading program. The example cited by commenters where a 
unit might operate during the non-ozone season portion but not the 
ozone season portion of two consecutive calendar years is neither a new 
issue nor a significant problem. If such a unit loses its allocation as 
an existing unit but then operates in a subsequent ozone season, under 
the Group 3 trading program (as under the other seasonal NOX 
trading programs) the unit becomes eligible to receive allocations from 
the new unit set-aside.
    Comment: EPA received several comments concerning units that have 
already retired. Some commenters recommended that these units should 
receive allocations under the Group 3 trading program at least until 
the units

[[Page 23131]]

had received allocations for a total of five years of operation under 
the current Group 2 trading program and the new Group 3 trading 
program, generally citing the rationale described above for why EPA 
continues to provide allocations for a limited amount of time in the 
case of units with unscheduled future retirements.
    Response: EPA disagrees with these comments. With respect to units 
that permanently retired before January 1, 2021, EPA will not provide 
allocations of Group 3 allowances. As noted above, the reason that the 
existing CSAPR trading programs have provided allowances to units for a 
period of time following their retirement is to avoid a distortion that 
immediate discontinuation of allocations otherwise could cause to the 
owner's incentives in making decisions about the unit's future. Where a 
unit's owners have already retired a unit, this reason for continuing 
allowance allocations for some period after retirement no longer 
applies. Thus, including a provision in the new Group 3 trading program 
that would allocate allowances to past retirements would simply 
redistribute allowances from operating units to retired units for no 
useful purpose. EPA again notes that any state may submit SIP revisions 
to replace EPA's default allocations with state-determined allocations 
if the state would prefer that allowances be allocated differently 
among the state's units.
    Comment: Another commenter on units that have already retired 
recommended not only that the units continue to receive allocations for 
a combined five-year period under the Group 2 and Group 3 trading 
programs but also that after the end of the five-year period EPA should 
add an equivalent quantity of allowances to the states' new unit set-
asides to ensure that sufficient allowances are available for new 
units.
    Response: EPA disagrees with this additional recommendation. As 
discussed above with respect to the comments received on the 
methodology for allocating allowances to units with unscheduled future 
retirements, the recommendation to add allowances to the new unit set-
asides is effectively a comment on the amounts of the emission budgets 
rather than on the allocation methodology, and comments on the amounts 
of the emission budgets are addressed elsewhere. EPA notes that the 
process for setting the emission budgets already includes a procedure 
to ensure that the emission budgets account for estimated emissions 
from planned new units.
    Comment: With respect to units with scheduled future retirements, 
in the proposed rule EPA proposed to treat the units identically to 
units with unscheduled future retirements, allocating allowances to 
these units for five years starting with their first year of non-
operation. Commenters observed that EPA was proposing to account for 
units with scheduled future retirements by reducing emission budgets in 
the control periods immediately following the retirements and suggested 
that it would be inconsistent for EPA to treat these units differently 
for purposes of the budget-setting process and the unit-level 
allocation process. The commenters implied that allowance markets might 
not be sufficiently liquid to facilitate the transfer of allowances 
from retired units to units that continue to operate, and suggested 
that the reductions in allocations to the operating units caused by the 
reductions in the overall emission budgets would constitute an increase 
in program stringency for the operating units.
    Response: EPA disagrees with commenters' implicit assumption that 
allowance markets will be illiquid and with the suggestion that changes 
in how allowances are allocated among operating and retired units, as 
opposed to changes in state emission budgets, represent changes in 
overall program stringency. However, EPA agrees that it is reasonable 
to treat the units with scheduled future retirements more consistently 
across the budget-setting and unit-level allocation processes. 
Accordingly, in the final action, EPA is accounting for units with 
scheduled future retirements not only by reducing emission budgets in 
the control periods immediately following the retirements but also by 
ending allocations to those retired units in the control periods 
immediately following the retirements. Just as units that have already 
retired before 2021 are not included in the set of existing units to 
which allowances are allocated for 2021 under EPA's default 
methodology, in the final rule units with scheduled retirements before 
2022, 2023, and 2024 are not included in the sets of existing units to 
which allowances are allocated for 2022, 2023, and 2024, respectively. 
As with EPA's rationale for not allocating allowances to units that 
have already retired, allocating allowances to a unit for control 
periods after the control period in which the unit is already scheduled 
to retire serves no useful purpose, because in such circumstances there 
is no potential distortion of economic incentives that needs to be 
considered. The effect of this change in the final rule is to ensure 
that allocations to a state's units that continue to operate do not 
change from control period to control period based solely on the 
retirements of other units in the state, where those retirements are 
known and already factored into the budgets. EPA notes that in the 
unlikely event that one of these retiring units operates in a control 
period after the control period in which it was scheduled to retire, it 
would be eligible to receive an allocation of allowances as a ``new'' 
unit from the state's new unit set-aside for the control period.
    Finally, EPA notes that because this change addresses scheduled 
future retirements occurring in 2021, 2022, and 2023 that are first 
reflected in the state emission budgets for the 2022, 2023, and 2024 
control periods, respectively, the change first affects unit-level 
allocations as of the 2022 control period. Under this final rule, every 
Group 3 state has the ability to establish state-determined unit-level 
allocations to replace EPA's default unit-level allocations through SIP 
revisions for any control period after 2021. Thus, any state that that 
would prefer to allocate allowances for control periods after 2021 to 
units with scheduled future retirements has the ability to do so 
through SIP revisions.
c. Allocations to New Units
    Consistent with the updates to which units are considered to be 
``existing units'' described in section VII.C.3.b, for purposes of this 
final rule a ``new unit'' that is eligible to receive allocations from 
the new unit set-aside (NUSA) for a state includes any covered unit 
that commences commercial operation on or after January 1, 2019, as 
well as a unit that becomes covered by meeting applicability criteria 
subsequent to January 1, 2019; a unit that relocates to a different 
state covered by a FIP promulgated by this rule; and an ``existing'' 
covered unit that loses its allocation as an existing unit due to a 
scheduled retirement or by otherwise ceasing operation but that resumes 
operation at some point thereafter. The amounts of allowances initially 
placed in each new unit set-aside for potential allocation to new units 
are determined as described in section VII.C.3.a. In addition, any 
allowances that would otherwise have been allocated to a unit with an 
unscheduled future retirement that is no longer eligible to receive 
allocations as an existing unit are redirected to the new unit set-
aside for the state in which the unit is located. Units qualifying to 
receive allocations from a new unit set-aside may receive such 
allocations starting with the first

[[Page 23132]]

year they are subject to the allowance-holding requirements of the 
rule. If the allowances in the NUSA for a given state are not allocated 
to new units, the allowances are redistributed to the existing units in 
the state before each compliance deadline.
    In the final rule, under the new Group 3 trading program EPA will 
allocate allowances from each new unit set-aside using a one-round 
approach that will be carried out after the end of the control period 
at issue. Under the one-round approach, any eligible units in the state 
that operated during the control period will be allocated allowances in 
proportion to their respective emissions during the control period, up 
to the amounts of those emissions if the NUSA contains sufficient 
allowances, and not exceeding those emissions. Any allowances remaining 
in a new unit set-aside after the allocations to new units will be 
reallocated to the existing units in the state. EPA will issue a notice 
of data availability concerning the proposed allocations by March 1 
following the control period, provide an opportunity for submission of 
objections, and issue a final notice of data availability and record 
the allocations by May 1 following the control period, one month before 
the June 1 compliance deadline. EPA believes this one-round approach 
for allocating allowances from each state's NUSA to eligible units is 
both simpler and more equitable that the two-round approach that EPA 
historically used in all the previous CSAPR trading programs. The 
existing CSAPR trading programs are being amended to also adopt the 
one-round approach starting with the 2021 control periods. The 
differences between the two-round and one-round procedures and reasons 
for adopting the revisions are discussed in section VII.C.8.b.\193\
---------------------------------------------------------------------------

    \193\ EPA proposed and requested comment on implementing the 
simplified NUSA allocation procedure as of the 2023 and 2021 control 
periods, respectively. No comments were received, and EPA is 
clarifying the regulations by implementing the simplified procedure 
as of the 2021 control period. For further discussion, see section 
VII.C.8.b.
---------------------------------------------------------------------------

    Comment: EPA received comments concerning allocation of the 
portions of new unit set-asides composed of allowances redirected to 
the new unit set-asides from existing units that have retired and lost 
their allocations. Some commenters suggested that while EPA should make 
these allowances available to new units, EPA should not reallocate 
these allowances to existing units after the completion of allocations 
to eligible new units, or should reallocate allowances only where the 
existing units demonstrated emission rates at or below the levels EPA 
used in setting the state budgets. Other commenters supported the 
proposed approach of reallocating the allowances to existing units, as 
provided under the existing CSAPR trading programs.
    Response: After consideration of the comments, EPA is finalizing 
the provisions that allow all allowances in the new unit set-asides, 
including allowances redirected from retired units, to be reallocated 
to existing units. As with many of the comments received concerning 
allocations to existing units, these comments are effectively 
advocating for reductions in the overall emission budgets through the 
mechanism of reduced allocations to certain units. In the final rule, 
this issue applies only the allowances no longer allocated to units 
with unscheduled future retirements, because the allowances formerly 
allocated to units with scheduled future retirements will be removed 
from the budgets for control periods after the scheduled retirements 
instead of being added to the new unit set-asides for the future 
control periods. EPA has not included a mechanism in this rule to 
adjust the emission budgets over time to account for either units with 
unscheduled future retirements or the construction of unplanned new 
units and is not prepared at this time to reduce the budgets for units 
with unscheduled future retirements without consideration of whether 
and how to increase the budgets for the construction of unplanned new 
units. Although EPA has determined that it is reasonable in this rule 
to reduce the emission budgets over time to account for units with 
scheduled future retirements, this is in part because EPA's budget-
setting process also accounts for the construction of planned new units 
over time.
d. Allocations to New Units in Indian Country
    Clean Air Act programs in Indian reservations and other areas of 
Indian country over which a tribe or EPA has demonstrated that a tribe 
has jurisdiction generally may be implemented either by a tribe through 
an EPA-approved tribal implementation plan (TIP) or by EPA through a 
FIP. Tribes may, but are not required to, submit TIPs. Under EPA's 
Tribal Authority Rule (TAR), 40 CFR 49.1-49.11, EPA is authorized to 
promulgate FIPs for sources in Indian country as necessary or 
appropriate to protect air quality if a tribe does not submit and 
receive EPA approval of a TIP. See 40 CFR 49.11(a); see also 42 U.S.C. 
7601(d)(4). To date, no tribes have sought approval of a TIP 
implementing the good neighbor provision at CAA section 
110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS. EPA has 
therefore determined that it is necessary and appropriate for EPA to 
implement the FIPs in any affected Indian reservations or other areas 
of Indian country over which a tribe has jurisdiction. However, there 
are no existing units that would qualify as ``covered units'' in Indian 
country located in the Group 3 states under this final rule.
    EPA is generally applying the CSAPR Update approach for allocating 
allowances to any new units located in Indian country, with parallel 
modifications to those described above with respect to unit-level 
allocations from the new unit set-asides for units not in Indian 
country. Under this approach, allowances to possible future new units 
located in Indian Country will be allocated by EPA from an Indian 
country new unit set-aside established for the Indian country (if any) 
within each state's borders. The amounts of allowances initially placed 
in each Indian country new unit set-aside for potential allocation to 
new units are determined as described in section VII.C.3.a. Because 
states generally have no SIP authority in these areas, EPA will 
continue to administer the allocation of allowances to any sources that 
locate in such areas of Indian country within a state's borders over 
which a tribe or EPA has demonstrated that a tribe has jurisdiction, 
even if the state submits a SIP to replace the applicable FIP for the 
sources in the state.
    EPA will allocate allowances from each Indian country new unit set-
aside using a one-round approach that will be carried out after the end 
of the control period at issue. Under the one-round approach, any 
eligible units in the area of Indian country that operated during the 
control period will be allocated allowances in proportion to their 
respective emissions during the control period, up to the amounts of 
those emissions if the Indian country NUSA contains sufficient 
allowances, and not exceeding those emissions. Unallocated allowances 
from the Indian country new unit set-aside for Indian country within a 
particular state's borders will be returned to the state's new unit 
set-aside and allocated according to the methodology for that new unit 
set-aside. EPA believes this one-round approach for allocating 
allowances from each Indian country NUSA to eligible units is both 
simpler and more equitable than the two-round approach that EPA 
historically used in all the previous CSAPR trading programs. The 
existing CSAPR trading programs are being

[[Page 23133]]

amended to also adopt the one-round approach starting with the 2021 
control periods. The differences between the two-round and one-round 
procedures and reasons for adopting the revisions are discussed in 
section VII.C.8.b.\194\
---------------------------------------------------------------------------

    \194\ EPA proposed and requested comment on implementing the 
simplified NUSA allocation procedure as of the 2023 and 2021 control 
periods, respectively. No comments were received, and EPA is 
clarifying the regulations by implementing the simplified procedure 
as of the 2021 control period. For further discussion, see section 
VII.C.8.b.
---------------------------------------------------------------------------

    Comment: Some commenters suggested alternatives to the provisions 
concerning the Indian country new unit set-asides. These commenters 
suggested that EPA should consolidate all allowances held back from all 
state budgets for potential new sources in Indian country into a single 
newly-created new unit set-aside for all Indian country within the 
borders of all states covered by the new Group 3 trading program in 
order to provide a clearer separation between state and tribal 
jurisdictions. The commenters further suggested that if any allowances 
in the consolidated Indian country set-aside are not allocated to new 
units, the allowances either should be retired or should be sold, with 
the sale proceeds dedicated to tribes through grant programs.
    Response: EPA disagrees with these comments. There are no existing 
EGUs in Indian country within the borders of any state covered by the 
Group 3 trading program. All of the allowances being held back for 
potential allocation to new units in Indian country are being held back 
from state emission budgets. These budgets were determined based on the 
projected emissions of the existing units in the states after 
accounting for emission reductions achievable through implementation of 
the selected control strategy (with adjustments for known changes to 
the fleet of units such as scheduled future retirements of existing 
units and construction of planned new units). Because the allowances 
added to the Indian country new unit set-asides are being held back 
from the overall state budget amounts that would otherwise be allocated 
among each state's existing units, EPA believes the most reasonable 
disposition for these allowances if they are not allocated to potential 
new units in Indian country is to return them to the states from whose 
emission budgets the allowances were held back, after which the 
allowances can be redistributed in accordance with the procedures used 
to allocate the remainder of those states' budgets.
    With respect to maintaining separation between state and tribal 
jurisdictions, EPA believes that the regulations for the new Group 3 
trading program already maintain a clear separation between the new 
unit set-asides for each state and the Indian country new unit set-
asides for Indian country within the borders of certain states, with 
the consequence that no greater clarity of separation would be achieved 
by consolidating the various Indian country new unit set-asides 
established under the new trading program into a single new unit set-
aside for all Indian country within the borders of all states covered 
by the Group 3 trading program. Further, EPA believes such an approach 
would be likely to cause confusion because it would differ from the 
established approach already being implemented in all the existing 
CSAPR trading programs, where a separate Indian country new unit set-
aside is established for any Indian country within the borders of any 
individual state covered by the trading program.
4. Transitioning From Existing CSAPR NOX Ozone Season Group 
2 Trading Program
    This section discusses four sets of provisions that EPA is 
implementing in order to address the transition of sources from the 
Group 2 trading program to the Group 3 trading program. First, to 
address the fact that the effective date for the final action in this 
rulemaking will fall after the start of the ozone season on May 1, 
2021, and to ensure that under these circumstances the Group 3 trading 
program can be implemented for the full May-September ozone season in 
2021 without imposing retroactive emission reduction requirements, EPA 
will allocate additional allowances, and make corresponding adjustments 
to states' 2021 assurance levels, so as to offset the otherwise 
applicable emission reduction requirements under this rulemaking for 
the portion of the 2021 ozone season occurring before the final rule's 
effective date. Second, in order to facilitate the continued use of 
market-based trading programs as the compliance mechanism for sources 
covered by this action while ensuring an appropriate level of 
stringency in the Group 3 trading program, EPA is implementing a 
process by which an initial bank of CSAPR NOX Ozone Season 
Group 3 allowances will be created through the conversion of certain 
banked CSAPR NOX Ozone Season Group 2 allowances allocated 
for the control periods in 2017 through 2020. Third, to provide 
additional compliance flexibility in extreme circumstances, EPA is 
creating a safety valve mechanism that would allow Group 3 sources to 
exchange additional 2017-2020 Group 2 allowances for Group 3 allowances 
at a higher conversion ratio. Finally, to maintain the previously 
established levels of stringency of the Group 2 trading program for the 
states and sources that remain subject to that program, CSAPR 
NOX Ozone Season Group 2 allowances equivalent in amount and 
usability to the vintage year 2021-2024 CSAPR NOX Ozone 
Season Group 2 allowances previously recorded in the compliance 
accounts for sources in the new Group 3 region are being recalled.
a. Supplemental Allowance Allocations To Avoid Retroactive Emission 
Reduction Requirements
    Although EPA anticipates that this final rule will be published in 
the Federal Register by early April 2021, before the start of the 2021 
ozone season on May 1, 2021, the effective date of the rule will fall 
after May 1, 2021 because of the requirements of the Congressional 
Review Act (CRA), 5 U.S.C. 801-808. Under CRA section 801(a)(3), a 
``major rule,'' as defined under the CRA, generally may not take effect 
sooner than 60 days after the date of publication in the Federal 
Register (or, if later, 60 days after the date on which Congress 
receives a report on the final rule from EPA). Under CRA section 
804(2), a ``major rule'' includes any rule that the Office of 
Management and Budget (OMB) finds is ``economically significant'' under 
Executive Order 12866, that is, a rule likely to result in an annual 
effect on the economy of $100 million or more. Because this rule is 
projected to result in annualized benefits greater than $100 million 
per year, as discussed in section VIII of the preamble, OMB has found 
that the rule is ``economically significant.'' It is thus a ``major 
rule'' for CRA purposes, with the result that the rule's effective date 
will occur after the start of the 2021 ozone season.
    EPA finds that, notwithstanding that the final rule's effective 
date will be after May 1, 2021, it will nevertheless serve the public 
interest and greatly aid in administrative efficiency for most elements 
of the Group 3 trading program--specifically, all elements of the 
trading program other than the elements designed to establish more 
stringent emissions limitations for the sources in Group 3 states--to 
start on May 1, 2021. This will facilitate implementation of the Group 
3 trading program in an orderly manner for the entire 2021 ozone season 
and reduce compliance burdens and potential confusion. Each of the 
CSAPR trading programs for ozone season NOX is

[[Page 23134]]

designed to be implemented over an entire ozone season. Implementing 
the transition from the Group 2 trading program to the Group 3 trading 
program in a manner that required the covered sources to participate in 
the Group 2 trading program for part of the 2021 ozone season and the 
Group 3 trading program for the remainder of that ozone season would be 
complex and burdensome for sources. Attempting to address the issue by 
splitting the Group 2 and Group 3 requirements into separate years is 
not a viable approach, because EPA has no legal basis for releasing the 
Group 3 sources from the emission reduction requirements found to be 
necessary in the CSAPR Update for a portion of the 2021 ozone season, 
and EPA similarly has no legal basis for deferring implementation of 
the 2021 emission reduction requirements found to be necessary under 
this rule until 2022. Moreover, the requirements of the Group 2 trading 
program and the Group 3 trading program are substantively identical as 
to almost all provisions, such that with respect to those provisions, a 
source will not need to alter its operations in any manner or face 
different compliance obligations as a consequence of a transition from 
the Group 2 trading program to the Group 3 trading program. Thus, EPA 
believes that no substantive concerns regarding retroactivity arise 
from implementing the Group 3 trading program starting on May 1, 2021, 
so long as those aspects of the Group 3 trading program that do 
meaningfully differ from the analogous aspects of the Group 2 trading 
program--that is, the relative stringencies of the two trading 
programs, as reflected in the emissions budgets and associated 
assurance levels--are applied only as of the effective date of the 
final rule.
    Thus, with respect to two aspects of the final rule, EPA is making 
the following adjustments in 2021 ozone season obligations in order to 
ensure that no new requirements are imposed on any regulated parties 
prior to the effective date of the final rule.
    To cause the more stringent budgets of the Group 3 trading program 
to apply only after the effective date of the final rule, EPA will make 
supplemental allocations of Group 3 allowances to Group 3 sources for 
the portion of the 2021 ozone season occurring before the effective 
date of the final rule. The total amounts of the supplemental 
allowances available for allocation to the sources in each state will 
be calculated by multiplying the difference between the state's Group 2 
and Group 3 budgets by the fraction of the 2021 ozone season, measured 
in days, occurring before the final rule's effective date. The state's 
total amount of supplemental allowances will then be allocated among 
the state's existing units as if the supplemental allowances had been 
included in the state's 2021 emissions budget for the Group 3 trading 
program. The allocations of supplemental allowances will be recorded at 
the same time as the allocations from the budget.
    To cause the more stringent assurance levels of the Group 3 trading 
program to apply only after the effective date of the final rule, EPA 
will include an increment in each state's assurance level for 2021 in 
addition to the state's emissions budget and variability limit for 
2021. The amount of the increment will be computed as 1.21 times the 
total amount of supplemental allowances determined for the state as 
described above, where 1.21 is the ratio of the Group 2 state assurance 
levels to the Group 2 state budgets and is also the ratio of the Group 
3 state assurance levels to the Group 3 state budgets. In the event of 
an exceedance of a state's assurance level, the allocations of 
supplemental allowances and the increment to the state's variability 
limit will also be taken into account for purposes of the calculations 
used to apportion responsibility for any exceedance of a state's 
assurance level among the owners and operators of the state's sources.
    In all respects other than the allocation of supplemental Group 3 
allowances and the addition of an increment to the states' assurance 
levels, EPA is implementing the Group 3 trading program for the 2021 
control period exactly as the program would be implemented for any 
other control period. Thus, allocations of Group 3 allowances from each 
state's emissions budget to existing and new units are being made for 
the entire 2021 ozone season (i.e., May 1, 2021, through September 30, 
2021), emissions will be monitored and reported for the entire 2021 
ozone season, and as of the allowance transfer deadline for the 2021 
control period (i.e., June 1, 2022) each source will be required to 
hold in its compliance account vintage-year 2021 Group 3 allowances not 
less than the source's emissions of NOX during the entire 
2021 ozone season. Because of the supplemental allowances allocated for 
the portion of the 2021 ozone season before the rule's effective date, 
EPA finds that implementing the program in this manner will 
substantively apply the final rule's emission reduction requirements 
only from the rule's effective date. Similarly, because of the 
increment to the states' assurance levels for 2021, EPA finds that 
implementing the trading program in this manner will substantively 
apply the final rule's more stringent assurance levels only from the 
rule's effective date. Moreover, any efforts undertaken by a source to 
reduce its emissions during the portion of the 2021 ozone season before 
the effective date of the rule will aid the source's compliance by 
reducing the amount of Group 3 allowances that the source will need to 
hold in its compliance account as of the allowance transfer deadline, 
increasing the range of options available to the source for meeting its 
compliance obligations under the Group 3 trading program.
    EPA requested comment on this approach for implementing the Group 3 
trading program in a manner that would apply the substantive increases 
in stringency established under the final rule on and after, but not 
before, the final rule's effective date. No commenters opposed this 
approach.
b. Creation of Initial Group 3 Allowance Bank
    For this rulemaking, EPA is creating a limited initial bank of 
allowances that can be used for compliance in the CSAPR NOX 
Ozone Season Group 3 Trading Program by converting certain allowances 
banked in 2017-2020 under the CSAPR NOX Ozone Season Group 2 
Trading Program at a conversion ratio determined by a formula. Any such 
conversion of banked allowances from the Group 2 trading program for 
use in the Group 3 trading program must ensure that implementation of 
the Group 3 trading program will result in NOX emission 
reductions sufficient to address significant contribution in the 12 
linked Group 3 states, while also providing industry certainty (and 
obtaining an environmental benefit) through continued recognition of 
the value of saving allowances through early reductions in emissions. 
EPA's approach to balancing these concerns in the CSAPR Update through 
the conversion of banked allowances from the CSAPR trading program for 
ozone season NOX emissions was upheld in Wisconsin v. EPA, 
see 938 F.3d at 321.
    Similar to the approach taken in the CSAPR update, EPA is creating 
the initial bank of allowances for the Group 3 trading program through 
a one-time conversion of banked Group 2 allowances. The allowances in 
the initial Group 3 bank will be allocated for the 2021 control period 
and will therefore be useable in that control period or any subsequent 
control period. Because the purpose of an initial bank is to assist in 
compliance flexibility without relaxing the program

[[Page 23135]]

stringency identified as appropriate to address states' obligations 
under the good neighbor provision, EPA's objective is to set the target 
amount for the initial bank at a level high enough to accommodate year-
to-year variability in operations and emissions, as reflected in 
states' variability limits, but not high enough to allow sources 
collectively to plan to emit in excess of the collective state budgets. 
For this rulemaking, as proposed, EPA is determining that an initial 
bank amount approximately equal to the sum of the states' variability 
limits is a reasonable level to accomplish this objective, given the 
expectation that sources would generally seek to carry a bank of 
roughly that amount forward from year to year in order to retain a 
comparable degree of compliance flexibility in subsequent control 
periods.\195\ Further, because emission reductions from some of the 
emission controls that EPA has identified as appropriate to use in 
setting budgets are first reflected in the 2022 state budgets rather 
than the 2021 state budgets, EPA is basing the initial bank target 
amount on the sum of the states' 2022 variability limits rather than 
the 2021 variability limits. This approach results in an initial bank 
target amount of 21,777 allowances, computed on the basis of a full 
ozone season.
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    \195\ When establishing a similar initial bank under the CSAPR 
Update, EPA set the target bank amount at 1.5 times the sum of the 
states' variability limits. See 81 FR at 74557-60. Experience under 
that trading program indicates that a smaller initial bank would 
have provided sufficient flexibility, as the bank grew in each 
control period of the trading program and the prices of allowances 
remained well below the estimated control costs EPA used to 
establish the budgets under that rule. Additionally, allowance 
prices under that trading program were $500-$600 per allowance when 
initially recorded (roughly one-third of the $1,600/ton cost 
threshold used in developing the Group 2 budgets), indicating that 
the initial bank created by the conversion may have been too large 
to ensure incentives for continuing implementation of the control 
strategies contemplated under that rulemaking.
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    As discussed in section VII.C.4.a, the effective date of this rule 
will occur after the start of the 2021 ozone season, and adjustments 
are being made to ensure that the increased stringency of this rule's 
state budgets and state assurance levels (i.e., the sums of the budgets 
and variability limits) takes effect only after the rule's effective 
date. Consistent with these other adjustments, and as proposed, the 
initial bank target amount will be similarly prorated. For example, if 
the effective date of the final rule is June 1, 2021, which would be 
after the first 31 days of the 153-day ozone season have passed, the 
full-season initial bank target amount of 21,777 allowances would be 
prorated to an initial bank target amount of 17,365 allowances.\196\ 
EPA notes that prorating the bank amount in this manner will not reduce 
sources' compliance flexibility for the 2021 ozone season, because the 
amounts of Group 3 allowances that sources will receive for the portion 
of the 2021 ozone season before the rule's effective date will be based 
on the existing Group 2 trading program budgets. The Group 2 budgets 
exceed the sources' collective 2019 emissions by over 38,000 tons (and 
exceed the sources' 2020 emissions by almost 60,000 tons), indicating 
potentially surplus allowances well above the full-season initial bank 
target amount of 21,777 allowances. Thus, although the prorating 
procedure will reduce the amount of Group 3 allowances that sources 
will receive in the form of an initial bank, the reduction in the 
quantity of these allowances will be more than offset by the 
supplemental Group 3 allowances that will be allocated in excess of 
sources' recent historical emission levels for the portion of the ozone 
season before this final rule's effective date.
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    \196\ The portion of the ozone season from June 1 through 
September 30 has 122 days (153-31 = 122), which is 79.74 percent of 
all the days in the ozone season (122 / 153 = 0.7974). Multiplying 
the full-season initial bank target amount of 21,777 allowances by 
79.74 percent yields a prorated target amount for the initial bank 
of 17,365 allowances.
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    Taking the same approach as was followed in the CSAPR Update, EPA 
will allocate the new Group 3 allowances constituting the initial bank 
through a conversion process in which Group 2 allowances allocated for 
the 2017 through 2020 control periods and banked under the existing 
Group 2 trading program will be exchanged for Group 3 allowances 
allocated for the 2021 control period at a uniform conversion ratio 
determined by a formula. The conversions will be carried out at the 
level of individual sources and general accounts, in each case using 
the same uniform conversion ratio. By creating the new Group 3 
allowances through the conversion of previously banked Group 2 
allowances, the bank creation mechanism rewards holders of banked Group 
2 allowances for conducting emission reduction activities that 
contributed to the creation of those banked allowances as well as for 
financially supporting emission reductions activities at other sources 
through allowance purchases. Creating the new Group 3 allowances 
through conversion of previously banked Group 2 allowances also helps 
preserve the stringency of the Group 2 trading program for the states 
that remain covered by that trading program at levels consistent with 
the stringency found to be appropriate to address those states' good 
neighbor obligations with respect to the 2008 ozone NAAQS in the CSAPR 
Update.
    Under EPA's proposed approach for creation of the bank, the 
conversion formula would have used the total quantity of 2017-2020 
Group 2 allowances being converted as the numerator and the total 
quantity of 2021 Group 3 allowances being created as the denominator. 
EPA also proposed to give holders of 2017-2020 Group 2 allowances 
complete flexibility to choose how many of those allowances they wanted 
to include in the conversion process, making the formula numerator 
entirely dependent on those choices. An unavoidable consequence of this 
proposed flexibility was that EPA would have been unable to predict the 
conversion ratio until holders finalized their choices shortly before 
the conversion date. In the proposed rule, the formula denominator was 
also uncertain to a lesser degree because of the then-unknown magnitude 
of the prorating adjustment affecting the quantity of 2021 Group 3 
allowances being created, although this uncertainty will be resolved as 
of publication of the final rule in the Federal Register. Commenters 
requested that EPA provide greater certainty concerning the conversion 
process, as discussed later in this section; further, commenters 
submitted no comments asking EPA to finalize the proposed flexibility 
for Group 2 allowance holders.
    After consideration of comments, EPA is not finalizing the proposed 
flexibility for Group 2 allowance holders to decide how many Group 2 
allowances to include in the conversion process and is instead 
finalizing a formula for the conversion ratio based on an alternative 
offered for comment that provides greater certainty. Under the 
alternative being finalized, the formula numerator is the portion of 
the total existing bank of 2017-2020 Group 2 allowances attributable to 
the Group 3 states, which is more specifically defined as: (1) The sum 
of the budgets of the Group 3 states under the Group 2 trading program 
for the 2017-2020 control periods, plus (2) the portion of the initial 
Group 2 bank target amount attributable to the Group 3 states, minus 
(3) the emissions of sources in the Group 3 states for the 2017-2020 
control periods.\197\ The formula denominator in the final rule 
continues to be based on the initial

[[Page 23136]]

Group 3 bank target amount, but reflects the full-season target amount 
instead of the target amount after the prorating adjustment. The final 
rule also provides for the value computed from the formula to be 
rounded down to the nearest whole number. Using data as of January 
2021, the formula numerator will be 186,014 allowances \198\ and the 
formula denominator will be 21,777 allowances, yielding a rounded 
conversion ratio of 8:1. In other words, the result of applying the 
formula in the final rule is that eight 2017-2020 Group 2 allowances 
will be exchanged for each 2021 Group 3 allowance created in the 
initial bank.\199\ Continuing the previous example, if the rule's 
effective date is June 1, 2021 and the initial Group 3 bank target 
amount after prorating is therefore 17,365 allowances, then 138,920 
Group 2 allowances \200\ would be removed from the accounts where those 
allowances are held and 17,365 Group 3 allowances would be recorded in 
the same accounts.
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    \197\ As stated in the proposed rule, the rationale for defining 
the formula numerator in this particular way is to preserve the 
intended stringency of the Group 2 trading program for the states 
and sources that will continue to participate in that program. See 
85 FR at 69018.
    \198\ Under the Group 2 trading program, the sum of the 2017-
2020 state budgets for the 12 Group 3 states is 680,872 tons (the 
sum of the budgets for the Group 3 states for 2017 is 170,218, and 
170,218 x 4 = 680,872). The portion of the initial Group 2 bank 
target amount attributable to the Group 3 states is 53,619 tons (the 
sum of the variability limits for the Group 3 states for 2017 is 
35,746, and 35,746 x 1.5 = 53,619). The sum of the Group 3 states' 
reported ozone season NOX emissions for 2017 through 2020 
is approximately 548,477 tons. Based on these data, the formula 
numerator would be 680,782 + 53,619-548,477 = 186,014 allowances.
    \199\ 186,014 / 21,777 = 8.54, which rounds down to 8.
    \200\ 17,365 x 8 = 138,920. EPA notes that under this example, 
the deducted Group 2 allowances would constitute roughly half of all 
banked 2017-2020 Group 2 allowances projected to remain in all 
accounts (including the compliance accounts for sources that will 
continue to be covered under the Group 2 trading program in control 
periods after 2020) after deductions for compliance with the Group 2 
trading program for the 2020 control period.
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    In addition to requesting greater certainty about the conversion 
process, commenters also indicated an interest in receiving the 
allowances in the initial Group 3 bank more quickly than would have 
occurred under the proposed rule. In response to these comments, EPA 
has advanced the conversion process schedule such that the conversions 
will be completed more than two months earlier than proposed and 
shortly after recordation of Group 3 allowance allocations from the 
state budgets for the 2021 control period for most sources. 
Approximately 45 days after the rule's effective date, EPA will 
temporarily suspend acceptance of transfers of Group 2 allowances. 
Before resuming acceptance of such transfers, EPA will allocate Group 3 
allowances up to the initial Group 3 bank target amount to Group 3 
sources at the 8:1 conversion ratio in proportion to the amounts of 
2017-2020 Group 2 allowances held in each such source's compliance 
account immediately before the conversion.\201\ If the Group 3 sources' 
compliance accounts do not collectively hold enough Group 2 allowances 
to exchange for the full target amount of the initial Group 3 bank at 
the 8:1 conversion ratio, EPA will allocate Group 3 allowances up to 
the remainder of the initial Group 3 bank target amount to general 
accounts at the same 8:1 conversion ratio in proportion to each such 
general account's holdings of 2017-2020 Group 2 allowances immediately 
before the conversion.\202\ For each Group 3 allowance allocated ard 
recorded in a given account, EPA will deduct from the same account 
eight 2017-2020 Group 2 allowances on a first-in, first-out basis. 
After recording the Group 3 allowance allocations and the 2017-2020 
Group 2 allowance deductions, EPA will resume acceptance of transfers 
of Group 2 allowances.
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    \201\ Group 2 allowances held in Group 2 sources' compliance 
accounts will not be affected by the conversion process.
    \202\ If the Group 3 sources' compliance accounts and the 
general accounts combined do not collectively hold enough Group 2 
allowances to exchange for the full target amount of the initial 
Group 3 bank at the 8:1 conversion ratio, the total quantity of 
Group 3 allowances created would be less than the initial Group 3 
bank target amount. However, the outcome would be reasonable because 
it would occur only if owners of Group 3 sources in fact were not 
sufficiently interested in receiving banked Group 3 allowances to 
hold the required quantity of 2017-2020 Group 2 allowances in the 
appropriate accounts.
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    Comment: Some commenters stated that EPA should not create an 
initial bank of Group 3 allowances because of a consequent reduction in 
stringency of the rule.
    Response: EPA disagrees with the comment that it should not create 
an initial bank of Group 3 allowances under the new trading program. 
EPA believes creating an initial bank of Group 3 allowances will 
provide Group 3 sources flexibility to comply with the stringency of 
the new trading program in light of year-to-year variability in unit 
operations and emissions. Creating the initial bank of Group 3 
allowances through the conversion of banked 2017-2020 Group 2 
allowances also provides sources within the Group 3 states with an 
opportunity to benefit under the Group 3 trading program from their 
efforts to bank allowances under the Group 2 trading program. Failure 
to establish an initial bank could reduce the incentive to achieve 
early reductions and bank allowances in the future by signaling to 
market participants that banked allowances accrued under existing 
trading programs will hold no value in any future new or modified 
trading program. EPA's approach of establishing an initial Group 3 bank 
in an amount equal to the sum of the new trading program's aggregate 
variability limits is similar to the methodology followed in the CSAPR 
Update that was upheld against challenge in the Wisconsin decision.
    Comment: Some commenters stated that EPA should create a larger 
bank, possibly by allowing some or all banked Group 2 allowances to be 
used for compliance in the Group 3 trading program on a 1-for-1 basis 
instead of being converted to Group 3 allowances at a conversion ratio 
greater than 1:1.
    Response: EPA disagrees with these comments. Creating an overly 
large initial bank of Group 3 allowances, regardless of the conversion 
ratio used, would dilute the intended control stringency and emission 
budgets established in this rule to address Group 3 states' obligations 
under the good neighbor provision with respect to the 2008 ozone NAAQS. 
Certainly, given the large existing bank of 2017-2020 Group 2 
allowances, allowing these Group 2 allowances to be used for compliance 
in the Group 3 trading program at a 1:1 ratio would unacceptably dilute 
the control stringency and emission budgets established by EPA in this 
rulemaking. As explained earlier in this section, EPA believes that 
creating an initial bank of Group 3 allowances in an amount not 
exceeding the sum of the Group 3 state's variability limits, and doing 
so through conversion of Group 2 allowances at an 8:1 ratio, is 
consistent with both achieving the requisite level of stringency and 
encouraging continued use of banking.
    Comment: A commenter suggested that EPA should base the initial 
Group 3 bank target amount not on the sum of Group 3 states' 
variability limits for 2022, but instead on the sum of Group 3 states' 
variability limits for 2021.
    Response: EPA disagrees with this comment. The initial Group 3 
allowance bank is intended to accommodate year-to-year variability in 
operations and emissions, and EPA expects that on average, sources 
collectively will aim to carry forward the bank from year to year so 
that in each subsequent control period, sources will continue to have 
the flexibility needed to accommodate year-to-year variability in 
operations and emissions. Unlike the 2022 state emission budgets, the 
2021 state emission budgets do not reflect emission reductions 
achievable from application of the full control stringency

[[Page 23137]]

that EPA is finding necessary to resolve the Group 3 states' 
obligations under the good neighbor provision with regard to the 2008 
ozone NAAQS. Because the Group 3 bank is intended to be an element of 
the Group 3 trading program on an ongoing basis, not just in 2021, as a 
matter of program design EPA considers it appropriate for the amount of 
the initial Group 3 bank to represent the full control stringency found 
to be necessary under this rule. For this reason, it is appropriate to 
base the initial Group 3 bank target amount on the sum of states' 
variability limits for the 2022 control period rather than the 2021 
control period.
    EPA also views creation of the larger initial Group 3 bank 
suggested by the commenter as unnecessary to ensure compliance is 
achievable. After consideration of the prorating adjustment discussed 
earlier in this section, using the 2021 variability limits instead of 
the 2022 variability limits as the basis for determining the size of 
the initial Group 3 bank would increase the size of the bank by less 
than 600 allowances. In the very unlikely event that Group 3 sources 
are unable to reduce their emissions in the 2021 control period 
sufficiently to meet their compliance obligations by holding the Group 
3 allowances allocated from the state emission budgets and from the 
initial Group 3 bank, sources would be able to obtain well over 600 
additional Group 3 allowances for 2021 compliance by electing to use 
the safety valve mechanism discussed in section VII.C.4.c.
    Comment: Some commenters stated that under the proposed conversion 
procedures, sources would not know the quantities of Group 3 allowances 
they would receive in sufficient time to rely on that information for 
purposes of planning their compliance activities.
    Response: EPA acknowledges that the large degree of flexibility 
offered to holders of Group 2 allowances under the proposed rule 
created uncertainty regarding one aspect of the process for creating 
the initial Group 3 bank--specifically, the conversion ratio that would 
be used to create the initial Group 3 bank. As discussed above, the 
final rule modifies the formula for the conversion ratio so that the 
value of the ratio (i.e., 8:1 based on 2017-2020 data) is knowable as 
of the date of this final rule. In the final rule EPA has also advanced 
the schedule for carrying out the conversion process so that the 
allowances in the initial Group 3 bank will be recorded in accounts by 
120 days after publication of the final rule in the Federal Register, 
or roughly two months before the end of the 2021 ozone season.
    However, EPA disagrees that uncertainty regarding either the 
conversion ratio or the amount of Group 3 allowances received by any 
individual source from the initial bank has any meaningful effect on 
sources' ability to plan their compliance activities. As an initial 
matter, under a trading program, the most cost-effective compliance 
strategy for a source is generally to reduce its emissions if it 
believes it can do so for less than the market price of an allowance 
and then to purchase allowances as needed to cover its remaining 
emissions or to sell surplus allowances to other sources that cannot 
reduce emissions as cheaply. Because allowance prices under any trading 
program are uncertain, sources must always make these compliance 
planning decisions based on their best allowance price projections 
while recognizing the existence of price uncertainty. For purposes of 
forecasting future allowance prices under the Group 3 trading program, 
the only relevant question concerning the initial Group 3 bank is the 
total quantity of allowances that will be created in that bank, because 
that total amount will factor into the market balance between the 
overall supply of allowances and the overall demand for allowances. 
EPA's proposed rule provided essentially complete information about the 
total quantity of allowances that would be created in the initial Group 
3 bank, and the final rule closely follows the proposed rule on this 
point. In short, nothing about EPA's proposed or final approach to 
creation of the initial Group 3 bank increased the uncertainty about 
future Group 3 allowance prices beyond the degree of uncertainty that 
is inherent in trading program-based approaches to environmental 
regulation.
    Further, even if a particular source decides to not to avail itself 
of the flexibility provided by a trading program and instead chooses to 
plan its compliance strategy based on the number of allowances it 
expects to receive as zero-cost allocations, the quantity of allowances 
that a source might receive from the initial Group 3 bank would 
necessarily play a relatively modest role in such a strategy. Of the 
total allowances available for 2021 compliance that will be allocated 
to sources from the state emission budgets and from the initial Group 3 
bank, more than 80 percent will come from the state emission budgets, 
and for subsequent control periods the proportion that will come from 
the state emission budgets will be 100 percent. In the proposed rule, 
EPA included extensive information on the proposed unit-level 
allocations from the proposed state emission budgets, including both a 
complete description of the allocation methodology and spreadsheets 
showing the allocations to each individual unit that would result from 
applying that methodology to the proposed state emission budgets. In 
the final rule, the only change to the allocation methodology is that, 
because certain units with scheduled future retirements will no longer 
receive allocations starting with the 2022, 2023, or 2024 control 
period when their scheduled retirements are taken into account for 
budget-setting purposes, the remaining units in those states that 
continue to operate will receive larger shares of the respective state 
budgets in those later control periods. It was clear from the proposed 
rule that any allocations of allowances from the initial Group 3 bank 
would be considerably smaller and therefore less relevant for an 
allocation-based compliance planning process than the allocations of 
allowances from the state emission budgets. This is consistent with the 
intended purpose of the initial Group 3 bank, which is to accommodate 
year-to-year variability in operations and emissions but not to allow 
for collective planned emissions to exceed the state emission budgets.
c. Opportunity To Obtain Additional Group 3 Allowances Through Further 
Conversion of Group 2 Allowances (``Safety Valve'' Mechanism)
    As discussed in section VI.B.1, in order to further ensure 
allowance market liquidity and compliance flexibility, in this final 
rule EPA is creating a ``safety valve'' mechanism that will allow Group 
3 sources to access additional Group 3 allowances for the 2021 control 
period. The new Group 3 allowances would be created in exchange for 
banked 2017-2020 Group 2 allowances that have not already been 
exchanged for Group 3 allowances as part of the process of creating the 
initial Group 3 allowance bank described in section VII.C.4.b. The 
safety valve mechanism will be available for the month of February 
2022, which falls approximately midway between October 30, 2021 (the 
deadline for reporting of emissions for the last three months of the 
2021 control period under the Group 3 trading program) and June 1, 2022 
(the deadline by which Group 3 sources must hold Group 3 allowances in 
their compliance accounts sufficient to cover their emissions during 
the 2021 control period). The conversion ratio used in the safety valve 
mechanism will be 18:1--in other words, 18 banked 2017-2020 Group 2 
allowances would have to

[[Page 23138]]

be surrendered in exchange for each Group 3 allowance issued through 
this mechanism. No Group 2 allowances will be exchanged for Group 3 
allowances under the safety valve mechanism except as specifically 
requested by the designated representative for a Group 3 source.
    EPA is establishing the safety valve mechanism and has designed its 
features to be responsive to comments on the proposed rule. Even 
without the safety valve mechanism, EPA considers it extremely unlikely 
that any source would be unable to achieve compliance with the Group 3 
trading program's requirements. Sources have a flexible combination of 
options to achieve compliance, including reducing emission at the 
source, using the allowances allocated to the source from the 
applicable state's emissions budget and from the initial Group 3 bank, 
and purchasing allowances from other sources that have made emission 
reductions. However, given the short time-frame before implementation 
of the Group 3 trading program in the 2021 ozone season, inclusion of a 
safety valve mechanism will increase sources' confidence in their 
ability to comply. EPA views this as an enhancement to the trading 
program consistent with mechanisms included in other emissions trading 
programs, as long as the mechanism is implemented in a manner that does 
not weaken the ability of the trading program to address Group 3 
states' obligations under the good neighbor provision with respect to 
the 2008 ozone NAAQS. The assurance that the safety valve mechanism 
does not undermine the purpose of the trading program is provided by 
the use of the 18:1 conversion ratio.
    As discussed in section VII.C.4.b., EPA received comments 
expressing widely varying perspectives concerning whether and, if so, 
what quantities of Group 3 allowances should be made available for 
compliance flexibility beyond the allowances allocated from state 
budgets. Some industry commenters advocated for a mechanism that would 
allow them to purchase additional allowances at a price of $1,600 per 
allowance, consistent with EPA's estimate of the cost per ton of 
emission reductions achievable through optimization of installed SCR 
controls. In contrast, some commenters from downwind states advocated 
for no issuance of any Group 3 allowances beyond the state emission 
budgets, but one of these commenters also suggested that if any such 
Group 3 allowances were issued through the exchange of banked Group 2 
allowances, the conversion ratio should reflect the relation of the 
estimated cost of the control strategy reflected in the Group 3 budgets 
to the market price of Group 2 allowances. The commenter suggested a 
conversion ratio of 11:1 based on the ratio of the same estimated 
$1,600 cost per ton of emission reductions available from SCR 
optimization to an estimated average market price for Group 2 
allowances of $137 per Group 2 allowance during 2019 and 2020.\203\ 
After consideration of these comments, EPA is setting the conversion 
ratio for the safety valve mechanism at 18:1, consistent with the 
principles underlying the recommendations of the commenters but using 
updated data. For the numerator of the conversion ratio, EPA is using 
$1,800 per ton, based on the estimated cost of the emission reductions 
available from SNCR optimization that are reflected in the final state 
emissions budgets. For the denominator of the updated ratio, EPA is 
using $100 per ton, reflecting an estimated average market price over 
the period from March 2020 through January 2021 for Group 2 allowances 
allocated for the 2020 control period.\204\ EPA finds, first, that this 
conversion ratio is high enough to avoid interfering with incentives 
for sources to reduce emissions through the use of the control 
technologies identified as appropriate for establishing states' 
emissions budgets in this action, and second, that it is low enough to 
provide additional flexibility that, in extreme circumstances, could 
facilitate compliance by some sources. Based on the total quantity of 
banked 2017-2020 Group 2 allowances expected to remain after completion 
of the deductions necessary for Group 2 trading program compliance for 
the 2020 control period and the deductions made in the process of 
creating the initial Group 3 bank, EPA estimates that the maximum 
quantity of Group 3 allowances that could be created through the safety 
valve mechanism will be in the range of 7,000 to 9,000 Group 3 
allowances. This degree of conversion of Group 2 allowances would be 
highly unlikely to occur, and indeed, EPA considers it more likely that 
no source will need to make use of the safety valve mechanism.
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    \203\ See Comments of Delaware Department of Natural Resources 
and Environmental Control (EPA-HQ-OAR-2020-0272-0122) at 14-15.
    \204\ According to price index values developed by SNL Energy 
and reported by S&P Global Market Intelligence, prices for 2020 
Group 2 allowances ranged between $58 and $75 from March 2020 until 
mid-November 2020. The reported price index values then rose to $200 
by year-end 2020 and to $475 for part of January 2021. The average 
of the reported daily price index values from March 2, 2020 (the 
first day of the price index series for Group 2 allowances allocated 
for the 2020 control period) through January 30, 2021 is $105, which 
EPA has rounded to $100 for purposes of computing the safety valve 
mechanism conversion ratio.
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    Under the final regulations, any use of the safety valve mechanism 
will be at the initiative of the designated representatives of Group 3 
sources. Throughout the month of February 2022, EPA will accept 
requests from designated representatives for allocations of additional 
Group 3 allowances under the safety valve mechanism. It will be the 
responsibility of the Group 3 designated representatives to obtain any 
Group 2 allowances needed for this purpose, either by using any 2017-
2020 Group 2 allowances remaining in the Group 3 source's compliance 
account after the initial Group 3 bank conversion process, transferring 
2017-2020 Group 2 allowances held in the account of a Group 2 source 
under the control of the same owners and operators, or purchasing 2017-
2020 Group 2 allowances from third parties. Holders of Group 2 
allowances are not obligated to sell or transfer their allowances to 
effectuate such conversions if they prefer to retain such allowances 
for use in the Group 2 trading program.\205\ As soon as practicable on 
or after March 1, 2022, if a request was received from the designated 
representative for a particular Group 3 source, EPA will deduct 2017-
2020 Group 2 allowances in sets of 18 from the source's compliance 
account on a first-in, first-out basis up to the maximum number of sets 
of 2017-2020 Group 2 allowances available in the account. For each set 
of 2017-2020 Group 2 allowances deducted from a Group 3 source's 
compliance account, EPA will record one Group 3 allowance in the 
account.
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    \205\ EPA sees no reason for concern that the creation of the 
safety valve mechanism for the Group 3 trading program, based on 
conversion of Group 2 allowances to Group 3 allowances, would 
adversely impact sources that will continue to participate in the 
Group 2 trading program. In both the 2019 and 2020 control periods, 
NOX emissions from the set of states that will continue 
to participate in the Group 2 trading program were at least 15 
percent below the sum of the emission budgets for those states, 
indicating that continued compliance with the Group 2 trading 
program's requirements is readily achievable even before 
consideration of the existing bank of Group 2 allowances. In 
addition, EPA expects that few if any banked Group 2 allowances will 
be removed from the Group 2 trading program in order to create 
additional Group 3 allowances through the safety valve mechanism 
because it is extremely likely that Group 3 sources will be able to 
fully comply with the Group 3 trading program's requirements by 
reducing emissions, using allowances allocated from the Group 3 
state emission budgets and from the initial Group 3 allowance bank, 
and trading with other Group 3 sources.

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[[Page 23139]]

d. Recall of Group 2 Allowances Allocated for Control Periods After 
2020
    To maintain the previously established levels of stringency of the 
Group 2 trading program for the states and sources that remain subject 
to that program under this action, EPA is recalling CSAPR 
NOX Ozone Season Group 2 allowances equivalent in amount and 
usability to all vintage year 2021-2024 CSAPR NOX Ozone 
Season Group 2 allowances previously allocated to sources in Group 3 
states and recorded in the sources' compliance accounts. Consistent 
with the proposed rule, the recall provisions established in this final 
rule apply to all sources in Group 3 states in whose compliance 
accounts CSAPR NOX Ozone Season Group 2 allowances for a 
control period from 2021 through 2024 were recorded, including sources 
where some or all units have permanently retired or where the 
previously recorded 2021-2024 allowances have been transferred out of 
the compliance account.\206\ However, in response to comments discussed 
at the end of this section, and as further detailed below, the final 
rule provides a more flexible compliance schedule intended to 
accommodate any sources that have already transferred the previously 
recorded 2021-2024 allowances out of their compliance accounts and 
provides greater flexibility as to the vintage years of Group 2 
allowances that sources may surrender to achieve compliance. As 
requested in comments, the final rule also clarifies how the recall 
provisions apply in instances where a source and its allowances have 
been transferred to different parties and adds more specificity 
regarding the procedures that EPA will follow to implement the recall.
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    \206\ EPA also proposed to recall Group 2 allowances equivalent 
to all 2021-2024 Group 2 allowances that were allocated to non-
source entities in Group 3 states and recorded in the entities' 
general accounts. This portion of the proposed rule is not being 
finalized because EPA has determined that no such allocations of 
2021-2024 Group 2 allowances to any non-source entity in a Group 3 
state have been recorded.
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    Under the Group 2 trading program regulations, each Group 2 
allowance is a ``limited authorization to emit one ton of 
NOX during the control period in one year,'' where the 
relevant limitations include the EPA Administrator's authority ``to 
terminate or limit the use and duration of such authorization to the 
extent the Administrator determines is necessary or appropriate to 
implement any provision of the Clean Air Act.'' 40 CFR 
97.806(c)(6)(ii). In this action, the Administrator is determining 
that, in order to effectively implement the Group 2 trading program as 
a compliance mechanism through which states not subject to the Group 3 
trading program may continue to meet their obligations under CAA 
section 110(a)(2)(D)(i)(I) with regard to the 2008 ozone NAAQS, it is 
necessary to limit the use of Group 2 allowances equivalent in quantity 
and usability to all Group 2 allowances previously allocated for the 
2021-2024 control periods and recorded in the compliance accounts of 
sources in Group 3 states. The Group 2 allowances that have already 
been allocated to sources in Group 3 states for the 2021-2024 control 
periods and recorded in the sources' compliance accounts represent more 
than half of the total quantity of Group 2 allowances that have been 
allocated and recorded for the 2021-2024 control periods. Because 
allowances can be freely traded, if the use of the 2021-2024 Group 2 
allowances previously recorded in Group 3 sources' compliance accounts 
(or equivalent Group 2 allowances) were not limited, the effect would 
be the same as if EPA had issued to sources in the states that will 
remain covered by the Group 2 trading program a quantity of allowances 
available for compliance under the 2021-2024 control periods more than 
double the levels that EPA determined to be appropriate emissions 
budgets for these states in the CSAPR Update. Through the use of banked 
allowances, the excess Group 2 allowances would affect compliance under 
the Group 2 trading program in control periods after 2024 as well. 
Continued implementation of the Group 2 trading program at levels of 
stringency consistent with the levels contemplated under the CSAPR 
Update therefore requires that EPA limit the use of the excess 
allowances, as EPA is doing in this final rule.
    In the recall provisions finalized in this action, limitations on 
the use of the excess 2021-2024 Group 2 allowances are being 
implemented through requirements to surrender, for each 2021-2024 Group 
2 allowance recorded in a Group 3 source's compliance account, one 
Group 2 allowance of equivalent usability under the Group 2 trading 
program. The surrender requirements apply to the owners and operators 
of the Group 3 sources in whose compliance account the excess 2021-2024 
Group 2 allowances were initially recorded. In general, each source's 
current owners and operators will be required to comply with the 
surrender requirements for the source by ensuring that sufficient 
allowances to complete the deductions are available in the source's 
compliance account by one of two possible deadlines discussed below. 
However, an exception is provided if it is demonstrated to EPA's 
satisfaction that a source's current owners and operators obtained 
ownership and operational control of the source in a transaction that 
did not include rights to direct the use and transfer of some or all of 
the 2021-2024 Group 2 allowances allocated and recorded (either before 
or after that transaction) in the source's compliance account. The 
final rule provides that in such a circumstance, with respect to the 
2021-2024 Group 2 allowances for which rights were not included in the 
transaction, the surrender requirements apply to the most recent former 
owners and operators of the source for which such a demonstration is 
not made. Because in this situation a source's former owners and 
operators might lack the ability to access the source's compliance 
account for purposes of complying with the surrender requirements, the 
former owners and operators will instead be allowed to meet the 
surrender requirements with Group 2 allowances held in a general 
account.\207\
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    \207\ EPA is currently unaware of any source that would need to 
use this flexibility but, in response to comments, has included the 
option in the final rule to address the theoretical possibility of 
such a situation.
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    To provide as much flexibility as possible consistent with the need 
to limit the use of the excess Group 2 allowances, for each 2021-2024 
Group 2 allowance recorded in a Group 3 source's compliance account, 
EPA will accept the surrender of either the same specific 2021-2024 
Group 2 allowance or any other Group 2 allowance with equivalent (or 
greater) usability under the Group 2 trading program. Thus, a surrender 
requirement with regard to a Group 2 allowance allocated for the 2021 
control period may be met through the surrender of any Group 2 
allowance allocated for the 2021 control period or the control period 
in any earlier year--in other words, any 2017-2021 Group 2 
allowance.\208\ Similarly, the surrender requirement with regard to a 
2022 Group 2 allowance, a 2023 Group 2 allowance, or a 2024 Group 2 
allowance may be met through the surrender of any 2017-2022 Group 2 
allowance, any 2017-2023 Group 2 allowance, or any 2017-2024 Group 2 
allowance, respectively.
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    \208\ The first control period for the Group 2 trading program 
was in 2017.
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    Owners and operators subject to the surrender requirements can 
choose from two possible deadlines for meeting the requirements. The 
first deadline will be July 14, 2021. As soon as practicable or

[[Page 23140]]

after this date, EPA will make a first attempt to complete the 
deductions of Group 2 allowances required for each Group 3 source from 
the source's compliance account. EPA will deduct Group 2 allowances 
first to address any surrender requirements for the 2021 control 
period, then to address any surrender requirements for the 2022, 2023, 
and 2024 control periods in turn. When deducting Group 2 allowances to 
address the surrender requirements for each control period, EPA will 
first deduct allowances allocated for that control period and then will 
deduct allowances allocated for each successively earlier control 
period. This order of deductions is intended to ensure that whatever 
Group 2 allowances are available in the account are applied to the 
surrender requirements in a manner that both maximizes the extent to 
which all of the source's surrender requirements will be met and also 
ensures that any Group 2 allowances left in the source's compliance 
account after completion of all required deductions will be the 
earliest allocated, and therefore most useful, Group 2 allowances 
possible. Among the Group 2 allowances allocated for a given control 
period, EPA will first deduct allowances that were initially recorded 
in that account, in the order of recordation, and will then deduct 
allowances that were transferred into that account after having been 
initially recorded in some other account, in the order of recordation.
    Following the first attempt to deduct Group 2 allowances to address 
Group 3 sources' surrender requirements, EPA will send a notification 
to the designated representative for each such source (as well as any 
alternate designated representative) indicating whether all required 
deductions were completed and, if not, the additional amounts of Group 
2 allowances usable in the 2021, 2022, 2023, and/or 2024 control 
periods that must be held in the appropriate account by the second 
surrender deadline of September 15, 2021. Each notification will be 
sent to the email addresses most recently provided to EPA for the 
recipients and will include information on how to contact EPA with any 
questions. Consistent with the proposed rule, the final rule provides 
that no allocations of Group 3 allowances will be recorded in a 
source's compliance account until all the source's surrender 
requirements with regard to 2021-2024 Group 2 allowances have been met. 
For this reason, the principal consequence to a source of failure to 
fully comply with the surrender requirements by the July 14, 2021 
surrender deadline is that any Group 3 allowances allocated to the 
units at the source for the 2021 and 2022 control periods that would 
otherwise have been recorded in the source's compliance account by July 
29, 2021 will not be recorded as of that recordation date.
    If all surrender requirements of 2021-2024 Group 2 allowances for a 
source have not been met in EPA's first attempt, EPA will make a second 
attempt to complete the required deductions from the source's 
compliance account (or from a specified general account, in the limited 
circumstance noted above) as soon as practicable on or after September 
15, 2021. The order in which Group 2 allowances will be deducted will 
be the same as described above for the first attempt.
    If the second attempt to deduct Group 2 allowances to meet the 
surrender requirements through deductions from the source's compliance 
account (or from a specified general account) is unsuccessful for a 
given source, the final regulations provide that as soon as practicable 
on or after November 15, 2021, to the extent necessary to address the 
unsatisfied surrender requirements for the source, EPA will deduct the 
2021-2024 Group 2 allowances that were initially recorded in the 
source's compliance account from whatever accounts the allowances are 
held in as of the date of the deduction, except for any allowances 
where, as of January 31, 2021, no person with an ownership interest in 
the allowances was an owner or operator of the source, was a direct or 
indirect parent or subsidiary of an owner or operator of the source, or 
was directly or indirectly under common ownership with an owner or 
operator of the source. Although this consequence of a source's failure 
to hold the allowances necessary to comply with the surrender 
requirements in the source's compliance account (or a specified general 
account) by the surrender deadline was not expressly stated in the 
recall provisions in the proposed rule, the provision merely makes 
explicit a remedy for a source's noncompliance that is inherent in 
EPA's existing authority under 40 CFR 97.806(c)(6)(ii) to limit the use 
of any Group 2 allowance as necessary or appropriate to address the 
requirements of CAA section 110(a)(2)(d)(i)(I). Before making any 
deduction under this provision, EPA will send a notification to the 
authorized account representative for the account in which the 
allowance is held and will provide an opportunity for submission of 
objections concerning the data upon which EPA is relying. In EPA's 
view, this provision does not unduly interfere with the legitimate 
expectations of participants in the allowance markets because the 
provision would not be invoked in the case of any allowance that was 
transferred to an independent party in an arms-length transaction 
before EPA's intent to recall 2021-2024 Group 2 allowances became 
widely known. The provision would apply only to a Group 2 allowance 
that, as of January 31, 2021, was still controlled either by the owners 
and operators of the source in whose compliance account it was 
initially recorded or by an entity affiliated with such an owner or 
operator. EPA believes that by January 31, 2021, which was three months 
after publication of the proposed rule for this rulemaking in the 
Federal Register, all market participants had ample opportunity to 
become informed of the proposed rule provisions to recall 2021-2024 
Group 2 allowances recorded in Group 3 sources' compliance 
accounts.\209\
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    \209\ Even before publication of the proposed rule, EPA posted 
information on its websites to notify market participants that a 
pending rulemaking could have consequences for the value and 
usability of Group 2 allowances. The posted locations included the 
electronic portal that authorized account representatives use to 
enter allowance transfers for recordation by EPA in the Allowance 
Management System. Additionally, EPA emailed a notice identifying 
the possibility of such consequences to the representatives for all 
Allowance Management System accounts.
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    The final rule includes the proposed provision under which failure 
of a source's owners and operators to comply with the surrender 
requirements is subject to enforcement as a violation of the Clean Air 
Act, with each allowance and each day of the control period 
constituting a separate violation.
    To eliminate any possible uncertainty regarding the amounts of 
Group 2 allowances allocated for the 2021-2024 control periods (or 
earlier control periods) that the owners and operators of each Group 3 
source must surrender under the final rule's recall provisions, EPA has 
prepared a list of the sources in Group 3 states in whose compliance 
accounts allocations of 2021-2024 Group 2 allowances were recorded with 
the amounts of the allocations recorded in each such compliance account 
for each control period from 2021 through 2024. An additional list 
shows, for each Group 3 source, the specific Group 2 allowances 
(batched by serial number) allocated for each control period and 
recorded in the source's compliance account and indicates whether, as 
of January 31, 2021, that batch of allowances was held in the source's 
compliance account, in an account believed to be partially or fully

[[Page 23141]]

controlled by a related party (i.e., an owner or operator of the source 
or an affiliate of an owner or operator of the source), or in an 
account believed to be fully controlled by independent parties. The 
lists are in a spreadsheet entitled ``Recall of CSAPR NOX 
Ozone Season Group 2 Allowances'', available in the docket for this 
action. After the first and second surrender deadlines, EPA intends to 
update the lists to indicate for each Group 3 source whether or not the 
surrender requirements for the source under the recall provisions have 
been fully satisfied. EPA will post the updated lists on a publicly 
accessible website to ensure that all market participants have the 
ability to determine which specific 2021-2024 Group 2 allowances 
initially recorded in any given Group 3 source's compliance account do 
or do not remain subject to potential deduction to address the source's 
surrender requirements under the recall provisions.
    Comment: One commenter requested that EPA provide greater 
flexibility for complying with the recall provisions in the case of 
sources that may have already sold the 2021-2024 Group 2 allowances 
previously recorded in the sources' compliance accounts. The commenter 
suggested that such sources might have difficulty acquiring the Group 2 
allowances needed to comply with the surrender requirements by the 
proposed surrender date, which would have been 60 days after 
publication of the final rule in the Federal Register.
    Response: In the final regulations, EPA has modified the recall 
provisions to provide two deadlines for compliance with the surrender 
requirements: July 14, 2021 and September 15, 2021. The final 
provisions also provide greater flexibility than the proposed rule by 
allowing the surrender requirements to be satisfied not only with Group 
2 allowances allocated for the same control periods as the excess 2021-
2024 Group 2 allowances, but also with Group 2 allowances allocated for 
earlier control periods. Any source may miss the first surrender 
deadline with no consequence except that any Group 3 allowances 
allocated to the units at the source will not be recorded in the 
source's compliance account by the otherwise applicable recordation 
date of July 29, 2021, but instead will be recorded after the source 
has fully complied with the surrender requirements. The second 
surrender deadline is expected to be more than five months after the 
publication date--and six months after the signature date--of this 
final rule. EPA believes that the second deadline provides sufficient 
time for any source that has sold the 2021-2024 Group 2 allowances 
initially recorded in the source's compliance account to acquire 
replacement Group 2 allowances for purposes of complying with the 
recall provisions. Further, because at the time of the proposed rule in 
this action, the large majority of Group 3 sources subject to the 
recall provisions still held all 2021-2024 Group 2 allowances initially 
recorded in their compliance accounts, EPA expects that most sources 
will be able to easily comply with the first deadline simply by not 
transferring those Group 2 allowances to another account before that 
deadline. Inclusion of the first deadline thus ensures that EPA will be 
able to record most Group 3 allowances within 30 days after the 
effective date of this final rule.
    Comment: One commenter suggested that retired sources that have 
already sold the 2021-2024 Group 2 allowances recorded in their 
compliance accounts should not be subject to the recall provisions on 
the grounds that ``requiring already-retired units to purchase 
allowances would be antithetical to the goal of a trading program, in 
which allowances can be freely traded.'' The commenter also suggested 
that there might be no willing sellers of Group 2 allowances from whom 
the retired sources could purchase replacement Group 2 allowances to 
comply with the recall provisions. The commenter further asserted that 
the proposed rule did not provide adequate notice that the recall 
provisions would apply to retired sources because the proposed 
regulatory text included a cross-reference to an existing rule section 
that addresses retired units.
    Response: EPA disagrees with this comment. As explained earlier in 
this section, recall of Group 2 allowances equivalent in quantity and 
usability to the 2021-2024 Group 2 allowances allocated to Group 3 
sources is necessary to maintain the previously established levels of 
stringency of the Group 2 trading program for the states and sources 
that remain subject to that program, because not recalling the excess 
allowances would be equivalent to increasing the budgets for the 
remaining Group 2 states, contrary to the stringency of the 
requirements established for those states in the CSAPR Update. The 
necessity of recalling the excess Group 2 allowances exists regardless 
of whether the sources in whose compliance accounts the excess 
allowances were initially recorded continue to operate or have retired.
    The commenter provides no support for the assertion that requiring 
retired sources to comply with the recall provisions is somehow 
inconsistent with a trading program, and EPA sees no basis for the 
assertion. EPA has made clear that the recall provisions apply to the 
owners and operators of the sources in whose compliance accounts the 
excess Group 2 allowances were initially recorded (and who paid nothing 
for those Group 2 allowances), not to persons who may have purchased 
the excess Group 2 allowances in arms-length transactions before EPA 
provided general notice of the proposed recall. By honoring arms-length 
market transactions for Group 2 allowances, EPA is executing the recall 
in a manner that is entirely consistent with the normal freedom to 
trade allowances under EPA's trading programs.
    The commenter's suggestion that there might be no willing sellers 
of Group 2 allowances is speculative and contrary to EPA's experience 
in administering every trading program implemented by the Agency over 
the course of the last 25 years, starting with the Acid Rain Program. 
The commenter's statement that ``some Group members are already finding 
that Group 2 allowances are not readily available because companies are 
holding onto them'' is vague and insufficient to counter EPA's 
reasonable expectation, supported by decades of experience, that Group 
2 allowances will be available for purchase in the six-month period 
following finalization of this action. To the extent that public notice 
of proposed changes to regulatory requirements may have temporarily 
affected activity in the market for Group 2 allowances, any such 
temporary effects would indicate only that, as intended, public notice 
made market participants aware of the possibility of changed regulatory 
requirements. The fact that some market participants may view waiting 
for the additional information contained in the final regulatory 
requirements as sensible does not serve as a reasonable basis for 
assertions that allowance markets will be illiquid when those final 
regulatory requirements are made public.
    The commenter's assertion that the proposed rule did not provide 
adequate notice that the recall provisions would apply to retired 
sources is belied by the fact that the commenter, as well as other 
commenters, understood that the recall provisions were proposed to 
apply to retired sources and submitted comments on that aspect of the 
proposed rule. Moreover, the commenter offers no basis to support the 
notion that any person reviewing the proposed rule would reasonably 
have believed that the proposed recall did not apply to retired

[[Page 23142]]

sources. The section of the preamble to the proposed rule that 
discusses the recall provisions states that the recall was proposed to 
apply with respect to ``all'' 2021-2024 Group 2 allowances allocated 
not only to sources in Group 3 states but also to non-source entities 
in Group 3 states. There is no language indicating that any source, 
retired or not, would be treated differently under the provisions than 
any other source, and the inclusion of non-source entities left no room 
for an interpretation that continued production of electricity and 
emissions was a prerequisite for applicability of the recall. The fact 
that, in order to be as clear as possible that the recall applied to 
sources with retired units, the proposed regulatory text included a 
cross-reference to an existing regulatory text provision identifying 
permanently retired units, but did not use the exact words 
``permanently retired units,'' does not somehow manufacture a lack of 
notice. The use of cross-references is common and appropriate in 
regulatory text. Further, the proposed regulatory text would have 
encompassed 2021-2024 Group 2 allowances allocated to retired units 
even without the clarifying cross-reference.
    Comment: One commenter requested that the regulations lay out in 
greater detail the specific procedures EPA would follow to administer 
the recall. The commenter sought clarification specifically as to how 
the recall provisions would apply in instances where a source or its 
allowances had been sold, potentially to different purchasers.
    Response: As described earlier in this section, the final 
regulations include more detailed provisions concerning the procedures 
EPA will follow to deduct Group 2 allowances to implement the surrender 
requirements. Consistent with the proposed rule, the final surrender 
requirements apply with respect to all Group 3 sources in whose 
compliance accounts 2021-2024 Group 2 allowances were recorded, 
regardless of whether some or all units at the source may have retired 
or whether the source or its allowances may have been sold. However, in 
response to the comment, the final regulations provide that if it is 
demonstrated to EPA's satisfaction that the current owners and 
operators of a source obtained ownership and operational control of the 
source in a transaction that did not include rights to direct the use 
and transfer of some or all of the 2021-2024 Group 2 allowances 
allocated and recorded (either before or after that transaction) in the 
source's compliance account, then with regard to the 2021-2024 Group 2 
allowances for which such rights were not included in the transaction, 
the surrender requirements apply to the most recent former owners and 
operators of the source for which such a demonstration is not made. EPA 
believes that this provision identifies the appropriate parties to whom 
the surrender requirements should apply in the situation identified by 
the commenter, consistent with EPA's intent expressed in the proposed 
rule for the requirements to apply to the owners and operators of the 
Group 3 source in whose compliance account the excess 2021-2024 Group 2 
allowances were initially recorded.
    Comment: One commenter requested that where a Group 3 source has 
purchased additional 2021-2024 Group 2 allowances beyond those 
initially recorded in the source's compliance account, the additional 
2021-2024 Group 2 allowances should not be subject to the recall 
provisions but should remain available for transfer to a Group 2 source 
for future use in the Group 2 trading program. Alternatively, the 
commenter requested that EPA convert the additional 2021-2024 Group 2 
allowances to Group 3 allowances that could be used in the Group 3 
trading program.
    Response: Under the final procedures for implementing the recall 
provisions, where a Group 3 source continues to hold the 2021-2024 
Group 2 allowances initially recorded in the source's compliance 
account and also holds additional 2021-2024 Group 2 allowances 
purchased in an arms-length transaction before January 31, 2021, 
surrender of the initially recorded 2021-2024 Group 2 allowances would 
satisfy the recall provisions and the purchased 2021-2024 Group 2 
allowances would remain available for transfer to a Group 2 source for 
future use in the Group 2 trading program. The purchased 2021-2024 
Group 2 allowances would not be available for use in the Group 3 
trading program, either through conversion to Group 3 allowances or 
otherwise.
5. Compliance Deadlines
    As discussed in section IV.C. of this preamble, the final rule 
requires sources to comply with the revised respective NOX 
emission budgets for the ozone seasons (May 1 through September 30 of 
each year) in 2021 and subsequent years in order to ensure that these 
necessary NOX emission reductions are implemented to assist 
in downwind states' attainment and maintenance of the 2008 ozone NAAQS. 
The increased stringency of Group 3 budgets for the 2021 ozone season 
will take effect on the effective date of this action, which will be 
part of the way into the 2021 ozone season, but before the July 20, 
2021 Serious area attainment date. Thus, under the new CSAPR 
NOX Ozone Season Group 3 Trading Program established in this 
rulemaking, the first affected control period is the 2021 ozone season 
(i.e. May 1, 2021, through September 30, 2021).
    Under all CSAPR trading programs, compliance at the source level is 
achieved by each source surrendering by a compliance deadline--defined 
in the new Group 3 trading program regulations at 40 CFR 97.1002 as the 
``allowance transfer deadline''--a number of allowances equal to the 
source's total emissions for the preceding ozone-season control period.
    For previous control periods under the existing CSAPR trading 
programs, the allowance transfer deadline was March 1 of the year 
following the control period. In this action, EPA is establishing the 
allowance transfer deadline for the Group 3 trading program--and for 
all the other CSAPR trading programs starting with the 2021 control 
periods \210\--to be June 1 of the year after the control period.\211\ 
For example, under this coordinated deadline, June 1, 2022, is the date 
by which Group 3 sources will be required to hold Group 3 allowances 
for the 2021 control period. The reason for the change from earlier 
practice is to accommodate the change in the methodology and schedule 
for allocating allowances to units from the new unit set-asides that 
will start with the 2021 control periods. Under that revised 
methodology, allowances from the new unit set-asides will be recorded 
in sources' compliance accounts by May 1 of the year following the 
control period, and some additional period after that date is needed to 
allow for allowance purchases in case a source receives fewer 
allowances from the new unit set-aside than anticipated. Under the 
previous regulations at 40 CFR 97.812, the deadline for recording 
second-round allocations from the new unit set-asides was February 15, 
two weeks before the March 1 allowance

[[Page 23143]]

transfer deadline. EPA believes sources will have greater trading 
flexibility if this interval is extended to a full month, resulting in 
the allowance transfer deadline of June 1. Extension of the allowance 
transfer deadline is not expected to have any impact on the achievement 
of the CSAPR trading programs' environmental objectives because it will 
not affect the quantities of allowances that sources will be required 
to hold as of the deadline or the total quantities of allowances that 
will be made available for compliance in advance of the deadline. 
Further discussion is provided in sections VII.C.3.c and VII.C.8.b.
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    \210\ As discussed in section VII.C.8.b., in order to minimize 
unnecessary differences between the CSAPR trading programs and the 
similarly structured Texas SO2 Trading Program, EPA is 
revising the allowance transfer deadline under the Texas 
SO2 Trading Program. However, EPA did not propose to 
revise the allowance transfer deadline under the Acid Rain Program 
for SO2 emissions (which is February 29 in leap years and 
March 1 in other years).
    \211\ EPA proposed and requested comment on implementing the 
revisions as of the 2023 and 2021 control periods, respectively. No 
comments were received, and EPA is simplifying the regulations by 
implementing the revisions as of the 2021 control period. For 
further discussion, see section VII.C.8.b.
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    EPA received no comments on the Group 3 trading program compliance 
deadlines for holding allowances after the end of each control period. 
Comments concerning the implementation of emission budgets that require 
emission reductions as of the 2021 ozone season instead of a later 
ozone season are addressed in sections VI.B.1 and VI.C.1.
6. Monitoring and Reporting
    Monitoring and reporting in accordance with the provisions of 40 
CFR part 75 are required for all units subject to all the CSAPR trading 
programs, which includes all units covered under this final rule. 
Consistent with these existing requirements, the monitoring system 
certification deadline by which monitors are installed and certified 
for compliance use under the CSAPR NOX Ozone Season Group 3 
Trading Program generally will be May 1, 2021, the beginning of the 
first control period in this final rule, with potentially later 
deadlines for units that commence commercial operation less than 180 
days before that date. Units already in compliance with monitoring 
system certification requirements for the Group 2 trading program will 
not have to undertake any additional activities to certify their 
monitoring systems for the Group 3 trading program. Similarly, Group 3 
units will not have to undertake additional activities to update any 
facility account demographic information. All account demographic 
information of current Group 2 facility accounts will be transitioned 
to the Group 3 trading program, including an account's designated 
representative, alternate designated representative, and any agents. 
The first period in which emission reporting is required under the new 
Group 3 trading program will be the quarter that includes May 1, 2021, 
(i.e., the second quarter of the year that covers April, May, and 
June). These monitoring and reporting requirements and deadlines are 
analogous to the current deadlines under the CSAPR NOX Ozone 
Season Group 2 Trading Program.
    Under 40 CFR part 75, a unit has several options for monitoring and 
reporting, including the use of a CEMS; an excepted monitoring 
methodology based in part on fuel-flow metering for certain gas- or 
oil-fired peaking units; low-mass emissions monitoring for certain non-
coal-fired, low emitting units; or an alternative monitoring system 
approved by the Administrator through a petition process. In addition, 
sources can submit petitions to the Administrator for alternatives to 
individual monitoring, recordkeeping, and reporting requirements 
specified in 40 CFR part 75. Each CEMS must undergo rigorous initial 
certification testing and periodic quality assurance testing 
thereafter, including the use of relative accuracy test audits and 24-
hour calibrations. In addition, when a monitoring system is not 
operating properly, standard substitute data procedures are applied and 
result in a conservative estimate of emissions for the period involved.
    Further, 40 CFR part 75 requires electronic submission of quarterly 
emissions reports to the Administrator, in a format prescribed by the 
Administrator. The reports will contain all of the data required 
concerning ozone season NOX emissions.
    Units currently subject to the CSAPR NOX Ozone Season 
Group 2 Trading Program are required to monitor and report 
NOX emissions in accordance with 40 CFR part 75, so covered 
sources in the Group 3 trading program will simply continue the same 
monitoring and reporting practices as required by 40 CFR part 75 under 
the Group 2 trading program.
7. Recordation of Allowances
    EPA is establishing a schedule for recording allocations of 
vintage-year 2021 CSAPR NOX Ozone Season Group 3 allowances 
to ensure that affected sources are allocated vintage year 2021 
allowances as soon as practicable and well before the 2021 ozone season 
compliance deadline (June 1, 2022). EPA is also establishing a schedule 
for recording allocations of vintage-year 2022 CSAPR NOX 
Ozone Season Group 3 allowances that accommodates sources' expectation 
to receive these allowance allocations soon after the publication of 
this final rule while also ensuring that states have the opportunity to 
develop and submit to EPA SIP revisions concerning allocations of 
allowances for vintage year 2022 and later.
    Specifically, allocations to existing units for the first control 
period outlined in this final rule (i.e. the 2021 ozone season) will be 
recorded by July 29, 2021. EPA will also record allocation of vintage 
year 2022 allowances by this deadline for all units except those in 
states that provided to EPA, by June 29, 2021, a letter indicating an 
intent to submit a SIP revision that, if approved, would substitute 
state-determined allocations for the default allocations determined by 
EPA for the 2022 control period. The deadline for states to submit to 
EPA such SIP revisions will be September 1, 2021. If a state that 
notified EPA of its intent to submit a SIP revision fails to submit 
such a SIP by the SIP submission deadline, EPA will record vintage year 
2022 FIP allocations to the sources in the state no later than 
September 15, 2021. No later than March 1, 2022, EPA will record the 
SIP allocations of vintage year 2022 Group 3 allowances for states with 
approved SIP revisions. By this same deadline, EPA will record the FIP 
allocations of vintage year 2022 Group 3 allowances for states whose 
SIP revisions are not approved by EPA.
    The recordation deadline for vintage year 2021 allowances to 
existing units is anticipated to be approximately 11 months before the 
date by which sources are required to hold allowances sufficient to 
cover their emissions for that first control period (June 1, 2022, as 
discussed above). This schedule allows sources ample time to engage in 
allowance trading activities consistent with their preferred compliance 
strategies. EPA will record vintage year 2023 and 2024 Group 3 
allowance allocations to existing units by July 1, 2022, and vintage 
year 2025 and 2026 Group 3 allowance allocations by July 1, 2023. By 
July 1 of each year after 2023, EPA will record Group 3 allowance 
allocations to existing units for the control period in the third year 
after the year of recordation. The recordation deadlines will apply to 
recordation of both allocations based on the default allocation 
provisions and allocations provided by states pursuant to approved SIP 
revisions.
    As an exception to all of the recordation deadlines that would 
otherwise apply, EPA will not record any allocations of Group 3 
allowances in a source's compliance account unless that source has 
complied with the requirements to surrender previously allocated 2021-
2024 Group 2 allowances. The surrender requirements are necessary to 
maintain the previously established levels of stringency of the Group 2 
trading program for the states and sources that remain subject to that

[[Page 23144]]

program under this final rule. EPA finds that it is reasonable to 
condition the recordation of Group 3 allowances on compliance with the 
surrender requirements because the condition will spur compliance and 
will not impose an inappropriate burden on sources. EPA considers 
establishment of this condition, which will facilitate the continued 
functioning of the Group 2 trading program, to be an appropriate 
exercise of the Agency's authority under CAA section 301 (42 U.S.C. 
7601) to prescribe such regulations as are necessary to carry out its 
functions under the Act.
    EPA notes that recording allocations to existing units generally 
three years in advance under the new Group 3 trading program represents 
a change from the historical recordation schedules for allocations to 
existing units under the other CSAPR trading programs, which have 
generally provided for such allocations to be recorded four years in 
advance. In this action, EPA is revising the recordation schedules 
under the other CSAPR trading programs, as well as the similarly 
structured Texas SO2 Trading Program, so as to generally 
record allocations to existing units three years in advance. This 
change will take effect with allocations for the 2025 control periods, 
which will be recorded by July 1, 2022, instead of by July 1, 2021. The 
reason for the change is the discovery of a timing conflict in all the 
CSAPR trading programs between the requirement to record four years in 
advance and the separate provisions governing allocations to existing 
units that have ceased operations. Under those separate provisions, EPA 
is unable to determine whether some existing units are entitled to 
continue to receive their allowance allocations more than three years 
in advance, and thus EPA does not have the information necessary to 
record all the allocations four years in advance. Further discussion of 
this revision to the schedule for recording allocations to existing 
units is provided in section VII.C.8.a.
    With respect to allocations of allowances from the new unit set-
asides and Indian country new unit set-asides, in previous control 
periods under the existing CSAPR trading programs, EPA has recorded 
these allocations in two rounds, by August 1 of the control period and 
by February 15 of the year following the control period. In this 
action, EPA is adopting a new one-round process for determining 
allocations from the new unit set-asides and Indian country new unit 
set-asides, and consistent with that revised allocation process, 
starting with allocations for the 2021 control periods,\212\ EPA will 
record all allocations from these set-asides as of May 1 in the year 
following the control period, in both the Group 3 trading program and 
the existing CSAPR trading programs, and both where the allocations are 
determined by EPA and where the allocations are provided by states 
pursuant to approved SIP revisions. Further discussion is provided in 
sections VII.C.3.c and VII.C.8.b.
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    \212\ EPA proposed and requested comment on implementing the 
revisions as of the 2023 and 2021 control periods, respectively. No 
comments were received, and EPA is simplifying the regulations by 
implementing the revisions as of the 2021 control period. For 
further discussion, see section VII.C.8.b.
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8. Conforming Revisions to Regulations for Existing Trading Programs
    As discussed elsewhere in this preamble, in most respects, but not 
in every respect, the provisions of the CSAPR NOX Ozone 
Season Group 3 Trading Program at subpart GGGGG of 40 CFR part 97 
parallel the provisions that have applied for control periods through 
2020 under the other CSAPR trading programs \213\ at subparts AAAAA 
through EEEEE of part 97 established in the CSAPR rulemaking and the 
CSAPR Update and, to a somewhat lesser extent, the provisions of the 
similarly structured Texas SO2 Trading Program established 
at subpart FFFFF of part 97. This section discusses the provisions of 
the new Group 3 trading program that differ from the provisions that 
have applied under the existing CSAPR trading programs, beyond the 
provisions discussed in section VII.C.4. addressing the transition to 
the new Group 3 trading program. This section also discusses various 
minor corrections and clarifications to the regulations.
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    \213\ The existing CSAPR trading programs and their respective 
subparts of 40 CFR part 97 are: CSAPR NOX Annual Trading 
Program (subpart AAAAA), CSAPR NOX Ozone Season Group 1 
Trading Program (subpart BBBBB), CSAPR SO2 Group 1 
Trading Program (subpart CCCCC), CSAPR SO2 Group 2 
Trading Program (subpart DDDDD), and CSAPR NOX Ozone 
Season Group 2 Trading Program (subpart EEEEE).
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    To clarify and facilitate administration of the regulations for all 
of EPA's trading programs in 40 CFR part 97, and to maintain their 
parallel nature to the extent possible, EPA is amending the regulations 
for the existing trading programs to reflect certain revisions as noted 
in the sections of this preamble describing the new Group 3 trading 
program. Section VII.C.8.a. addresses the revisions discussed in 
section VII.C.7. to address a timing conflict in the current 
regulations for all of the existing programs. Section VII.C.8.b. 
addresses the revisions discussed in sections VII.C.3.c and VII.C.3.d 
to simplify and improve the process for allocating allowances from the 
new unit set-asides and Indian country new unit set-asides under the 
existing CSAPR programs. Section VII.C.8.c. addresses additional minor 
revisions and corrections. EPA received no adverse comment regarding 
any of these conforming revisions or corrections.
    In this action, EPA did not reopen or request comment on the 
regulations for any of the existing trading programs in 40 CFR part 97, 
subparts AAAAA through FFFFF, except with respect to specific revisions 
to these subparts identified in this section, as well as the revisions 
to the regulations for the Group 2 trading program discussed in section 
VII.C.4. that address the transition from the Group 2 trading program 
to the Group 3 trading program.
a. Resolution of Timing Conflict Between Certain Existing Provisions
    Consistent with the provisions of the new CSAPR trading program 
finalized in this action, EPA is amending the regulations for the 
existing CSAPR trading programs and the Texas SO2 Trading 
Program to resolve a timing conflict between the provisions that set 
deadlines for recordation of allowances allocated to existing units and 
the provisions that govern allocations of allowances to units that have 
ceased operation for the control periods in at least two consecutive 
years. The recordation provisions in all of the trading programs 
generally have required EPA to record allocations of allowances to 
existing units four years in advance of the control periods for which 
the allowances are being allocated. For example, on July 1, 2020, EPA 
recorded allocations to most existing units of allowances for use in 
the 2024 control periods for all the existing trading programs. 
However, other provisions of all the trading programs require EPA not 
to record allocations to existing units that do not operate for two 
consecutive control periods, starting with the fifth control period 
after the first control period in which the unit did not operate. For 
example, if a unit that would otherwise receive allocations as an 
existing unit does not operate in the 2019 and 2020 control periods, 
the unit will continue to receive allocations for the control periods 
in 2019 through 2023 but will no longer be entitled to receive 
allocations for control periods in 2024 and thereafter. These two sets 
of timing requirements are in conflict, as demonstrated by the examples 
just presented: as of the July 1, 2020,

[[Page 23145]]

deadline to record allocations for the 2024 control periods, EPA could 
not yet know whether any units that did not operate in 2019 might 
resume operation later in 2020, and EPA therefore could not yet know 
whether all such units would lose their eligibility to receive 
allocations for the 2024 control periods or not.\214\
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    \214\ Because the 4-years-in-advance recordation schedule was 
phased in, the conflict with the provision addressing units that 
have ceased operation did not affect recordation activities under 
any CSAPR program until 2018. To date, EPA has addressed the 
conflict by deferring recordation of allocations to certain units 
past the applicable recordation deadlines until all information 
needed to determine whether the units are entitled to receive the 
allocations becomes available.
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    To address the timing conflict described above, EPA is amending the 
regulations for each of the CSAPR trading programs and the Texas 
SO2 Trading Program to generally require recordation of 
allowances allocated to existing units to take place three years rather 
than four years in advance of the control period for which allowances 
are being allocated. Returning to the examples above, if these 
amendments had been in effect with respect to allocations for the 
control periods in 2024, EPA would not have been required to record 
allocations for the 2024 control period until July 1, 2021, by which 
time complete information on all units' operations in 2019 and 2020 
will be available. Relatedly, for states that determine allocations of 
allowances to their sources under approved SIP revisions, EPA is 
amending the deadlines by which the states must submit the allocations 
to EPA for recordation. Under the amended deadlines, the states' 
submissions are due three years instead of four years before the 
applicable control period.\215\
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    \215\ Because states' deadlines for submission of SIP revisions 
under the CSAPR regulations are based on the deadlines by which they 
must submit their subsequent state-determined allowance allocations, 
in some circumstances the revision to the deadline for submitting 
allowance allocations will also effectively extend the deadline for 
such a SIP revision. See, e.g., 40 CFR 52.38(a)(4)(ii), (a)(5)(vi).
---------------------------------------------------------------------------

    The amended recordation and submission schedules will be effective 
beginning with recordation of allocations for control periods in 2025 
and will apply to EPA's schedule for recording not only the allocations 
determined by EPA under the federal CSAPR trading programs but also the 
allocations determined by states or EPA under state CSAPR trading 
programs that are similarly recorded by EPA. EPA believes these 
amendments address the timing conflict in the existing trading program 
regulations in a manner that is as consistent as possible with the 
other provisions of the regulations, because while the amendments alter 
the point in time at which trading program participants receive 
allowances, the amendments will not alter the quantities of allowances 
received by any participant in any of the existing trading programs. In 
contrast, the only two other simple options for resolving the timing 
conflict--either shortening the period of non-operation that would 
cause a unit to lose its allocation from two years to one year or 
lengthening the period for which non-operating units would retain their 
allowance allocations from five years to six years--would cause changes 
in the amounts of allowances received by some trading program 
participants, and some stakeholders might view those changes as 
inequitable or undesirable for other policy reasons.
    Further details on the specific regulatory provisions that are 
affected by the revisions are provided in section IX.D. of the 
preamble.
b. Modifications to NUSA Provisions
    Consistent with the provisions of the new CSAPR trading program in 
this action for ozone season emissions of NOX from sources 
in Group 3 states, EPA is amending the regulations for the existing 
CSAPR trading programs governing allocations of allowances to units 
from NUSAs and Indian country NUSAs to reduce the potential for 
inequitable outcomes and to clarify and simplify the regulations. In 
order to ensure maximum consistency across all participants in the 
trading programs, the amendments will govern EPA's administration of 
the integrated trading programs not only under FIPs but also under 
approved SIPs where the NUSA allocation procedures are specified in 
provisions of the federal CSAPR trading programs in 40 CFR part 97 that 
have been incorporated into the SIP by reference.
    The regulations applicable to control periods through 2020 under 
the existing CSAPR trading programs have provided for a two-round 
allocation process. For purposes of the first round, a unit was 
generally eligible to receive allocations from the NUSA for its state 
regardless of when it commenced commercial operation, as long as either 
no allocation of allowances to the unit as an existing unit was 
previously determined \216\ or the unit was no longer entitled to 
receive its previously determined allocation as an existing unit. The 
first-round allocations were calculated during the control period at 
issue and were proportional to the eligible units' emissions during the 
preceding control period, up to the amount of allowances available in 
the NUSA. EPA performed preliminary calculations and published a notice 
by June 1, provided an opportunity for objections, and then adjusted 
the calculations as necessary, issued a final notice, and recorded the 
allocations by August 1 of the control period.
---------------------------------------------------------------------------

    \216\ A determination that a unit should be allocated zero 
allowances is considered an allocation. See, e.g., 40 CFR 97.402 
(definition of ``allocate or allocation'').
---------------------------------------------------------------------------

    If any allowances remained in the NUSA for a given state after the 
first round, EPA carried out a second round, for which eligibility was 
limited to units that commenced commercial operation in the year of the 
control period at issue or the preceding year. The second-round 
allocations were calculated early in the year after the year of the 
control period at issue (very shortly after the January 30 deadline for 
submission of emissions data for October through December) and were 
proportional to the positive differences, if any, between the eligible 
units' emissions during the control period at issue and the amounts of 
any allocations the units received in the first round, up to the 
remaining amount of allowances available in the NUSA. Any allowances 
remaining after the second round were allocated to existing units in 
the state in proportion to their previous allocations. EPA made a 
preliminary identification of eligible units and published a notice by 
December 15, provided an opportunity for objections, and then performed 
the calculations, issued a final notice, and recorded the allocations 
by February 15 following the year of the control period, two weeks 
before the then-applicable March 1 allowance transfer deadline.
    As indicated in the description above, the previous procedures had 
the potential to produce inequitable results, where some units could 
receive allowances in the first round (based on their emissions in the 
preceding control period) that exceeded the amounts needed to cover 
their emissions during the control period at issue, while other units 
that commenced operation more recently might not receive any allowances 
in either the first round (because the units had no covered emissions 
in the preceding control period) or the second round (because the NUSA 
may have been exhausted in the first round). Further, based on the 
experience of administering the two-round NUSA allocation process since 
2015, EPA believes the previous procedures were unnecessarily complex 
and caused confusion for some market participants.

[[Page 23146]]

    To simplify the NUSA allocation process and eliminate the potential 
inequities noted, EPA is amending the regulations for the existing 
CSAPR programs to replace the previous two-round NUSA allocation 
process with a one-round process that will allocate allowances to all 
eligible units in proportion to their emissions in the control period 
at issue. The amended provisions will be effective beginning with NUSA 
allocations for the control periods in 2021. Under the procedures, 
which apply to both NUSAs and Indian country NUSAs, EPA will perform 
preliminary calculations and issue a notice by March 1 of the year 
after the control period at issue, one month after the January 30 
deadline for submission of the required emission data. After providing 
an opportunity for objections, EPA will make any necessary adjustments, 
issue a final notice, and record the allowances by May 1. To 
accommodate this process, the amendments also extend the allowance 
transfer deadline (i.e., the date by which all covered sources must 
hold allowances in their compliance accounts sufficient to cover their 
emissions during the preceding control period) by three months, from 
March 1 of the year following the control period to June 1. In 
coordination with the revised recordation deadlines, EPA is also 
extending the deadline for states to submit to EPA their state-
determined allocations for new units from July 1 in the year of the 
control period to April 1 in the year following the control period. 
Finally, although the Texas SO2 Trading Program does not 
have NUSA provisions, in order to minimize unnecessary differences 
between the deadlines for analogous provisions in that program and the 
CSAPR programs, EPA is also revising the Supplemental Allowance Pool 
recordation deadline and the allowance transfer deadline under the 
Texas SO2 Trading Program to May 1 and June 1, respectively, 
of the year after the control period. Like the amendments to the NUSA 
provisions, the amendments to the deadlines described in this paragraph 
would apply for purposes of EPA's administration of the integrated 
trading programs under both FIPs and approved SIPs.
    The revisions to the NUSA allocation procedures also allow for 
related simplification of the CSAPR trading programs' assurance 
provisions. Under the assurance provisions that have applied for 
control periods through 2020, when emissions in a state for a given 
control period exceed the state's assurance level, if there are any 
units in the state that operated during the control period but that did 
not receive an actual allowance allocation either as an existing unit 
or from the NUSA, the regulations require EPA to publish a notice 
calling for the owners and operators of such units to submit certain 
information which EPA would use to determine imputed allowance 
allocations for the units. EPA then would use the imputed allowance 
allocations for these units, together with the actual allowance 
allocations for other units, to apportion responsibility for the 
assurance level exceedance among the owners and operators of all the 
state's units. Under the amendments to the NUSA allocation process, all 
units that have covered emissions during any control period will 
receive allocations either as an existing unit or from the NUSA, making 
the procedures for determining imputed allocations unnecessary. 
Accordingly, EPA is simplifying the assurance provisions for all of the 
existing CSAPR trading programs by removing the requirement for EPA to 
issue the additional notice just discussed, starting with the 2021 
control periods.\217\ EPA is also revising the date as of which the 
``common designated representative'' for a group of sources is 
determined for purposes of the assurance provisions from April 1 to 
July 1 of the year following the control period, preserving that date's 
current position of being one month after the allowance transfer 
deadline. This revision maintains the existing coordination between 
these two regulatory deadlines and applies to all the existing CSAPR 
trading programs, whether administered under FIPs or approved SIPs, as 
well as the Texas SO2 Trading Program.
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    \217\ There are currently no analogous provisions in the Texas 
SO2 Trading Program.
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    EPA is making the changes to the NUSA allocation provisions, 
assurance provisions, and related deadlines effective as of the 2021 
control period. EPA proposed to make the changes effective as of the 
2023 control period, which is the first control period by which it 
would have been possible for states to fully replace the FIP 
requirements established in this action with a SIP revision. However, 
EPA also specifically requested comment on implementing the changes as 
of the 2021 control period. Having received no comment opposing the 
substance of the proposed revisions and no comment favoring 
implementation as of the 2023 control period, EPA is finalizing the 
amendments as of the 2021 control period in order to simplify the 
programs and clarify the regulations to the greatest extent possible.
    Further details on the specific regulatory provisions that are 
affected by the revisions are provided in section IX.D. of the 
preamble.
c. Minor Corrections and Clarifications to Existing Regulations
    EPA is implementing a small number of additional minor corrections 
and clarifications to the NUSA provisions in the existing CSAPR trading 
programs. First, EPA is amending the provisions that address the 
disposition of allowances that are determined to have been allocated 
incorrectly and that consequently are recalled and added to the NUSA 
for reallocation. The regulations that have applied through the 2020 
control periods provided for the recalled allowances to be reallocated 
through the NUSA allocation process for the same control period for 
which the allowances were originally allocated incorrectly. Because 
some corrections may occur after the NUSA allocation process for a 
control period has already been completed, EPA is revising these 
provisions to also allow the recalled allowances to be reallocated as 
part of the NUSA allocation process for a subsequent control period.
    Second, EPA is correcting the specific numbers of allowances 
identified as the NUSA amounts for several states under the existing 
CSAPR programs established in the CSAPR rulemaking.\218\ Following the 
promulgation of the CSAPR regulations in August 2011, EPA issued two 
rules revising the amounts of the emissions budgets, NUSAs, and Indian 
country NUSAs for several states.\219\ Subsequent to these rule 
revisions, EPA recalculated the allocations to individual existing 
units and published a notice of data availability establishing the new 
allocations.\220\ However, because of rounding differences, in certain 
instances the sum of the recalculated allocations to the individual 
units in a state plus the amounts identified in the regulations for the 
NUSA and Indian country NUSA for the state does not exactly equal the 
state budget.\221\ In this

[[Page 23147]]

final action, EPA is adjusting the amounts of the NUSAs identified in 
the regulations for control periods in future years up or down by the 
amount needed to eliminate the rounding differences. The sizes of the 
NUSA adjustments range from 1 to 17 allowances. These revisions do not 
affect the amounts of any state emissions budgets.
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    \218\ This revision affects the CSAPR NOX Annual, 
NOX Ozone Season Group 1, SO2 Group 1, and 
SO2 Group 2 trading programs established in the CSAPR 
rulemaking but does not affect the CSAPR NOX Ozone Season 
Group 2 trading program established in the CSAPR Update rulemaking.
    \219\ See 77 FR 10324 (February 21, 2012); 77 FR 34830 (June 12, 
2012).
    \220\ See 79 FR 71674 (December 3, 2014).
    \221\ To date, EPA has addressed the rounding differences 
through the NUSA administration process by allocating whatever 
amounts of allowances remain in the states' budgets after 
allocations to existing units instead of allocating the specific 
amounts of allowances stated as the amounts of the states' NUSAs in 
the regulations. Thus, the amendments simply clarify the regulations 
and bring them into conformance with current practice.
---------------------------------------------------------------------------

    Third, EPA is adding provisions to the regulations for each of the 
existing CSAPR trading programs addressing the disposition of 
allowances held in the compliance accounts of sources in states that 
are no longer covered by those programs. Under the added provisions, 
EPA would identify or, if necessary, establish a general account 
controlled by each such source's owners and operators and would 
transfer any such allowances to that general account. The added 
provisions parallel analogous provisions that were proposed and are 
being finalized in this action to address the disposition of any CSAPR 
NOX Ozone Season Group 2 allowances that may remain in the 
compliance accounts of sources in states covered by the new CSAPR 
NOX Ozone Season Group 3 trading program after the various 
procedures governing conversion or recall of such allowances have been 
carried out.
    Finally, EPA is making non-substantive revisions to the sections of 
the existing CSAPR trading program regulations that set forth the 
amounts of the budgets, new unit set-asides, and variability limits. 
The revisions clarify the regulations by indicating the specific 
control periods when such amounts no longer apply to the sources in a 
given state because the state's sources are no longer required to 
participate in that trading program.
    Further details on the specific regulatory provisions that would be 
affected by the revisions are provided in section IX.D. of the 
preamble.

D. Submitting a SIP

    States may replace a FIP with a SIP under the Clean Air Act at any 
time if the SIP is approved by EPA, see CAA section 110(c)(1)(B). EPA 
has established certain specialized provisions for replacing FIPs with 
SIPs within all of the CSAPR trading programs, including the use of so-
called ``abbreviated SIPs'' and ``full SIPs,'' see 40 CFR 52.38(a)(4) 
and (5) and (b)(4), (5), (8), and (9); 40 CFR 52.39(e), (f), (h), and 
(i). Under the new or amended FIPs for the 12 states whose sources are 
required to participate in the new CSAPR NOX Ozone Season 
Group 3 Trading Program, ``abbreviated'' and ``full'' SIP options 
continue to be available. An ``abbreviated SIP'' allows a state to 
submit a SIP revision that would establish state-determined allowance 
allocation provisions replacing the default FIP allocation provisions 
but leaves the remaining FIP provisions in place. A ``full SIP'' allows 
a state to adopt a trading program meeting certain requirements that 
would allow sources in the state to continue to use the EPA-
administered trading program through an approved SIP revision, rather 
than a FIP. In addition, as under the CSAPR and the CSAPR Update, EPA 
is providing states with an opportunity to adopt state-determined 
allowance allocations for existing units for the second control period 
under this rule--in this case, the 2022 control period--through 
streamlined SIP revisions. See 76 FR 48326-48332 for additional 
discussion on full and abbreviated SIP options and 40 CFR 52.38(b).
1. SIP Option To Modify 2022 Allocations
    As under the CSAPR and the CSAPR Update, EPA is allowing a state to 
submit a SIP revision establishing allowance allocations for existing 
units in the state for the second control period of the new 
requirements, in 2022, to replace the EPA-determined default 
allocations. This process is the same as the process used at the start 
of other CSAPR trading programs but with updated deadlines, i.e., a 
state must submit a letter to EPA by June 29, 2021 indicating its 
intent to submit a complete SIP revision by September 1, 2021. The SIP 
would provide in an EPA-prescribed format a list of existing units and 
their allocations for the 2022 control period. If a state does not 
submit a letter of intent to submit a SIP revision, the EPA-determined 
default allocations will be recorded by July 29, 2021. If a state 
submits a timely letter of intent but fails to submit a SIP revision, 
the EPA-determined default allocations will be recorded by September 
15, 2021. If a state submits a timely letter of intent followed by a 
timely SIP revision that is approved, the approved SIP allocations will 
be recorded by March 1, 2022.
2. SIP Option To Modify Allocations in 2023 and Beyond
    For the 2023 control period and later, states in the CSAPR 
NOX Ozone Season Group 3 Trading Program can modify the EPA-
determined default allocations with an approved SIP revision. The SIP 
submittal deadline is December 1, 2021. The deadline for states to 
submit state-determined allocations beginning with the 2023 and 2024 
control periods under an approved SIP would be June 1, 2022, and the 
deadline for EPA to record those allocations would be July 1, 2022. 
Similarly, a state can submit a SIP revision beginning with control 
periods in 2025 and beyond by December 1, 2022, with state allocations 
for the 2025 and 2026 control periods due June 1, 2023, and EPA 
recordation of the allocations by July 1, 2023. For the 2023 control 
period and later, SIPs can be full or abbreviated SIPs. As discussed in 
section VII.F.3. below, states will also have the option to expand 
applicability to include EGUs between 15 MWe and 25 MWe or, in the case 
of states subject to the NOX SIP Call, large non-EGU boilers 
and combustion turbines. Inclusion of the large non-EGUs would serve as 
a mechanism to address the state's outstanding regulatory obligations 
under the NOX SIP Call with respect to those sources, and 
the state would be allowed to allocate a defined quantity of additional 
Group 3 allowances because of the expanded set of sources. See above 
and 76 FR 48326-48332 for additional discussion on full and abbreviated 
SIP options and 40 CFR 52.38(b).
3. SIP Revisions That Do Not Use the New Group 3 Trading Program
    States can submit SIP revisions to replace the FIP that achieve the 
necessary emission reductions but do not use the CSAPR NOX 
Ozone Season Group 3 Trading Program. For a transport SIP revision that 
does not use the CSAPR NOX Ozone Season Group 3 Trading 
Program, EPA would evaluate the transport SIP based on the particular 
control strategies selected and whether the strategies as a whole 
provide adequate and enforceable provisions ensuring that the necessary 
emission reductions (i.e., reductions equal to or greater than what the 
Group 3 trading program will achieve) will be achieved. In order to 
best ensure its approvability, the SIP revision should include the 
following general elements: (1) A comprehensive baseline 2021 statewide 
NOX emission inventory (which includes existing control 
requirements), which should be consistent with the 2021 emission 
inventory that EPA used to calculate the required state budget in this 
final action (unless the state can explain the discrepancy); (2) a list 
and description of control measures to satisfy the state emission 
reduction obligation and a demonstration showing when each measure 
would be in place to meet the 2021 and successive control periods; (3) 
fully-adopted state rules providing for such NOX controls 
during

[[Page 23148]]

the ozone season; (4) for EGUs greater than 25 MWe, monitoring and 
reporting under 40 CFR part 75, and for other units, monitoring and 
reporting procedures sufficient to demonstrate that sources are 
complying with the SIP (see 40 CFR part 51 subpart K (``source 
surveillance'' requirements)); and (5) a projected inventory 
demonstrating that state measures along with federal measures will 
achieve the necessary emission reductions in time to meet the 2021 
compliance deadline. The SIPs must meet procedural requirements under 
the Act, such as the requirements for public hearing, be adopted by the 
appropriate state board or authority, and establish by a practically 
enforceable regulation or permit a schedule and date for each affected 
source or source category to achieve compliance. Once the state has 
made a SIP submission, EPA will evaluate the submission(s) for 
completeness. EPA's criteria for determining completeness of a SIP 
submission are codified at 40 CFR part 51 appendix V.
    For further information on replacing a FIP with a SIP, see the 
discussion in the final CSAPR rulemaking (76 FR 48326).
4. No SIP Option for Additional States To Participate in the New 
Trading Program
    EPA is not finalizing the proposed option that would have allowed 
EPA to approve a SIP submitted by a state whose sources are required to 
participate in the CSAPR NOX Ozone Season Group 1 Trading 
Program (i.e., Georgia) or a state whose sources are required to 
continue to participate in the CSAPR NOX Ozone Season Group 
2 Trading Program (Alabama, Arkansas, Iowa, Kansas, Mississippi, 
Missouri, Oklahoma, Tennessee, Texas, and Wisconsin) requiring its 
sources to participate instead in the new Group 3 trading program. No 
comments were received indicating interest in such an option, and 
elimination of the option facilitates simplification and clarification 
of several areas of the regulations. A similar option was made 
available to Georgia in the CSAPR Update (with respect to the Group 2 
trading program) to address possible concerns expressed by some 
commenters in the CSAPR Update rulemaking that if sources in Georgia 
were not allowed to trade with sources in other states, the allowances 
issued to the sources in Georgia would otherwise be of limited use. See 
81 FR 74504, 74588 (former 40 CFR 52.38(b)(6)). Because EPA has already 
approved a SIP revision under which Georgia adopted a state program 
requiring its sources to participate in the Group 1 trading program, 
EPA in this action is simplifying and clarifying the regulations by 
removing the option for Georgia to instead adopt a SIP instead 
requiring its sources to participate in the Group 2 trading program. 
Relatedly, EPA is removing the provisions in the Group 2 trading 
program regulations setting forth the amounts of the emissions budget, 
new unit set-aside, and variability limit that would have applied if 
EPA had approved a SIP revision from Georgia's requiring the state's 
sources to participate in that program as well as the provisions in the 
Group 1 trading program regulations that would have converted all 
remaining Group 1 allowances into amounts of Group 2 allowances.

E. Title V Permitting

    This final rule, like the CSAPR and the CSAPR Update, does not 
establish any permitting requirements independent of those under Title 
V of the CAA and the regulations implementing Title V, 40 CFR parts 70 
and 71.\222\ All major stationary sources of air pollution and certain 
other sources are required to apply for title V operating permits that 
include emission limitations and other conditions as necessary to 
ensure compliance with the applicable requirements of the CAA, 
including the requirements of the applicable SIP. CAA sections 502(a) 
and 504(a), 42 U.S.C. 7661a(a) and 7661c(a). The ``applicable 
requirements'' that must be addressed in title V permits are defined in 
the title V regulations (40 CFR 70.2 and 71.2 (definition of 
``applicable requirement'')).
---------------------------------------------------------------------------

    \222\ Part 70 addresses requirements for state title V programs, 
and Part 71 governs the federal title V program.
---------------------------------------------------------------------------

    EPA anticipates that, given the nature of the units subject to this 
final rule and given that all of the units covered here are already 
subject to the CSAPR Update, most if not all of the sources at which 
the units are located are already subject to title V permitting 
requirements. For sources subject to title V, the interstate transport 
requirements for the 2008 ozone NAAQS that are applicable to them under 
the new or amended FIPs would be ``applicable requirements'' under 
title V and therefore must be addressed in the title V permits. For 
example, requirements concerning designated representatives, 
monitoring, reporting, and recordkeeping, the requirement to hold 
allowances covering emissions, the assurance provisions, and liability 
are ``applicable requirements'' that must be addressed in the permits.
    Title V of the CAA establishes the basic requirements for state 
title V permitting programs, including, among other things, provisions 
governing permit applications, permit content, and permit revisions 
that address applicable requirements under final FIPs in a manner that 
provides the flexibility necessary to implement market-based programs 
such as the trading programs established by the CSAPR and the CSAPR 
Update and this final rule. 42 U.S.C. 7661a(b); 40 CFR 70.6(a)(8) & 
(10); 40 CFR 71.6(a)(8) & (10).
    In the CSAPR and the CSAPR Update, EPA established standard 
requirements governing how sources covered by that rule would comply 
with title V and its regulations.\223\ 40 CFR 97.506(d) and 97.806(d). 
For any new or existing sources under this final rule establishing the 
Group 3 trading program, identical title V compliance provisions would 
apply, just as they would have in the CSAPR NOX Ozone Season 
Group 2 Trading Program. For example, the title V regulations provide 
that a permit issued under title V must include ``[a] provision stating 
that no permit revision shall be required under any approved . . . 
emissions trading and other similar programs or processes for changes 
that are provided for in the permit.'' 40 CFR 70.6(a)(8) and 
71.6(a)(8). Consistent with these provisions in the title V 
regulations, in the CSAPR and the CSAPR Update, EPA included a 
provision stating that no permit revision is necessary for the 
allocation, holding, deduction, or transfer of allowances. 40 CFR 
97.506(d)(1) and 97.806(d)(1). This provision is also included in each 
title V permit for an affected source. This final rule maintains the 
approach taken under the CSAPR and the CSAPR Update that allows 
allowances to be traded (or allocated, held, or deducted) without a 
revision to the title V permit of any of the sources involved.
---------------------------------------------------------------------------

    \223\ EPA has also issued a guidance document and template that 
includes instructions describing how to incorporate the applicable 
requirements into a source's Title V permit. https://www3.epa.gov/airtransport/CSAPR/pdfs/CSAPR_Title_V_Permit_Guidance.pdf.
---------------------------------------------------------------------------

    Similarly, this final rule would also continue to support the means 
by which a source in a CSAPR trading program can use the title V minor 
modification procedure to change its approach for monitoring and 
reporting emissions, in certain circumstances. Specifically, sources 
may use the minor modification procedure so long as the new monitoring 
and reporting approach is one of the prior-approved approaches under 
the CSAPR and the CSAPR Update (i.e., approaches using a

[[Page 23149]]

continuous emission monitoring system under subparts B and H of Part 
75, an excepted monitoring system under appendices D and E to Part 75, 
a low mass emissions excepted monitoring methodology under 40 CFR 
75.19, or an alternative monitoring system under subpart E of part 75), 
and the permit already includes a description of the new monitoring and 
reporting approach to be used. See 40 CFR 97.506(d)(2) and 
97.806(d)(2); 40 CFR 70.7(e)(2)(i)(B) and 40 CFR 71.7(e)(1)(i)(B). As 
described in EPA's 2015 guidance, the Agency suggests in its template 
that sources may comply with this requirement by including a table of 
all of the approved monitoring and reporting approaches under the CSAPR 
and the CSAPR Update trading programs in which the source is required 
to participate, and the applicable requirements governing each of those 
approaches. Inclusion of the table in a source's title V permit 
therefore allows a covered unit that seeks to change or add to its 
chosen monitoring and recordkeeping approach to easily comply with the 
regulations governing the use of the title V minor modification 
procedure.
    Under the CSAPR and the CSAPR Update, in order to employ a 
monitoring or reporting approach different from the prior-approved 
approaches discussed previously, unit owners and operators must submit 
monitoring system certification applications to EPA establishing the 
monitoring and reporting approach actually to be used by the unit, or, 
if the owners and operators choose to employ an alternative monitoring 
system, to submit petitions for that alternative to EPA. These 
applications and petitions are subject to EPA review and approval to 
ensure consistency in monitoring and reporting among all trading 
program participants. EPA's responses to any petitions for alternative 
monitoring systems or for alternatives to specific monitoring or 
reporting requirements are posted on EPA's website.\224\ EPA maintains 
the same approach in this final rule.
---------------------------------------------------------------------------

    \224\ https://www.epa.gov/airmarkets/part-75-petition-responses.
---------------------------------------------------------------------------

    Consistent with EPA's approach under the CSAPR and the CSAPR 
Update, the applicable requirements resulting from the new and amended 
FIPs generally will have to be incorporated into affected sources' 
existing title V permits either pursuant to the provisions for 
reopening for cause (40 CFR 70.7(f) and 71.7(f)) or the standard permit 
renewal provisions (40 CFR 70.7(c) and 71.7(c)).\225\ For sources newly 
subject to title V that are affected sources under the FIPs, the 
initial title V permit issued pursuant to 40 CFR 70.7(a) should address 
the final FIP requirements.
---------------------------------------------------------------------------

    \225\ A permit is reopened for cause if any new applicable 
requirements (such as those under a FIP) become applicable to an 
affected source with a remaining permit term of 3 or more years. If 
the remaining permit term is less than 3 years, such new applicable 
requirements will be added to the permit during permit renewal. See 
40 CFR 70.7(f)(1)(I) and 71.7(f)(1)(I).
---------------------------------------------------------------------------

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

F. Relationship to Other Emission Trading and Ozone Transport Programs

1. Existing Trading Programs
    This final rule ends the requirements for sources in certain states 
to participate in the existing CSAPR NOX Ozone Season Group 
2 Trading Program with respect to emissions occurring after 2020 and 
requires those same sources instead to participate in a new CSAPR 
NOX Ozone Season Group 3 Trading Program with more stringent 
emissions budgets with respect to those emissions.\226\ As discussed in 
section VII.C.4. above, the final rule lays out certain requirements 
associated with this transition, including provisions to accommodate an 
effective date sometime after the start of the 2021 ozone season, two 
mechanisms for the creation of limited quantities of Group 3 allowances 
available for use in the new Group 3 trading program in exchange for 
certain banked 2017-2020 Group 2 allowances, and the recall of 2021-
2024 Group 2 allowances previously allocated to the sources in Group 3 
states. In addition, in section VII.C.8. of this document, EPA 
describes certain features of the new Group 3 trading program that 
differ from the current features of the other CSAPR trading programs 
and that EPA is adopting as revisions to the other CSAPR trading 
programs, as well as a subset of those new features adopted as 
revisions to the similarly structured Texas SO2 Trading 
Program. Beyond these items, nothing else in this rule affects any 
requirements for any source under the CSAPR NOX Annual, 
SO2 Group 1 or Group 2, or NOX Ozone Season Group 
1 or Group 2 trading programs or the Texas SO2 Trading 
Program. These trading programs all remain in place and will continue 
to be administered by EPA.
---------------------------------------------------------------------------

    \226\ The sources would remain subject to the Group 2 trading 
program with respect to emissions occurring in 2020 and earlier 
years and would also remain subject to various transitional 
provisions in the Group 2 trading program regulations, including 
both the provisions at 40 CFR 97.826(c) governing the conversion of 
certain banked 2017-2020 Group 2 allowances to a limited quantity of 
Group 3 allowances and the provisions at 40 CFR 97.811(d) governing 
the recall of certain previously recorded 2021-2024 Group 2 
allowances. See section VII.C.4.
---------------------------------------------------------------------------

2. Title IV Interactions
    This final rule does not affect any Acid Rain Program requirements. 
Acid Rain Program SO2 and NOX requirements are 
established independently in Title IV of the Clean Air Act and will 
continue to apply independently of this final rule's provisions. Acid 
Rain sources will still be required to comply with Title IV 
requirements, including the requirement to hold Title IV allowances to 
cover SO2 emissions after the end of each annual control 
period. EPA notes that the deadline by which sources affected under the 
Acid Rain Program must hold Title IV allowances is not affected by this 
final action and will continue to be 60 days after the end of the 
control period (i.e., February 29 or March 1 of the following year). 
Thus, starting with the compliance deadlines in 2022 for the control 
periods in 2021, the Acid Rain Program deadline will be approximately 
three months earlier than the corresponding deadline by which sources 
affected under all the CSAPR trading programs and the Texas 
SO2 Trading Program must hold allowances available for 
compliance under those programs, which will be June 1 of the year 
following the year of the control period, as discussed in sections 
VII.C.5 and VII.C.8.b.
3. NOX SIP Call Interactions
    States affected by both the NOX SIP Call and this action 
will be required to comply with the requirements of both rules. This 
final rule requires NOX ozone season emission reductions 
from EGUs larger than 25 MWe in many NOX SIP Call states and 
at greater stringency than required by the NOX SIP Call. 
Therefore, this final rule will achieve emission reductions sufficient 
to address the emission reduction requirements of the NOX 
SIP Call for these large EGUs.
    The NOX SIP Call states used the NOX Budget 
Trading Program to comply with the NOX SIP Call requirements 
both for EGUs serving generators with a nameplate capacity greater than 
25 MWe and for large non-EGU boilers and combustion turbines with a 
maximum design heat input greater than 250 mmBtu/hr. (In some states, 
EGUs

[[Page 23150]]

serving a generator with a nameplate capacity equal to or smaller than 
25 MWe were also part of the NOX Budget Trading Program as a 
carryover from the Ozone Transport Commission NOX Budget 
Program.) However, EPA discontinued the NOX Budget Trading 
Program after 2008 when implementation of the CAIR NOX Ozone 
Season Trading Program began. Since that time, states have had to find 
appropriate alternative ways to continue to show compliance with the 
NOX SIP Call, particularly for large non-EGUs. As one 
option, EPA has allowed states to modify the applicability provisions 
of the NOX ozone season trading programs established under 
CAIR and later the CSAPR Update (although not the CSAPR) to include all 
NOX Budget Trading Program units as a way to continue to 
meet the requirements of the NOX SIP Call for these sources.
    In this action, as under CAIR and the CSAPR Update, EPA is again 
allowing any NOX SIP Call state affected by this final rule 
to voluntarily submit a SIP revision to expand the applicability of the 
CSAPR NOX Ozone Season Group 3 Trading Program to include 
all NOX Budget Trading Program units. As part of such a SIP 
revision, the state would be allowed to issue additional emission 
allowances capped at a level intended to preserve the stringency of the 
Group 3 trading program. Analysis shows that the NOX Budget 
Trading Program units (mainly large non-EGU boilers, combustion 
turbines, and combined cycle units with a maximum design heat input 
greater than 250 mmBtu/hr) continue to emit well below their portions 
of the NOX SIP Call state budgets. In order to ensure that 
the necessary amounts of EGU emission reductions occur for this final 
rule, the corresponding state ozone-season emissions budget amount can 
be increased by the lesser of: (1) The relevant non-EGU budget under 
the NOX SIP Call or (2) the highest emissions of the 
relevant set of non-EGUs in the most recent 3 years. EPA believes that 
the environmental impact would be neutral using this approach, and 
hourly reporting of emissions under 40 CFR part 75 would continue. This 
option will address requests by states for help in determining an 
appropriate way to address the continuing NOX SIP Call 
requirement for large boilers and turbines. If a state elects to bring 
its NOX SIP Call non-EGUs into the Group 3 trading program, 
the program's assurance provisions continue to apply only to the EGUs 
covered by the program, and the amounts of the variability limits and 
assurance levels established for EGUs will remain unchanged.
    The NOX SIP Call generally requires that states choosing 
to rely on large EGUs and large non-EGU boilers and turbines for 
meeting NOX SIP Call emission reduction requirements must 
establish a NOX mass emissions cap on each source and 
require 40 CFR part 75, subpart H monitoring or alternative monitoring. 
As an alternative to source-by-source NOX mass emission 
caps, a state may impose NOX emission rate limits on each 
source and use maximum operating capacity for estimating NOX 
mass emissions or may rely on other requirements that the state 
demonstrates to be equivalent to either the NOX mass 
emission caps or the NOX emission rate limits that assume 
maximum operating capacity. Collectively, the caps or their 
alternatives cannot exceed the portion of the state budget for those 
sources. See 40 CFR 51.121(f)(2) and (i)(1). If a state submits and EPA 
approves a SIP expanding the applicability to include all of the 
state's NOX Budget Trading Program units in the CSAPR 
NOX Ozone Season Group 3 Trading Program, the cap 
requirement would be met through the new budget and the monitoring 
requirement would be met through the trading program provisions, which 
require part 75 monitoring. Whether states choose to include 
NOX Budget Trading Program units in the CSAPR NOX 
Ozone Season Group 3 Trading Program through SIPs or not, EPA will work 
with states to ensure that NOX SIP Call obligations continue 
to be met.
    Comment: One commenter questioned the need to allow states to 
include large non-EGUs of the types that participated in the 
NOX Budget Trading Program in the Group 3 trading program 
since current ozone season NOX emissions from the large non-
EGUs are a small fraction of historical emissions because many units 
have retired and the remaining ones have moved away from coal as the 
main fuel and are now largely natural gas-fired.
    Response: EPA is not requiring states to include non-EGUs of the 
types that participated in the NOX Budget Trading program in 
the Group 3 trading program. EPA continues to believe that allowing 
states to include these sources in the Group 3 trading program (or for 
some states, the Group 2 trading program) provides states a potentially 
useful option for continued compliance with ongoing NOX SIP 
Call requirements.
    Comment: A commenter questioned the methodology EPA would use to 
ensure that including these sources in the Group 3 trading program 
could be done in an environmentally neutral way. The commenter did not 
feel EPA had explained how that would work in practice.
    Response: EPA has allowed the voluntary inclusion of these sources 
in the CSAPR programs for a number of years. The methodology for 
determining the amount of allowances to provide for the additional 
sources is capped at the lesser of recent historical actual emissions 
and the allocations from the original NOX SIP Call program. 
This methodology accounts for the kinds of overall emission reductions 
that have occurred as cited by the commenter and holds emissions at 
actual levels, thus not allowing emissions increases from a decision by 
a state to voluntarily include these sources in the new CSAPR trading 
program.

VIII. Costs, Benefits, and Other Impacts of the Final Rule

    In the Regulatory Impact Analysis for the Final Revised Cross-State 
Air Pollution Rule Update for the 2008 Ozone NAAQS (RIA), EPA estimated 
the health and climate benefits, compliance costs, and emissions 
changes that may result from the final rule for the analysis period 
2021 to 2040. The estimated health and climate benefits and compliance 
costs are presented in detail in the RIA accompanying this final 
action. EPA notes that the estimated health and climate benefits and 
compliance costs are directly associated with optimizing NOX 
removal by turning on and optimizing existing idled SCRs; optimizing 
existing idled selective non-catalytic reduction (SNCRs); and 
installing state-of-the-art combustion controls. The estimated health 
and climate benefits and compliance costs also result from a small 
amount of generation shifting as the power system adjusts to the 
regulatory requirements.
    EPA analyzed this final action's emission budgets, using a uniform 
control stringency represented by $1,800 per ton of NOX 
(2016$), as well as a more and a less stringent alternative. The more 
and less stringent alternatives differ in that they set different 
NOX ozone season emission budgets for the affected EGUs. The 
less stringent alternative uses emission budgets that were developed 
using uniform control stringency represented by $500 per ton of 
NOX (2016$). The more stringent alternative uses emission 
budgets that were developed using uniform control stringency 
represented by $9,600 per ton of NOX (2016$). Table VIII.1 
provides the projected 2021, 2025, 2030, 2035, and 2040 EGU emission 
reductions for the evaluated regulatory

[[Page 23151]]

control alternatives.\227\ For additional information on emissions 
changes, see Table 4.5 in Chapter 4 of the RIA.
---------------------------------------------------------------------------

    \227\ EPA relied on Engineering Analysis to account for changes 
in NOX (annual and ozone season), SO2, and 
direct PM. While this approach captures the impact of generation 
shifting for NOX emissions, it does not fully capture the 
impact of generation shifting for SO2 and PM in complying 
with the budgets established in this final rule. In order to meet 
the court-ordered timeline for this rulemaking EPA prioritized fully 
capturing the impact of reductions from generation shifting on 
NOX and CO2, but did not account for the 
relatively small amount of SO2 and primary PM emissions 
reductions that would likely occur due to generation shifting. Hence 
total benefits could be higher than those reported in this RIA. EPA 
relied on IPM estimates to capture changes in CO2 
emissions, which fully account for the impact of generation 
shifting.

  Table VIII.1--Estimated 2021, 2025, 2030, 2035, and 2040 a EGU Emissions Reductions in the 12 States of NOX,
                              SO2, and CO2 and More and Less Stringent Alternatives
                                                   [Tons] b c
----------------------------------------------------------------------------------------------------------------
                                                                                  More stringent  Less stringent
                                                                    Final rule      alternative     alternative
----------------------------------------------------------------------------------------------------------------
2021:
    NOX (annual)................................................          16,000          16,000           2,000
    NOX (ozone season)..........................................          16,000          16,000           2,000
    SO2 (annual) *..............................................             (*)             (*)             (*)
    CO2 (annual, thousand metric)...............................  ..............  ..............  ..............
2025:
    NOX (annual)................................................          21,000          37,000           2,000
    NOX (ozone season)..........................................          19,000          34,000           2,000
    SO2 (annual) *..............................................             (*)             (*)             (*)
    CO2 (annual, thousand metric)...............................           5,000          14,000           4,000
2030:
    NOX (annual)................................................          16,000          27,000           2,000
    NOX (ozone season)..........................................          13,000          25,000           2,000
    SO2 (annual) *..............................................             (*)             (*)             (*)
    CO2 (annual, thousand metric)...............................           8,000          19,000           6,000
2035:
    NOX (annual)................................................          15,000          26,000           2,000
    NOX (ozone season)..........................................          13,000          25,000           2,000
    SO2 (annual) *..............................................             (*)             (*)             (*)
    CO2 (annual, thousand metric)...............................           8,000          19,000           6,000
2040:
    NOX (annual)................................................          14,000          25,000           2,000
    NOX (ozone season)..........................................          13,000          24,000           2,000
    SO2 (annual) *..............................................             (*)             (*)             (*)
    CO2 (annual, thousand metric)...............................           4,000          13,000           3,000
----------------------------------------------------------------------------------------------------------------
a The 2021-2040 emissions reductions estimates are based on IPM projections for CO2 and engineering analysis for
  annual and ozone season NOX. SO2 and PM2.5 emissions were only partially analyzed. IPM was run for the
  following years: 2021, 2023, 2025, 2030, 2035, 2040, 2045 and 2050. For more information, see Chapter 4 and
  the Ozone Transport Policy Analysis Final Rule TSD.
b NOX emissions are reported in English (short) tons; CO2 is reported in metric tons.
c In addition to no annual SO2 emissions reductions as shown in the table above, there are no annual direct
  PM2.5 emissions changes.
* There are no annual SO2 and PM2.5 emissions reductions that come from turning on SCRs and SNCRs assuming that
  nothing else changes, but EPA did not analyze the effects on SO2 and direct PM that may come from shifting
  power generation, for example from coal-fired power plants to gas-fired or other types of power plants. EPA
  does expect some changes in SO2 and PM2.5 emissions due to shifting of power generation.

    EPA analyzed ozone-season NOX emission reductions and 
the associated costs to the power sector of implementing the EGU 
NOX ozone-season emissions budgets in each of the 12 states 
using the Integrated Planning Model (IPM) and its underlying data and 
inputs. The estimates of the changes in the cost of supplying 
electricity for the regulatory control alternatives are presented in 
Table VIII.2. Total costs continue to change in later IPM run years as 
the modeled system responds to projected demand growth and shifts in 
the power sector under the illustrative scenarios. For a detailed 
description of these cost trends, please see Chapter 4, Section 4.4.3 
of the RIA.

  Table VIII.2--National Compliance Cost Estimates (Millions of 2016$) for the Regulatory Control Alternatives
----------------------------------------------------------------------------------------------------------------
                                                                                  More-stringent  Less-stringent
                                                                    Final rule      alternative     alternative
----------------------------------------------------------------------------------------------------------------
2021-2025 (Annualized)..........................................           $10.0           $41.4          $(2.9)
2021-2040 (Annualized)..........................................            24.8            28.5            19.6
2021 (Annual)...................................................             5.1             5.2             1.6
2022 (Annual)...................................................            19.2            61.5             5.9
2023 (Annual)...................................................            19.2            61.5             5.9
2024 (Annual)...................................................             2.1             4.5          (14.9)
2025 (Annual)...................................................             1.6             4.0          (14.9)
2030 (Annual)...................................................            63.6            32.3            67.0

[[Page 23152]]

 
2035 (Annual)...................................................            18.2            41.2            14.3
2040 (Annual)...................................................             8.8           134.0            18.9
----------------------------------------------------------------------------------------------------------------
``2021-2025 (Annualized)'' reflects total estimated annual compliance costs levelized over the period 2021
  through 2025 and discounted using a 4.25 real discount rate.\228\ This does not include compliance costs
  beyond 2025. ``2021-2040 (Annualized)'' reflects total estimated annual compliance costs levelized over the
  period 2021 through 2040 and discounted using a 4.25 real discount rate. This does not include compliance
  costs beyond 2040. ``2021 (Annual)'' through ``2040 (Annual)'' costs reflect annual estimates in each of those
  years.

    Tables VIII.3 and VIII.4 report the estimated economic value of 
avoided premature deaths and illness in each year relative to the 
baseline along with the 95% confidence interval. In each of these 
tables, for each discount rate and regulatory control alternative, 
multiple benefits estimates are presented reflecting alternative ozone 
and PM2.5 mortality risk estimates. For additional 
information on health benefits, see Chapter 5 of the RIA.
---------------------------------------------------------------------------

    \228\ This table reports compliance costs consistent with 
expected electricity sector economic conditions. An NPV of costs was 
calculated using a 4.25% real discount rate consistent with the rate 
used in IPM's objective function for cost-minimization. The NPV of 
costs was then used to calculate the levelized annual value over a 
5-year period (2021-2025) and a 20-year period (2021-2040) using the 
4.25% rate as well. Table VIII.7 reports the NPV of the annual 
stream of costs from 2021-2040 using 3% and 7% consistent with OMB 
guidance.

  Table VIII.3--Table VIII.3. Estimated Discounted Economic Value of Ozone-Attributable Premature Mortality and
                                Illnesses for the Final Policy Scenarios in 2021
                                [95% Confidence Interval; millions of 2016$] a b
----------------------------------------------------------------------------------------------------------------
                                                                     More stringent           Less stringent
                                              Final rule              alternative              alternative
----------------------------------------------------------------------------------------------------------------
3% Discount Rate.....................  $230 ($58 to $480) \c\   $260 ($88 to $520) \c\   $22 ($6 to $47) \c\ and
                                        and $1,900 ($210 to      and $1,900 ($210 to      $190 ($20 to $490) \d\
                                        $5,000) \d\.             $5,000) \d\.
7% Discount Rate.....................  $200 ($38 to $460) \c\   $200 ($38 to $460) \c\   $20 ($4 to $45) \c\ and
                                        and $1,700 ($170 to      and $1,700 ($170 to      $170 ($17 to $440) \d\
                                        $4,500) \d\.             $4,500) \d\.
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to two significant figures. The two benefits estimates are separated by the word ``and'' to
  signify that they are two separate estimates. The estimates do not represent lower- and upper-bound estimates
  and should not be summed.
\b\ We estimated changes in annual mean PM2.5 and PM2.5 -related benefits in 2024, but not 2021. As discussed in
  Chapter 4, in 2021, the only control measure expected to be adopted for compliance in the regulatory control
  alternatives is optimization of existing SCRs, and this measure will operate only during the ozone season. As
  discussed in Chapter 3, NOX reductions in the ozone season provide minimal PM2.5 benefits since PM2.5 nitrate
  concentrations, which result from conversion of NOX emissions to nitrate, are minimal during the warmer
  temperatures during the ozone season. Conversely, the conversion of nitrates to PM2.5 is much greater in
  cooler (non-ozone season) months, and thus it becomes worthwhile to estimate PM2.5 benefits from NOX
  reductions in those months. In 2024, the presence of additional control measures that operate year-round and
  other changes in market conditions as a result of the rule lead to notable NOX reductions in the winter
  months.
\c\ Sum of ozone mortality estimated using the pooled Katsouyanni et al. (2009) and Zanobetti and Schwartz
  (2008) short-term risk estimate and the Di et al. (2017) long-term mortality risk estimate. As PM-related
  mortality quantified using risk estimates from the Di et al. (2017) and Turner et al. (2016) are within 5% of
  one another, in the interest of clarity and simplicity, we present the results estimated using the risk
  estimate from Di et al. (2017) alone.
\d\ Sum of ozone mortality estimated using the long-term risk estimate and the Di et al. (2017) long-term
  mortality risk estimate. As PM-related mortality quantified using risk estimates from the Di et al. (2017) and
  Turner et al. (2016) are within 5% of one another, in the interest of clarity and simplicity, we present the
  results estimated using the risk estimate from Di et al. (2017) alone.


  Table VIII.4--Estimated Discounted Economic Value of Avoided Ozone and PM2.5-Attributable Premature Mortality
                               and Illnesses for the Final Policy Scenario in 2024
                                [95% Confidence Interval; millions of 2016$] a b
----------------------------------------------------------------------------------------------------------------
                                                                   More stringent            Less stringent
                                           Final rule                alternative             alternative \b\
----------------------------------------------------------------------------------------------------------------
3% Discount Rate.................  $310 ($72 to $680) \c\     $530 ($130 to $1,100)     $22 ($6 to $47) \c\ and
                                    and $2,400 ($250 to        \c\ and $4,200 ($450 to   $190 ($20 to $490). \d\
                                    $6,200) \d\.               $11,000) \d\.
7% Discount Rate.................  $280 ($48 to $640) \c\     $470 ($84 to $1,100) \c\  $20 ($4 to $45) \c\ and
                                    and $2,100 ($210 to        and $3,800 ($370 to       $170 ($17 to $440). \d\
                                    $5,600) \d\.               $9,900) \d\.
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to two significant figures. The two benefits estimates are separated by the word ``and'' to
  signify that they are two separate estimates. The estimates do not represent lower- and upper-bound estimates
  and should not be summed.
\b\ No PM-attributable benefits accrue for this scenario.
\c\ Sum of ozone mortality estimated using the pooled Katsouyanni et al. (2009) and Zanobetti and Schwartz
  (2008) short-term risk estimate and the Di et al. (2017) long-term mortality risk estimate. As PM-related
  mortality quantified using risk estimates from the Di et al. (2017) and Turner et al. (2016) are within 5% of
  one another, in the interest of clarity and simplicity, we present the results estimated using the risk
  estimate from Di et al. (2017).
\d\ Sum of ozone mortality estimated using the long-term risk estimate and the Di et al. (2017) long-term
  mortality risk estimate. PM-related mortality quantified using risk estimates from the Di et al. (2017) and
  Turner et al. (2016) are within 5% of one another. In the interest of clarity and simplicity, we present the
  results estimated using the risk estimate from Di et al. (2017) alone.


[[Page 23153]]

    Table VIII.5 shows the estimated monetary value of the estimated 
changes in CO2 emissions expected to occur over 2021-2040 
for the final rule, the more-stringent alternative, and the less-
stringent alternative. EPA estimated the dollar value of the 
CO2-related effects for each analysis year between 2021 and 
2040 by applying the SC-CO2 estimates to the estimated 
changes in CO2 emissions in the corresponding year under the 
regulatory options.\229\ For additional information on climate 
benefits, see Chapter 5 of the RIA.
---------------------------------------------------------------------------

    \229\ Under the baseline, CO2 emissions are projected 
to rise through 2025 and then taper off through 2035 and rise during 
the rest of the period, reflecting increasing demand growth, 
changing generation mix patterns and the impact of retiring 
capacity. CO2 emissions reductions as a result of the 
modeled policies follow a similar trend, which causes total climate 
benefit estimates to oscillate over time.

      Table VIII.5--Estimated Total Annual Global Climate Benefits (2021-40) from Changes in CO2 Emissions
                                               [Millions of 2016$]
----------------------------------------------------------------------------------------------------------------
                                                                                                    3% discount
     Regulatory alternative            Year         5% discount     3% discount    2.5% discount    rate (95th
                                                       rate            rate            rate         percentile)
----------------------------------------------------------------------------------------------------------------
Final...........................            2021               0               1               1               2
                                            2022              46             143             206             434
                                            2023              94             290             417             882
                                            2024             102             311             444             946
                                            2025             109             331             473           1,011
                                            2030             128             373             525           1,146
                                            2035              98             273             380             838
                                            2040             127             340             467           1,043
More-Stringent Alternative......            2021               1               2               3               7
                                            2022              76             237             341             720
                                            2023             156             480             689           1,460
                                            2024             204             623             892           1,898
                                            2025             254             771           1,100           2,350
                                            2030             323             939           1,322           2,885
                                            2035             316             878           1,222           2,698
                                            2040             383           1,025           1,410           3,146
Less-Stringent Alternative......            2021               0               1               1               3
                                            2022              39             122             176             371
                                            2023              80             248             356             754
                                            2024              81             248             355             755
                                            2025              82             248             353             755
                                            2030              93             271             381             831
                                            2035              73             203             282             623
                                            2040              91             242             333             743
----------------------------------------------------------------------------------------------------------------
Note: We emphasize the importance and value of considering the benefits calculated using all four SC-CO2
  estimates. As discussed in Chapter 5 of the RIA and in the Technical Support Document: Social Cost of Carbon,
  Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990 (IWG 2021), a consideration of
  climate benefits calculated using discount rates below 3 percent, including 2 percent and lower, are also
  warranted when discounting intergenerational impacts.

    In Table VIII.6, EPA presents a summary of the benefits, costs, and 
net benefits of this final action and the more and less stringent 
alternatives for 2021. Table VIII.7 presents a summary of these impacts 
for this final action and the more and less stringent alternatives for 
2025. Table VIII.8 presents a summary of these impacts for this final 
action and the more and less stringent alternatives for 2030. 
Discussion of the non-monetized health and welfare benefits from these 
pollutants is found in Chapter 5 of the RIA.

 Table VIII.6--Benefits, Costs, and Net Benefits of the Final and More and Less Stringent Alternatives for 2021
                                                  for the U.S.
                                         [Millions of 2016$] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                                More stringent              Less stringent
                                      Final rule                  alternative                 alternative
----------------------------------------------------------------------------------------------------------------
Health Benefits (3%)........  $230 and $1,900...........  $260 and $1,900...........  $20 and $190.
Climate Benefits (3%).......  $1........................  $2........................  $1.
Total Benefits..............  $230 and $1,900...........  $260 and $1,900...........  $20 and $190.
Costs.......................  $5........................  $5........................  $2
                             -----------------------------------------------------------------------------------
Net Benefits................  $230 and $1,900...........  $260 and $1,900...........  $20 and $190.
----------------------------------------------------------------------------------------------------------------
Health Benefits (7%)........  $200 and $1,700...........  $200 and $1,700...........  $20 and $170.
Climate Benefits (3%).......  $1........................  $2........................  $1.
Total Benefits..............  $200 and $1,700...........  $200 and $1,700...........  $20 and $170.
Costs.......................  $5........................  $5........................  $2.
                             -----------------------------------------------------------------------------------

[[Page 23154]]

 
Net Benefits................  $200 and $1,700...........  $200 and $1,700...........  $20 and $170.
----------------------------------------------------------------------------------------------------------------
\a\ We focus results to provide a snapshot of costs and benefits in 2021, using the best available information
  to approximate social costs and social benefits recognizing uncertainties and limitations in those estimates.
  The two benefits estimates are separated by the word ``and'' to signify that they are two separate estimates.
  The estimates do not represent lower- and upper-bound estimates and should not be summed.
\b\ Benefits include those related to public health and climate. The health benefits are associated with several
  point estimates and are presented at real discount rates of 3 and 7 percent. Climate benefits are based on
  changes (reductions) in CO2 emissions and are calculated using four different estimates of the social cost of
  carbon (SC-CO2) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th percentile at 3
  percent discount rate). For the presentational purposes of this table, we show the benefits associated with
  the average SC-CO2 at a 3 percent discount rate, but the Agency does not have a single central SC-CO2 point
  estimate. We emphasize the importance and value of considering the benefits calculated using all four SC-CO2
  estimates; the additional benefit estimates range from $0.24 million to $2.31 million in 2021 for the
  finalized option and are presented above in Table VIII.5. As discussed in Chapter 5, a consideration of
  climate benefits calculated using discount rates below 3 percent, including 2 percent and lower, are also
  warranted when discounting intergenerational impacts. The costs presented in this table are 2021 annual
  estimates for each alternative analyzed.
\c\ Rows may not appear to add correctly due to rounding.


 Table VIII.7--Benefits, Costs, and Net Benefits of the Final and More and Less Stringent Alternatives for 2025
                                                  for the U.S.
                                         [Millions of 2016$] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                                More stringent              Less stringent
                                      Final Rule                  alternative                 alternative
----------------------------------------------------------------------------------------------------------------
Health Benefits (3%)........  $320 and $2,400...........  $540 and $4,200...........  $20 and $200.
Climate Benefits (3%).......  $330......................  $770......................  $250.
Total Benefits..............  $650 and $2,700...........  $1,300 and $5,000.........  $270 and $450.
                             -----------------------------------------------------------------------------------
Costs.......................  $2........................  $4........................  -$15.
----------------------------------------------------------------------------------------------------------------
Net Benefits................  $650 and $2,700...........  $1,300 and $5,000.........  $280 and $460.
Health Benefits (7%)........  $290 and $2,200...........  $490 and $3,800...........  $20 and $170.
Climate Benefits (3%).......  $330......................  $770......................  $250.
Total Benefits..............  $620 and $2,500...........  $1,300 and $4,600.........  $270 and $420.
                             -----------------------------------------------------------------------------------
Costs.......................  $2........................  $4........................  -$15.
                             -----------------------------------------------------------------------------------
Net Benefits................  $620 and $2,500...........  $1,300 and $4,500.........  $280 and $430.
----------------------------------------------------------------------------------------------------------------
\a\ We focus results to provide a snapshot of costs and benefits in 2025, using the best available information
  to approximate social costs and social benefits recognizing uncertainties and limitations in those estimates.
  The two benefits estimates are separated by the word ``and'' to signify that they are two separate estimates.
  The estimates do not represent lower- and upper-bound estimates and should not be summed.
\b\ Benefits include those related to public health and climate. The health benefits are associated with several
  point estimates and are presented at real discount rates of 3 and 7 percent. Climate benefits are based on
  changes (reductions) in CO2 emissions and are calculated using four different estimates of the social cost of
  carbon (SC-CO2) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th percentile at 3
  percent discount rate). For the presentational purposes of this table, we show the benefits associated with
  the average SC-CO2 at a 3 percent discount rate, but the Agency does not have a single central SC-CO2 point
  estimate. We emphasize the importance and value of considering the benefits calculated using all four SC-CO2
  estimates; the additional benefit estimates range from $109 million to $1,011 million in 2025 for the
  finalized option and are presented above in Table VIII.5. As discussed in Chapter 5, a consideration of
  climate benefits calculated using discount rates below 3 percent, including 2 percent and lower, are also
  warranted when discounting intergenerational impacts. The costs presented in this table are 2025 annual
  estimates for each alternative analyzed.
\c\ Rows may not appear to add correctly due to rounding.


 Table VIII.8--Benefits, Costs, and Net Benefits of the Final and More and Less Stringent Alternatives for 2030
                                                  for the U.S.
                                         [Millions of 2016$] \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                                   More stringent            Less stringent
                                           Final rule                alternative               alternative
----------------------------------------------------------------------------------------------------------------
Health Benefits (3%).............  $340 and $2,600..........  $590 and $4,600.........  $30 and $210.
Climate Benefits (3%)............  $370.....................  $940....................  $270.
Total Benefits...................  $710 and $3,000..........  $1,500 and $5,500.......  $300 and $480.
Costs............................  $64......................  $32.....................  $67.
                                  ------------------------------------------------------------------------------
Net Benefits.....................  $650 and $2,900..........  $1,500 and $5,500.......  $230 and $410.
----------------------------------------------------------------------------------------------------------------
Health Benefits (7%).............  $330 and $2,500..........  $560 and $3,900.........  $20 and $180.
Climate Benefits (3%)............  $370.....................  $940....................  $270.
Total Benefits...................  $700 and $2,900..........  $1500 and $4,800........  $290 and $450.

[[Page 23155]]

 
Costs............................  $64......................  $32.....................  $67.
                                  ------------------------------------------------------------------------------
Net Benefits.....................  $640 and $2,800..........  $1,500 and $4,800.......  $220 and $380.
----------------------------------------------------------------------------------------------------------------
\a\ We focus results to provide a snapshot of costs and benefits in 2030, using the best available information
  to approximate social costs and social benefits recognizing uncertainties and limitations in those estimates.
  The two benefits estimates are separated by the word ``and'' to signify that they are two separate estimates.
  The estimates do not represent lower- and upper-bound estimates and should not be summed.
\b\ Benefits include those related to public health and climate. The health benefits are associated with several
  point estimates and are presented at real discount rates of 3 and 7 percent. Climate benefits are based on
  changes (reductions) in CO2 emissions and are calculated using four different estimates of the social cost of
  carbon (SC-CO2) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th percentile at 3
  percent discount rate). For the presentational purposes of this table, we show the benefits associated with
  the average SC-CO2 at a 3 percent discount rate, but the Agency does not have a single central SC-CO2 point
  estimate. We emphasize the importance and value of considering the benefits calculated using all four SC-CO2
  estimates; the additional benefit estimates range from $128 million to $1,146 million in 2030 for the
  finalized option and are presented above in Table VIII.5. As discussed in Chapter 5, a consideration of
  climate benefits calculated using discount rates below 3 percent, including 2 percent and lower, are also
  warranted when discounting intergenerational impacts. The costs presented in this table are 2030 annual
  estimates for each alternative analyzed.
\c\ Rows may not appear to add correctly due to rounding.

    In addition, Table VIII.9 presents estimates of the present value 
(PV) of the benefits and costs and the equivalent annualized value 
(EAV), an estimate of the annualized value of the net benefits 
consistent with the present value, over the twenty-year period of 2021 
to 2040. The estimates of the PV and EAV are calculated using discount 
rates of 3 and 7 percent as directed by OMB's Circular A-4 and are 
presented in 2016 dollars discounted to 2021.

Table VIII.9--Estimated Health Benefits, Climate Benefits, Compliance Costs, and Net Benefits of the Final Rule,
                                                2021 Through 2040
                                      [Millions 2016$, discounted to 2021]
----------------------------------------------------------------------------------------------------------------
                                                  3% Discount rate                     7% Discount rate
----------------------------------------------------------------------------------------------------------------
Present Value:
    Health Benefits b.................  $4,800 and $37,000.................  $3,200 and $25,000.
    Climate Benefits b................  $4,400.............................  $4,400.
    Compliance Costs c................  $370...............................  $260.
                                       -------------------------------------------------------------------------
    Net Benefits......................  $8,800 and $41,000.................  $7,300 and $29,000.
----------------------------------------------------------------------------------------------------------------
Equivalent Annualized Value:
    Health Benefits...................  $320 and $2,500....................  $300 and $2,400.
    Climate Benefits..................  $290...............................  $290.
    Compliance Costs..................  $25................................  $25.
                                       -------------------------------------------------------------------------
    Net Benefits......................  $590 and $2,800....................  $570 and $2,700.
----------------------------------------------------------------------------------------------------------------
a Numbers may not sum due to independent rounding. The two benefits estimates are separated by the word ``and''
  to signify that they are two separate estimates. The estimates do not represent lower- and upper-bound
  estimates and should not be summed.
b The health benefits are associated with several point estimates and are presented at real discount rates of 3
  and 7 percent. Climate benefits are based on changes (reductions) in CO2 emissions and are calculated using
  four different estimates of the social cost of carbon (SC-CO2) (model average at 2.5 percent, 3 percent, and 5
  percent discount rates; 95th percentile at 3 percent discount rate). For the presentational purposes of this
  table, we show the climate benefits associated with the average SC-CO2 at a 3 percent discount rate, but the
  Agency does not have a single central SC-CO2 point estimate. We emphasize the importance and value of
  considering the benefits calculated using all four SC-CO2 estimates; the additional benefit estimates are
  presented above in Table VIII.5. As discussed in Chapter 5 of the Regulatory Impact Analysis for the Final
  Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, a consideration of climate benefits
  calculated using discount rates below 3 percent, including 2 percent and lower, are also warranted when
  discounting intergenerational impacts.
c To estimate these annualized costs, EPA uses a conventional and widely accepted approach that applies a
  capital recovery factor (CRF) multiplier to capital investments and adds that to the annual incremental
  operating expenses. Annual costs were calculated using a 4.25% real discount rate consistent with the rate
  used in IPM's objective function for cost-minimization.

    As shown in Table VIII.9, the PV of the health benefits of this 
final rule, discounted at a 3-percent discount rate, is estimated to be 
about $4,800 million and $37,000 million, with an EAV of about $320 
million and $2,500 million. At a 7-percent discount rate, the PV of the 
health benefits is estimated to be $3,200 million and $25,000 million, 
with an EAV of about $300 million and $2,400 million. The two health 
benefits estimates for each discount rate reflect alternative ozone and 
PM2.5 mortality risk estimates. The PV of the climate 
benefits of this final rule, discounted at a 3-percent rate, is 
estimated to be about $4,400 million, with an EAV of about $290 
million. The PV of the compliance costs, discounted at a 3-percent 
rate, is estimated to be about $370 million, with an EAV of about $25 
million. At a 7-percent discount rate, the PV of the compliance costs 
is estimated to be about $260 million, with an EAV of about $25 
million. See the RIA for additional discussion on costs, benefits, and 
impacts.

[[Page 23156]]

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

    This section describes the amendments to the regulatory text for 
the federal implementation plans and the trading program regulations 
related to the findings and remedy discussed elsewhere in this 
document. The primary amendments to the CFR are revisions to the CSAPR 
Update FIP provisions in 40 CFR part 52 and the creation of a new CSAPR 
NOX Ozone Season Group 3 Trading Program in 40 CFR part 97, 
subpart GGGGG. In addition, amendments are being made to the 
regulations for the existing CSAPR NOX Ozone Season Group 2 
Trading Program to address the transition of the sources in certain 
states from the existing Group 2 trading program to the new Group 3 
trading program. The existing regulations for the administrative appeal 
procedures in 40 CFR part 78 are also being revised to reflect the 
applicability of those procedures to decisions of the EPA Administrator 
under the new Group 3 trading program.
    In addition to these primary amendments, certain revisions are 
being made to the regulations for the existing CSAPR trading programs 
and the Texas SO2 Trading Program for conformity with the 
proposed provisions of the new Group 3 trading program, as discussed in 
section VII.C.8, and a cross-reference in the NOX SIP Call 
regulations at 40 CFR 51.121 to the CSAPR Update FIP provisions is 
being updated. This section also describes a small number of minor 
additional proposed corrections and clarifications to the existing CFR 
text for the CSAPR trading programs, the Texas SO2 Trading 
Program, and the appeal procedures. EPA has included documents in the 
docket for this final action showing all of the proposed revisions to 
part 52, part 78, and subparts AAAAA through FFFFF of part 97 in 
redline-strikeout format.

A. Amended CSAPR Update FIP Provisions

    The CSAPR and CSAPR Update FIP provisions related to ozone season 
NOX emissions are set forth in Sec.  52.38(b) as well as 
sections of part 52 specific to each covered state. Amendments to Sec.  
52.38(b)(1) expand the overall set of CSAPR trading programs addressing 
ozone season NOX emissions to include the new Group 3 
trading program in subpart GGGGG of part 97 in addition to the current 
Group 1 and Group 2 trading programs in subparts BBBBB and EEEEE of 
part 97, respectively, while amendments to Sec.  52.38(b)(2) identify 
the states whose sources are required under the new or amended FIPs to 
participate in each of the respective trading programs with regard to 
their emissions occurring in particular years. More specifically, for 
sources in the states that EPA finds have further good neighbor 
obligations with respect to the 2008 ozone NAAQS under this rule, new 
Sec.  52.38(b)(2)(iv) ends the requirement to participate in the Group 
2 trading program after the 2020 control period and new Sec.  
52.38(b)(2)(v) establishes the requirement to participate in the new 
Group 3 trading program starting with the 2021 control period.
    The changes in FIP requirements set forth in Sec.  52.38(b)(1) and 
(2) are substantively replicated in the state-specific CFR sections for 
each of the Group 3 states.\230\ In each such CFR section, the current 
provision indicating that sources in the state are required to 
participate in the CSAPR NOX Ozone Season Group 2 Trading 
Program is revised to end that requirement with respect to emissions 
after 2020 and to restore previously removed language indicating that 
participation by those sources in the Group 2 trading program was only 
a partial remedy for the state's underlying good neighbor 
obligation.\231\ A further provision is added in each section 
indicating that sources in the state are required to participate in the 
CSAPR NOX Ozone Season Group 3 Trading Program with respect 
to emissions starting in 2021. These added provisions do not contain 
the partial-remedy language, consistent with EPA's determinations in 
this rule that participation in the Group 3 trading program by a 
state's EGUs constitutes a full remedy for each such state's underlying 
good neighbor obligation. No changes are being made to the CFR sections 
for the remaining states whose sources currently participate in the 
Group 2 trading program. For these states, EPA's findings in this 
action are consistent with and therefore affirm the previous removal of 
language indicating that participation by the states' sources in the 
Group 2 trading program was only a partial remedy for the states' 
underlying good neighbor obligations.\232\
---------------------------------------------------------------------------

    \230\ See Sec. Sec.  52.731(b) (Illinois), 52.789(b) (Indiana), 
52.940(b) (Kentucky), 52.984(d) (Louisiana), 52.1084(b) (Maryland), 
52.1186(e) (Michigan), 52.1584(e) (New Jersey), 52.1684(b) (New 
York), 52.1882(b) (Ohio), 52.2040(b) (Pennsylvania), 52.2440(b) 
(Virginia), and 52.2540(b) (West Virginia).
    \231\ As discussed elsewhere in this document, EPA is correcting 
the approval of Kentucky's SIP revision that previously led to 
removal of the partial-remedy language for that state and instead 
issuing a disapproval. For the remaining states, the partial-remedy 
language was removed in the CSAPR Close-Out, which has been vacated.
    \232\ See Sec. Sec.  52.54(b) (Alabama), 52.184 (Arkansas), 
52.840(b) (Iowa), 52.882(b) (Kansas), 52.1284 (Mississippi), 
52.1326(b) (Missouri), 52.1930 (Oklahoma), 52.2283(d) (Texas), and 
52.2587(e) (Wisconsin).
---------------------------------------------------------------------------

    As under the CSAPR and the CSAPR Update, states subject to the FIPs 
under this rule have several options to revise their SIPs to modify or 
replace those FIPs while continuing to use the Group 3 trading program 
as the mechanism for meeting the states' good neighbor obligations. New 
Sec.  52.38(b)(10), (11), and (12) establish options to replace 
allowance allocations for the 2022 control period, to adopt an 
abbreviated SIP revision for control periods in 2023 or later years, 
and to adopt a full SIP revision for control periods in later years, 
respectively. The first two options would modify certain provisions of 
the trading program as applied to a state's sources but leave the FIP 
in place, while the third option would replace the FIP with largely 
identical SIP requirements for sources to participate in a state Group 
3 trading program integrated with the federal Group 3 trading program. 
These options closely replicate the analogous current options in Sec.  
52.38(b)(7), (8), and (9) with regard to the Group 2 trading program.
    Like the analogous options under the Group 2 trading program, the 
abbreviated and full SIP options under the Group 3 trading program in 
new Sec.  52.38(b)(11)(i) and (ii) and (b)(12)(i) and (ii) include 
options for a state to expand applicability to include certain non-EGU 
boilers and combustion turbines or smaller EGUs in the state that were 
previously subject to the NOX Budget Trading Program. As 
discussed in section VII.F.3 of this document, in conjunction with an 
expansion to include the non-EGUs, the state would be able to also 
issue an additional amount of allowances. Revised Sec.  
52.38(b)(13)(ii) \233\ clarifies that a SIP revision requiring a 
state's sources--EGUs or non-EGUs--to participate in the Group 3 
trading program would satisfy the state's obligations to adopt control 
measures for such sources under the NOX SIP Call.
---------------------------------------------------------------------------

    \233\ Redesignated from Sec.  52.38(b)(10)(ii). The 
corresponding cross-reference in the NOX SIP Call 
regulations at Sec.  51.121(r)(2) is being updated to reflect the 
redesignation.
---------------------------------------------------------------------------

    The proposed option discussed in section VII.D.4 of this preamble 
for a state whose EGUs currently are required to participate the Group 
1 or Group 2 trading program to submit a full SIP revision requiring 
its sources to instead participate in the Group 3 trading

[[Page 23157]]

program is not being finalized. The similar option at existing Sec.  
52.38(b)(6) for Georgia to submit a full SIP revision requiring its 
sources to participate in the Group 2 trading program is being removed, 
along with the provisions governing the associated conversions of Group 
1 allowances to Group 2 allowances at existing Sec.  97.526(c)(2) and 
(3). Language addressing treatment of the converted Group 2 allowances 
under the Group 2 trading program's assurance provisions is removed 
from the definition of ``common designated representative's share'' at 
Sec.  97.802.
    The principal consequences of EPA's approval of a full SIP revision 
under Sec.  52.38(b) are set forth in Sec.  52.38(13) and (14). Revised 
Sec.  52.38(b)(13)(i) \234\ provides that--with exceptions indicated in 
other provisions of Sec.  52.38(b)--full and unconditional approval of 
a state's full SIP revision under new Sec.  52.38(b)(13) as correcting 
the SIP's deficiency that was the basis for a given FIP would cause the 
automatic withdrawal of the corresponding FIP requirements with regard 
to the sources in the state (except sources in Indian country with the 
borders of the state). New Sec.  52.38(b)(14)(i), which addresses the 
Group 1 and Group 2 trading programs rather than the Group 3 trading 
program, identifies specific amended provisions of the federal Group 1 
and Group 2 trading programs that will continue to apply to sources in 
a state Group 1 or Group 2 trading program implemented under a SIP 
provision in order to provide programmatic consistency across sources 
participating in the federal trading program and sources participating 
in integrated state trading programs. Revised Sec.  
52.38(b)(14)(ii),\235\ which addresses the Group 3 trading program as 
well as the Group 1 and Group 2 trading programs, preserves EPA's 
ability to complete allowance allocations for any control period where 
such allocations were already underway when the SIP revision was 
approved. Provisions indicating these consequences of approval of a 
full SIP revision are also being added to the state-specific CFR 
sections.
---------------------------------------------------------------------------

    \234\ Redesignated from Sec.  52.38(b)(10)(i).
    \235\ Redesignated from Sec.  52.38(b)(11)(i).
---------------------------------------------------------------------------

    The transition between the Group 2 trading program and the Group 3 
trading program, as well as the transition between the Group 1 trading 
program and the Group 2 trading program or Group 3 trading program, is 
addressed in Sec.  52.38(b)(14)(iii), which identifies several 
allowance-related provisions of the federal trading program regulations 
that continue to apply when the sources in a state transition to a 
different federal trading program (and also continue to apply under an 
integrated state trading program). New Sec.  52.38(b)(14)(iii)(A) and 
revised Sec.  52.38(b)(14)(iii)(B),\236\ respectively, preserve EPA's 
authority under new Sec.  97.526(c) to transfer Group 1 allowances 
among accounts under common control and EPA's authority under revised 
Sec.  97.526(d) \237\ to carry out conversions of Group 1 allowances to 
Group 3 allowances in all compliance accounts (as well as all general 
accounts) following the transition of a state's sources from the Group 
2 trading program to the Group 3 trading program or following any SIP 
revision, adding to the regulations' existing coverage with respect to 
conversions of Group 1 allowances to Group 2 allowances. New Sec.  
52.38(b)(14)(iii)(C) and (D), respectively, preserve EPA's analogous 
authority under new Sec.  97.826(c) and (d) with respect to transfers 
of Group 3 allowances among accounts and conversions of Group 2 
allowances to Group 3 allowances in analogous circumstances. New Sec.  
52.38(b)(14)(iii)(E) similarly preserves EPA's authority under new 
Sec.  97.811(d), concerning the recall of Group 2 allowances allocated 
to sources in Group 3 states for control periods after 2020. For 
clarity, revisions to the state-specific CFR sections substantively 
replicate the provisions of Sec.  52.38(b)(14)(iii) indicating that the 
provisions of Sec. Sec.  97.826(c) and (d) and 97.811(d) continue to 
apply following the transition of a state's sources from one trading 
program to another and following approval of any SIP revision under 
Sec.  52.38(b).
---------------------------------------------------------------------------

    \236\ Redesignated from Sec.  52.38(b)(11)(ii).
    \237\ Redesignated from Sec.  97.526(c).
---------------------------------------------------------------------------

    New Sec.  52.38(b)(16)(ii) provides that, after the control period 
in 2020, EPA will stop administering all Group 2 trading program 
provisions established under SIP revisions previously approved for 
Group 2 states whose sources are required to participate in the Group 3 
trading program starting with the 2021 control period.\238\
---------------------------------------------------------------------------

    \238\ The states with approved SIP revisions that are affected 
under this provision are Indiana and New York.
---------------------------------------------------------------------------

    Finally, new Sec.  52.38(b)(17) contains updatable lists of states 
with approved SIP revisions to modify or replace the FIP requirements 
for the Group 3 trading program, supplementing the analogous lists at 
Sec.  52.38(b)(15) and (b)(16)(i) \239\ for the Group 1 and Group 2 
trading programs.
---------------------------------------------------------------------------

    \239\ Redesignated from Sec.  52.38(b)(12) and (13).
---------------------------------------------------------------------------

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

    The Group 3 trading program regulations are being promulgated in a 
new subpart GGGGG of part 97 (40 CFR 97.1001 through 97.1035). 
Definitions, applicability, standard requirements, and other general 
provisions are set forth in Sec. Sec.  97.1001 through 97.1008. State 
budgets and allocations of allowances to individual units are addressed 
in Sec. Sec.  97.1010 through 97.1012, and provisions concerning 
designated representatives are covered in Sec. Sec.  97.1013 through 
97.1018. Management and use of allowances, including accounts, 
recordation, transfers, compliance, and banking, are addressed in 
Sec. Sec.  97.1020 through 97.1028. Provisions for monitoring, 
recordkeeping, and reporting are set forth in Sec. Sec.  97.1030 
through 97.1035.
    In general, the Group 3 trading program provisions parallel the 
existing Group 2 trading program regulations in subpart EEEEE of part 
97 but reflect the amounts of the budgets, new unit set-asides, Indian 
country new unit set-asides, and variability limits established in this 
proposed rulemaking, all of which are set forth in new Sec.  97.1010.
    Under Sec.  97.1006(c)(3)(i) and (ii), the obligations to hold one 
Group 3 allowance for each ton of emissions during the control period 
and to comply with the Group 3 trading program's assurance provisions 
begins with the 2021 control period, four years later than the 
analogous start dates for the Group 2 trading program. The deadlines 
for certifying monitoring systems under Sec.  97.1030(b) and for 
beginning quarterly reporting under Sec.  97.1034(d)(1) similarly are 
four years later than the analogous Group 2 trading program deadlines. 
The allowance recordation deadlines under Sec.  97.1021 begin generally 
four years later than the comparable recordation deadlines under the 
Group 2 trading program but will reach the same schedule by July 1, 
2023, which is the deadline for recordation of allowances for the 
control period in 2026 under both trading programs. However, under new 
Sec.  97.1021(m), EPA will not record any allocations of Group 3 
allowances to any unit at a source until all deductions of Group 2 
allowances previously allocated to the units at the source for control 
periods after 2020 have been completed in accordance with new Sec.  
97.811(d).
    Like the analogous Group 2 regulations, the Group 3 regulations 
allow a Group 3 allowance that was allocated to any account as a 
replacement for deducted Group 1 or Group 2 allowances to be used for 
all of

[[Page 23158]]

the purposes for which any other Group 3 allowance may be used. This is 
accomplished by adding references to Sec. Sec.  97.526(d) \240\ and 
97.826(d)--the sections under which the conversions are carried out--to 
the definitions of ``allocate'' and ``CSAPR NOX Ozone Season 
Group 3 allowance'' in Sec.  97.1002 as well as the default order for 
deducting allowances for compliance purposes under Sec.  97.1024(c)(2).
---------------------------------------------------------------------------

    \240\ Redesignated from Sec.  97.526(c).
---------------------------------------------------------------------------

    As is currently allowed under the Group 2 trading program, in order 
to facilitate NOX SIP Call compliance, a state is allowed to 
expand applicability of the Group 3 trading program to include any 
sources that previously participated in the NOX Budget 
Trading Program, and the state can also issue an amount of allowances 
beyond the state's Group 3 trading program budget if applicability is 
expanded to include large non-EGU boilers and turbines. Again, like the 
Group 2 trading program, the assurance provisions apply only to 
emissions from the sources subject to the Group 3 trading program 
before any such expansion. Accordingly, the assurance provisions in the 
proposed Group 3 trading program regulations exclude any additional 
units and allowances brought into the program through such a SIP 
revision. Specifically, the definitions of ``base CSAPR NOX 
Ozone Season Group 3 unit'' and ``base CSAPR NOX Ozone 
Season Group 3 source'' in Sec.  97.1002 exclude units and sources that 
would not have been included in the program under Sec.  97.1004, and 
all provisions related to the Group 3 assurance provisions reference 
only such ``base'' units and sources.
    Sections 97.1016, 97.1018, and 97.1020(c)(1) and (5) reduce the 
administrative compliance burden for sources in the transition from the 
Group 2 trading program to the Group 3 trading program by providing 
that certain one-time or periodic submissions made for purposes of 
compliance with the Group 1 or Group 2 trading program will be 
considered valid for purposes of the Group 3 trading program as well. 
The submissions treated in this manner are a certificate of 
representation or notice of delegation submitted by a designated 
representative and an application for a general account or notice of 
delegation submitted by an authorized account representative.
    Finally, in conjunction with promulgation of the new Group 3 
trading program, EPA is amending the administrative appeal provisions 
in part 78 to make the procedures of that part applicable to 
determinations of the EPA Administrator under the new Group 3 trading 
program in the same manner as the procedures are applicable to similar 
determinations under the other CSAPR trading programs and previous EPA 
trading programs. These amendments add provisions for the Group 3 
trading program to: The list in Sec.  78.1(a)(1) of CFR sections (and 
analogous SIP revisions) generally giving rise to determinations 
subject to the part 78 procedures; the list in Sec.  78.1(b) of certain 
determinations that are expressly subject to those procedures; the list 
in Sec.  78.3(a) of the types of persons who may seek review under the 
procedures; the list in Sec.  78.3(b) of persons who must be served 
regarding an appeal; the list in Sec.  78.3(c) of the required contents 
of petitions for review; the list in Sec.  78.3(d) of matters for which 
a right of review under part 78 is not provided; and the requirements 
in Sec.  78.4(a)(1) as to who must sign a filing.

C. Transitional Provisions

    As discussed in section VII.C.4., EPA is establishing four sets of 
transitional provisions to address the transition of sources that 
currently participate in the CSAPR NOX Ozone Season Group 2 
Trading Program but that, starting with the 2021 control period, will 
instead participate in the CSAPR NOX Ozone Season Group 3 
Trading Program.
    The first set of transitional provisions addresses the practical 
issues associated with transitioning to a new trading program for the 
2021 ozone season given that the effective date for the final action in 
this rulemaking will fall after the start of the ozone season on May 1, 
2021. In order to avoid application of the more stringent emission 
reduction requirements proposed in this action retroactively before the 
final rule's effective date, this set of provisions makes supplemental 
allocations of Group 3 allowances to Group 3 sources in amounts 
collectively equal to the differences in the respective states' budgets 
under the Group 2 and Group 3 trading programs for the portion of the 
2021 ozone season occurring before that date. The total amounts of 
supplemental allowances for each state will be determined under new 
Sec.  97.1010(d). The amount of the allocation to each Group 3 unit 
will be the incremental amount that each unit would have received if 
the supplemental allowances had been allocated as part of the 
respective state's emissions budget for 2021, using the same allocation 
methodology EPA applies to compute the allocations to existing units 
from the emissions budget, as set forth in new Sec.  97.1011(a)(3). In 
addition, to avoid retroactive application of the more stringent Group 
3 assurance levels associated with the more stringent Group 3 budgets 
before the final rule's effective date, the assurance levels for each 
Group 3 state for the 2021 control period are increased by the product 
of 1.21 times the total amount of the supplemental allocations to the 
units in that state. The language implementing this provision is 
included in new Sec.  97.1006(c)(2)(iii). New paragraph (2)(ii) of the 
definition of ``common designated representative's assurance level'' in 
Sec.  97.1002 includes language that accounts for the allocations of 
supplemental allowances and the increment to the variability limit when 
apportioning responsibility for any exceedance of a state's assurance 
level among the owners and operators of the state's sources.
    The second and third sets of transitional provisions under this 
final rule address conversions of Group 2 allowances (and in some 
instances Group 1 allowances) to Group 3 allowances for use in the new 
Group 3 trading program. These provisions are implemented largely 
through the addition of new Sec.  97.826(d) to the Group 2 trading 
program regulations and revisions to the analogous conversion 
provisions in the Group 1 trading program regulations. Most notably, 
the one-time conversion of some banked 2017-2020 Group 2 allowances to 
an initial bank of Group 3 allowances is implemented through the 
provisions in new Sec.  97.826(d)(1). These provisions set forth the 
schedule and mechanics for a one-time conversion of Group 2 allowances 
that were allocated for the control periods in 2017 through 2020 and 
that that remain banked following the completion of deductions for 
compliance for the 2020 control period. The conversion will be applied 
to all banked Group 2 allowances that as of the scheduled conversion 
date are held in any compliance account for a source located in a Group 
3 state and, if necessary, to allowances held in general accounts, but 
will not be applied to allowances held in a compliance account for a 
source located in a Group 2 state.
    The provisions setting forth the procedures for conversion of 
additional 2017-2020 Group 2 allowances to Group 3 allowances as a 
safety valve mechanism are in Sec.  97.826(d)(2). Also, there is a 
possibility under the Group 2 trading program that some new Group 2 
allowances may be issued to a Group 3 source after the conversions to 
Group 3 allowances have already taken place. Under Sec.  97.826(d)(3), 
EPA may convert these allowances to Group 3 allowances as if they had 
been issued and recorded

[[Page 23159]]

before the general conversion to create an initial Group 3 bank.
    Owners and operators of Group 3 sources generally may not retain 
banked Group 2 allowances in the compliance accounts for those sources 
after the date when the various transitional provisions have been 
carried out. If any such Group 2 allowances allocated for a control 
period before 2021 remain in the compliance account for a Group 3 
source after April 1, 2022, new Sec.  97.826(c) allows EPA to identify 
or, if necessary, establish a general account controlled by the 
source's owners and operators and to relocate the Group 3 allowances to 
that account. If obligations to hold Group 2 allowances arise later, 
such as an obligation to hold additional allowances because of excess 
emissions, new Sec.  97.826(e) authorizes the use of Group 3 allowances 
to satisfy such obligations. When held for this purpose, a single Group 
3 allowance could satisfy the obligation to hold more than one Group 2 
allowance, as though the conversion were reversed. (As an alternative 
to using these provisions, the owners and operators of a Group 3 source 
could use Group 2 allowances held in a general account.)
    Parallel amendments are being made to the provisions addressing 
conversions of Group 1 allowances to Group 2 allowances in Sec.  
97.526. Specifically, amendments to Sec.  97.526(d)(1)(iv) \241\ allow 
EPA to identify or, if necessary, establish a general account 
controlled by the source's owners and operators and to relocate to that 
new account any unclaimed Group 2 allowances resulting from the 
creation of an initial bank of Group 2 allowances during the first 
control period under the Group 2 trading program. In addition, there is 
a possibility under the Group 1 trading program that some new Group 1 
allowances may be issued to a Group 3 source after the conversions of 
Group 1 to Group 2 allowances and then Group 2 to Group 3 allowances 
have already taken place. Under new Sec.  97.526(d)(2)(ii), EPA may 
convert these Group 1 allowances to Group 3 allowances as if they had 
been issued and recorded before the general conversions. New Sec.  
97.526(e)(2) authorizes the use of Group 3 allowances to satisfy 
obligations to hold Group 1 allowances that may arise later, such as an 
obligation to hold additional allowances because of excess emissions.
---------------------------------------------------------------------------

    \241\ Redesignated from Sec.  97.526(c)(4).
---------------------------------------------------------------------------

    The fourth set of transitional provisions under this final rule, 
which address the recall of Group 2 allowances previously allocated for 
control periods after 2020 to Group 3 sources, is implemented at new 
Sec.  97.811(d). The scope of the allowance surrender requirements and 
assignment of responsibility for compliance are addressed in Sec.  
97.811(d)(1) and (2). The procedures EPA will follow to deduct 
allowances from sources' compliance accounts (or in exceptional 
circumstances, from general accounts) are set forth in Sec.  
97.811(d)(3) and (4). Clean Air Act violations for noncompliance with 
the surrender requirements are addressed at Sec.  97.811(d)(5). 
Provisions addressing recordation and notifications are included at 
Sec.  97.811(d)(6) and (7).
    Finally, in Sec.  78.1(b)(14) and (17), determinations of the EPA 
Administrator under Sec. Sec.  97.526(d) and 97.826(d) regarding 
conversions of Group 1 and Group 2 allowances to Group 3 allowances and 
determinations of the EPA Administrator under Sec.  97.811(d) regarding 
the recall of Group 2 allowances previously allocated to Group 3 units 
for control periods after 2020 are added to the list of determinations 
expressly subject to the part 78 procedures.

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

    As discussed in section VII.C.8, EPA is finalizing several 
amendments to the existing CSAPR trading programs and the Texas 
SO2 Trading Program for conformity with the analogous 
provisions of the new Group 3 trading program.
    The amendments providing for EPA to record allocations to existing 
units three instead of four years in advance of the control period at 
issue, starting with allocations for the 2025 control periods, are 
implemented in the existing CSAPR trading programs through revisions to 
Sec. Sec.  97.421(f), 97.521(f), 97.621(f), 97.721(f), and 97.821(f).
    The amendments switching from a two-round process to a one-round 
process for allocating allowances from new unit set-asides and Indian 
country new unit set-asides starting with the 2021 control periods are 
implemented in the existing CSAPR trading programs through revisions to 
Sec. Sec.  97.411(b), 97.511(b), 97.611(b), 97.711(b), and 97.811(b) 
and 97.412, 97.512, 97.612, 97.712, and 97.812. The changes to the 
deadlines for EPA to record the allocations determined through the 
proposed one-round process are implemented through revisions to 
Sec. Sec.  97.421(g) through (j), 97.521(g) through (j), 97.621(g) 
through (j), 97.721(g) through (j), and 97.821(g) through (j). The 
necessary coordinating revisions to dates included in the definitions 
of ``allowance transfer deadline'' and ``common designated 
representative'' are made in Sec. Sec.  97.402, 97.502, 97.602, 97.702, 
and 97.802. The simplifications of the assurance provisions made 
possible by the changes in the new unit set-aside provisions are 
implemented through revisions to Sec. Sec.  97.425(b), 97.525(b), 
97.625(b), 97.725(b), and 97.825(b) as well as simplification of 
related definitions (``common designated representative's assurance 
level'') and removal of disused definitions (``allowable NOX 
emission rate'', ``allowable SO2 emission rate'', ``coal-
derived fuel'', and ``heat rate'') in Sec. Sec.  97.402, 97.502, 
97.602, 97.702, and 97.802. The related extensions to the deadlines for 
states with approved SIP revisions to submit to EPA any state-
determined allowance allocations are implemented through revisions to 
Sec.  52.38(a)(4) and (5) and (b)(4), (5), (8) and (9) and Sec.  
52.39(e), (f), (h), and (i).
    As discussed in section VII.C.8., EPA is replicating several of the 
deadline revisions proposed for the existing CSAPR trading programs in 
the similarly structured Texas SO2 Trading Program in order 
to minimize unnecessary differences between the regulations for the 
programs. These revisions to the Texas SO2 Trading Program 
regulations are implemented at Sec.  97.902 (definitions of ``allowance 
transfer deadline'' and ``common designated representative''), 
97.921(b) and (c), and 97.925(b).
    The amendments authorizing EPA to reallocate any incorrectly 
allocated allowances through the new unit set-aside procedures for a 
control period after the correction is identified, instead of the new 
unit set-aside procedures for the control period for which the 
incorrect allocations were originally made, are implemented in 
Sec. Sec.  97.411(c)(5), 97.511(c)(5), 97.611(c)(5), 97.711(c)(5), and 
97.811(c)(5).
    The amendments correcting the amounts of allowances in the new unit 
set-asides to address rounding differences from earlier amendments and 
removing the amounts of budgets, new unit set-asides, and variability 
limits that no longer apply or that would have applied only in the 
event of an optional SIP revision are implemented in Sec. Sec.  97.410, 
97.510, 97.610, 97.710, and 97.810.
    The amendments addressing the transfer of allowances from 
compliance accounts to general accounts in instances where the sources 
in a state are no longer covered by a particular CSAPR trading program 
are

[[Page 23160]]

implemented in new Sec. Sec.  97.426(c), 97.526(c), 97.626(c), 
97.726(c), and 97.826(c).
    New Sec.  52.38(a)(7)(i) and (b)(14)(i) and Sec.  52.39(k)(1) 
identify the amended federal trading program provisions that EPA will 
implement in the existing state CSAPR trading programs to ensure 
consistent program implementation across all sources, whether the 
sources participate in the integrated trading programs under FIPs or 
approved SIP revisions.
    EPA is making additional, non-substantive corrections and 
clarifications in various provisions of the existing CSAPR trading 
programs in subparts AAAAA through EEEEE of part 97, the Texas 
SO2 Trading Program in subpart FFFFF of part 97, and the 
appeal procedures in part 78. The corrections and clarifications 
address minor typographical, wording, and formatting errors or update 
existing cross-references to reflect the new and redesignated 
provisions in Sec. Sec.  52.38 and 52.39. In the NOX SIP 
Call regulations at 40 CFR 51.121, a cross-reference to the CSAPR 
Update FIP provisions is being updated. In addition, the proposed 
corrections and clarifications include the following items:
     Reorganization of the definitions of ``common designated 
representative's assurance level'' and ``common designated 
representative's share'' in Sec. Sec.  97.402, 97.502, 97.602, 97.702, 
and 97.802. The revisions clarify the definitions by relocating certain 
language between them and eliminating provisions that are no longer 
necessary because of the revisions to the new unit set-aside allocation 
procedures and the assurance provisions.
     Addition of a definition of ``CSAPR NOX Ozone Season Group 
3 allowance'' in Sec. Sec.  97.502 and 97.802 and addition of 
definitions of ``CSAPR NOX Ozone Season Group 3 Trading Program'' and/
or ``nitrogen oxides'' in Sec. Sec.  97.402, 97.502, 97.602, 97.702, 
97.802, and 97.902. The new definitions of terms for the Group 3 
allowances and trading program are needed for other provisions that 
reference the Group 3 allowances or trading program, while the 
definition of nitrogen oxides corrects a current omission. Nitrogen 
oxides are defined as ``all oxides of nitrogen except nitrous oxide 
(N2O), expressed on an equivalent molecular weight basis as 
nitrogen dioxide (NO2)'', which is consistent both with the 
definitions used in other EPA programs (see, e.g., 40 CFR 51.50, 
51.121(a), and 51.122(a)) and with historical practice in the existing 
CSAPR programs.
     Revisions to the descriptions of units and control periods 
eligible for allocations of allowances from the new unit set-asides and 
Indian country new unit set-asides in Sec. Sec.  97.412, 97.512, 
97.612, 97.712, and 97.812. The revisions do not substantively alter 
which units may receive allocations or the amounts of those 
allocations. Rather, the revisions more clearly express the existing 
requirements of the allocation procedures, under which EPA calculates a 
given unit's allocations considering only the unit's emissions that 
occur after its deadline for monitor certification (because any earlier 
emissions would not have occurred in a ``control period'' for that 
unit).
     Revisions to the provisions for identification of specific 
allowances to be deducted for compliance in Sec. Sec.  97.424(c), 
97.524(c), 97.624(c), 97.724(c), 97.824(c), and 97.924(c). The 
revisions clarify by referencing designated representatives instead of 
authorized account representatives, consistent with the existing 
requirement that the authorized account representative for a source's 
compliance account must be the designated representative for the 
source.
     Addition of references in part 78 to the Texas SO2 Trading 
Program. The added references are analogous to the references that are 
being added to part 78 for the new Group 3 trading program. The 
applicability of the appeal procedures in part 78 to decisions of the 
EPA Administrator under the Texas SO2 Trading Program has 
already been established in the provisions for that trading program at 
Sec.  97.908, but the addition of references in part 78 clarifies the 
regulations.

X. Statutory and Executive Order Reviews

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

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

    This final action is an economically significant regulatory action 
and was submitted to the Office of Management and Budget (OMB) for 
review. Any changes made in response to OMB recommendations have been 
documented in the docket. EPA prepared an analysis of the potential 
costs and benefits associated with this final action. This analysis, 
which is contained in the ``Regulatory Impact Analysis for the Final 
Revised Cross-State Air Pollution Rule Update for the 2008 Ozone 
NAAQS'' [EPA-452-R-21-002], is available in the docket and is briefly 
summarized in section VIII of this preamble.

B. Paperwork Reduction Act (PRA)

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

C. Regulatory Flexibility Act (RFA)

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

D. Unfunded Mandates Reform Act (UMRA)

    This final action does not contain an unfunded mandate of $100 
million or more as described in UMRA, 2 U.S.C. 1531-1538, and will not 
significantly or uniquely affect small governments. Note that EPA 
expects the final rule to potentially have an impact on only one

[[Page 23161]]

category of government-owned entities (municipality-owned entities). 
This analysis does not examine potential indirect economic impacts 
associated with the final rule, such as employment effects in 
industries providing fuel and pollution control equipment, or the 
potential effects of electricity price increases on government 
entities. For more information on the estimated impact on government 
entities, refer to the RIA, which is in the public docket.

E. Executive Order 13132: Federalism

    This final action does not have federalism implications. As 
finalized, this final action will not have substantial direct effects 
on the states, on the relationship between the national government and 
the states, or on the distribution of power and responsibilities among 
the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action has tribal implications. However, it will neither 
impose substantial direct compliance costs on federally recognized 
tribal governments, nor preempt tribal law.
    This final action implements EGU NOX ozone season 
emission reductions in 12 eastern states (Illinois, Indiana, Kentucky, 
Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, 
Pennsylvania, Virginia, and West Virginia.). However, at this time, 
none of the existing or planned EGUs affected by this rule are owned by 
tribes or located in Indian country. This action may have tribal 
implications if a new affected EGU is built in Indian country. 
Additionally, tribes have a vested interest in how this rule affects 
air quality.
    In developing the CSAPR, which was promulgated on July 6, 2011, to 
address interstate transport of ozone pollution under the 1997 ozone 
NAAQS, EPA consulted with tribal officials under the EPA Policy on 
Consultation and Coordination with Indian Tribes early in the process 
of developing that regulation to allow for meaningful and timely tribal 
input into its development. A summary of that consultation is provided 
at 76 FR 48346.
    In that rulemaking, EPA received comments from several tribal 
commenters regarding the availability of the CSAPR allowance 
allocations to new units in Indian country. EPA responded to these 
comments by instituting Indian country new unit set-asides in the final 
CSAPR. In order to protect tribal sovereignty, these set-asides are 
managed and distributed by the federal government regardless of whether 
the CSAPR in the adjoining or surrounding state is implemented through 
a FIP or SIP. While there are no existing affected EGUs in Indian 
country covered by this action, the Indian country set-asides will 
ensure that any future new units built in Indian country will be able 
to obtain the necessary allowances. This rule maintains the Indian 
country new unit set-aside and adjusts the amounts of allowances in 
each set-aside according to the same methodology of the CSAPR and the 
CSAPR Update.
    EPA consulted with tribal officials early in the process of 
developing this rule in accordance with the EPA Policy on Consultation 
and Coordination with Indian Tribes (May 2011). Before proposing this 
rule, EPA informed tribes of the rule's development on a National 
Tribal Air Association (NTAA) monthly air policy conference call that 
took place on June 25, 2020. In a separate NTAA call on October 20, 
2020, EPA gave an overview of the proposed rule. In order to permit 
tribes to have meaningful and timely input into the development of the 
final rule, EPA offered consultation to tribal leaders. On October 30, 
2020, EPA sent out letters via electronic mail to all 574 federally 
recognized tribes informing them of this action, offering consultation 
and requesting comment on this rulemaking. Courtesy copies of the 
letters were also sent via email to tribal air staff and tribal 
environmental professionals. EPA also sent courtesy copies to EPA's 
Regional Tribal Air Coordinators for notification to their tribes. To 
further provide tribes with the resources that they might require to 
engage in effective consultation, EPA also held an informational 
webinar on the rule on November 9, 2020. EPA did not receive any 
requests for consultation on this rule.
    Comment: As part of the public comment process, EPA received 
comments from the National Tribal Air Association (NTAA), the Keweenaw 
Bay Indian Community, the Leech Lake Band of Ojibwe, and the Ute 
Mountain Ute Tribe Environmental Programs Department. Commenters felt 
that EPA has not complied with its tribal consultation obligations.
    Response: EPA recognizes the critical importance of engagement with 
tribes and believes that it has provided tribes appropriate opportunity 
to provide input on this rule through NTAA calls, an informational 
webinar, and requests for consultation. EPA will continue to engage 
with tribes as part of the outreach strategy for this final rule.

G. 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 the 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-based federal standard. This action's health and risk 
assessments are contained in Chapter 5 of the accompanying RIA. EPA 
believes that the ozone reductions, PM2.5 reductions, and 
CO2 reductions from this final rule will further improve 
children's health.
    Comment: EPA received comment contending that EPA has failed to 
identify and assess the health risks to children from its decision to 
authorize continued interstate ozone pollution that contributes to 
violations of the 2008 and 2015 ozone air quality standards in downwind 
states. The commenter states that EPA has consistently recognized that 
children are disproportionately vulnerable to the environmental health 
risks of ozone and asserts that by authorizing continued pollution that 
will harm children, EPA has failed to ensure that its policies, 
programs, activities, and standards address these risks. The commenter 
claims that this rule is subject to section 2-202 of the Executive 
Order, which provides that ``covered regulatory action'' means ``any 
substantive action in a rulemaking'' that is ``likely to result in a 
rule that may'' (1) ``adversely affect in a material way . . . the 
environment, public health or safety, or State, local, or tribal 
governments or communities'' and (2) ``concern an environmental health 
risk or safety risk that an agency has reason to believe may 
disproportionately affect children.'' The commenter asserts that ozone 
pollution above the air quality standards EPA has adopted indisputably 
is a health risk that disproportionately affects children.
    Response: According to section 2-202, a rulemaking is a ``covered 
regulatory action'' and thus subject to the Executive Order if the 
action is economically significant under Executive Order 12866 and 
involves an environmental health risk or safety risk that the agency 
has reason to believe may disproportionately affect children. While OMB 
has determined that this rulemaking is economically significant for 
purposes of Executive Order 12866,

[[Page 23162]]

the rulemaking does not meet the second criterion. The health-based 
standard at issue in this action has already been set in a prior 
rulemaking to promulgate the 2008 ozone NAAQS, wherein EPA did consider 
the effects of the standard under the Executive Order. See 73 FR 16436, 
16506-07. Therefore, this action does not concern an environmental 
health or safety risk because EPA is simply evaluating how to implement 
an existing health standard.

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

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy. EPA has prepared a Statement of Energy 
Effects for the regulatory control alternative as follows. The Agency 
estimates a much less than 1 percent change in retail electricity 
prices on average across the contiguous U.S. in 2021, and a much less 
than 1 percent reduction in coal-fired electricity generation in 2021 
as a result of this rule. EPA projects that utility power sector 
delivered natural gas prices will change by less than 1 percent in 
2021. For more information on the estimated energy effects, refer to 
the RIA, which is in the public docket.

I. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

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

    Because of the need to meet the court-ordered signature deadline on 
this action, EPA did not have sufficient time to undertake a definitive 
assessment of the impacts of this final rule on minority populations, 
low-income populations and/or indigenous peoples, as specified in 
Executive Order 12898 (59 FR 7629, February 16, 1994). EPA does not 
have information at this time that would suggest that this rule has the 
potential to result in disproportionately high and adverse human health 
or environmental impacts on vulnerable populations or overburdened 
communities; however, EPA is also not currently in a position to make a 
determination to this effect. In this section, EPA outlines the 
potential impacts of this rule and describes the analytical framework 
the agency intends to use to evaluate potential environmental justice 
concerns in future rulemakings.
    Ozone pollution from power plants has both local and regional 
components: Part of the pollution in a given location--even in 
locations near emission sources--is due to emissions from nearby 
sources and part is due to emissions that are transported in the 
atmosphere over large distances and mix with emissions from other 
sources. Undertaken to implement CAA section 110(a)(2)(D), this action 
addresses that ``significant'' portion of contribution from upwind 
states to a nonattainment or maintenance receptor. As a result, the 
rule will reduce exposures to ozone in areas that are struggling to 
attain or maintain the 2008 ozone NAAQS. By addressing maintenance 
receptors, this rule reduces the likelihood that areas close to the 
level of the standard will exceed the current health-based standards in 
the future. The rule will result in incidental reductions in ozone in 
other areas, as well as reducing emissions of PM and other pollutants 
from EGUs that have both localized and distant impacts.
    At the same time, this action alone cannot fully resolve any 
disproportionate impacts of ozone levels in downwind areas. Rather, it 
eliminates upwind state ``significant contribution,'' thus ameliorating 
those conditions and improving downwind air quality. While this rule is 
expected to reduce interstate ozone transport and thus to yield overall 
health and environmental benefits, further analysis would be required 
to assess potential environmental justice concerns--including, for 
example, whether the downwind air quality benefits are equitably 
distributed.\242\
---------------------------------------------------------------------------

    \242\ A potential environmental justice concern is ``the actual 
or potential lack of fair treatment or meaningful involvement of 
minority populations, low-income populations, tribes, and indigenous 
peoples in the development, implementation and enforcement of 
environmental laws, regulations and policies.'' EPA, Guidance on 
Considering Environmental Justice During the Development of 
Regulatory Actions (May 2015).
---------------------------------------------------------------------------

    It is important to note that nothing in this final rule allows 
sources to violate their title V permit or any other federal, state, or 
local emissions or air quality requirements. Moreover, CAA section 
110(a)(2)(D) addresses transport of criteria pollutants between states 
and is only one of many provisions of the CAA that provide EPA, states, 
and local governments with authorities to reduce exposure to ozone in 
communities. These legal authorities work together to reduce exposure 
to these pollutants in communities, including for minority, low-income, 
and tribal populations, and provide substantial health benefits to both 
the general public and sensitive sub-populations.
    EPA informed tribal communities of its development of this rule on 
a National Tribal Air Association--EPA air policy conference call on 
June 25, 2020. EPA also held two informational webinars for tribes and 
environmental justice communities on November 9, 2020 and November 10, 
2020, respectively, where EPA presented an overview of the rule and 
provided tribes and communities with resources that they might require 
to engage in the public comment process.
    While a court-ordered deadline precludes a fulsome environmental 
justice analysis for this rulemaking, this section describes a 
framework for assessing potential environmental justice concerns for 
future rulemakings based on EPA's Technical Guidance for Assessing 
Environmental Justice in Regulatory Analysis (2016). Going forward, EPA 
is committed to conducting environmental justice analysis for 
rulemakings based on a framework similar to what is outlined here, in 
addition to investigating ways to further weave environmental justice 
into the fabric of the rulemaking process including through enhanced 
meaningful engagement with environmental justice communities.\243\
---------------------------------------------------------------------------

    \243\ While not the focus of this discussion, meaningful 
involvement intersects with analytic considerations in several 
important respects. The use of plain language to explain the 
regulatory analysis can make it easier for the public to understand 
what was done and submit comments. Requests for information on 
unique exposure pathways or end points of concern, as well as data 
sources, early in the regulatory process can improve the analysis of 
potential EJ concerns. Specific aspects of the regulatory design may 
also make it easier to monitor and share information with the public 
once the rulemaking is in place.
---------------------------------------------------------------------------

    When assessing the potential for disproportionately high and 
adverse health or environmental impacts of regulatory actions on 
minority populations, low-income populations, tribes, and/or indigenous 
peoples, EPA strives to answer three broad questions: (1) Is there 
evidence of potential environmental justice concerns in the baseline 
(the state of the world absent the regulatory action)? Assessing the 
baseline will allow EPA to determine whether pre-existing disparities 
are associated with the pollutant(s) under consideration (e.g., if the 
effects of the pollutant(s) are more concentrated in some population 
groups). (2) Is there evidence of potential environmental justice 
concerns for the regulatory option(s) under consideration? 
Specifically, how are the pollutant(s) and its effects distributed for 
the regulatory options under consideration?

[[Page 23163]]

And, (3) do the regulatory option(s) under consideration exacerbate or 
mitigate environmental justice concerns relative to the baseline? \244\ 
It is not always possible to quantitatively assess all three questions. 
For instance, in some regulatory contexts it may only be possible to 
quantitatively characterize the baseline due to data and modeling 
limitations.
---------------------------------------------------------------------------

    \244\ Differential impacts on population groups of concern can 
only be identified in relation to a comparison group. A comparison 
group can be defined in multiple ways, for instance in terms of 
individuals with similar socioeconomic characteristics located at a 
broader geographic level or with different socioeconomic 
characteristics within an affected area. The goal is to select a 
comparison group that allows one to identify how the effects of the 
regulation vary by race, ethnicity, and income separate from other 
systematic differences across groups or geographic areas.
---------------------------------------------------------------------------

    A good starting point for assessing the need for a more detailed 
environmental justice analysis is to review the available evidence from 
the published literature and from community input on what factors may 
make population groups of concern more vulnerable to adverse effects 
(e.g., unique pathways; cumulative exposure from multiple stressors; 
behavioral, biological, or environmental factors that increase 
susceptibility). It is also important to evaluate the data and methods 
available for conducting an environmental justice analysis. A 
screening-level analysis is recommended to help characterize population 
groups of concern in the context of a specific rulemaking, as well as 
identify potential comparison groups, data, methods and analytical 
needs.
    Current EPA guidance does not prescribe or recommend a specific 
approach or methodology for conducting screening-level analysis,\245\ 
though a key consideration is consistency with the assumptions 
underlying other parts of the regulatory analysis when evaluating the 
baseline and regulatory option(s). Even without a more in-depth 
analysis of potential environmental justice concerns, the screening-
level analysis can be useful for describing the proximity of regulated 
sources to minority populations, low-income populations, and/or 
indigenous peoples; the number of sources that may be impacting 
population groups of concern; the nature and amounts of pollutant(s) 
that may impact population groups of concern; unique exposure pathways 
associated with the regulated pollutant(s); stakeholder concern(s) 
about the potential regulatory action; and any history of environmental 
justice concerns associated with the pollutant(s) being regulated.
---------------------------------------------------------------------------

    \245\ See EPA, Guidelines for Preparing Economic Analyses (Dec. 
2010, rev. May 2014), available at https://www.epa.gov/sites/production/files/2017-08/documents/ee-0568-50.pdf; EPA, Guidance on 
Considering Environmental Justice During the Development of 
Regulatory Actions (May 2015), available at https://www.epa.gov/sites/production/files/2015-06/documents/considering-ej-in-rulemaking-guide-final.pdf; EPA, Technical Guidance for Assessing 
Environmental Justice in Regulatory Analysis (June 2016) available 
at https://www.epa.gov/sites/production/files/2016-06/documents/ejtg_5_6_16_v5.1.pdf.
---------------------------------------------------------------------------

    In cases where further investigation of potential environmental 
justice concerns is warranted, a variety of techniques are available. 
These techniques are briefly described below, and EPA refers the reader 
to EPA's Technical Guidance for Assessing Environmental Justice in 
Regulatory Analysis (2016) for more detailed discussion of each 
approach including their advantages and limitations. The approach taken 
to conduct environmental justice analysis is informed by the 
quantitative information generated for the risk and benefits analysis 
conducted in support of the rulemaking and the analytic opportunities 
that provides. Building in consideration of environmental justice at 
the early stages of the analysis--for instance, to ensure that unique 
exposure pathways are adequately characterized--thus is of paramount 
importance. When data allow, it is also informative to characterize the 
distribution of risks, exposures, or outcomes within each population 
group, not just average impacts, with particular attention paid to the 
characteristics of populations at the high end of the distribution. 
Qualitative approaches may also prove a useful complement to 
quantitative assessment in cases where either data are not available at 
a sufficiently disaggregated level to conduct distributional analysis 
or when they offer insight into considerations omitted from 
quantitative assessment (e.g., how environmental quality interacts with 
people's values, behaviors, motivations, or cultures).
    Two of the most straightforward analytic approaches to 
environmental justice analysis are summary statistics and visual 
displays. Summary statistics can be used to characterize the 
distribution of health and environmental impacts (e.g., county- or 
census-tract level average) for population groups of concern relative 
to an appropriate comparison group (e.g., national or state average). 
Visual displays such as maps can communicate how the geographic 
distribution of pollution overlaps with that of population groups of 
concern and therefore can identify potential areas where additional 
outreach, data collection, or monitoring may be warranted.
    More sophisticated analytic approaches may also be possible when 
data allow. Proximity-based analysis uses the distance to polluting 
source(s) as a proxy for risk or exposure. Specifically, it compares 
the demographic and socioeconomic characteristics of population groups 
relatively close (e.g., within a certain distance or census tract) to 
the source of pollution to those living further away. Simple 
statistical tests are then used identify whether, on average, there are 
statistically discernible differences between those living close to 
versus further away from the polluting sources. The validity of the 
proximity-based approach rests on the appropriateness of several 
assumptions, such as that the effects of the pollutant(s) occur only 
within the designated area and that all individuals residing close by 
are equivalently exposed. When data are available, it may also be 
possible to conduct risk or exposure analysis to evaluate potential 
environmental justice concerns. Emissions or other ambient 
concentration data can be combined with fate and transport modeling. In 
cases where disaggregated information is available on the types of 
activities that result in differences in exposure across population 
groups of concern, it may be possible to characterize differences in 
health effects due to the regulatory action. It also may be possible to 
combine exposure data with information on differences in risk across 
population groups.

K. Congressional Review Act

    This action is subject to the CRA, 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 a ``major rule'' as defined by 5 
U.S.C. 804(2), because OMB has determined that this rule is 
``economically significant.''

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

    Section 307(b)(1) of the CAA indicates which federal courts of 
appeals are the proper forum for petitions for review of final actions 
by EPA under the CAA. This section provides, in part, that petitions 
for review must be filed in the Court of Appeals for the District of 
Columbia Circuit for: (i) ``Any nationally applicable regulations 
promulgated, or final action taken, by the Administrator,'' or (ii) 
locally or regionally applicable final action if ``such action is based 
on a determination of nationwide scope or effect and if in taking such 
action the Administrator finds and publishes that such action is based 
on such a

[[Page 23164]]

determination.'' For locally or regionally applicable final actions, 
the CAA reserves to EPA complete discretion whether to invoke the 
exception in (ii).
    This final action is ``nationally applicable'' within the meaning 
of CAA section 307(b)(1). In the alternative, the Administrator is 
exercising the complete discretion afforded to her under the CAA to 
make and publish a finding that this action is based on a determination 
of ``nationwide scope or effect'' within the meaning of CAA section 
307(b)(1).\246\ This final action implements the good neighbor 
provision in 21 states, 6 EPA regions, and 6 federal appellate court 
circuits. The final action applies a uniform, nationwide analytical 
method and interpretation of CAA section 110(a)(2)(D)(i)(I) across 
these states in a single final action, and the final action is based on 
a common core of legal, technical, and policy determinations.\247\ The 
rule is based on a common core of statutory and case law analysis, 
factual findings, and policy determinations concerning the transport of 
ozone-precursor pollutants from the different states subject to it, as 
well as the impacts of those pollutants and the impacts of options to 
address those pollutants in yet other states. In particular, in this 
action, EPA is applying its 4-step analytic framework to implement the 
good neighbor provision across these states, using a consistent set of 
policy and analytical determinations. These determinations include 
findings identifying downwind nonattainment and maintenance receptors 
and upwind states linked to those receptors; the use of a common multi-
factor test to determine which upwind-state contributions to 
nonattainment and maintenance receptors are ``significant'' and must be 
eliminated; and the promulgation of emissions budgets, an integrated 
interstate emissions trading program, and a regionally consistent set 
of other compliance requirements for EGUs across twelve states to 
implement the necessary emission reductions.
---------------------------------------------------------------------------

    \246\ In deciding whether to invoke the exception by making and 
publishing a finding that this final action is based on a 
determination of nationwide scope or effect, the Administrator has 
also taken into account a number of policy considerations, including 
her judgment balancing the benefit of obtaining the D.C. Circuit's 
authoritative centralized review versus allowing development of the 
issue in other contexts and the best use of agency resources.
    \247\ In the report on the 1977 Amendments that revised section 
307(b)(1) of the CAA, Congress noted that the Administrator's 
determination that the ``nationwide scope or effect'' exception 
applies would be appropriate for any action that has a scope or 
effect beyond a single judicial circuit. See H.R. Rep. No. 95-294 at 
323, 324, reprinted in 1977 U.S.C.C.A.N. 1402-03.
---------------------------------------------------------------------------

    For these reasons, this final action is nationally applicable. 
Alternatively, the Administrator is exercising the complete discretion 
afforded to her by the CAA and hereby finds that this final action is 
based on a determination of nationwide scope or effect for purposes of 
CAA section 307(b)(1). Pursuant to CAA section 307(b), any petitions 
for review of this final action must be filed in the D.C. Circuit 
within 60 days from the date this final action is published in the 
Federal Register.
    This final action is subject to the provisions of section 307(d). 
CAA section 307(d)(1)(B) provides that section 307(d) applies to, among 
other things, ``the promulgation or revision of an implementation plan 
by the Administrator under [CAA section 110(c)].'' 42 U.S.C. 
7407(d)(1)(B). This final action promulgates new and revised federal 
implementation plans pursuant to the authority of section 110(c). To 
the extent any portion of this rulemaking is not expressly identified 
under section 307(d)(1)(B), the Administrator has determined that the 
provisions of section 307(d) apply to this action. See CAA section 
307(d)(1)(V) (the provisions of section 307(d) apply to ``such other 
actions as the Administrator may determine'').

List of Subjects

40 CFR Part 51

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

40 CFR Part 52

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

40 CFR Part 78

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

40 CFR Part 97

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

    Dated: March 15, 2021.
Michael Regan,
Administrator.

    For the reasons stated in the preamble, EPA amends parts 51, 52, 
78, and 97 of title 40 of the Code of Federal Regulations as follows:

PART 51--REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL OF 
IMPLEMENTATION PLANS

0
1. The authority citation for part 51 continues to read as follows:

    Authority:  23 U.S.C. 101; 42 U.S.C. 7401-7671q.

Subpart G--Control Strategy


Sec.  51.121  [Amended]

0
2. In Sec.  51.121, amend paragraph (r)(2) by removing ``40 CFR 
52.38(b)(10)(ii),'' and adding in its place ``40 CFR 
52.38(b)(13)(ii),''.

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

Subpart A--General Provisions

0
4. Amend Sec.  52.38 by:
0
a. Amending paragraph (a) by revising the paragraph heading;;
0
b. Adding a paragraph heading to paragraph (a)(1) and removing 
``(NOX).'' and adding in its place ``(NOX), 
except as otherwise provided in this section.'';
0
c. Adding a paragraph heading to paragraph (a)(2);
0
d. Adding a paragraph heading to paragraph (a)(3) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a)(1) of this 
section, a State'' and adding in its place ``A State'';
0
e. Revising paragraph (a)(4) introductory text;
0
f. In paragraph (a)(4)(i)(A), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
g. In paragraph (a)(4)(i)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 1 to this paragraph;'', adding 
a heading to the table, removing the table entry for ``2023 and any 
year thereafter'', and adding table entries for ``2023 and 2024'' and 
``2025 and any year thereafter'';
0
h. In paragraph (a)(4)(i)(C), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2021, or by April 1 of the year following the

[[Page 23165]]

control period, for a control period in 2021 or thereafter; and'';
0
i. Adding a paragraph heading to paragraph (a)(5) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a)(1) of this 
section, a State'' and adding in its place ``A State'';
0
j. In paragraph (a)(5)(i)(A), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
k. In paragraph (a)(5)(i)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 2 to this paragraph;'', adding 
a heading to the table, removing the table entry for ``2023 and any 
year thereafter'', and adding table entries for ``2023 and 2024'' and 
``2025 and any year thereafter'';
0
l. In paragraph (a)(5)(i)(C), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2021, or by April 1 of the year following the control 
period, for a control period in 2021 or thereafter; and'';
0
m. In paragraph (a)(5)(v), adding ``and'' after the semicolon at the 
end of the paragraph;
0
n. Adding a paragraph heading to paragraph (a)(6) and removing 
``Following promulgation'' and adding in its place ``Except as provided 
in paragraph (a)(7) of this section, following promulgation'';
0
o. Revising paragraph (a)(7);
0
p. Adding a paragraph heading to paragraph (a)(8) introductory text;
0
q. Revising the paragraph heading to paragraph (b);
0
r. Revising paragraph (b)(1);
0
s. Adding a paragraph heading to paragraph (b)(2);
0
t. In paragraph (b)(2)(ii), removing ``2016 only:'' and adding in its 
place ``2016 only, except as provided in paragraph (b)(14)(iii) of this 
section:'';
0
u. Revising paragraph (b)(2)(iii);
0
v. Adding paragraphs (b)(2)(iv) and (v);
0
w. Adding a paragraph heading to paragraph (b)(3) introductory text and 
removing ``Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State'' and adding in its place ``A State'';
0
x. Revising paragraph (b)(4) introductory text;
0
y. In paragraph (b)(4)(ii)(A), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
z. In paragraph (b)(4)(ii)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 3 to this paragraph;'', adding 
a heading to the table, removing the table entry for ``2023 and any 
year thereafter'', and adding table entries for ``2023 and 2024'' and 
``2025 and any year thereafter'';
0
aa. In paragraph (b)(4)(ii)(C), removing ``year of such control 
period.'' and adding in its place ``year of such control period, for a 
control period before 2021, or by April 1 of the year following the 
control period, for a control period in 2021 or thereafter; and'';
0
bb. Adding a paragraph heading to paragraph (b)(5) introductory text 
and removing ``Notwithstanding the provisions of paragraph (b)(1) of 
this section, a State'' and adding in its place ``A State'';
0
cc. In paragraph (b)(5)(ii)(A), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
dd. In paragraph (b)(5)(ii)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 4 to this paragraph;'', adding 
a heading to the table, removing the table entry for ``2023 and any 
year thereafter'', and adding table entries for ``2023 and 2024'' and 
``2025 and any year thereafter'';
0
ee. In paragraph (b)(5)(ii)(C), removing ``year of such control 
period.'' and adding in its place ``year of such control period, for a 
control period before 2021, or by April 1 of the year following the 
control period, for a control period in 2021 or thereafter; and'';
0
ff. In paragraph (b)(5)(vi), adding ``and'' after the semicolon at the 
end of the paragraph;
0
gg. Removing and reserving paragraph (b)(6);
0
hh. Adding a paragraph heading to paragraph (b)(7) introductory text, 
removing ``Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State'' and adding in its place ``A State'', and adding ``or 
(iv)'' after ``(b)(2)(iii)'';
0
ii. Revising paragraphs (b)(8) introductory text and (b)(8)(ii);
0
jj. In paragraph (b)(8)(iii)(A)(2), removing the period at the end of 
the paragraph and adding in its place a semicolon;
0
kk. In paragraph (b)(8)(iii)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 5 to this paragraph;'', adding 
a heading to the table, and revising the table entry for ``2025 and any 
year thereafter'';
0
ll. In paragraph (b)(8)(iii)(C), removing ``year of such control 
period.'' and adding in its place ``year of such control period, for a 
control period before 2021, or by April 1 of the year following the 
control period, for a control period in 2021 or thereafter; and'';
0
mm. In paragraph (b)(8)(iii)(D), removing ``Sec.  97.526(c)'' and 
adding in its place ``Sec.  97.526(d)'';
0
nn. Adding a paragraph heading to paragraph (b)(9) introductory text, 
removing ``Notwithstanding the provisions of paragraph (b)(1) of this 
section, a State'' and adding in its place ``A State'', and adding ``or 
(iv)'' after ``(b)(2)(iii)'' each time ``(b)(2)(iii)'' appears;
0
oo. Revising paragraph (b)(9)(ii);
0
pp. In paragraph (b)(9)(iii)(A)(2), removing the period at the end of 
the paragraph and adding in its place a semicolon;
0
qq. In paragraph (b)(9)(iii)(B), removing ``the following dates:'' and 
adding in its place ``the dates in Table 6 to this paragraph;'', adding 
a heading to the table, and revising the table entry for ``2025 and any 
year thereafter'';
0
rr. In paragraph (b)(9)(iii)(C), removing ``year of such control 
period.'' and adding in its place ``year of such control period, for a 
control period before 2021, or by April 1 of the year following the 
control period, for a control period in 2021 or thereafter; and'';
0
ss. In paragraph (b)(9)(iii)(D), removing ``Sec.  97.526(c)'' and 
adding in its place ``Sec.  97.526(d)'';
0
tt. In paragraph (b)(9)(vii), adding ``and'' after the semicolon at the 
end of the paragraph;
0
uu. Redesignating paragraphs (b)(10) through (13) as paragraphs (b)(13) 
through (16), respectively, and adding new paragraphs (b)(10) through 
(12), and further redesignating newly redesignated paragraphs 
(b)(16)(ii) through (iv) as paragraphs (b)(16)(i)(A) through (C), 
respectively;
0
vv. Revising newly redesignated paragraph (b)(13) introductory text;
0
ww. In newly redesignated paragraph (b)(13)(i), removing ``The 
provisions of paragraph (b)(2)(i) or (iii)'' and adding in its place 
``Except as provided in paragraph (b)(14) of this section, the 
provisions of paragraph (b)(2)(i), (iii), (iv), or (v)'';
0
xx. In newly redesignated paragraph (b)(13)(ii), adding ``or 
(b)(12)(ii)'' after ``(b)(9)(ii)'' and removing ``such sources.'' and 
adding in its place ``such sources, provided that the Administrator and 
the State continue to carry out their respective functions under such 
regulations.'';
0
yy. Revising newly redesignated paragraph (b)(14);
0
zz. Adding a paragraph heading to newly redesignated paragraph (b)(15) 
introductory text;
0
aaa. Revising newly redesignated paragraphs (b)(16) introductory text 
and (b)(16)(i);
0
bbb. In newly redesignated paragraph (b)(16)(i)(C), removing 
``(b)(2)(iii),'' and adding in its place ``(b)(2)(iii) or (iv),''; and

[[Page 23166]]

0
ccc. Adding paragraphs (b)(16)(ii) and (b)(17).
    The additions and revisions read as follows:


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

    (a) NOX annual emissions--(1) General requirements. * * *
    (2) Applicability of CSAPR NOX Annual Trading Program provisions. * 
* *
* * * * *
    (3) State-determined allocations of CSAPR NOX Annual allowances for 
2016. * * *
* * * * *
    (4) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR NOX Annual Trading Program. A State listed in paragraph 
(a)(2)(i) of this section may adopt and include in a SIP revision, and 
the Administrator will approve, regulations replacing specified 
provisions of subpart AAAAA of part 97 of this chapter for the State's 
sources, and not substantively replacing any other provisions, as 
follows:
    (i) * * *
    (B) * * *

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

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

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

* * * * *
    (6) Withdrawal of CSAPR FIP provisions relating to NOX annual 
emissions. * * *
    (7) Continued applicability of certain federal trading program 
provisions for NOX annual emissions. (i) Notwithstanding the provisions 
of paragraph (a)(6) of this section or any State's SIP, when carrying 
out the functions of the Administrator under any State CSAPR 
NOX Annual Trading Program pursuant to a SIP revision 
approved under this section, the Administrator will apply the following 
provisions of this section, as amended, and the following provisions of 
subpart AAAAA of part 97 of this chapter, as amended, with regard to 
the State and any source subject to such State trading program:
    (A) The definitions in Sec.  97.402 of this chapter;
    (B) The provisions in Sec.  97.410(a) of this chapter (concerning 
in part the amounts of the new unit set-asides);
    (C) The provisions in Sec. Sec.  97.411(b)(1) and 97.412(a) of this 
chapter (concerning the procedures for administering the new unit set-
asides), except where the State allocates or auctions CSAPR 
NOX Annual allowances under an approved SIP revision;
    (D) The provisions in Sec.  97.411(c)(5) of this chapter 
(concerning the disposition of incorrectly allocated CSAPR 
NOX Annual allowances);
    (E) The provisions in Sec.  97.421(f), (g), and (i) of this chapter 
(concerning the deadlines for recordation of allocations or auctions of 
CSAPR NOX Annual allowances) and the provisions in 
paragraphs (a)(4)(i)(B) and (C) and (a)(5)(i)(B) and (C) of this 
section (concerning the deadlines for submission to the Administrator 
of State-determined allocations or auction results); and
    (F) The provisions in Sec.  97.425(b) of this chapter (concerning 
the procedures for administering the assurance provisions).
    (ii) Notwithstanding the provisions of paragraph (a)(6) of this 
section, if, at the time of any approval of a State's SIP revision 
under this section, the Administrator has already started recording any 
allocations of CSAPR NOX Annual allowances under subpart 
AAAAA of part 97 of this chapter to units in the State for a control 
period in any year, the provisions of such subpart authorizing the 
Administrator to complete the allocation and recordation of such 
allowances to units in the State for each such control period shall 
continue to apply, unless provided otherwise by such approval of the 
State's SIP revision.
    (8) States with approved SIP revisions addressing the CSAPR NOX 
Annual Trading Program. * * *
* * * * *
    (b) NOX ozone season emissions--(1) General requirements. The CSAPR 
NOX Ozone Season Group 1 Trading Program provisions, the 
CSAPR NOX Ozone Season Group 2 Trading Program provisions, 
and the CSAPR NOX Ozone Season Group 3 Trading Program 
provisions set forth respectively in subparts BBBBB, EEEEE, and GGGGG 
of part 97 of this chapter constitute the CSAPR Federal Implementation 
Plan provisions that relate to emissions of NOX during the 
ozone season (defined as May 1 through September 30 of a calendar 
year), except as otherwise provided in this section.
    (2) Applicability of CSAPR NOX Ozone Season Group 1, Group 2, and 
Group 3 Trading Program provisions. * * *
* * * * *

[[Page 23167]]

    (iii) The provisions of subpart EEEEE of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2017 and each subsequent year: Alabama, Arkansas, Iowa, 
Kansas, Mississippi, Missouri, Oklahoma, Tennessee, Texas, and 
Wisconsin.
    (iv) The provisions of subpart EEEEE of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2017 through 2020 only, except as provided in paragraph 
(b)(14)(iii) of this section: Illinois, Indiana, Kentucky, Louisiana, 
Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, 
and West Virginia.
    (v) The provisions of subpart GGGGG of part 97 of this chapter 
apply to sources in each of the following States and Indian country 
located within the borders of such States with regard to emissions 
occurring in 2021 and each subsequent year: Illinois, Indiana, 
Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, 
Pennsylvania, Virginia, and West Virginia.
    (3) State-determined allocations of CSAPR NOX Ozone Season Group 1 
allowances for 2016. * * *
* * * * *
    (4) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR NOX Ozone Season Group 1 Trading Program. A State listed 
in paragraph (b)(2)(i) of this section may adopt and include in a SIP 
revision, and the Administrator will approve, regulations replacing 
specified provisions of subpart BBBBB of part 97 of this chapter for 
the State's sources, and not substantively replacing any other 
provisions, as follows:
* * * * *
    (ii) * * *
    (B) * * *

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

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

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

* * * * *
    (7) State-determined allocations of CSAPR NOX Ozone Season Group 2 
allowances for 2018. * * *
* * * * *
    (8) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR NOX Ozone Season Group 2 Trading Program. A State listed 
in paragraph (b)(2)(iii) or (iv) of this section may adopt and include 
in a SIP revision, and the Administrator will approve, regulations 
replacing specified provisions of subpart EEEEE of part 97 of this 
chapter for the State's sources, and not substantively replacing any 
other provisions, as follows:
* * * * *
    (ii) The State may adopt, as applicability provisions replacing the 
provisions in Sec.  97.804(a) and (b) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that applicability is expanded to include all other units 
(beyond any units to which applicability could be expanded under 
paragraph (b)(8)(i) of this section) that would have been subject to 
any emissions trading program regulations approved as a SIP revision 
for the State under Sec.  51.121 of this chapter; and
    (iii) * * *
    (B) * * *

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


[[Page 23168]]

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

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

* * * * *
    (10) State-determined allocations of CSAPR NOX Ozone 
Season Group 3 allowances for 2022. A State listed in paragraph 
(b)(2)(v) of this section may adopt and include in a SIP revision, and 
the Administrator will approve, as CSAPR NOX Ozone Season 
Group 3 allowance allocation provisions replacing the provisions in 
Sec.  97.1011(a) of this chapter with regard to the State and the 
control period in 2022, a list of CSAPR NOX Ozone Season 
Group 3 units and the amount of CSAPR NOX Ozone Season Group 
3 allowances allocated to each unit on such list, provided that the 
list of units and allocations meets the following requirements:
    (i) All of the units on the list must be units that are in the 
State and commenced commercial operation before January 1, 2019;
    (ii) The total amount of CSAPR NOX Ozone Season Group 3 
allowance allocations on the list must not exceed the amount, under 
Sec.  97.1010(a) of this chapter for the State and the control period 
in 2022, of the CSAPR NOX Ozone Season Group 3 trading 
budget minus the sum of the new unit set-aside and Indian country new 
unit set-aside;
    (iii) The list must be submitted electronically in a format 
specified by the Administrator; and
    (iv) The SIP revision must not provide for any change in the units 
and allocations on the list after approval of the SIP revision by the 
Administrator and must not provide for any change in any allocation 
determined and recorded by the Administrator under subpart GGGGG of 
part 97 of this chapter;
    (v) Provided that:
    (A) By June 29, 2021, the State must notify the Administrator 
electronically in a format specified by the Administrator of the 
State's intent to submit to the Administrator a complete SIP revision 
meeting the requirements of paragraphs (b)(10)(i) through (iv) of this 
section by September 1, 2021; and
    (B) The State must submit to the Administrator a complete SIP 
revision described in paragraph (b)(10)(v)(A) of this section by 
September 1, 2021.
    (11) Abbreviated SIP revisions replacing certain provisions of the 
federal CSAPR NOX Ozone Season Group 3 Trading Program. A State listed 
in paragraph (b)(2)(v) of this section may adopt and include in a SIP 
revision, and the Administrator will approve, regulations replacing 
specified provisions of subpart GGGGG of part 97 of this chapter for 
the State's sources, and not substantively replacing any other 
provisions, as follows:
    (i) The State may adopt, as applicability provisions replacing the 
provisions in Sec.  97.1004(a)(1) and (2) of this chapter with regard 
to the State, provisions substantively identical to those provisions, 
except that the words ``more than 25 MWe'' are replaced, wherever such 
words appear, by words specifying a uniform lower limit on the amount 
of megawatts that is not greater than the amount specified by the words 
``more than 25 MWe'' and is not less than the amount specified by the 
words ``15 MWe or more'';
    (ii) The State may adopt, as applicability provisions replacing the 
provisions in Sec.  97.1004(a) and (b) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that applicability is expanded to include all other units 
(beyond any units to which applicability could be expanded under 
paragraph (b)(11)(i) of this section) that would have been subject to 
any emissions trading program regulations approved as a SIP revision 
for the State under Sec.  51.121 of this chapter; and
    (iii) The State may adopt, as CSAPR NOX Ozone Season 
Group 3 allowance allocation or auction provisions replacing the 
provisions in Sec. Sec.  97.1011(a) and (b)(1) and 97.1012(a) of this 
chapter with regard to the State and the control period in 2023 or any 
subsequent year, any methodology under which the State or the 
permitting authority allocates or auctions CSAPR NOX Ozone 
Season Group 3 allowances and may adopt, in addition to the definitions 
in Sec.  97.1002 of this chapter, one or more definitions that shall 
apply only to terms as used in the adopted CSAPR NOX Ozone 
Season Group 3 allowance allocation or auction provisions, if such 
methodology--
    (A) Requires the State or the permitting authority to allocate and, 
if applicable, auction a total amount of CSAPR NOX Ozone 
Season Group 3 allowances for any such control period not exceeding the 
amount, under Sec. Sec.  97.1010(a) and 97.1021 of this chapter for the 
State and such control period, of the CSAPR NOX Ozone Season 
Group 3 trading budget minus the sum of the Indian country new unit 
set-aside and the amount of any CSAPR NOX Ozone Season Group 
3 allowances already allocated and recorded by the Administrator, plus, 
if the State adopts regulations expanding applicability to additional 
units pursuant to paragraph (b)(11)(ii) of this section, an additional 
amount of CSAPR NOX Ozone Season Group 3 allowances not 
exceeding the lesser of:
    (1) The highest of the sum, for all additional units in the State 
to which applicability is expanded pursuant to paragraph (b)(11)(ii) of 
this section, of the NOX emissions reported in accordance 
with part 75 of this chapter for the ozone season in the year before 
the year of the submission deadline for the SIP revision under 
paragraph (b)(11)(iv) of this section and the corresponding sums of the 
NOX emissions reported in accordance with part 75 of this 
chapter for each of the two immediately preceding ozone seasons, 
provided that each such seasonal sum shall exclude the amount of any 
NOX emissions reported by any unit for all hours in any 
calendar day

[[Page 23169]]

during which the unit did not have at least one quality-assured monitor 
operating hour, as defined in Sec.  72.2 of this chapter; or
    (2) The portion of the emissions budget under the State's emissions 
trading program regulations approved as a SIP revision under Sec.  
51.121 of this chapter that is attributable to the units to which 
applicability is expanded pursuant to paragraph (b)(11)(ii) of this 
section;
    (B) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 3 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 3 units covered by Sec.  97.1011(a) of this chapter, 
that the State or the permitting authority submit such allocations or 
the results of such auctions for such control period (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 3 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator no later than the dates in Table 7 to 
this paragraph;

                  Table 7 to Paragraph (b)(11)(iii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 3       allocations or auction results
 allowances are allocated or auctioned         to the Administrator
------------------------------------------------------------------------
2023...................................  June 1, 2022.
2024...................................  June 1, 2022.
2025...................................  June 1, 2023.
2026...................................  June 1, 2023.
2027 and any year thereafter...........  June 1 of the third year before
                                          the year of the control
                                          period.
------------------------------------------------------------------------

    (C) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 3 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 3 units covered by Sec. Sec.  97.1011(b)(1) and 
97.1012(a) of this chapter, that the State or the permitting authority 
submit such allocations or the results of such auctions (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 3 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator by April 1 of the year following the 
year of such control period; and
    (D) Does not provide for any change, after the submission deadlines 
in paragraphs (b)(11)(iii)(B) and (C) of this section, in the 
allocations submitted to the Administrator by such deadlines and does 
not provide for any change in any allocation determined and recorded by 
the Administrator under subpart GGGGG of part 97 of this chapter or 
Sec.  97.526(d) or Sec.  97.826(d) of this chapter;
    (iv) Provided that the State must submit a complete SIP revision 
meeting the requirements of paragraph (b)(11)(i), (ii), or (iii) of 
this section by December 1 of the year before the year of the deadlines 
for submission of allocations or auction results under paragraphs 
(b)(11)(iii)(B) and (C) of this section applicable to the first control 
period for which the State wants to replace the applicability 
provisions, make allocations, or hold an auction under paragraph 
(b)(11)(i), (ii), or (iii) of this section.
    (12) Full SIP revisions adopting State CSAPR NOX Ozone Season Group 
3 Trading Programs. A State listed in paragraph (b)(2)(v) of this 
section may adopt and include in a SIP revision, and the Administrator 
will approve, as correcting the deficiency in the SIP that is the basis 
for the CSAPR Federal Implementation Plan set forth in paragraphs 
(b)(1), (b)(2)(v), and (b)(10) and (11) of this section with regard to 
sources in the State (but not sources in any Indian country within the 
borders of the State), regulations that are substantively identical to 
the provisions of the CSAPR NOX Ozone Season Group 3 Trading 
Program set forth in Sec. Sec.  97.1002 through 97.1035 of this 
chapter, except that the SIP revision:
    (i) May adopt, as applicability provisions replacing the provisions 
in Sec.  97.1004(a)(1) and (2) of this chapter with regard to the 
State, provisions substantively identical to those provisions, except 
that the words ``more than 25 MWe'' are replaced, wherever such words 
appear, by words specifying a uniform lower limit on the amount of 
megawatts that is not greater than the amount specified by the words 
``more than 25 MWe'' and is not less than the amount specified by the 
words ``15 MWe or more'';
    (ii) May adopt, as applicability provisions replacing the 
provisions in Sec.  97.1004(a) and (b) of this chapter with regard to 
the State, provisions substantively identical to those provisions, 
except that applicability is expanded to include all other units 
(beyond any units to which applicability could be expanded under 
paragraph (b)(12)(i) of this section) that would have been subject to 
any emissions trading program regulations approved as a SIP revision 
for the State under Sec.  51.121 of this chapter;
    (iii) May adopt, as CSAPR NOX Ozone Season Group 3 
allowance allocation provisions replacing the provisions in Sec. Sec.  
97.1011(a) and (b)(1) and 97.1012(a) of this chapter with regard to the 
State and the control period in 2023 or any subsequent year, any 
methodology under which the State or the permitting authority allocates 
or auctions CSAPR NOX Ozone Season Group 3 allowances and 
that--
    (A) Requires the State or the permitting authority to allocate and, 
if applicable, auction a total amount of CSAPR NOX Ozone 
Season Group 3 allowances for any such control period not exceeding the 
amount, under Sec. Sec.  97.1010(a) and 97.1021 of this chapter for the 
State and such control period, of the CSAPR NOX Ozone Season 
Group 3 trading budget minus the sum of the Indian country new unit 
set-aside and the amount of any CSAPR NOX Ozone Season Group 
3 allowances already allocated and recorded by the Administrator, plus, 
if the State adopts regulations expanding applicability to additional 
units pursuant to paragraph (b)(12)(ii) of this section, an additional 
amount of CSAPR NOX Ozone Season Group 3 allowances not 
exceeding the lesser of:
    (1) The highest of the sum, for all additional units in the State 
to which applicability is expanded pursuant to paragraph (b)(12)(ii) of 
this section, of the NOX emissions reported in accordance 
with part 75 of this chapter for the ozone season in the year before 
the year of the submission deadline for the SIP revision under 
paragraph (b)(12)(viii) of this section and the corresponding sums of 
the NOX emissions reported in accordance with part 75 of 
this chapter for each of the two immediately preceding ozone seasons, 
provided that each such seasonal sum shall exclude the amount

[[Page 23170]]

of any NOX emissions reported by any unit for all hours in 
any calendar day during which the unit did not have at least one 
quality-assured monitor operating hour, as defined in Sec.  72.2 of 
this chapter; or
    (2) The portion of the emissions budget under the State's emissions 
trading program regulations approved as a SIP revision under Sec.  
51.121 of this chapter that is attributable to the units to which 
applicability is expanded pursuant to paragraph (b)(12)(ii) of this 
section;
    (B) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 3 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 3 units covered by Sec.  97.1011(a) of this chapter, 
that the State or the permitting authority submit such allocations or 
the results of such auctions for such control period (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 3 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator no later than the dates in Table 8 to 
this paragraph;

                  Table 8 to Paragraph (b)(12)(iii)(B)
------------------------------------------------------------------------
  Year of the control period
  for which CSAPR NOX Ozone    Deadline for submission of allocations or
Season Group 3 allowances are     auction results to the Administrator
    allocated or auctioned
------------------------------------------------------------------------
2023.........................  June 1, 2022.
2024.........................  June 1, 2022.
2025.........................  June 1, 2023.
2026.........................  June 1, 2023.
2027 and any year thereafter.  June 1 of the third year before the year
                                of the control period.
------------------------------------------------------------------------

    (C) Requires, to the extent the State adopts provisions for 
allocations or auctions of CSAPR NOX Ozone Season Group 3 
allowances for any such control period to any CSAPR NOX 
Ozone Season Group 3 units covered by Sec. Sec.  97.1011(b)(1) and 
97.1012(a) of this chapter, that the State or the permitting authority 
submit such allocations or the results of such auctions (except 
allocations or results of auctions to such units of CSAPR 
NOX Ozone Season Group 3 allowances remaining in a set-aside 
after completion of the allocations or auctions for which the set-aside 
was created) to the Administrator by April 1 of the year following the 
year of such control period; and
    (D) Does not provide for any change, after the submission deadlines 
in paragraphs (b)(12)(iii)(B) and (C) of this section, in the 
allocations submitted to the Administrator by such deadlines and does 
not provide for any change in any allocation determined and recorded by 
the Administrator under subpart GGGGG of part 97 of this chapter or 
Sec.  97.526(d) or Sec.  97.826(d) of this chapter;
    (iv) May adopt, in addition to the definitions in Sec.  97.1002 of 
this chapter, one or more definitions that shall apply only to terms as 
used in the CSAPR NOX Ozone Season Group 3 allowance 
allocation or auction provisions adopted under paragraph (b)(12)(iii) 
of this section;
    (v) May substitute the name of the State for the term ``State'' as 
used in subpart GGGGG of part 97 of this chapter, to the extent the 
Administrator determines that such substitutions do not make 
substantive changes in the provisions in Sec. Sec.  97.1002 through 
97.1035 of this chapter; and
    (vi) Must not include any of the requirements imposed on any unit 
in Indian country within the borders of the State in the provisions in 
Sec. Sec.  97.1002 through 97.1035 of this chapter and must not include 
the provisions in Sec. Sec.  97.1011(b)(2) and (c)(5)(iii), 97.1012(b), 
and 97.1021(h) of this chapter, all of which provisions will continue 
to apply under any portion of the CSAPR Federal Implementation Plan 
that is not replaced by the SIP revision;
    (vii) Provided that, if and when any covered unit is located in 
Indian country within the borders of the State, the Administrator may 
modify his or her approval of the SIP revision to exclude the 
provisions in Sec. Sec.  97.1002 (definitions of ``base CSAPR 
NOX Ozone Season Group 3 source'', ``base CSAPR 
NOX Ozone Season Group 3 unit'', ``common designated 
representative'', ``common designated representative's assurance 
level'', and ``common designated representative's share''), 
97.1006(c)(2), and 97.1025 of this chapter and the portions of other 
provisions of subpart GGGGG of part 97 of this chapter referencing 
these sections and may modify any portion of the CSAPR Federal 
Implementation Plan that is not replaced by the SIP revision to include 
these provisions; and
    (viii) Provided that the State must submit a complete SIP revision 
meeting the requirements of paragraphs (b)(12)(i) through (vi) of this 
section by December 1 of the year before the year of the deadlines for 
submission of allocations or auction results under paragraphs 
(b)(12)(iii)(B) and (C) of this section applicable to the first control 
period for which the State wants to replace the applicability 
provisions, make allocations, or hold an auction under paragraph 
(b)(12)(i), (ii), or (iii) of this section.
    (13) Withdrawal of CSAPR FIP provisions relating to NOX ozone 
season emissions; satisfaction of NOX SIP Call requirements. Following 
promulgation of an approval by the Administrator of a State's SIP 
revision as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan set forth in paragraphs (b)(1), 
(b)(2)(i), and (b)(3) and (4) of this section, paragraphs (b)(1), 
(b)(2)(iii) or (iv), and (b)(7) and (8) of this section, or paragraphs 
(b)(1), (b)(2)(v), and (b)(10) and (11) of this section for sources in 
the State--
* * * * *
    (14) Continued applicability of certain federal trading program 
provisions for NOX ozone season emissions. (i) Notwithstanding the 
provisions of paragraph (b)(13)(i) of this section or any State's SIP, 
when carrying out the functions of the Administrator under any State 
CSAPR NOX Ozone Season Group 1 Trading Program or State 
CSAPR NOX Ozone Season Group 2 Trading Program pursuant to a 
SIP revision approved under this section, the Administrator will apply 
the following provisions of this section, as amended, and the following 
provisions of subpart BBBBB of part 97 of this chapter, as amended, or 
subpart EEEEE of part 97 of this chapter, as amended, with regard to 
the State and any source subject to such State trading program:
    (A) The definitions in Sec.  97.502 of this chapter or Sec.  97.802 
of this chapter;
    (B) The provisions in Sec.  97.510(a) of this chapter (concerning 
in part the amounts of the new unit set-asides);
    (C) The provisions in Sec. Sec.  97.511(b)(1) and 97.512(a) of this 
chapter or

[[Page 23171]]

Sec. Sec.  97.811(b)(1) and 97.812(a) of this chapter (concerning the 
procedures for administering the new unit set-asides), except where the 
State allocates or auctions CSAPR NOX Ozone Season Group 1 
allowances or CSAPR NOX Ozone Season Group 2 allowances 
under an approved SIP revision;
    (D) The provisions in Sec.  97.511(c)(5) of this chapter or Sec.  
97.811(c)(5) of this chapter (concerning the disposition of incorrectly 
allocated CSAPR NOX Ozone Season Group 1 allowances or CSAPR 
NOX Ozone Season Group 2 allowances);
    (E) The provisions in Sec.  97.521(f), (g), and (i) of this chapter 
or Sec.  97.821(f), (g), and (i) of this chapter (concerning the 
deadlines for recordation of allocations or auctions of CSAPR 
NOX Ozone Season Group 1 allowances or CSAPR NOX 
Ozone Season Group 2 allowances) and the provisions in paragraphs 
(b)(4)(ii)(B) and (C) and (b)(5)(ii)(B) and (C) of this section or 
paragraphs (b)(8)(iii)(B) and (C) and (b)(9)(iii)(B) and (C) of this 
section (concerning the deadlines for submission to the Administrator 
of State-determined allocations or auction results);
    (F) The provisions in Sec.  97.525(b) of this chapter or Sec.  
97.825(b) of this chapter (concerning the procedures for administering 
the assurance provisions); and
    (G) The provisions in Sec.  97.526(e) of this chapter or Sec.  
97.826(e) of this chapter (concerning the use of CSAPR NOX 
Ozone Season Group 2 allowances or CSAPR NOX Ozone Season 
Group 3 allowances to satisfy requirements to hold CSAPR NOX 
Ozone Season Group 1 allowances or the use of CSAPR NOX 
Ozone Season Group 3 allowances to satisfy requirements to hold CSAPR 
NOX Ozone Season Group 2 allowances).
    (ii) Notwithstanding the provisions of paragraph (b)(13)(i) of this 
section, if, at the time of any approval of a State's SIP revision 
under this section, the Administrator has already started recording any 
allocations of CSAPR NOX Ozone Season Group 1 allowances 
under subpart BBBBB of part 97 of this chapter, or allocations of CSAPR 
NOX Ozone Season Group 2 allowances under subpart EEEEE of 
part 97 of this chapter, or allocations of CSAPR NOX Ozone 
Season Group 3 allowances under subpart GGGGG of part 97 of this 
chapter, to units in the State for a control period in any year, the 
provisions of such subpart authorizing the Administrator to complete 
the allocation and recordation of such allowances to units in the State 
for each such control period shall continue to apply, unless provided 
otherwise by such approval of the State's SIP revision.
    (iii) Notwithstanding any discontinuation of the applicability of 
subpart BBBBB or EEEEE of part 97 of this chapter to the sources in a 
State with regard to emissions occurring in any control period pursuant 
to paragraph (b)(2)(ii) or (iv) or (b)(13)(i) of this section, the 
following provisions shall continue to apply with regard to all CSAPR 
NOX Ozone Season Group 1 allowances and CSAPR NOX 
Ozone Season Group 2 allowances at any time allocated for any control 
period to any source or other entity in the State and shall apply to 
all entities, wherever located, that at any time held or hold such 
allowances:
    (A) The provisions of Sec.  97.526(c) of this chapter (concerning 
the transfer of CSAPR NOX Ozone Season Group 1 allowances 
between certain Allowance Management System accounts under common 
control);
    (B) The provisions of Sec.  97.526(d) of this chapter (concerning 
the conversion of amounts of unused CSAPR NOX Ozone Season 
Group 1 allowances allocated for control periods before 2017 to 
different amounts of CSAPR NOX Ozone Season Group 2 
allowances or CSAPR NOX Ozone Season Group 3 allowances);
    (C) The provisions of Sec.  97.826(c) of this chapter (concerning 
the transfer of CSAPR NOX Ozone Season Group 2 allowances 
between certain Allowance Management System accounts under common 
control);
    (D) The provisions of Sec.  97.826(d) of this chapter (concerning 
the conversion of amounts of unused CSAPR NOX Ozone Season 
Group 2 allowances allocated for control periods before 2021 to 
different amounts of CSAPR NOX Ozone Season Group 3 
allowances); and
    (E) The provisions of Sec.  97.811(d) of this chapter (concerning 
the recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all CSAPR NOX Ozone 
Season Group 2 allowances allocated for control periods after 2020 and 
recorded in the compliance accounts of sources in States listed in 
paragraph (b)(2)(iv) of this section).
    (15) States with approved SIP revisions addressing the CSAPR NOX 
Ozone Season Group 1 Trading Program. * * *
* * * * *
    (16) States with approved SIP revisions addressing the CSAPR NOX 
Ozone Season Group 2 Trading Program. (i) The following States have SIP 
revisions approved by the Administrator under paragraph (b)(7), (8), or 
(9) of this section:
* * * * *
    (ii) Notwithstanding any provision of subpart EEEEE of part 97 of 
this chapter or any State's SIP, with regard to any State listed in 
paragraph (b)(2)(iv) of this section and any control period that begins 
after December 31, 2020, the Administrator will not carry out any of 
the functions set forth for the Administrator in subpart EEEEE of part 
97 of this chapter, except Sec. Sec.  97.811(d) and 97.826(c) and (d) 
of this chapter, or in any emissions trading program provisions in a 
State's SIP approved under paragraph (b)(8) or (9) of this section.
    (17) States with approved SIP revisions addressing the CSAPR NOX 
Ozone Season Group 3 Trading Program. The following States have SIP 
revisions approved by the Administrator under paragraph (b)(10), (11), 
or (12) of this section:
    (i) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(10) of this section as 
replacing the CSAPR NOX Ozone Season Group 3 allowance 
allocation provisions in Sec.  97.1011(a) of this chapter with regard 
to the State and the control period in 2022: [None].
    (ii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(11) of this section as 
replacing the CSAPR NOX Ozone Season Group 3 applicability 
provisions in Sec.  97.1004(a) and (b) or Sec.  97.1004(a)(1) and (2) 
of this chapter or the CSAPR NOX Ozone Season Group 2 
allowance allocation provisions in Sec. Sec.  97.1011(a) and (b)(1) and 
97.1012(a) of this chapter with regard to the State and the control 
period in 2023 or any subsequent year: [None].
    (iii) For each of the following States, the Administrator has 
approved a SIP revision under paragraph (b)(12) of this section as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan set forth in paragraphs (b)(1), (b)(2)(v), and 
(b)(10) and (11) of this section with regard to sources in the State 
(but not sources in any Indian country within the borders of the 
State): [None].

0
5. Amend Sec.  52.39 by:
0
a. Adding a paragraph heading to paragraph (a) and removing 
``(SO2).'' and adding in its place ``(SO2), 
except as otherwise provided in this section.'';
0
b. Adding paragraph headings to paragraphs (b) and (c);
0
c. Adding a paragraph heading to paragraph (d) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a) of this

[[Page 23172]]

section, a State'' and adding in its place ``A State'';
0
d. Revising paragraph (e) introductory text;
0
e. In paragraph (e)(1)(i), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
f. In paragraph (e)(1)(ii), removing ``the following dates:'' and 
adding in its place ``the dates in Table 1 to this paragraph;'', adding 
a heading to the table, removing the table entry for ``2023 and any 
year thereafter'', and adding table entries for ``2023 and 2024'' and 
``2025 and any year thereafter'';
0
g. In paragraph (e)(1)(iii), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2021, or by April 1 of the year following the control 
period, for a control period in 2021 or thereafter; and'';
0
h. Adding a paragraph heading to paragraph (f) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a) of this 
section, a State'' and adding in its place ``A State'';
0
i. In paragraph (f)(1)(i), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
j. In paragraph (f)(1)(ii), removing ``the following dates:'' and 
adding in its place ``the dates in Table 2 to this paragraph;'', adding 
a heading to the table, removing the table entry for ``2023 and any 
year thereafter'', and adding table entries for ``2023 and 2024'' and 
``2025 and any year thereafter'';
0
k. In paragraph (f)(1)(iii), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2021, or by April 1 of the year following the control 
period, for a control period in 2021 or thereafter; and'';
0
l. In paragraph (f)(5), adding ``and'' after the semicolon at the end 
of the paragraph;
0
m. Adding a paragraph heading to paragraph (g) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a) of this 
section, a State'' and adding in its place ``A State'';
0
n. Revising paragraph (h) introductory text;
0
o. In paragraph (h)(1)(i), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
p. In paragraph (h)(1)(ii), removing ``the following dates:'' and 
adding in its place ``the dates in Table 3 to this paragraph;'', adding 
a heading to the table, removing the table entry for ``2023 and any 
year thereafter'', and adding table entries for ``2023 and 2024'' and 
``2025 and any year thereafter'';
0
q. In paragraph (h)(1)(iii), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2021, or by April 1 of the year following the control 
period, for a control period in 2021 or thereafter; and'';
0
r. Adding a paragraph heading to paragraph (i) introductory text and 
removing ``Notwithstanding the provisions of paragraph (a) of this 
section, a State'' and adding in its place ``A State'';
0
s. In paragraph (i)(1)(i), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
t. In paragraph (i)(1)(ii), removing ``the following dates:'' and 
adding in its place ``the dates in Table 4 to this paragraph;'', adding 
a heading to the table, removing the table entry for ``2023 and any 
year thereafter'', and adding table entries for ``2023 and 2024'' and 
``2025 and any year thereafter'';
0
u. In paragraph (i)(1)(iii), removing ``year of such control period.'' 
and adding in its place ``year of such control period, for a control 
period before 2021, or by April 1 of the year following the control 
period, for a control period in 2021 or thereafter; and'';
0
v. In paragraph (i)(5), adding ``and'' after the semicolon at the end 
of the paragraph;
0
w. Adding a paragraph heading to paragraph (j) and removing ``Following 
promulgation'' and adding in its place ``Except as provided in 
paragraph (k) of this section, following promulgation'';
0
x. Revising paragraph (k); and
0
y. Adding paragraph headings to paragraphs (l) introductory text and 
(m) introductory text.
    The additions and revisions read as follows:


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

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

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

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

[[Page 23173]]



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

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

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

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

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

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

[[Page 23174]]

State for a control period in any year, the provisions of such subpart 
authorizing the Administrator to complete the allocation and 
recordation of such allowances to units in the State for each such 
control period shall continue to apply, unless provided otherwise by 
such approval of the State's SIP revision.
    (l) States with approved SIP revisions addressing the CSAPR SO2 
Group 1 Trading Program. * * *
* * * * *
    (m) States with approved SIP revisions addressing the CSAPR SO2 
Group 2 Trading Program. * * *
* * * * *

Subpart O--Illinois

0
6. Amend Sec.  52.731 by:
0
a. In paragraph (b)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second 
sentence;
0
b. Redesignating paragraph (b)(3) as paragraph (b)(4) and adding a new 
paragraph (b)(3);
0
c. In newly redesignated paragraph (b)(4), removing ``(b)(2)'' and 
adding in its place ``(b)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (b)(5).
    The additions read as follows:


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

* * * * *
    (b) * * *
    (3) The owner and operator of each source and each unit located in 
the State of Illinois and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Illinois' State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
* * * * *
    (5) Notwithstanding the provisions of paragraph (b)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart P--Indiana

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


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

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

Subpart S--Kentucky

0
8. Amend Sec.  52.940 by:
0
a. In paragraph (b)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second 
sentence;
0
b. Redesignating paragraph (b)(3) as paragraph (b)(4) and adding a new 
paragraph (b)(3);
0
c. In newly redesignated paragraph (b)(4), removing ``(b)(2)'' and 
adding in its place ``(b)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears,

[[Page 23175]]

and removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (b)(5).
    The additions read as follows:


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

* * * * *
    (b) * * *
    (3) The owner and operator of each source and each unit located in 
the State of Kentucky and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Kentucky's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
* * * * *
    (5) Notwithstanding the provisions of paragraph (b)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart T--Louisiana

0
9. Amend Sec.  52.984 by:
0
a. In paragraph (d)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second and 
third sentences;
0
b. Redesignating paragraph (d)(3) as paragraph (d)(4) and adding a new 
paragraph (d)(3);
0
c. In newly redesignated paragraph (d)(4), removing ``(d)(2)'' and 
adding in its place ``(d)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (d)(5).
    The additions read as follows:


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

* * * * *
    (d) * * *
    (3) The owner and operator of each source and each unit located in 
the State of Louisiana and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 3 Trading Program in subpart GGGGG of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2021 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Louisiana's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b)(1) and 
(b)(2)(v) for those sources and units, except to the extent the 
Administrator's approval is partial or conditional. The obligation to 
comply with such requirements with regard to sources and units located 
in Indian country within the borders of the State will not be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Louisiana's SIP.
* * * * *
    (5) Notwithstanding the provisions of paragraph (d)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart V--Maryland

0
10. Amend Sec.  52.1084 by:
0
a. In paragraph (b)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second 
sentence;
0
b. Redesignating paragraph (b)(3) as paragraph (b)(4) and adding a new 
paragraph (b)(3);
0
c. In newly redesignated paragraph (b)(4), removing ``(b)(2)'' and 
adding in its place ``(b)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (b)(5).
    The additions read as follows:


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

* * * * *
    (b) * * *
    (3) The owner and operator of each source and each unit located in 
the State of Maryland and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Maryland's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
* * * * *
    (5) Notwithstanding the provisions of paragraph (b)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart X--Michigan

0
11. Amend Sec.  52.1186 by:

[[Page 23176]]

0
a. In paragraph (e)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second and 
third sentences;
0
b. Redesignating paragraph (e)(3) as paragraph (e)(4) and adding a new 
paragraph (e)(3);
0
c. In newly redesignated paragraph (e)(4), removing ``(e)(2)'' and 
adding in its place ``(e)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (e)(5).
    The additions read as follows:


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

* * * * *
    (e) * * *
    (3) The owner and operator of each source and each unit located in 
the State of Michigan and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 3 Trading Program in subpart GGGGG of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2021 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to Michigan's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b)(1) and 
(b)(2)(v) for those sources and units, except to the extent the 
Administrator's approval is partial or conditional. The obligation to 
comply with such requirements with regard to sources and units located 
in Indian country within the borders of the State will not be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to Michigan's SIP.
* * * * *
    (5) Notwithstanding the provisions of paragraph (e)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart FF--New Jersey

0
12. Amend Sec.  52.1584 by:
0
a. In paragraph (e)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second 
sentence;
0
b. Redesignating paragraph (e)(3) as paragraph (e)(4) and adding a new 
paragraph (e)(3);
0
c. In newly redesignated paragraph (e)(4), removing ``(e)(2)'' and 
adding in its place ``(e)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (e)(5).
    The additions read as follows:


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

* * * * *
    (e) * * *
    (3) The owner and operator of each source and each unit located in 
the State of New Jersey and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to New Jersey's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
* * * * *
    (5) Notwithstanding the provisions of paragraph (e)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart HH--New York

0
13. Amend Sec.  52.1684 by:
0
a. In paragraph (b)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second and 
third sentences;
0
b. Redesignating paragraph (b)(3) as paragraph (b)(4) and adding a new 
paragraph (b)(3);
0
c. In newly redesignated paragraph (b)(4), removing ``(b)(2)'' and 
adding in its place ``(b)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (b)(5).
    The additions read as follows:


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

* * * * *
    (b) * * *
    (3) The owner and operator of each source and each unit located in 
the State of New York and Indian country within the borders of the 
State and for which requirements are set forth under the CSAPR 
NOX Ozone Season Group 3 Trading Program in subpart GGGGG of 
part 97 of this chapter must comply with such requirements with regard 
to emissions occurring in 2021 and each subsequent year. The obligation 
to comply with such requirements with regard to sources and units in 
the State will be eliminated by the promulgation of an approval by the 
Administrator of a revision to New York's State Implementation Plan 
(SIP) as correcting the SIP's deficiency that is the basis for the 
CSAPR Federal Implementation Plan (FIP) under Sec.  52.38(b)(1) and 
(b)(2)(v) for those sources and units, except to the extent the 
Administrator's approval is partial or conditional. The obligation to 
comply with such requirements with regard to sources and units located 
in Indian country within the borders of the State will not be 
eliminated by the promulgation of an approval by the Administrator of a 
revision to New York's SIP.
* * * * *

[[Page 23177]]

    (5) Notwithstanding the provisions of paragraph (b)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart KK--Ohio

0
14. Amend Sec.  52.1882 by:
0
a. In paragraph (b)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second 
sentence;
0
b. Redesignating paragraph (b)(3) as paragraph (b)(4) and adding a new 
paragraph (b)(3);
0
c. In newly redesignated paragraph (b)(4), removing ``(b)(2)'' and 
adding in its place ``(b)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (b)(5).
    The additions read as follows:


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

* * * * *
    (b) * * *
    (3) The owner and operator of each source and each unit located in 
the State of Ohio and for which requirements are set forth under the 
CSAPR NOX Ozone Season Group 3 Trading Program in subpart 
GGGGG of part 97 of this chapter must comply with such requirements 
with regard to emissions occurring in 2021 and each subsequent year. 
The obligation to comply with such requirements will be eliminated by 
the promulgation of an approval by the Administrator of a revision to 
Ohio's State Implementation Plan (SIP) as correcting the SIP's 
deficiency that is the basis for the CSAPR Federal Implementation Plan 
(FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except to the extent the 
Administrator's approval is partial or conditional.
* * * * *
    (5) Notwithstanding the provisions of paragraph (b)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart NN--Pennsylvania

0
15. Amend Sec.  52.2040 by:
0
a. In paragraph (b)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second 
sentence;
0
b. Redesignating paragraph (b)(3) as paragraph (b)(4) and adding a new 
paragraph (b)(3);
0
c. In newly redesignated paragraph (b)(4), removing ``(b)(2)'' and 
adding in its place ``(b)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (b)(5).
    The additions read as follows:


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

* * * * *
    (b) * * *
    (3) The owner and operator of each source and each unit located in 
the State of Pennsylvania and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Pennsylvania's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
* * * * *
    (5) Notwithstanding the provisions of paragraph (b)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart VV--Virginia

0
16. Amend Sec.  52.2440 by:
0
a. In paragraph (b)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second 
sentence;
0
b. Redesignating paragraph (b)(3) as paragraph (b)(4) and adding a new 
paragraph (b)(3);
0
c. In newly redesignated paragraph (b)(4), removing ``(b)(2)'' and 
adding in its place ``(b)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (b)(5).
    The additions read as follows:


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

* * * * *
    (b) * * *
    (3) The owner and operator of each source and each unit located in 
the State of Virginia and for which requirements are set forth under 
the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to Virginia's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under

[[Page 23178]]

Sec.  52.38(b)(1) and (b)(2)(v), except to the extent the 
Administrator's approval is partial or conditional.
* * * * *
    (5) Notwithstanding the provisions of paragraph (b)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

Subpart XX--West Virginia

0
17. Amend Sec.  52.2540 by:
0
a. In paragraph (b)(2), removing ``2017 and each subsequent year.'' and 
adding in its place ``2017 through 2020.'', and removing the second 
sentence;
0
b. Redesignating paragraph (b)(3) as paragraph (b)(4) and adding a new 
paragraph (b)(3);
0
c. In newly redesignated paragraph (b)(4), removing ``(b)(2)'' and 
adding in its place ``(b)(3)'' each time it appears, removing ``Group 
2'' and adding in its place ``Group 3'' each time it appears, and 
removing ``EEEEE'' and adding in its place ``GGGGG'' each time it 
appears; and
0
d. Adding paragraph (b)(5).
    The additions read as follows:


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

* * * * *
    (b) * * *
    (3) The owner and operator of each source and each unit located in 
the State of West Virginia and for which requirements are set forth 
under the CSAPR NOX Ozone Season Group 3 Trading Program in 
subpart GGGGG of part 97 of this chapter must comply with such 
requirements with regard to emissions occurring in 2021 and each 
subsequent year. The obligation to comply with such requirements will 
be eliminated by the promulgation of an approval by the Administrator 
of a revision to West Virginia's State Implementation Plan (SIP) as 
correcting the SIP's deficiency that is the basis for the CSAPR Federal 
Implementation Plan (FIP) under Sec.  52.38(b)(1) and (b)(2)(v), except 
to the extent the Administrator's approval is partial or conditional.
* * * * *
    (5) Notwithstanding the provisions of paragraph (b)(2) of this 
section, after 2020 the provisions of Sec.  97.826(c) of this chapter 
(concerning the transfer of CSAPR NOX Ozone Season Group 2 
allowances between certain accounts under common control), the 
provisions of Sec.  97.826(d) of this chapter (concerning the 
conversion of amounts of unused CSAPR NOX Ozone Season Group 
2 allowances allocated for control periods before 2021 to different 
amounts of CSAPR NOX Ozone Season Group 3 allowances), and 
the provisions of Sec.  97.811(d) of this chapter (concerning the 
recall of CSAPR NOX Ozone Season Group 2 allowances 
equivalent in quantity and usability to all such allowances allocated 
to units in the State for control periods after 2020) shall continue to 
apply.

PART 78--APPEAL PROCEDURES

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

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


0
19. Amend Sec.  78.1 by:
0
a. In paragraphs (a)(1)(i)(A) and (B), removing the period at the end 
of the paragraph and adding in its place a semicolon;
0
b. Revising paragraphs (a)(1)(i)(C) and (D);
0
c. Removing paragraph (a)(1)(i)(E) and redesignating paragraph 
(a)(1)(i)(F) as paragraph (a)(1)(i)(E);
0
d. In paragraph (a)(1)(iv), removing ``and subpart EEEEE'' and adding 
in its place ``subpart EEEEE of part 97 of this chapter, and subpart 
GGGGG'' and removing ``and Sec.  52.38(b)(6), (8), or (9)'' and adding 
in its place ``Sec.  52.38(b)(8) or (9) of this chapter, and Sec.  
52.38(b)(11) or (12)'';
0
e. In paragraph (b)(1) introductory text, removing the semicolon at the 
end of the paragraph and adding in its place a comma;
0
f. In paragraph (b)(9)(i), removing ``(c)(2) of'' and adding in its 
place ``(c)(2) of'';
0
g. In paragraph (b)(13)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.412'';
0
h. In paragraph (b)(13)(iii), removing ``Sec. Sec.  97.424 and 97.425'' 
and adding in its place ``Sec.  97.424 or Sec.  97.425'';
0
i. In paragraph (b)(14)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.512'';
0
j. In paragraph (b)(14)(iii), removing ``Sec. Sec.  97.524 and 97.525'' 
and adding in its place ``Sec.  97.524 or Sec.  97.525'';
0
k. In paragraph (b)(14)(viii), removing ``the removal of'' and adding 
in its place ``the deduction of'', and removing ``under Sec.  
97.526(c)'' and adding in its place ``or CSAPR NOX Ozone 
Season Group 3 allowances under Sec.  97.526(d)'';
0
l. In paragraph (b)(15)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.612'';
0
m. In paragraph (b)(15)(iii), removing ``Sec. Sec.  97.624 and 97.625'' 
and adding in its place ``Sec.  97.624 or Sec.  97.625'';
0
n. In paragraph (b)(16)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.712'';
0
o. In paragraph (b)(16)(iii), removing ``Sec. Sec.  97.724 and 97.725'' 
and adding in its place ``Sec.  97.724 or Sec.  97.725'';
0
p. In paragraph (b)(17)(i), removing ``and (b)'' and adding in its 
place ``or (c) or Sec.  97.812'';
0
q. In paragraph (b)(17)(iii), removing ``Sec. Sec.  97.824 and 97.825'' 
and adding in its place ``Sec.  97.824 or Sec.  97.825'';
0
r. Adding paragraphs (b)(17)(viii) and (ix);
0
s. Redesignating paragraph (b)(18) as paragraph (b)(20) and adding new 
paragraphs (b)(18) and (19);
0
t. In newly redesignated paragraph (b)(20)(i), removing ``A 
determination of eligibility for'' and adding in its place ``The 
decision on eligibility for a''; and
0
u. In newly redesignated paragraph (b)(20)(iii), removing ``and Sec.  
98.448(d)'' and adding in its place ``or (d)''.
    The revisions and additions read as follows:


Sec.  78.1  Purpose and scope.

    (a) * * *
    (1) * * *
    (i) * * *
    (C) Subparts AA through II, AAA through III, or AAAA through IIII 
of part 96 of this chapter; subparts AA through II, AAA through III, or 
AAAA through IIII of part 97 of this chapter; or State regulations 
approved under Sec.  51.123(o)(1) or (2) or (aa)(1) or (2) or Sec.  
51.124(o)(1) or (2) of this chapter;
    (D) Subpart AAAAA, BBBBB, CCCCC, DDDDD, EEEEE, FFFFF, or GGGGG of 
part 97 of this chapter or State regulations approved under Sec.  
52.38(a)(4) or (5) or (b)(4), (5), (8), (9), (11), or (12) or Sec.  
52.39(e), (f), (h), or (i) of this chapter; or
* * * * *
    (b) * * *
    (17) * * *
    (viii) The decision on the deduction of CSAPR NOX Ozone 
Season Group 2 allowances from an Allowance Management System account 
and the allocation to such account or another

[[Page 23179]]

account of CSAPR NOX Ozone Season Group 3 allowances under 
Sec.  97.826(d) of this chapter.
    (ix) The decision on the recall of allocations of CSAPR 
NOX Ozone Season Group 2 allowances and the deduction of 
such allowances from an Allowance Management System account under Sec.  
97.811(d) of this chapter.
    (18) Under subpart FFFFF of part 97 of this chapter,
    (i) The decision on the allocation of Texas SO2 Trading 
Program allowances under Sec.  97.911(a)(2) or (c) or Sec.  97.912 of 
this chapter.
    (ii) The decision on the transfer of Texas SO2 Trading 
Program allowances under Sec.  97.923 of this chapter.
    (iii) The decision on the deduction of Texas SO2 Trading 
Program allowances under Sec.  97.924 or Sec.  97.925 of this chapter.
    (iv) The correction of an error in an Allowance Management System 
account under Sec.  97.927 of this chapter.
    (v) The adjustment of information in a submission and the decision 
on the deduction and transfer of Texas SO2 Trading Program 
allowances based on the information as adjusted under Sec.  97.928 of 
this chapter.
    (vi) The finalization of control period emissions data, including 
retroactive adjustment based on audit.
    (vii) The approval or disapproval of a petition under Sec.  97.935 
of this chapter.
    (19) Under subpart GGGGG of part 97 of this chapter,
    (i) The decision on the allocation of CSAPR NOX Ozone 
Season Group 3 allowances under Sec.  97.1011(a)(2) or (3) or (c) or 
Sec.  97.1012 of this chapter.
    (ii) The decision on the transfer of CSAPR NOX Ozone 
Season Group 3 allowances under Sec.  97.1023 of this chapter.
    (iii) The decision on the deduction of CSAPR NOX Ozone 
Season Group 3 allowances under Sec.  97.1024 or Sec.  97.1025 of this 
chapter.
    (iv) The correction of an error in an Allowance Management System 
account under Sec.  97.1027 of this chapter.
    (v) The adjustment of information in a submission and the decision 
on the deduction and transfer of CSAPR NOX Ozone Season 
Group 3 allowances based on the information as adjusted under Sec.  
97.1028 of this chapter.
    (vi) The finalization of control period emissions data, including 
retroactive adjustment based on audit.
    (vii) The approval or disapproval of a petition under Sec.  97.1035 
of this chapter.
* * * * *

0
20. Amend Sec.  78.2 by:
0
a. Revising paragraph (a)(1);
0
b. In paragraphs (a)(2)(ii) and (iii), removing ``Who submitted'' and 
adding in its place ``Any person who submitted''; and
0
c. In paragraph (b), removing ``subpart'' and adding in its place 
``part''.
    The revision reads as follows:


Sec.  78.2  General.

    (a) * * *
    (1) The terms used in this part with regard to a decision of the 
Administrator that is appealed under this part shall have the meanings 
as set forth in the regulations under which the Administrator made such 
decision and as set forth in paragraph (a)(2) of this section and Sec.  
72.2 of this chapter.
* * * * *

0
21. Amend Sec.  78.3 by:
0
a. Revising paragraph (a);
0
b. In paragraph (b)(3)(i)(A), removing ``(a)(1), (2), (10), or (11) of 
this section.'' and adding in its place ``(a)(1) of this section;'';
0
c. In paragraph (b)(3)(i)(B), removing ``(a)(3) of this section.'' and 
adding in its place ``(a)(2) of this section;'';
0
d. In paragraph (b)(3)(i)(C), removing ``(a)(4), (5), (6), (7), (8), or 
(9) of this section.'' and adding in its place ``(a)(3) of this 
section;'';
0
e. Adding paragraphs (b)(3)(i)(D) and (E);
0
f. In paragraph (c)(5)(ii), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
g. Revising paragraphs (c)(7)(i) through (v);
0
h. In paragraph (d)(1), removing the period at the end of the paragraph 
and adding in its place a semicolon;
0
i. In paragraph (d)(2)(i), removing ``the Acid Rain Program or subpart 
AAAAA, BBBBB, CCCCC, DDDDD, or EEEEE of part 97 of this chapter.'' and 
adding in its place ``parts 72, 73, 74, 75, 76, and 77 of this 
chapter;'';
0
j. In paragraph (d)(2)(ii), removing ``the NOX Budget 
Trading Program.'' and adding in its place ``subparts A through J of 
part 97 of this chapter;'';
0
k. In paragraph (d)(2)(iii), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
l. Adding paragraphs (d)(2)(iv) and (v);
0
m. In paragraphs (d)(3) and (4), removing the period at the end of the 
paragraph and adding in its place a semicolon;
0
n. Revising paragraphs (d)(5) and (6); and
0
o. Removing paragraph (d)(7) and redesignating paragraph (d)(8) as 
paragraph (d)(7).
    The revisions and additions read as follows:


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

    (a)(1) The following persons may petition for administrative review 
of a decision of the Administrator that is made under parts 72, 73, 74, 
75, 76, and 77 of this chapter and that is appealable under Sec.  
78.1(a):
    (i) The designated representative for a unit or source covered by 
the decision or the authorized account representative for any Allowance 
Tracking System account covered by the decision; or
    (ii) Any interested person with regard to the decision.
    (2) The following persons may petition for administrative review of 
a decision of the Administrator that is made under subparts A through J 
of part 97 of this chapter and that is appealable under Sec.  78.1(a):
    (i) The NOX authorized account representative for a unit 
or source covered by the decision or any NOX Allowance 
Tracking System account covered by the decision; or
    (ii) Any interested person with regard to the decision.
    (3) The following persons may petition for administrative review of 
a decision of the Administrator that is made under subparts AA through 
II, AAA through III, or AAAA through IIII of part 96 of this chapter or 
subparts AA through II, AAA through III, or AAAA through IIII of part 
97 of this chapter and that is appealable under Sec.  78.1(a):
    (i) The CAIR designated representative for a unit or source covered 
by the decision or the CAIR authorized account representative for any 
CAIR NOX Allowance Tracking System account, CAIR 
SO2 Allowance Tracking System account, or CAIR 
NOX Ozone Season Allowance Tracking System account covered 
by the decision; or
    (ii) Any interested person with regard to the decision.
    (4) The following persons may petition for administrative review of 
a decision of the Administrator that is made under subpart AAAAA, 
BBBBB, CCCCC, DDDDD, EEEEE, FFFFF, or GGGGG of part 97 of this chapter 
and that is appealable under Sec.  78.1(a):
    (i) The designated representative for a unit or source covered by 
the decision or the authorized account representative for any Allowance 
Management System account covered by the decision; or
    (ii) Any interested person with regard to the decision.
    (5) The following persons may petition for administrative review of 
a decision of the Administrator that is made under subpart RR of part 
98 of this chapter and that is appealable under Sec.  78.1(a):

[[Page 23180]]

    (i) The designated representative for a facility covered by the 
decision; or
    (ii) Any interested person with regard to the decision.
    (b) * * *
    (3) * * *
    (i) * * *
    (D) The designated representative or authorized account 
representative, for a petition under paragraph (a)(4) of this section; 
or
    (E) The designated representative, for a petition under paragraph 
(a)(5) of this section; and
* * * * *
    (c) * * *
    (7) * * *
    (i) Parts 72, 73, 74, 75, 76, and 77 of this chapter;
    (ii) Subparts A through J of part 97 of this chapter;
    (iii) Subparts AA through II, AAA through III, or AAAA through IIII 
of part 96 of this chapter or subparts AA through II, AAA through III, 
or AAAA through IIII of part 97 of this chapter;
    (iv) Subpart AAAAA, BBBBB, CCCCC, DDDDD, EEEEE, FFFFF, or GGGGG of 
part 97 of this chapter; or
    (v) Subpart RR of part 98 of this chapter.
    (d) * * *
    (2) * * *
    (iv) A certificate of representation submitted by a designated 
representative or an application for a general account submitted by an 
authorized account representative under subpart AAAAA, BBBBB, CCCCC, 
DDDDD, EEEEE, FFFFF, or GGGGG of part 97 of this chapter; or
    (v) A certificate of representation submitted by a designated 
representative under part 98 of this chapter;
* * * * *
    (5) Any provision or requirement of subparts AA through II, AAA 
through III, or AAAA through IIII of part 96 of this chapter or 
subparts AA through II, AAA through III, or AAAA through IIII of part 
97 of this chapter, including the standard requirements under Sec.  
96.106, Sec.  96.206, or Sec.  96.306 of this chapter or Sec.  97.106, 
Sec.  97.206, or Sec.  97.306 of this chapter, respectively, and any 
emission monitoring or reporting requirements;
    (6) Any provision or requirement of subpart AAAAA, BBBBB, CCCCC, 
DDDDD, EEEEE, FFFFF, or GGGGG of part 97 of this chapter, including the 
standard requirements under Sec.  97.406, Sec.  97.506, Sec.  97.606, 
Sec.  97.706, Sec.  97.806, Sec.  97.906, or Sec.  97.1006 of this 
chapter, respectively, and any emission monitoring or reporting 
requirements; or
* * * * *

0
22. Amend Sec.  78.4 by:
0
a. Revising paragraph (a)(1)(i);
0
b. In paragraph (a)(1)(ii), designating the first sentence as paragraph 
(a)(1)(ii)(A) and designating the second sentence as paragraph 
(a)(1)(ii)(B);
0
c. In paragraph (a)(1)(iii), designating the first sentence as 
paragraph (a)(1)(iii)(A) and designating the second sentence as 
paragraph (a)(1)(iii)(B); and
0
d. Redesignating paragraph (a)(1)(iv) as paragraph (a)(1)(v) and adding 
a new paragraph (a)(1)(iv).
    The revision and addition read as follows:


Sec.  78.4  Filings.

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


Sec.  78.5  [Amended]

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


Sec.  78.6  [Amended]

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


Sec.  78.10  [Amended]

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


Sec.  78.11  [Amended]

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


Sec.  78.12  [Amended]

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


Sec.  78.13  [Amended]

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


Sec.  78.14  [Amended]

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


Sec.  78.15  [Amended]

0
30. In Sec.  78.15, amend paragraphs (a) and (e) by removing ``of this 
part'' each time it appears.


Sec.  78.16  [Amended]

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


Sec.  78.17  [Amended]

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

[[Page 23181]]

Sec.  78.18  [Amended]

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


Sec.  78.19  [Amended]

0
34. Amend Sec.  78.19 by:
0
a. In paragraph (d), in the second sentence, adding ``the'' before 
``Environmental Appeals Board''; and
0
b. In paragraph (e), removing ``of this part''.


Sec.  78.20  [Amended]

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

PART 97--FEDERAL NOX BUDGET TRADING PROGRAM, CAIR NOX AND SO2 
TRADING PROGRAMS, CSAPR NOX AND SO2 TRADING PROGRAMS, AND TEXAS SO2 
TRADING PROGRAM

0
36. The authority citation for part 97 continues to read as follows:

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

Subpart AAAAA--CSAPR NOX Annual Trading Program

0
37. Amend Sec.  97.402 by:
0
a. Removing the definition of ``Allowable NOX emission 
rate'';
0
b. Revising the definition of ``Allowance transfer deadline'';
0
c. In the definition of ``Alternate designated representative'', adding 
``CSAPR NOX Ozone Season Group 3 Trading Program,'' before 
``CSAPR SO2 Group 1 Trading Program,'';
0
d. In the definition of ``Biomass'', paragraph (3) introductory text, 
removing the semicolon and adding in its place a colon;
0
e. Removing the definition of ``Coal-derived fuel'';
0
f. In the definition of ``Cogeneration unit'', paragraph (2)(i)(B), 
removing ``15 percent of total energy output.'' and adding in its place 
``15 percent of total energy output; or'';
0
g. In the definition of ``Common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2021, or as of July 1 immediately after such 
deadline for such a control period in 2021 or thereafter, the same'', 
and removing ``located'' before ``in a State'';
0
h. Revising the definitions of ``Common designated representative's 
assurance level'' and ``Common designated representative's share'';
0
i. In the definition of ``CSAPR NOX Ozone Season Group 1 
Trading Program'', removing ``(b)(3) through (5), and (b)(10) through 
(12)'' and adding in its place ``and (b)(3) through (5) and (13) 
through (15)'';
0
j. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(7) through (9), (13), (14), and (16)'', and removing ``Sec.  
52.38(b)(6) or (9)'' and adding in its place ``Sec.  52.38(b)(9)'';
0
k. Adding in alphabetical order a definition for ``CSAPR NOX 
Ozone Season Group 3 Trading Program'';
0
l. In the definition of ``Designated representative'', adding ``CSAPR 
NOX Ozone Season Group 3 Trading Program,'' before ``CSAPR 
SO2 Group 1 Trading Program,'';
0
m. In the definition of ``Fossil fuel'', paragraph (2), removing ``and 
(ii),'' and adding in its place ``and (b)(2)(ii),'';
0
n. Removing the definition of ``Heat rate''; and
0
o. Adding in alphabetical order a definition for ``Nitrogen oxides''.
    The revisions and additions read as follows:


Sec.  97.402  Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2021, midnight of March 1 immediately after such control period or, for 
a control period in 2021 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR NOX Annual allowance transfer must 
be submitted for recordation in a CSAPR NOX Annual source's 
compliance account in order to be available for use in complying with 
the source's CSAPR NOX Annual emissions limitation for such 
control period in accordance with Sec. Sec.  97.406 and 97.424.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.406(c)(2)(iii), the amount (rounded to the 
nearest allowance) equal to the sum of the total amount of CSAPR 
NOX Annual allowances allocated for such control period to 
the group of one or more CSAPR NOX Annual units in such 
State (and such Indian country) having the common designated 
representative for such control period and the total amount of CSAPR 
NOX Annual allowances purchased by an owner or operator of 
such CSAPR NOX Annual units in an auction for such control 
period and submitted by the State or the permitting authority to the 
Administrator for recordation in the compliance accounts for such CSAPR 
NOX Annual units in accordance with the CSAPR NOX 
Annual allowance auction provisions in a SIP revision approved by the 
Administrator under Sec.  52.38(a)(4) or (5) of this chapter, 
multiplied by the sum of the State NOX Annual trading budget 
under Sec.  97.410(a) and the State's variability limit under Sec.  
97.410(b) for such control period, and divided by such State 
NOX Annual trading budget.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of NOX emissions from all 
CSAPR NOX Annual units in a State (and Indian country within 
the borders of such State) during such control period, the total 
tonnage of NOX emissions during such control period from the 
group of one or more CSAPR NOX Annual units in such State 
(and such Indian country) having the common designated representative 
for such control period.
* * * * *
    CSAPR NOX Ozone Season Group 3 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart GGGGG of this part and Sec.  
52.38(b)(1), (b)(2)(v), and (b)(10) through (14) and (17) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(10) or (11) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(12) of this chapter), as a means of 
mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.404  [Amended]

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


Sec.  97.405  [Amended]

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

[[Page 23182]]

Sec.  97.406  [Amended]

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


Sec.  97.410  [Amended]

0
41. Amend Sec.  97.410 by:
0
a. In paragraph (a) introductory text, removing ``2015 and thereafter'' 
and adding in its place ``the years indicated'';
0
b. In paragraph (a)(1)(v), removing ``1,439'' and adding in its place 
``1,441'';
0
c. In paragraph (a)(2)(v), removing ``1,075'' and adding in its place 
``1,074'';
0
d. In paragraph (a)(3)(v), removing ``3,830'' and adding in its place 
``3,831'';
0
e. In paragraph (a)(4)(v), removing ``3,253'' and adding in its place 
``3,256'';
0
f. In paragraph (a)(5)(v), removing ``712'' and adding in its place 
``715'';
0
g. In paragraph (a)(8)(v), removing ``331'' and adding in its place 
``333'';
0
h. In paragraph (a)(9)(v), removing ``1,198'' and adding in its place 
``1,201'';
0
i. In paragraph (a)(10)(v), removing ``561'' and adding in its place 
``565'';
0
j. In paragraph (a)(11)(v), removing ``2,925'' and adding in its place 
``2,929'';
0
k. In paragraph (a)(12)(v), removing ``1,772'' and adding in its place 
``1,771'';
0
l. In paragraph (a)(13)(v), removing ``159'' and adding in its place 
``155'';
0
m. In paragraph (a)(14)(v), removing ``412'' and adding in its place 
``410'';
0
n. In paragraph (a)(17)(v), removing ``2,384'' and adding in its place 
``2,383'';
0
o. In paragraph (a)(18)(v), removing ``617'' and adding in its place 
``620'';
0
p. In paragraph (a)(19)(v), removing ``387'' and adding in its place 
``381'';
0
q. Removing and reserving paragraphs (a)(20)(iv) through (vi);
0
r. In paragraph (a)(21)(v), removing ``1,662'' and adding in its place 
``1,663'';
0
s. In paragraph (a)(22)(v), removing ``2,729'' and adding in its place 
``2,730''; and
0
t. Removing and reserving paragraph (b)(20).

0
42. Amend Sec.  97.411 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), and in 
the newly redesignated paragraph, removing ``By June 1, 2015 and June 1 
of each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2015 through 2020,'', and removing ``and (12),'' and adding 
in its place ``and (12) and Sec. Sec.  97.406(b)(2) and 97.430 through 
97.435,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``Sec.  97.412(a)(2) through 
(7) and (12) and Sec. Sec.  97.406(b)(2) and 97.430 through 97.435.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(1)(i)(A) or (B) of this section, as applicable.'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii), removing ``such control period contains'' 
and adding in its place ``a control period before 2021 contains'';
0
f. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(1)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
g. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), and in 
the newly redesignated paragraph, removing ``By June 1, 2015 and June 1 
of each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2015 through 2020,'', and removing ``and (12),'' and adding 
in its place ``and (12) and Sec. Sec.  97.406(b)(2) and 97.430 through 
97.435,'';
0
h. Adding paragraph (b)(2)(i)(B);
0
i. In paragraph (b)(2)(ii)(A), removing ``Sec.  97.412(b)(2) through 
(7) and (12) and Sec. Sec.  97.406(b)(2) and 97.430 through 97.435.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(2)(i)(A) or (B) of this section, as applicable.'';
0
j. Revising paragraph (b)(2)(ii)(B);
0
k. In paragraph (b)(2)(iii), removing ``such control period contains'' 
and adding in its place ``a control period before 2021 contains'';
0
l. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(2)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
m. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
n. In paragraph (c)(5)(i)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
o. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
p. In paragraph (c)(5)(ii)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision''; and
0
q. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph.
    The additions and revisions read as follows:


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

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Annual allowance 
allocation to each CSAPR NOX Annual unit in a State, in 
accordance with Sec.  97.412(a)(2) through (7), (10), and (12) and 
Sec. Sec.  97.406(b)(2) and 97.430 through 97.435, for the control 
period in the year before the year of the applicable calculation 
deadline under this paragraph and will promulgate a notice of data 
availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(1)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(1)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(1)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Annual allowance 
allocation to each CSAPR NOX Annual unit in Indian country 
within the borders of a State, in accordance with Sec.  97.412(b)(2) 
through (7), (10), and (12) and Sec. Sec.  97.406(b)(2) and 97.430 
through 97.435, for the control period in the year before the year of 
the applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(2)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(2)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any

[[Page 23183]]

objections submitted in accordance with paragraph (b)(2)(ii)(A) of this 
section.
* * * * *

0
43. Amend Sec.  97.412 by:
0
a. Adding a paragraph heading to paragraph (a) introductory text;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.411(a)(1);'' and adding 
in its place ``Sec.  97.411(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.430(b) not later 
than December 31 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for allocations for a control period 
before 2021, or that operate during such control period, for 
allocations for a control period in 2021 or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraph (a)(3)(ii);
0
f. In paragraph (a)(3)(iv), removing ``resumes operation.'' and adding 
in its place ``resumes operation, for allocations for a control period 
before 2021, or the control period in which the unit resumes operation, 
for allocations for a control period in 2021 or thereafter.'';
0
g. In paragraph (a)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for allocations for a 
control period before 2021, or the unit's total tons of NOX 
emissions during the control period, for allocations for a control 
period in 2021 or thereafter.'';
0
h. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
i. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
j. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 
2021, if, after completion'';
0
k. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2021, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2021 or thereafter, any unallocated'';
0
l. Redesignating paragraph (a)(11) as paragraph (a)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
m. Adding paragraph (a)(11)(ii);
0
n. Revising paragraph (a)(12);
0
o. Adding a paragraph heading to paragraph (b) introductory text and 
removing ``located'' before ``in Indian country'';
0
p. In paragraph (b)(1)(i), removing ``Sec.  97.411(a)(1); or'' and 
adding in its place ``Sec.  97.411(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.430(b) not later 
than December 31 of the year of the control period; or'';
0
q. Revising paragraph (b)(3)(ii);
0
r. In paragraph (b)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for allocations for a 
control period before 2021, or the unit's total tons of NOX 
emissions during the control period, for allocations for a control 
period in 2021 or thereafter.'';
0
s. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
t. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
u. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 
2021, if, after completion'';
0
v. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2021, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2021 or thereafter, any 
unallocated'';
0
w. Redesignating paragraph (b)(11) as paragraph (b)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
x. Adding paragraph (b)(11)(ii); and
0
y. Revising paragraph (b)(12).
    The additions and revisions read as follows:


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

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR NOX Annual unit commences commercial operation, 
for allocations for a control period before 2021; or
    (B) The control period containing the deadline for certification of 
the CSAPR NOX Annual unit's monitoring systems under Sec.  
97.430(b), for allocations for a control period in 2021 or thereafter;
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.411(b)(1)(i), (ii), and (v), of the 
amount of CSAPR NOX Annual allowances allocated under 
paragraphs (a)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR NOX Annual unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2021 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2021 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR NOX Annual units in descending order 
based on such units' allocation amounts under paragraph (a)(7), 
(a)(9)(iv), or (a)(10) of this section, as applicable, and, in cases of 
equal allocation amounts, in alphabetical order of the relevant 
sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR NOX 
Annual allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such new unit set-aside equal the total 
amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR NOX Annual unit commences commercial operation, 
for allocations for a control period before 2021; or
    (B) The control period containing the deadline for certification of 
the CSAPR NOX Annual unit's monitoring systems under Sec.  
97.430(b), for allocations for a control period in 2021 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.411(b)(2)(i), (ii), and (v), of the 
amount of CSAPR NOX Annual allowances allocated under 
paragraphs

[[Page 23184]]

(b)(2) through (7), (10), and (12) of this section for such control 
period to each CSAPR NOX Annual unit eligible for such 
allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2021 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2021 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR NOX Annual units in 
descending order based on such units' allocation amounts under 
paragraph (b)(7) or (b)(9)(iv) of this section, as applicable, and, in 
cases of equal allocation amounts, in alphabetical order of the 
relevant sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR NOX 
Annual allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such Indian country new unit set-aside equal 
the total amount of such Indian country new unit set-aside.


Sec.  97.420  [Amended]

0
44. Amend Sec.  97.420 by:
0
a. In paragraph (c)(1)(ii)(D), adding ``; and'' after the closing 
quotation mark; and
0
b. In paragraph (c)(3)(iii)(B), removing ``to NOX'' and 
adding in its place ``to CSAPR NOX''.

0
45. Amend Sec.  97.421 by:
0
a. Redesignating paragraph (f) as paragraph (f)(1) and in the newly 
redesignated paragraph, removing ``By July 1, 2019 and July 1 of each 
year thereafter,'' and adding in its place ``By July 1, 2019 and July 
1, 2020,'';
0
b. Adding paragraph (f)(2);
0
c. Redesignating paragraph (g) as paragraph (g)(1) and in the newly 
redesignated paragraph, removing ``By August 1, 2015 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2015 through 2020,'';
0
d. Adding paragraph (g)(2);
0
e. Redesignating paragraph (h) as paragraph (h)(1) and in the newly 
redesignated paragraph, removing ``By August 1, 2015 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2015 through 2020,'';
0
f. Adding paragraph (h)(2); and
0
g. In paragraphs (i) and (j), removing ``By February 15, 2016 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2016 through 2021,''.
    The additions read as follows:


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

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

0
46. Amend Sec.  97.424 by adding a paragraph heading to paragraph (c) 
and revising paragraph (c)(1) to read as follows:


Sec.  97.424  Compliance with CSAPR NOX Annual emissions limitation.

* * * * *
    (c) Selection of CSAPR NOX Annual allowances for deduction--(1) 
Identification by serial number. The designated representative for a 
source may request that specific CSAPR NOX Annual 
allowances, identified by serial number, in the source's compliance 
account be deducted for emissions or excess emissions for a control 
period in a given year in accordance with paragraph (b) or (d) of this 
section. In order to be complete, such request shall be submitted to 
the Administrator by the allowance transfer deadline for such control 
period and include, in a format prescribed by the Administrator, the 
identification of the CSAPR NOX Annual source and the 
appropriate serial numbers.
* * * * *

0
47. Amend Sec.  97.425 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. Removing paragraphs (b)(2) introductory text and (b)(2)(i) and (ii) 
and redesignating paragraphs (b)(2)(iii) introductory text and 
(b)(2)(iii)(A) and (B) as paragraphs (b)(2) introductory text and 
(b)(2)(i) and (ii), respectively;
0
c. In newly redesignated paragraph (b)(2) introductory text, removing 
``the notice of data availability required in paragraph (b)(2)(ii) of 
this section and the calculations referenced by the relevant notice'' 
and adding in its place ``each notice'';
0
d. In newly redesignated paragraph (b)(2)(i), removing ``the relevant 
notice required under paragraph (b)(1)(ii) of this section and 
referenced in the notice required under paragraph (b)(2)(ii) of this 
section'' and adding in its place ``such notice'';
0
e. In newly redesignated paragraph (b)(2)(ii), removing 
``(b)(2)(iii)(A)'' and adding in its place ``(b)(2)(i)'' each time it 
appears, and adding ``results of the'' before ``calculations 
incorporating any adjustments'';
0
f. In paragraphs (b)(3), (b)(4)(i), (b)(5), (b)(6) introductory text, 
and (b)(6)(i), removing ``(b)(2)(iii)(B)'' and adding in its place 
``(b)(2)(ii)'' each time it appears;
0
g. Removing and reserving paragraph (b)(6)(ii); and
0
h. In paragraph (b)(6)(iii) introductory text, removing ``paragraphs 
(b)(6)(i) and (ii)'' and adding in its place ``paragraph (b)(6)(i)''.
    The revisions read as follows:


Sec.  97.425  Compliance with CSAPR NOX Annual assurance provisions.

* * * * *
    (b) * * *

[[Page 23185]]

    (1) By June 1 of each year from 2018 through 2021 and August 1 of 
each year thereafter, the Administrator will:
* * * * *
    (ii) For the set of any States (and Indian country within the 
borders of such States) for which the results of the calculations 
required in paragraph (b)(1)(i) of this section indicate that total 
NOX emissions exceed the respective State assurance levels 
for such control period--
    (A) Calculate, for each such State (and Indian country within the 
borders of such State) and such control period and each common 
designated representative for such control period for a group of one or 
more CSAPR NOX Annual sources and units in such State (and 
such Indian country), the common designated representative's share of 
the total NOX emissions from all CSAPR NOX Annual 
units at CSAPR NOX Annual sources in such State (and such 
Indian country), the common designated representative's assurance 
level, and the amount (if any) of CSAPR NOX Annual 
allowances that the owners and operators of such group of sources and 
units must hold in accordance with the calculation formula in Sec.  
97.406(c)(2)(i); and
    (B) Promulgate a notice of data availability of the results of the 
calculations required in paragraphs (b)(1)(i) and (b)(1)(ii)(A) of this 
section, including separate calculations of the NOX 
emissions from each CSAPR NOX Annual source in each such 
State (and Indian country within the borders of such State).
* * * * *

0
48. Amend Sec.  97.426 by:
0
a. In paragraph (b), removing ``Sec.  97.428.'' and adding in its place 
``Sec.  97.428 or paragraph (c) of this section.''; and
0
b. Adding paragraph (c).
    The addition reads as follows:


Sec.  97.426  Banking.

* * * * *
    (c) At any time after the allowance transfer deadline for the last 
control period for which a State NOX Annual trading budget 
is set forth in Sec.  97.410(a) for a given State, the Administrator 
may record a transfer of any CSAPR NOX Annual allowances 
held in the compliance account for a source in such State (or Indian 
country within the borders of such State) to a general account 
identified or established by the Administrator with the source's 
designated representative as the authorized account representative and 
with the owners and operators of the source (as indicated on the 
certificate of representation for the source) as the persons 
represented by the authorized account representative. The Administrator 
will notify the designated representative not less than 15 days before 
making such a transfer.


Sec.  97.431  [Amended]

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


Sec.  97.434  [Amended]

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

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

0
51. Amend Sec.  97.502 by:
0
a. Removing the definition of ``Allowable NOX emission 
rate'';
0
b. Revising the definition of ``Allowance transfer deadline'';
0
c. In the definition of ``Biomass'', paragraph (3) introductory text, 
removing the semicolon and adding in its place a colon;
0
d. Removing the definition of ``Coal-derived fuel'';
0
e. In the definition of ``Cogeneration unit'', paragraph (2)(i)(B), 
removing ``15 percent of total energy output.'' and adding in its place 
``15 percent of total energy output; or'';
0
f. In the definition of ``Common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2021, or as of July 1 immediately after such 
deadline for such a control period in 2021 or thereafter, the same'', 
and removing ``located'' before ``in a State'';
0
g. Revising the definitions of ``Common designated representative's 
assurance level'' and ``Common designated representative's share'';
0
h. In the definition of ``CSAPR NOX Ozone Season Group 1 
Trading Program'', removing ``(b)(3) through (5), and (b)(10) through 
(12)'' and adding in its place ``and (b)(3) through (5) and (13) 
through (15)'';
0
i. In the definition of ``CSAPR NOX Ozone Season Group 2 
allowance'', removing ``Sec.  97.526(c),'' and adding in its place 
``Sec.  97.526(d),'', and removing ``Sec.  52.38(b)(6), (7), (8), or 
(9)'' and adding in its place ``Sec.  52.38(b)(7), (8), or (9)'';
0
j. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(7) through (9), (13), (14), and (16)'', and removing ``Sec.  
52.38(b)(6) or (9)'' and adding in its place ``Sec.  52.38(b)(9)'';
0
k. Adding in alphabetical order definitions for ``CSAPR NOX 
Ozone Season Group 3 allowance'' and ``CSAPR NOX Ozone 
Season Group 3 Trading Program'';
0
l. In the definition of ``Fossil fuel'', paragraph (2), removing ``and 
(ii),'' and adding in its place ``and (b)(2)(ii),'';
0
m. Removing the definition of ``Heat rate'';
0
n. Adding in alphabetical order a definition for ``Nitrogen oxides''; 
and
0
o. In the definition of ``State'', removing ``(b)(3) through (5), and 
(b)(10) through (12)'' and adding in its place ``and (b)(3) through (5) 
and (13) through (15)''.
    The revisions and additions read as follows:


Sec.  97.502  Definitions.

* * * * *
    Allowance transfer deadline means, for a control period in 2015 or 
2016, midnight of December 1 immediately after such control period or, 
for a control period in a year from 2017 through 2020, midnight of 
March 1 immediately after such control period or, for a control period 
in 2021 or thereafter, midnight of June 1 immediately after such 
control period (or if such December 1, March 1, or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR NOX Ozone Season Group 1 allowance 
transfer must be submitted for recordation in a CSAPR NOX 
Ozone Season Group 1 source's compliance account in order to be 
available for use in complying with the source's CSAPR NOX 
Ozone Season Group 1 emissions limitation for such control period in 
accordance with Sec. Sec.  97.506 and 97.524.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.506(c)(2)(iii), the amount (rounded to the 
nearest allowance) equal to the sum of the total amount of CSAPR 
NOX Ozone Season Group 1 allowances allocated for such 
control period to the group of one or more CSAPR NOX Ozone 
Season Group 1 units in such State (and such Indian country) having the 
common designated representative for such control period and the total 
amount of CSAPR NOX Ozone Season

[[Page 23186]]

Group 1 allowances purchased by an owner or operator of such CSAPR 
NOX Ozone Season Group 1 units in an auction for such 
control period and submitted by the State or the permitting authority 
to the Administrator for recordation in the compliance accounts for 
such CSAPR NOX Ozone Season Group 1 units in accordance with 
the CSAPR NOX Ozone Season Group 1 allowance auction 
provisions in a SIP revision approved by the Administrator under Sec.  
52.38(b)(4) or (5) of this chapter, multiplied by the sum of the State 
NOX Ozone Season Group 1 trading budget under Sec.  
97.510(a) and the State's variability limit under Sec.  97.510(b) for 
such control period, and divided by such State NOX Ozone 
Season Group 1 trading budget.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of NOX emissions from all 
CSAPR NOX Ozone Season Group 1 units in a State (and Indian 
country within the borders of such State) during such control period, 
the total tonnage of NOX emissions during such control 
period from the group of one or more CSAPR NOX Ozone Season 
Group 1 units in such State (and such Indian country) having the common 
designated representative for such control period.
* * * * *
    CSAPR NOX Ozone Season Group 3 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under subpart GGGGG of this part, Sec.  97.526(d), or Sec.  97.826(d), 
or by a State or permitting authority under a SIP revision approved by 
the Administrator under Sec.  52.38(b)(10), (11), or (12) of this 
chapter, to emit one ton of NOX during a control period of 
the specified calendar year for which the authorization is allocated or 
auctioned or of any calendar year thereafter under the CSAPR 
NOX Ozone Season Group 3 Trading Program.
    CSAPR NOX Ozone Season Group 3 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart GGGGG of this part and Sec.  
52.38(b)(1), (b)(2)(v), and (b)(10) through (14) and (17) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(10) or (11) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(12) of this chapter), as a means of 
mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.504  [Amended]

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


Sec.  97.505  [Amended]

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


Sec.  97.506  [Amended]

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


Sec.  97.510  [Amended]

0
55. Amend Sec.  97.510 by:
0
a. In paragraph (a) introductory text, removing ``2015 and thereafter'' 
and adding in its place ``the years indicated'';
0
b. Removing and reserving paragraphs (a)(1)(iv) and (v), (a)(2)(iv) and 
(v), and (a)(3)(iv) through (vi);
0
c. In paragraph (a)(4)(v), removing ``481'' and adding in its place 
``485''; and
0
d. Removing and reserving paragraphs (a)(5)(iv) and (v), (a)(6)(iv) and 
(v), (a)(7)(iv) through (vi), (a)(8)(iv) and (v), (a)(9)(iv) through 
(vi), (a)(10)(iv) and (v), (a)(11)(iv) through (vi), (a)(12)(iv) 
through (vi), (a)(13)(iv) and (v), (a)(14)(iv) and (v), (a)(15)(iv) 
through (vi), (a)(16)(iv) through (vi), (a)(17)(iv) and (v), 
(a)(18)(iv) and (v), (a)(19)(iv) and (v), (a)(20)(iv) through (vi), 
(a)(21)(iv) and (v), (a)(22)(iv) through (vi), (a)(23)(iv) and (v), 
(a)(24)(iv) and (v), (a)(25)(iv) through (vi), and (b)(1) through (3) 
and (5) through (25).

0
56. Amend Sec.  97.511 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), and in 
newly redesignated paragraph, removing ``By June 1, 2015 and June 1 of 
each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2015 through 2020,'', and removing ``and (12),'' and adding 
in its place ``and (12) and Sec. Sec.  97.506(b)(2) and 97.530 through 
97.535,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``Sec.  97.512(a)(2) through 
(7) and (12) and Sec. Sec.  97.506(b)(2) and 97.530 through 97.535.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(1)(i)(A) or (B) of this section, as applicable.'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii)(B), removing ``2017 or any subsequent 
year'' and adding in its place ``a year from 2017 through 2020'';
0
f. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(1)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
g. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), and in 
the newly redesignated paragraph, removing ``By June 1, 2015 and June 1 
of each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2015 through 2020,'', and removing ``and (12),'' and adding 
in its place ``and (12) and Sec. Sec.  97.506(b)(2) and 97.530 through 
97.535,'';
0
h. Adding paragraph (b)(2)(i)(B);
0
i. In paragraph (b)(2)(ii)(A), removing ``Sec.  97.512(b)(2) through 
(7) and (12) and Sec. Sec.  97.506(b)(2) and 97.530 through 97.535.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(2)(i)(A) or (B) of this section, as applicable.'';
0
j. Revising paragraph (b)(2)(ii)(B);
0
k. In paragraph (b)(2)(iii)(B), removing ``2017 or any subsequent 
year'' and adding in its place ``a year from 2017 through 2020'';
0
l. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(2)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
m. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
n. In paragraph (c)(5)(i)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
o. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
p. In paragraph (c)(5)(ii)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision''; and
0
q. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph.
    The additions and revisions read as follows:


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

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator

[[Page 23187]]

will calculate the CSAPR NOX Ozone Season Group 1 allowance 
allocation to each CSAPR NOX Ozone Season Group 1 unit in a 
State, in accordance with Sec.  97.512(a)(2) through (7), (10), and 
(12) and Sec. Sec.  97.506(b)(2) and 97.530 through 97.535, for the 
control period in the year before the year of the applicable 
calculation deadline under this paragraph and will promulgate a notice 
of data availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(1)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(1)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(1)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Ozone Season 
Group 1 allowance allocation to each CSAPR NOX Ozone Season 
Group 1 unit in Indian country within the borders of a State, in 
accordance with Sec.  97.512(b)(2) through (7), (10), and (12) and 
Sec. Sec.  97.506(b)(2) and 97.530 through 97.535, for the control 
period in the year before the year of the applicable calculation 
deadline under this paragraph and will promulgate a notice of data 
availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(2)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(2)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(2)(ii)(A) of this section.
* * * * *

0
57. Amend Sec.  97.512 by:
0
a. Adding a paragraph heading to paragraph (a) introductory text ;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.511(a)(1);'' and adding 
in its place ``Sec.  97.511(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.530(b) not later 
than September 30 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for allocations for a control period 
before 2021, or that operate during such control period, for 
allocations for a control period in 2021 or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraph (a)(3)(ii);
0
f. In paragraph (a)(3)(iv), removing ``resumes operation.'' and adding 
in its place ``resumes operation, for allocations for a control period 
before 2021, or the control period in which the unit resumes operation, 
for allocations for a control period in 2021 or thereafter.'';
0
g. In paragraph (a)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for allocations for a 
control period before 2021, or the unit's total tons of NOX 
emissions during the control period, for allocations for a control 
period in 2021 or thereafter.'';
0
h. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
i. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
j. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 
2021, if, after completion'';
0
k. In paragraph (a)(9)(i)(B), removing ``2017 or any subsequent year,'' 
and adding in its place ``2017, 2018, 2019, or 2020,'';
0
l. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2021, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2021 or thereafter, any unallocated'';
0
m. Redesignating paragraph (a)(11) as paragraph (a)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
n. Adding paragraph (a)(11)(ii);
0
o. Revising paragraph (a)(12);
0
p. Adding a paragraph heading to paragraph (b) introductory text and 
removing ``located'' before ``in Indian country'';
0
q. In paragraph (b)(1)(i), removing ``Sec.  97.511(a)(1); or'' and 
adding in its place ``Sec.  97.511(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.530(b) not later 
than September 30 of the year of the control period; or'';
0
r. Revising paragraph (b)(3)(ii);
0
s. In paragraph (b)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for allocations for a 
control period before 2021, or the unit's total tons of NOX 
emissions during the control period, for allocations for a control 
period in 2021 or thereafter.'';
0
t. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
u. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
v. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 
2021, if, after completion'';
0
w. In paragraph (b)(9)(i)(B), removing ``2017 or any subsequent year,'' 
and adding in its place ``2017, 2018, 2019, or 2020,'';
0
x. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2021, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2021 or thereafter, any 
unallocated'';
0
y. Redesignating paragraph (b)(11) as paragraph (b)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
z. Adding paragraph (b)(11)(ii); and
0
aa. Revising paragraph (b)(12).
    The additions and revisions read as follows:


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

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR NOX Ozone Season Group 1 unit commences commercial 
operation, for allocations for a control period before 2021; or

[[Page 23188]]

    (B) The control period containing the deadline for certification of 
the CSAPR NOX Ozone Season Group 1 unit's monitoring systems 
under Sec.  97.530(b), for allocations for a control period in 2021 or 
thereafter;
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.511(b)(1)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 1 allowances 
allocated under paragraphs (a)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone 
Season Group 1 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2021 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2021 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR NOX Ozone Season Group 1 units in 
descending order based on such units' allocation amounts under 
paragraph (a)(7), (a)(9)(iv), or (a)(10) of this section, as 
applicable, and, in cases of equal allocation amounts, in alphabetical 
order of the relevant sources' names and numerical order of the 
relevant units' identification numbers, and will adjust each unit's 
allocation amount under such paragraph upward or downward by one CSAPR 
NOX Ozone Season Group 1 allowance (but not below zero) in 
the order in which the units are listed, and will repeat this 
adjustment process as necessary, until the total allocations from such 
new unit set-aside equal the total amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR NOX Ozone Season Group 1 unit commences commercial 
operation, for allocations for a control period before 2021; or
    (B) The control period containing the deadline for certification of 
the CSAPR NOX Ozone Season Group 1 unit's monitoring systems 
under Sec.  97.530(b), for allocations for a control period in 2021 or 
thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.511(b)(2)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 1 allowances 
allocated under paragraphs (b)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone 
Season Group 1 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2021 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2021 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR NOX Ozone Season Group 
1 units in descending order based on such units' allocation amounts 
under paragraph (b)(7) or (b)(9)(iv) of this section, as applicable, 
and, in cases of equal allocation amounts, in alphabetical order of the 
relevant sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR NOX 
Ozone Season Group 1 allowance (but not below zero) in the order in 
which the units are listed, and will repeat this adjustment process as 
necessary, until the total allocations from such Indian country new 
unit set-aside equal the total amount of such Indian country new unit 
set-aside.


Sec.  97.520  [Amended]

0
58. Amend Sec.  97.520 by:
0
a. In paragraph (c)(1)(ii)(D), adding ``; and'' after the closing 
quotation mark; and
0
b. In paragraph (c)(3)(iii)(B), removing ``to NOX'' and 
adding in its place ``to CSAPR NOX''.

0
59. Amend Sec.  97.521 by:
0
a. Redesignating paragraph (f) as paragraph (f)(1) and in the newly 
redesignated paragraph, removing ``By July 1, 2019 and July 1 of each 
year thereafter,'' and adding in its place ``By July 1, 2019 and July 
1, 2020,'';
0
b. Adding paragraph (f)(2);
0
c. Redesignating paragraph (g) as paragraph (g)(1) and in the newly 
redesignated paragraph, removing ``By August 1, 2015 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2015 through 2020,'';
0
d. Adding paragraph (g)(2);
0
e. Redesignating paragraph (h) as paragraph (h)(1) and in the newly 
redesignated paragraph, removing ``By August 1, 2015 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2015 through 2020,'';
0
f. Adding paragraph (h)(2); and
0
g. In paragraphs (i)(2) and (j)(2), removing ``By February 15, 2018 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2018 through 2021,''.
    The additions read as follows:


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

* * * * *
    (f) * * *
    (2) By July 1, 2022 and July 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season Group 1 
source's compliance account the CSAPR NOX Ozone Season Group 
1 allowances allocated to the CSAPR NOX Ozone Season Group 1 
units at the source, or in each appropriate Allowance Management System 
account the CSAPR NOX Ozone Season Group 1 allowances 
auctioned to CSAPR NOX Ozone Season Group 1 units, in 
accordance with Sec.  97.511(a), or with a SIP revision approved under 
Sec.  52.38(b)(4) or (5) of this chapter, for the control period in the 
third year after the year of the applicable recordation deadline under 
this paragraph.
    (g) * * *
    (2) By May 1, 2022 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 1 source's compliance account the CSAPR NOX Ozone 
Season Group 1 allowances allocated to the CSAPR NOX Ozone 
Season Group 1 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 1 
allowances auctioned to CSAPR NOX Ozone Season Group 1 
units, in accordance with Sec.  97.512(a), or with a SIP revision 
approved under Sec.  52.38(b)(4) or (5) of this chapter, for

[[Page 23189]]

the control period in the year before the year of the applicable 
recordation deadline under this paragraph.
    (h) * * *
    (2) By May 1, 2022 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 1 source's compliance account the CSAPR NOX Ozone 
Season Group 1 allowances allocated to the CSAPR NOX Ozone 
Season Group 1 units at the source in accordance with Sec.  97.512(b) 
for the control period in the year before the year of the applicable 
recordation deadline under this paragraph.
* * * * *

0
60. Amend Sec.  97.524 by adding a paragraph heading to paragraph (c) 
and revising paragraph (c)(1) to read as follows:


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

* * * * *
    (c) Selection of CSAPR NOX Ozone Season Group 1 allowances for 
deduction--(1) Identification by serial number. The designated 
representative for a source may request that specific CSAPR 
NOX Ozone Season Group 1 allowances, identified by serial 
number, in the source's compliance account be deducted for emissions or 
excess emissions for a control period in a given year in accordance 
with paragraph (b) or (d) of this section. In order to be complete, 
such request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the CSAPR 
NOX Ozone Season Group 1 source and the appropriate serial 
numbers.
* * * * *

0
61. Amend Sec.  97.525 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. Removing paragraphs (b)(2) introductory text and (b)(2)(i) and (ii) 
and redesignating paragraphs (b)(2)(iii) introductory text and 
(b)(2)(iii)(A) and (B) as paragraphs (b)(2) introductory text and 
(b)(2)(i) and (ii), respectively;
0
c. In newly redesignated paragraph (b)(2) introductory text, removing 
``the notice of data availability required in paragraph (b)(2)(ii) of 
this section and the calculations referenced by the relevant notice'' 
and adding in its place ``each notice'';
0
d. In newly redesignated paragraph (b)(2)(i), removing ``the relevant 
notice required under paragraph (b)(1)(ii) of this section and 
referenced in the notice required under paragraph (b)(2)(ii) of this 
section'' and adding in its place ``such notice'';
0
e. In newly redesignated paragraph (b)(2)(ii), removing 
``(b)(2)(iii)(A)'' and adding in its place ``(b)(2)(i)'' each time it 
appears, and adding ``results of the'' before ``calculations 
incorporating any adjustments'';
0
f. In paragraphs (b)(3), (b)(4)(i), (b)(5), (b)(6) introductory text, 
and (b)(6)(i), removing ``(b)(2)(iii)(B)'' and adding in its place 
``(b)(2)(ii)'' each time it appears;
0
g. Removing and reserving paragraph (b)(6)(ii); and
0
h. In paragraph (b)(6)(iii) introductory text, removing ``paragraphs 
(b)(6)(i) and (ii)'' and adding in its place ``paragraph (b)(6)(i)''.
    The revisions read as follows:


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

* * * * *
    (b) * * *
    (1) By June 1 of each year from 2018 through 2021 and August 1 of 
each year thereafter, the Administrator will:
* * * * *
    (ii) For the set of any States (and Indian country within the 
borders of such States) for which the results of the calculations 
required in paragraph (b)(1)(i) of this section indicate that total 
NOX emissions exceed the respective State assurance levels 
for such control period--
    (A) Calculate, for each such State (and Indian country within the 
borders of such State) and such control period and each common 
designated representative for such control period for a group of one or 
more CSAPR NOX Ozone Season Group 1 sources and units in 
such State (and such Indian country), the common designated 
representative's share of the total NOX emissions from all 
CSAPR NOX Ozone Season Group 1 units at CSAPR NOX 
Ozone Season Group 1 sources in such State (and such Indian country), 
the common designated representative's assurance level, and the amount 
(if any) of CSAPR NOX Ozone Season Group 1 allowances that 
the owners and operators of such group of sources and units must hold 
in accordance with the calculation formula in Sec.  97.506(c)(2)(i); 
and
    (B) Promulgate a notice of data availability of the results of the 
calculations required in paragraphs (b)(1)(i) and (b)(1)(ii)(A) of this 
section, including separate calculations of the NOX 
emissions from each CSAPR NOX Ozone Season Group 1 source in 
each such State (and Indian country within the borders of such State).
* * * * *

0
62. Amend Sec.  97.526 by:
0
a. Revising the section heading;
0
b. In paragraph (b), removing ``removed under paragraph (c)'' and 
adding in its place ``paragraph (c) or (d)'';
0
c. Revising paragraph (c); and
0
d. Adding paragraphs (d) and (e).
    The revisions and additions read as follows:


Sec.  97.526  Banking and conversion.

* * * * *
    (c) At any time after the allowance transfer deadline for the last 
control period for which a State NOX Ozone Season Group 1 
trading budget is set forth in Sec.  97.510(a) for a given State and 
after completion of the procedures under paragraph (d)(1) of this 
section, the Administrator may record a transfer of any CSAPR 
NOX Ozone Season Group 1 allowances held in the compliance 
account for a source in such State (or Indian country within the 
borders of such State) to a general account identified or established 
by the Administrator with the source's designated representative as the 
authorized account representative and with the owners and operators of 
the source (as indicated on the certificate of representation for the 
source) as the persons represented by the authorized account 
representative. The Administrator will notify the designated 
representative not less than 15 days before making such a transfer.
    (d) Notwithstanding any other provision of this subpart, part 52 of 
this chapter, or any SIP revision approved under Sec.  52.38(b)(4) or 
(5) of this chapter:
    (1) As soon as practicable after the completion of deductions under 
Sec.  97.524 for the control period in 2016, but not later than March 
1, 2018, the Administrator will temporarily suspend acceptance of CSAPR 
NOX Ozone Season Group 1 allowance transfers submitted under 
Sec.  97.522 and, before resuming acceptance of such transfers, will 
take the actions in paragraphs (d)(1)(i) through (iii) of this section 
with regard to every general account and every compliance account 
except a compliance account for a CSAPR NOX Ozone Season 
Group 1 source in a State listed in Sec.  52.38(b)(2)(i) of this 
chapter (or Indian country within the borders of such a State):
    (i) The Administrator will deduct all CSAPR NOX Ozone 
Season Group 1 allowances allocated for the control periods in 2015 and 
2016 from each such account.
    (ii) The Administrator will determine a conversion factor equal to 
the greater of 1.0000 or the quotient, expressed to four decimal 
places, of the sum of all

[[Page 23190]]

CSAPR NOX Ozone Season Group 1 allowances deducted from all 
such accounts under paragraph (d)(1)(i) of this section divided by the 
product of 1.5 multiplied by the sum of the variability limits for the 
control period in 2017 set forth in Sec.  97.810(b) for all States 
except a State listed in Sec.  52.38(b)(2)(i) of this chapter.
    (iii) The Administrator will allocate and record in each such 
account an amount of CSAPR NOX Ozone Season Group 2 
allowances for the control period in 2017 computed as the quotient, 
rounded up to the nearest allowance, of the number of CSAPR 
NOX Ozone Season Group 1 allowances deducted from such 
account under paragraph (d)(1)(i) of this section divided by the 
conversion factor determined under paragraph (d)(1)(ii) of this 
section, except as provided in paragraph (d)(1)(iv) of this section.
    (iv) Where, pursuant to paragraph (d)(1)(i) of this section, the 
Administrator deducts CSAPR NOX Ozone Season Group 1 
allowances from the compliance account for a source in a State not 
listed in Sec.  52.38(b)(2)(iii) or (iv) of this chapter (or Indian 
country within the borders of such a State), the Administrator will not 
record CSAPR NOX Ozone Season Group 2 allowances in that 
compliance account but instead will allocate and record the amount of 
CSAPR NOX Ozone Season Group 2 allowances for the control 
period in 2017 computed for such source in accordance with paragraph 
(d)(1)(iii) of this section in a general account identified by the 
designated representative for such source, provided that if the 
designated representative fails to identify such a general account in a 
submission to the Administrator by July 14, 2021, the Administrator may 
record such CSAPR NOX Ozone Season Group 2 allowances in a 
general account identified or established by the Administrator with the 
designated representative as the authorized account representative and 
with the owners and operators of such source (as indicated on the 
certificate of representation for the source) as the persons 
represented by the authorized account representative.
    (2)(i) After the Administrator has carried out the procedures set 
forth in paragraph (d)(1) of this section, upon any determination that 
would otherwise result in the initial recordation of a given number of 
CSAPR NOX Ozone Season Group 1 allowances in the compliance 
account for a source in a State listed in Sec.  52.38(b)(2)(iii) of 
this chapter (or Indian country within the borders of such a State), 
the Administrator will not record such CSAPR NOX Ozone 
Season Group 1 allowances but instead will allocate and record in such 
account an amount of CSAPR NOX Ozone Season Group 2 
allowances for the control period in 2017 computed as the quotient, 
rounded up to the nearest allowance, of such given number of CSAPR 
NOX Ozone Season Group 1 allowances divided by the 
conversion factor determined under paragraph (d)(1)(ii) of this 
section.
    (ii) After the Administrator has carried out the procedures set 
forth in paragraph (d)(1) of this section and Sec.  97.826(d)(1), upon 
any determination that would otherwise result in the initial 
recordation of a given number of CSAPR NOX Ozone Season 
Group 1 allowances in the compliance account for a source in a State 
listed in Sec.  52.38(b)(2)(v) of this chapter (or Indian country 
within the borders of such a State), the Administrator will not record 
such CSAPR NOX Ozone Season Group 1 allowances but instead 
will allocate and record in such account an amount of CSAPR 
NOX Ozone Season Group 3 allowances for the control period 
in 2021 computed as the quotient, rounded up to the nearest allowance, 
of such given number of CSAPR NOX Ozone Season Group 1 
allowances divided by the conversion factor determined under paragraph 
(d)(1)(ii) of this section and further divided by the conversion factor 
determined under Sec.  97.826(d)(1)(i)(D).
    (e) Notwithstanding any other provision of this subpart or any SIP 
revision approved under Sec.  52.38(b)(4) or (5) of this chapter, CSAPR 
NOX Ozone Season Group 2 allowances or CSAPR NOX 
Ozone Season Group 3 allowances may be used to satisfy requirements to 
hold CSAPR NOX Ozone Season Group 1 allowances under this 
subpart as follows, provided that nothing in this paragraph alters the 
time as of which any such allowance holding requirement must be met or 
limits any consequence of a failure to timely meet any such allowance 
holding requirement:
    (1) After the Administrator has carried out the procedures set 
forth in paragraph (d)(1) of this section, the owner or operator of a 
CSAPR NOX Ozone Season Group 1 source in a State listed in 
Sec.  52.38(b)(2)(ii) of this chapter (or Indian country within the 
borders of such a State) may satisfy a requirement to hold a given 
number of CSAPR NOX Ozone Season Group 1 allowances for the 
control period in 2015 or 2016 by holding instead, in a general account 
established for this sole purpose, an amount of CSAPR NOX 
Ozone Season Group 2 allowances for the control period in 2017 (or any 
later control period for which the allowance transfer deadline defined 
in Sec.  97.802 has passed) computed as the quotient, rounded up to the 
nearest allowance, of such given number of CSAPR NOX Ozone 
Season Group 1 allowances divided by the conversion factor determined 
under paragraph (d)(1)(ii) of this section.
    (2) After the Administrator has carried out the procedures set 
forth in paragraph (d)(1) of this section and Sec.  97.826(d)(1), the 
owner or operator of a CSAPR NOX Ozone Season Group 1 source 
in a State listed in Sec.  52.38(b)(2)(iv) of this chapter (or Indian 
country within the borders of such a State) may satisfy a requirement 
to hold a given number of CSAPR NOX Ozone Season Group 1 
allowances for the control period in 2015 or 2016 by holding instead, 
in a general account established for this sole purpose, an amount of 
CSAPR NOX Ozone Season Group 3 allowances for the control 
period in 2021 (or any later control period for which the allowance 
transfer deadline defined in Sec.  97.1002 has passed) computed as the 
quotient, rounded up to the nearest allowance, of such given number of 
CSAPR NOX Ozone Season Group 1 allowances divided by the 
conversion factor determined under paragraph (d)(1)(ii) of this section 
and further divided by the conversion factor determined under Sec.  
97.826(d)(1)(i)(D).


Sec.  97.531  [Amended]

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

Subpart CCCCC--CSAPR SO2 Group 1 Trading Program

0
64. Amend Sec.  97.602 by:
0
a. Removing the definition of ``Allowable SO2 emission 
rate'';
0
b. Revising the definition of ``Allowance transfer deadline'';
0
c. In the definition of ``Alternate designated representative'', 
removing ``or CSAPR NOX Ozone Season Group 2 Trading 
Program,'' and adding in its place ``CSAPR NOX Ozone Season 
Group 2 Trading Program, or CSAPR NOX Ozone Season Group 3 
Trading Program,'';
0
d. In the definition of ``Biomass'', paragraph (3) introductory text, 
removing the semicolon and adding in its place a colon;
0
e. Removing the definition of ``Coal-derived fuel'';
0
f. In the definition of ``Cogeneration unit'', paragraph (2)(i)(B), 
removing ``15 percent of total energy output.'' and adding in its place 
``15 percent of total energy output; or'';

[[Page 23191]]

0
g. In the definition of ``Common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2021, or as of July 1 immediately after such 
deadline for such a control period in 2021 or thereafter, the same'', 
and removing ``located'' before ``in a State'';
0
h. Revising the definitions of ``Common designated representative's 
assurance level'' and ``Common designated representative's share'';
0
i. In the definition of ``CSAPR NOX Ozone Season Group 1 
Trading Program'', removing ``(b)(3) through (5), and (b)(10) through 
(12)'' and adding in its place ``and (b)(3) through (5) and (13) 
through (15)'';
0
j. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(7) through (9), (13), (14), and (16)'', and removing ``Sec.  
52.38(b)(6) or (9)'' and adding in its place ``Sec.  52.38(b)(9)'';
0
k. Adding in alphabetical order a definition for ``CSAPR NOX 
Ozone Season Group 3 Trading Program'';
0
l. In the definition of ``Designated representative'', removing ``or 
CSAPR NOX Ozone Season Group 2 Trading Program,'' and adding 
in its place ``CSAPR NOX Ozone Season Group 2 Trading 
Program, or CSAPR NOX Ozone Season Group 3 Trading 
Program,'';
0
m. In the definition of ``Fossil fuel'', paragraph (2), removing ``and 
(ii),'' and adding in its place ``and (b)(2)(ii),'';
0
n. Removing the definition of ``Heat rate''; and
0
o. Adding in alphabetical order a definition for ``Nitrogen oxides''.
    The revisions and additions read as follows:


Sec.  97.602  Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2021, midnight of March 1 immediately after such control period or, for 
a control period in 2021 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR SO2 Group 1 allowance transfer 
must be submitted for recordation in a CSAPR SO2 Group 1 
source's compliance account in order to be available for use in 
complying with the source's CSAPR SO2 Group 1 emissions 
limitation for such control period in accordance with Sec. Sec.  97.606 
and 97.624.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.606(c)(2)(iii), the amount (rounded to the 
nearest allowance) equal to the sum of the total amount of CSAPR 
SO2 Group 1 allowances allocated for such control period to 
the group of one or more CSAPR SO2 Group 1 units in such 
State (and such Indian country) having the common designated 
representative for such control period and the total amount of CSAPR 
SO2 Group 1 allowances purchased by an owner or operator of 
such CSAPR SO2 Group 1 units in an auction for such control 
period and submitted by the State or the permitting authority to the 
Administrator for recordation in the compliance accounts for such CSAPR 
SO2 Group 1 units in accordance with the CSAPR 
SO2 Group 1 allowance auction provisions in a SIP revision 
approved by the Administrator under Sec.  52.39(e) or (f) of this 
chapter, multiplied by the sum of the State SO2 Group 1 
trading budget under Sec.  97.610(a) and the State's variability limit 
under Sec.  97.610(b) for such control period, and divided by such 
State SO2 Group 1 trading budget.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of SO2 emissions from all 
CSAPR SO2 Group 1 units in a State (and Indian country 
within the borders of such State) during such control period, the total 
tonnage of SO2 emissions during such control period from the 
group of one or more CSAPR SO2 Group 1 units in such State 
(and such Indian country) having the common designated representative 
for such control period.
* * * * *
    CSAPR NOX Ozone Season Group 3 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart GGGGG of this part and Sec.  
52.38(b)(1), (b)(2)(v), and (b)(10) through (14) and (17) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(10) or (11) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(12) of this chapter), as a means of 
mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.604  [Amended]

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


Sec.  97.605  [Amended]

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


Sec.  97.606  [Amended]

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


Sec.  97.610  [Amended]

0
68. Amend Sec.  97.610 by:
0
a. In paragraph (a) introductory text, removing ``2015 and thereafter'' 
and adding in its place ``the years indicated'';
0
b. In paragraph (a)(1)(v), removing ``6,206'' and adding in its place 
``6,223'';
0
c. In paragraph (a)(3)(v), removing ``1,429'' and adding in its place 
``1,426'';
0
d. In paragraph (a)(4)(v), removing ``6,377'' and adding in its place 
``6,381'';
0
e. In paragraph (a)(5)(v), removing ``564'' and adding in its place 
``568'';
0
f. In paragraph (a)(6)(v), removing ``2,736'' and adding in its place 
``2,743'';
0
g. In paragraph (a)(7)(v), removing ``4,978'' and adding in its place 
``4,982'';
0
h. In paragraph (a)(8)(v), removing ``111'' and adding in its place 
``110'';
0
i. In paragraph (a)(9)(v), removing ``523'' and adding in its place 
``535'';
0
j. In paragraph (a)(10)(v), removing ``4,552'' and adding in its place 
``4,559'';
0
k. In paragraph (a)(11)(v), removing ``2,845'' and adding in its place 
``2,850'';
0
l. In paragraph (a)(12)(v), removing ``2,240'' and adding in its place 
``2,242'';
0
m. In paragraph (a)(13)(v), removing ``1,177'' and adding in its place 
``1,181'';
0
n. In paragraph (a)(14)(v), removing ``1,402'' and adding in its place 
``1,401'';
0
o. In paragraph (a)(15)(v), removing ``5,297'' and adding in its place 
``5,299''; and
0
p. In paragraph (a)(16)(v), removing ``1,867'' and adding in its place 
``1,870''.

0
69. Amend Sec.  97.611 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), and in 
the newly redesignated paragraph, removing ``By June 1, 2015 and June 1 
of each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2015 through 2020,'', and removing ``and (12),'' and

[[Page 23192]]

adding in its place ``and (12) and Sec. Sec.  97.606(b)(2) and 97.630 
through 97.635,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``Sec.  97.612(a)(2) through 
(7) and (12) and Sec. Sec.  97.606(b)(2) and 97.630 through 97.635.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(1)(i)(A) or (B) of this section, as applicable.'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii), removing ``such control period contains'' 
and adding in its place ``a control period before 2021 contains'';
0
f. In paragraphs (b)(1)(iv) introductory text and (b)(1)(iv)(A), 
removing ``SO2 annual'' and adding in its place 
``SO2 Group 1'';
0
g. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(1)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
h. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), and in 
the newly redesignated paragraph, removing ``By June 1, 2015 and June 1 
of each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2015 through 2020,'', and removing ``and (12),'' and adding 
in its place ``and (12) and Sec. Sec.  97.606(b)(2) and 97.630 through 
97.635,'';
0
i. Adding paragraph (b)(2)(i)(B);
0
j. In paragraph (b)(2)(ii)(A), removing ``Sec.  97.612(b)(2) through 
(7) and (12) and Sec. Sec.  97.606(b)(2) and 97.630 through 97.635.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(2)(i)(A) or (B) of this section, as applicable.'';
0
k. Revising paragraph (b)(2)(ii)(B);
0
l. In paragraph (b)(2)(iii), removing ``such control period contains'' 
and adding in its place ``a control period before 2021 contains'';
0
m. In paragraphs (b)(2)(iv) introductory text and (b)(2)(iv)(A), 
removing ``SO2 annual'' and adding in its place 
``SO2 Group 1'';
0
n. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(2)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
o. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
p. In paragraph (c)(5)(i)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
q. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
r. In paragraph (c)(5)(ii)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision''; and
0
s. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph.
    The additions and revisions read as follows:


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

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR SO2 Group 1 allowance 
allocation to each CSAPR SO2 Group 1 unit in a State, in 
accordance with Sec.  97.612(a)(2) through (7), (10), and (12) and 
Sec. Sec.  97.606(b)(2) and 97.630 through 97.635, for the control 
period in the year before the year of the applicable calculation 
deadline under this paragraph and will promulgate a notice of data 
availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(1)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(1)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(1)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR SO2 Group 1 allowance 
allocation to each CSAPR SO2 Group 1 unit in Indian country 
within the borders of a State, in accordance with Sec.  97.612(b)(2) 
through (7), (10), and (12) and Sec. Sec.  97.606(b)(2) and 97.630 
through 97.635, for the control period in the year before the year of 
the applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(2)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(2)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(2)(ii)(A) of this section.
* * * * *

0
70. Amend Sec.  97.612 by:
0
a. Adding a paragraph heading to paragraph (a) introductory text;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.611(a)(1);'' and adding 
in its place ``Sec.  97.611(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.630(b) not later 
than December 31 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for allocations for a control period 
before 2021, or that operate during such control period, for 
allocations for a control period in 2021 or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraph (a)(3)(ii);
0
f. In paragraph (a)(3)(iv), removing ``resumes operation.'' and adding 
in its place ``resumes operation, for allocations for a control period 
before 2021, or the control period in which the unit resumes operation, 
for allocations for a control period in 2021 or thereafter.'';
0
g. In paragraph (a)(4)(i), removing ``SO2 annual'' and 
adding in its place ``SO2 Group 1'', and removing 
``preceding control period.'' and adding in its place ``preceding 
control period, for allocations for a control period before 2021, or 
the unit's total tons of SO2 emissions during the control 
period, for allocations for a control period in 2021 or thereafter.'';
0
h. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
i. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
j. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and

[[Page 23193]]

adding in its place ``For a control period before 2021, if, after 
completion'';
0
k. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2021, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2021 or thereafter, any unallocated'';
0
l. Redesignating paragraph (a)(11) as paragraph (a)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
m. Adding paragraph (a)(11)(ii);
0
n. Revising paragraph (a)(12);
0
o. Adding a paragraph heading to paragraph (b) introductory text and 
removing ``located'' before ``in Indian country'';
0
p. In paragraph (b)(1)(i), removing ``Sec.  97.611(a)(1); or'' and 
adding in its place ``Sec.  97.611(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.630(b) not later 
than December 31 of the year of the control period; or'';
0
q. Revising paragraph (b)(3)(ii);
0
r. In paragraph (b)(4)(i), removing ``SO2 annual'' and 
adding in its place ``SO2 Group 1'', and removing 
``preceding control period.'' and adding in its place ``preceding 
control period, for allocations for a control period before 2021, or 
the unit's total tons of SO2 emissions during the control 
period, for allocations for a control period in 2021 or thereafter.'';
0
s. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
t. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
u. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 
2021, if, after completion'';
0
v. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2021, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2021 or thereafter, any 
unallocated'';
0
w. Redesignating paragraph (b)(11) as paragraph (b)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
x. Adding paragraph (b)(11)(ii); and
0
y. Revising paragraph (b)(12).
    The additions and revisions read as follows:


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

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR SO2 Group 1 unit commences commercial operation, 
for allocations for a control period before 2021; or
    (B) The control period containing the deadline for certification of 
the CSAPR SO2 Group 1 unit's monitoring systems under Sec.  
97.630(b), for allocations for a control period in 2021 or thereafter;
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.611(b)(1)(i), (ii), and (v), of the 
amount of CSAPR SO2 Group 1 allowances allocated under 
paragraphs (a)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR SO2 Group 1 unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2021 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2021 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR SO2 Group 1 units in descending order 
based on such units' allocation amounts under paragraph (a)(7), 
(a)(9)(iv), or (a)(10) of this section, as applicable, and, in cases of 
equal allocation amounts, in alphabetical order of the relevant 
sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR SO2 
Group 1 allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such new unit set-aside equal the total 
amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR SO2 Group 1 unit commences commercial operation, 
for allocations for a control period before 2021; or
    (B) The control period containing the deadline for certification of 
the CSAPR SO2 Group 1 unit's monitoring systems under Sec.  
97.630(b), for allocations for a control period in 2021 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.611(b)(2)(i), (ii), and (v), of the 
amount of CSAPR SO2 Group 1 allowances allocated under 
paragraphs (b)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR SO2 Group 1 unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2021 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2021 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR SO2 Group 1 units in 
descending order based on such units' allocation amounts under 
paragraph (b)(7) or (b)(9)(iv) of this section, as applicable, and, in 
cases of equal allocation amounts, in alphabetical order of the 
relevant sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR SO2 
Group 1 allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such Indian country new unit set-aside equal 
the total amount of such Indian country new unit set-aside.


Sec.  97.620  [Amended]

0
71. Amend Sec.  97.620 by:

[[Page 23194]]

0
a. In paragraph (c)(1)(ii)(D), adding ``; and'' after the closing 
quotation mark; and
0
b. In paragraph (c)(3)(iii)(B), removing ``to SO2'' and 
adding in its place ``to CSAPR SO2''.

0
72. Amend Sec.  97.621 by:
0
a. Redesignating paragraph (f) as paragraph (f)(1) and in the newly 
redesignated paragraph, removing ``By July 1, 2019 and July 1 of each 
year thereafter,'' and adding in its place ``By July 1, 2019 and July 
1, 2020,'';
0
b. Adding paragraph (f)(2);
0
c. Redesignating paragraph (g) as paragraph (g)(1) and in the newly 
redesignated paragraph, removing ``By August 1, 2015 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2015 through 2020,'';
0
d. Adding paragraph (g)(2);
0
e. Redesignating paragraph (h) as paragraph (h)(1) and in the newly 
redesignated paragraph, removing ``By August 1, 2015 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2015 through 2020,'';
0
f. Adding paragraph (h)(2); and
0
g. In paragraphs (i) and (j), removing ``By February 15, 2016 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2016 through 2021,''.
    The additions read as follows:


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

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

0
73. Amend Sec.  97.624 by adding a paragraph heading to paragraph (c) 
and revising paragraph (c)(1) to read as follows:


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

* * * * *
    (c) Selection of CSAPR SO2 Group 1 allowances for deduction--(1) 
Identification by serial number. The designated representative for a 
source may request that specific CSAPR SO2 Group 1 
allowances, identified by serial number, in the source's compliance 
account be deducted for emissions or excess emissions for a control 
period in a given year in accordance with paragraph (b) or (d) of this 
section. In order to be complete, such request shall be submitted to 
the Administrator by the allowance transfer deadline for such control 
period and include, in a format prescribed by the Administrator, the 
identification of the CSAPR SO2 Group 1 source and the 
appropriate serial numbers.
* * * * *

0
74. Amend Sec.  97.625 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. Removing paragraphs (b)(2) introductory text and (b)(2)(i) and (ii) 
and redesignating paragraphs (b)(2)(iii) introductory text and 
(b)(2)(iii)(A) and (B) as paragraphs (b)(2) introductory text and 
(b)(2)(i) and (ii), respectively;
0
c. In newly redesignated paragraph (b)(2) introductory text, removing 
``the notice of data availability required in paragraph (b)(2)(ii) of 
this section and the calculations referenced by the relevant notice'' 
and adding in its place ``each notice'';
0
d. In newly redesignated paragraph (b)(2)(i), removing ``the relevant 
notice required under paragraph (b)(1)(ii) of this section and 
referenced in the notice required under paragraph (b)(2)(ii) of this 
section'' and adding in its place ``such notice'';
0
e. In newly redesignated paragraph (b)(2)(ii), removing 
``(b)(2)(iii)(A)'' and adding in its place ``(b)(2)(i)'' each time it 
appears, and adding ``results of the'' before ``calculations 
incorporating any adjustments'';
0
f. In paragraphs (b)(3), (b)(4)(i), (b)(5), (b)(6) introductory text, 
and (b)(6)(i), removing ``(b)(2)(iii)(B)'' and adding in its place 
``(b)(2)(ii)'' each time it appears;
0
g. Removing and reserving paragraph (b)(6)(ii); and
0
h. In paragraph (b)(6)(iii) introductory text, removing ``paragraphs 
(b)(6)(i) and (ii)'' and adding in its place ``paragraph (b)(6)(i)''.
    The revisions read as follows:


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

* * * * *
    (b) * * *
    (1) By June 1 of each year from 2018 through 2021 and August 1 of 
each year thereafter, the Administrator will:
* * * * *
    (ii) For the set of any States (and Indian country within the 
borders of such States) for which the results of the calculations 
required in paragraph (b)(1)(i) of this section indicate that total 
SO2 emissions exceed the respective State assurance levels 
for such control period--
    (A) Calculate, for each such State (and Indian country within the 
borders of such State) and such control period and each common 
designated representative for such control period for a group of one or 
more CSAPR SO2 Group 1 sources and units in such State (and 
such Indian country), the common designated representative's share of 
the total SO2 emissions from all CSAPR SO2 Group 
1 units at CSAPR SO2 Group 1 sources in such State (and such 
Indian country), the common designated representative's assurance 
level, and the amount (if any) of CSAPR SO2 Group 1 
allowances that the owners and operators of such group of sources and 
units must hold in accordance with the calculation formula in Sec.  
97.606(c)(2)(i); and
    (B) Promulgate a notice of data availability of the results of the 
calculations required in paragraphs (b)(1)(i) and (b)(1)(ii)(A) of this 
section, including separate calculations of the SO2 
emissions from each CSAPR SO2 Group 1 source in each such 
State (and Indian country within the borders of such State).
* * * * *

0
75. Amend Sec.  97.626 by:
0
a. In paragraph (b), removing ``Sec.  97.628.'' and adding in its place

[[Page 23195]]

``Sec.  97.628 or paragraph (c) of this section.''; and
0
b. Adding paragraph (c).
    The addition reads as follows:


Sec.  97.626  Banking.

* * * * *
    (c) At any time after the allowance transfer deadline for the last 
control period for which a State SO2 Group 1 trading budget 
is set forth in Sec.  97.610(a) for a given State, the Administrator 
may record a transfer of any CSAPR SO2 Group 1 allowances 
held in the compliance account for a source in such State (or Indian 
country within the borders of such State) to a general account 
identified or established by the Administrator with the source's 
designated representative as the authorized account representative and 
with the owners and operators of the source (as indicated on the 
certificate of representation for the source) as the persons 
represented by the authorized account representative. The Administrator 
will notify the designated representative not less than 15 days before 
making such a transfer.


Sec.  97.632  [Amended]

0
76. In Sec.  97.632, amend paragraph (a) by removing ``subpart D or 
appendix D to part 75'' and adding in its place ``subpart D of, or 
appendix D to, part 75''.


Sec.  97.634  [Amended]

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

Subpart DDDDD--CSAPR SO2 Group 2 Trading Program

0
78. Amend Sec.  97.702 by:
0
a. Removing the definition of ``Allowable SO2 emission 
rate'';
0
b. Revising the definition of ``Allowance transfer deadline'';
0
c. In the definition of ``Biomass'', paragraph (3) introductory text, 
removing the semicolon and adding in its place a colon;
0
d. Removing the definition of ``Coal-derived fuel'';
0
e. In the definition of ``Cogeneration unit'', paragraph (2)(i)(B), 
removing ``15 percent of total energy output.'' and adding in its place 
``15 percent of total energy output; or'';
0
f. In the definition of ``Common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2021, or as of July 1 immediately after such 
deadline for such a control period in 2021 or thereafter, the same'', 
and removing ``located'' before ``in a State'';
0
g. Revising the definitions of ``Common designated representative's 
assurance level'' and ``Common designated representative's share'';
0
h. In the definition of ``CSAPR NOX Ozone Season Group 1 
Trading Program'', removing ``(b)(3) through (5), and (b)(10) through 
(12)'' and adding in its place ``and (b)(3) through (5) and (13) 
through (15)'';
0
i. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(7) through (9), (13), (14), and (16)'', and removing ``Sec.  
52.38(b)(6) or (9)'' and adding in its place ``Sec.  52.38(b)(9)'';
0
j. In the definition of ``Fossil fuel'', paragraph (2), removing ``and 
(ii),'' and adding in its place ``and (b)(2)(ii),'';
0
k. Removing the definition of ``Heat rate''; and
0
l. Adding in alphabetical order a definition for ``Nitrogen oxides''.
    The revisions and additions read as follows:


Sec.  97.702  Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2021, midnight of March 1 immediately after such control period or, for 
a control period in 2021 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR SO2 Group 2 allowance transfer 
must be submitted for recordation in a CSAPR SO2 Group 2 
source's compliance account in order to be available for use in 
complying with the source's CSAPR SO2 Group 2 emissions 
limitation for such control period in accordance with Sec. Sec.  97.706 
and 97.724.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.706(c)(2)(iii), the amount (rounded to the 
nearest allowance) equal to the sum of the total amount of CSAPR 
SO2 Group 2 allowances allocated for such control period to 
the group of one or more CSAPR SO2 Group 2 units in such 
State (and such Indian country) having the common designated 
representative for such control period and the total amount of CSAPR 
SO2 Group 2 allowances purchased by an owner or operator of 
such CSAPR SO2 Group 2 units in an auction for such control 
period and submitted by the State or the permitting authority to the 
Administrator for recordation in the compliance accounts for such CSAPR 
SO2 Group 2 units in accordance with the CSAPR 
SO2 Group 2 allowance auction provisions in a SIP revision 
approved by the Administrator under Sec.  52.39(h) or (i) of this 
chapter, multiplied by the sum of the State SO2 Group 2 
trading budget under Sec.  97.710(a) and the State's variability limit 
under Sec.  97.710(b) for such control period, and divided by such 
State SO2 Group 2 trading budget.
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of SO2 emissions from all 
CSAPR SO2 Group 2 units in a State (and Indian country 
within the borders of such State) during such control period, the total 
tonnage of SO2 emissions during such control period from the 
group of one or more CSAPR SO2 Group 2 units in such State 
(and such Indian country) having the common designated representative 
for such control period.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.704  [Amended]

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


Sec.  97.705  [Amended]

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


Sec.  97.706  [Amended]

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


Sec.  97.710  [Amended]

0
82. Amend Sec.  97.710 by:
0
a. In paragraph (a) introductory text, removing ``Group 1 allowances 
for the control periods in 2015 and thereafter'' and adding in its 
place ``Group 2 allowances for the control periods in the years 
indicated'';
0
b. In paragraph (a)(2)(v), removing ``2,711'' and adding in its place 
``2,721'';

[[Page 23196]]

0
c. In paragraph (a)(3)(v), removing ``798'' and adding in its place 
``801'';
0
d. In paragraph (a)(4)(v), removing ``798'' and adding in its place 
``800'';
0
e. In paragraph (a)(5)(v), removing ``2,658'' and adding in its place 
``2,662''; and
0
f. Removing and reserving paragraphs (a)(7)(iv) through (vi) and 
(b)(7).


0
83. Amend Sec.  97.711 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), and in 
the newly redesignated paragraph removing ``By June 1, 2015 and June 1 
of each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2015 through 2020,'', and removing ``and (12),'' and adding 
in its place ``and (12) and Sec. Sec.  97.706(b)(2) and 97.730 through 
97.735,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``Sec.  97.712(a)(2) through 
(7) and (12) and Sec. Sec.  97.706(b)(2) and 97.730 through 97.735.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(1)(i)(A) or (B) of this section, as applicable.'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii), removing ``such control period contains'' 
and adding in its place ``a control period before 2021 contains'';
0
f. In paragraphs (b)(1)(iv) introductory text and (b)(1)(iv)(A), 
removing ``SO2 annual'' and adding in its place 
``SO2 Group 2'';
0
g. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(1)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
h. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), and in 
the newly redesignated paragraph, removing ``By June 1, 2015 and June 1 
of each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2015 through 2020,'', and removing ``and (12),'' and adding 
in its place ``and (12) and Sec. Sec.  97.706(b)(2) and 97.730 through 
97.735,'';
0
i. Adding paragraph (b)(2)(i)(B);
0
j. In paragraph (b)(2)(ii)(A), removing ``Sec.  97.712(b)(2) through 
(7) and (12) and Sec. Sec.  97.706(b)(2) and 97.730 through 97.735.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(2)(i)(A) or (B) of this section, as applicable.'';
0
k. Revising paragraph (b)(2)(ii)(B);
0
l. In paragraph (b)(2)(iii), removing ``such control period contains'' 
and adding in its place ``a control period before 2021 contains'';
0
m. In paragraphs (b)(2)(iv) introductory text and (b)(2)(iv)(A), 
removing ``SO2 annual'' and adding in its place 
``SO2 Group 2'';
0
n. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(2)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
o. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
p. In paragraph (c)(5)(i)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision'';
0
q. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
r. In paragraph (c)(5)(ii)(B), adding ``(or a subsequent control 
period)'' before ``in accordance with such SIP revision''; and
0
s. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph.
    The additions and revisions read as follows:


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

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR SO2 Group 2 allowance 
allocation to each CSAPR SO2 Group 2 unit in a State, in 
accordance with Sec.  97.712(a)(2) through (7), (10), and (12) and 
Sec. Sec.  97.706(b)(2) and 97.730 through 97.735, for the control 
period in the year before the year of the applicable calculation 
deadline under this paragraph and will promulgate a notice of data 
availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(1)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(1)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(1)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR SO2 Group 2 allowance 
allocation to each CSAPR SO2 Group 2 unit in Indian country 
within the borders of a State, in accordance with Sec.  97.712(b)(2) 
through (7), (10), and (12) and Sec. Sec.  97.706(b)(2) and 97.730 
through 97.735, for the control period in the year before the year of 
the applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(2)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(2)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(2)(ii)(A) of this section.
* * * * *

0
84. Amend Sec.  97.712 by:
0
a. Adding a paragraph heading to paragraph (a) introductory text;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.711(a)(1);'' and adding 
in its place ``Sec.  97.711(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.730(b) not later 
than December 31 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for allocations for a control period 
before 2021, or that operate during such control period, for 
allocations for a control period in 2021 or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraph (a)(3)(ii);
0
f. In paragraph (a)(3)(iv), removing ``resumes operation.'' and adding 
in its place ``resumes operation, for allocations for a control period 
before 2021, or the control period in which the unit resumes operation, 
for allocations

[[Page 23197]]

for a control period in 2021 or thereafter.'';
0
g. In paragraph (a)(4)(i), removing ``SO2 annual'' and 
adding in its place ``SO2 Group 2'', and removing 
``preceding control period.'' and adding in its place ``preceding 
control period, for allocations for a control period before 2021, or 
the unit's total tons of SO2 emissions during the control 
period, for allocations for a control period in 2021 or thereafter.'';
0
h. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
i. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
j. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 
2021, if, after completion'';
0
k. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2021, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2021 or thereafter, any unallocated'';
0
l. Redesignating paragraph (a)(11) as paragraph (a)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
m. Adding paragraph (a)(11)(ii);
0
n. Revising paragraph (a)(12);
0
o. Adding a paragraph heading to paragraph (b) introductory text and 
removing ``located'' before ``in Indian country'';
0
p. In paragraph (b)(1)(i), removing ``Sec.  97.711(a)(1); or'' and 
adding in its place ``Sec.  97.711(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.730(b) not later 
than December 31 of the year of the control period; or'';
0
q. Revising paragraph (b)(3)(ii);
0
r. In paragraph (b)(4)(i), removing ``SO2 annual'' and 
adding in its place ``SO2 Group 2'', and removing 
``preceding control period.'' and adding in its place ``preceding 
control period, for allocations for a control period before 2021, or 
the unit's total tons of SO2 emissions during the control 
period, for allocations for a control period in 2021 or thereafter.'';
0
s. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
t. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
u. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 
2021, if, after completion'';
0
v. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2021, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2021 or thereafter, any 
unallocated'';
0
w. Redesignating paragraph (b)(11) as paragraph (b)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
x. Adding paragraph (b)(11)(ii); and
0
y. Revising paragraph (b)(12).
    The additions and revisions read as follows:


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

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR SO2 Group 2 unit commences commercial operation, 
for allocations for a control period before 2021; or
    (B) The control period containing the deadline for certification of 
the CSAPR SO2 Group 2 unit's monitoring systems under Sec.  
97.730(b), for allocations for a control period in 2021 or thereafter;
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.711(b)(1)(i), (ii), and (v), of the 
amount of CSAPR SO2 Group 2 allowances allocated under 
paragraphs (a)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR SO2 Group 2 unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2021 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2021 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR SO2 Group 2 units in descending order 
based on such units' allocation amounts under paragraph (a)(7), 
(a)(9)(iv), or (a)(10) of this section, as applicable, and, in cases of 
equal allocation amounts, in alphabetical order of the relevant 
sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR SO2 
Group 2 allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such new unit set-aside equal the total 
amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR SO2 Group 2 unit commences commercial operation, 
for allocations for a control period before 2021; or
    (B) The control period containing the deadline for certification of 
the CSAPR SO2 Group 2 unit's monitoring systems under Sec.  
97.730(b), for allocations for a control period in 2021 or thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.711(b)(2)(i), (ii), and (v), of the 
amount of CSAPR SO2 Group 2 allowances allocated under 
paragraphs (b)(2) through (7), (10), and (12) of this section for such 
control period to each CSAPR SO2 Group 2 unit eligible for 
such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2021 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2021 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR SO2 Group 2 units in 
descending order based on such units' allocation amounts under 
paragraph (b)(7) or (b)(9)(iv) of this section, as applicable, and, in 
cases of equal allocation amounts, in

[[Page 23198]]

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


Sec.  97.720  [Amended]

0
85. Amend Sec.  97.720 by:
0
a. In paragraph (c)(1)(ii)(D), adding ``; and'' after the closing 
quotation mark; and
0
b. In paragraph (c)(3)(iii)(B), removing ``to SO2'' and 
adding in its place ``to CSAPR SO2''.

0
86. Amend Sec.  97.721 by:
0
a. Redesignating paragraph (f) as paragraph (f)(1) and in the newly 
redesignated paragraph, removing ``By July 1, 2019 and July 1 of each 
year thereafter,'' and adding in its place ``By July 1, 2019 and July 
1, 2020,'';
0
b. Adding paragraph (f)(2);
0
c. Redesignating paragraph (g) as paragraph (g)(1) and in the newly 
redesignated paragraph, removing ``By August 1, 2015 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2015 through 2020,'';
0
d. Adding paragraph (g)(2);
0
e. Redesignating paragraph (h) as paragraph (h)(1) and in the newly 
redesignated paragraph, removing ``By August 1, 2015 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2015 through 2020,'';
0
f. Adding paragraph (h)(2); and
0
g. In paragraphs (i) and (j), removing ``By February 15, 2016 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2016 through 2021,''.
    The additions read as follows:


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

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

0
87. Amend Sec.  97.724 by adding a paragraph heading to paragraph (c) 
and revising paragraph (c)(1) to read as follows:


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

* * * * *
    (c) Selection of CSAPR SO2 Group 2 allowances for 
deduction--(1) Identification by serial number. The designated 
representative for a source may request that specific CSAPR 
SO2 Group 2 allowances, identified by serial number, in the 
source's compliance account be deducted for emissions or excess 
emissions for a control period in a given year in accordance with 
paragraph (b) or (d) of this section. In order to be complete, such 
request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the CSAPR 
SO2 Group 2 source and the appropriate serial numbers.
* * * * *

0
88. Amend Sec.  97.725 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. Removing paragraphs (b)(2) introductory text and (b)(2)(i) and (ii) 
and redesignating paragraphs (b)(2)(iii) introductory text and 
(b)(2)(iii)(A) and (B) as paragraphs (b)(2) introductory text and 
(b)(2)(i) and (ii), respectively;
0
c. In newly redesignated paragraph (b)(2) introductory text, removing 
``the notice of data availability required in paragraph (b)(2)(ii) of 
this section and the calculations referenced by the relevant notice'' 
and adding in its place ``each notice'';
0
d. In newly redesignated paragraph (b)(2)(i), removing ``the relevant 
notice required under paragraph (b)(1)(ii) of this section and 
referenced in the notice required under paragraph (b)(2)(ii) of this 
section'' and adding in its place ``such notice'';
0
e. In newly redesignated paragraph (b)(2)(ii), removing 
``(b)(2)(iii)(A)'' and adding in its place ``(b)(2)(i)'' each time it 
appears, and adding ``results of the'' before ``calculations 
incorporating any adjustments'';
0
f. In paragraphs (b)(3), (b)(4)(i), (b)(5), (b)(6) introductory text, 
and (b)(6)(i), removing ``(b)(2)(iii)(B)'' and adding in its place 
``(b)(2)(ii)'' each time it appears;
0
g. Removing and reserving paragraph (b)(6)(ii); and
0
h. In paragraph (b)(6)(iii) introductory text, removing ``paragraphs 
(b)(6)(i) and (ii)'' and adding in its place ``paragraph (b)(6)(i)''.
    The revisions read as follows:


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

* * * * *
    (b) * * *
    (1) By June 1 of each year from 2018 through 2021 and August 1 of 
each year thereafter, the Administrator will:
* * * * *
    (ii) For the set of any States (and Indian country within the 
borders of such States) for which the results of the calculations 
required in paragraph (b)(1)(i) of this section indicate that total 
SO2 emissions exceed the respective State assurance levels 
for such control period--
    (A) Calculate, for each such State (and Indian country within the 
borders of such State) and such control period and each common 
designated representative for such control period for a group of one or 
more CSAPR SO2 Group 2 sources and units in such State (and 
such Indian country), the common designated representative's share of 
the total SO2 emissions from all CSAPR SO2 Group 
2 units at CSAPR SO2 Group 2 sources in such State (and such 
Indian country), the common designated representative's assurance 
level, and the amount (if any) of CSAPR SO2 Group 2 
allowances that the owners and

[[Page 23199]]

operators of such group of sources and units must hold in accordance 
with the calculation formula in Sec.  97.706(c)(2)(i); and
    (B) Promulgate a notice of data availability of the results of the 
calculations required in paragraphs (b)(1)(i) and (b)(1)(ii)(A) of this 
section, including separate calculations of the SO2 
emissions from each CSAPR SO2 Group 2 source in each such 
State (and Indian country within the borders of such State).
* * * * *


0
89. Amend Sec.  97.726 by:
0
a. In paragraph (b), removing ``Sec.  97.728.'' and adding in its place 
``Sec.  97.728 or paragraph (c) of this section.''; and
0
b. Adding paragraph (c).
    The addition reads as follows:


Sec.  97.726  Banking.

* * * * *
    (c) At any time after the allowance transfer deadline for the last 
control period for which a State SO2 Group 2 trading budget 
is set forth in Sec.  97.710(a) for a given State, the Administrator 
may record a transfer of any CSAPR SO2 Group 2 allowances 
held in the compliance account for a source in such State (or Indian 
country within the borders of such State) to a general account 
identified or established by the Administrator with the source's 
designated representative as the authorized account representative and 
with the owners and operators of the source (as indicated on the 
certificate of representation for the source) as the persons 
represented by the authorized account representative. The Administrator 
will notify the designated representative not less than 15 days before 
making such a transfer.


Sec.  97.731  [Amended]

0
90. In Sec.  97.731, amend paragraph (d)(3) introductory text by 
removing in the last sentence the word ``with''.


Sec.  97.732  [Amended]

0
91. In Sec.  97.732, amend paragraph (a) by removing ``subpart D or 
appendix D to part 75'' and adding in its place ``subpart D of, or 
appendix D to, part 75''.

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

0
92. Amend Sec.  97.802 by:
0
a. In the definition of ``Allocate or allocation'', introductory text, 
removing ``Sec.  97.526(c),'' and adding in its place ``Sec.  
97.526(d),'', and removing ``Sec.  52.38(b)(6), (7), (8), or (9)'' and 
adding in its place ``Sec.  52.38(b)(7), (8), or (9)'';
0
b. Removing the definition of ``Allowable NOX emission 
rate'';
0
c. Revising the definition of ``Allowance transfer deadline'';
0
d. In the definitions of ``Auction'' and ``Base CSAPR NOX 
Ozone Season Group 2 unit'', removing ``Sec.  52.38(b)(6), (8), or 
(9)'' and adding in its place ``Sec.  52.38(b)(8) or (9)'';
0
e. In the definition of ``Biomass'', paragraph (3) introductory text, 
removing the semicolon and adding in its place a colon;
0
f. Removing the definition of ``Coal-derived fuel'';
0
g. In the definition of ``Cogeneration unit'', paragraph (2)(i)(B), 
removing ``15 percent of total energy output.'' and adding in its place 
``15 percent of total energy output; or'';
0
h. In the definition of ``Common designated representative'', removing 
``such control period, the same'' and adding in its place ``such a 
control period before 2021, or as of July 1 immediately after such 
deadline for such a control period in 2021 or thereafter, the same'', 
and removing ``located'' before ``in a State'';
0
i. Revising the definitions of ``Common designated representative's 
assurance level'' and ``Common designated representative's share'';
0
j. Removing the definitions of ``CSAPR NOX Ozone Season 
Group 1 allowance'' and ``CSAPR NOX Ozone Season Group 1 
Trading Program'';
0
k. In the definition of ``CSAPR NOX Ozone Season Group 2 
allowance'', removing ``Sec.  97.526(c),'' and adding in its place 
``Sec.  97.526(d),'', and removing ``Sec.  52.38(b)(6), (7), (8), or 
(9)'' and adding in its place ``Sec.  52.38(b)(7), (8), or (9)'';
0
l. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(7) through (9), (13), (14), and (16)'', and removing ``Sec.  
52.38(b)(6) or (9)'' and adding in its place ``Sec.  52.38(b)(9)'';
0
m. Adding in alphabetical order definitions for ``CSAPR NOX 
Ozone Season Group 3 allowance'' and ``CSAPR NOX Ozone 
Season Group 3 Trading Program'';
0
n. Removing the definition of ``Heat rate'';
0
o. Adding in alphabetical order a definition for ``Nitrogen oxides''; 
and
0
p. In the definition of ``State'', removing ``(2)(i) and (iii), (6) 
through (11), and (13)'' and adding in its place ``(b)(2)(iii) and 
(iv), and (b)(7) through (9), (13), (14), and (16)''.
    The revisions and additions read as follows:


Sec.  97.802  Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2021, midnight of March 1 immediately after such control period or, for 
a control period in 2021 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a CSAPR NOX Ozone Season Group 2 allowance 
transfer must be submitted for recordation in a CSAPR NOX 
Ozone Season Group 2 source's compliance account in order to be 
available for use in complying with the source's CSAPR NOX 
Ozone Season Group 2 emissions limitation for such control period in 
accordance with Sec. Sec.  97.806 and 97.824.
* * * * *
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.806(c)(2)(iii):
    (1) The amount (rounded to the nearest allowance) equal to the sum 
of the total amount of CSAPR NOX Ozone Season Group 2 
allowances allocated for such control period to the group of one or 
more base CSAPR NOX Ozone Season Group 2 units in such State 
(and such Indian country) having the common designated representative 
for such control period and the total amount of CSAPR NOX 
Ozone Season Group 2 allowances purchased by an owner or operator of 
such base CSAPR NOX Ozone Season Group 2 units in an auction 
for such control period and submitted by the State or the permitting 
authority to the Administrator for recordation in the compliance 
accounts for such base CSAPR NOX Ozone Season Group 2 units 
in accordance with the CSAPR NOX Ozone Season Group 2 
allowance auction provisions in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(8) or (9) of this chapter, 
multiplied by the sum of the State NOX Ozone Season Group 2 
trading budget under Sec.  97.810(a) and the State's variability limit 
under Sec.  97.810(b) for such control period, and divided by the 
greater of such State NOX Ozone Season Group 2 trading 
budget or the sum of all amounts of CSAPR NOX Ozone Season 
Group 2 allowances for such control period allocated to or purchased in 
the State's auction for all

[[Page 23200]]

such base CSAPR NOX Ozone Season Group 2 units;
    (2) Provided that the allocations of CSAPR NOX Ozone 
Season Group 2 allowances for any control period taken into account for 
purposes of this definition shall exclude any CSAPR NOX 
Ozone Season Group 2 allowances allocated for such control period under 
Sec.  97.526(d).
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of NOX emissions from all base 
CSAPR NOX Ozone Season Group 2 units in a State (and Indian 
country within the borders of such State) during such control period, 
the total tonnage of NOX emissions during such control 
period from the group of one or more base CSAPR NOX Ozone 
Season Group 2 units in such State (and such Indian country) having the 
common designated representative for such control period.
* * * * *
    CSAPR NOX Ozone Season Group 3 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under subpart GGGGG of this part, Sec.  97.526(d), or Sec.  97.826(d), 
or by a State or permitting authority under a SIP revision approved by 
the Administrator under Sec.  52.38(b)(10), (11), or (12) of this 
chapter, to emit one ton of NOX during a control period of 
the specified calendar year for which the authorization is allocated or 
auctioned or of any calendar year thereafter under the CSAPR 
NOX Ozone Season Group 3 Trading Program.
    CSAPR NOX Ozone Season Group 3 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart GGGGG of this part and Sec.  
52.38(b)(1), (b)(2)(v), and (b)(10) through (14) and (17) of this 
chapter (including such a program that is revised in a SIP revision 
approved by the Administrator under Sec.  52.38(b)(10) or (11) of this 
chapter or that is established in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(12) of this chapter), as a means of 
mitigating interstate transport of ozone and NOX.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.804  [Amended]

0
93. In Sec.  97.804, amend paragraph (c) introductory text by removing 
``Sec.  52.38(b)(6), (8), or (9)'' and adding in its place ``Sec.  
52.38(b)(8) or (9)''.


Sec.  97.805  [Amended]

0
94. In Sec.  97.805, amend paragraph (b) by removing the paragraph 
heading.


Sec.  97.810  [Amended]

0
95. Amend Sec.  97.810 by:
0
a. In paragraph (a) introductory text, removing ``2017 and thereafter'' 
and adding in its place ``the years indicated'';
0
b. In paragraphs (a)(1)(i) through (iii), adding ``for 2017 and 
thereafter'' before ``is'';
0
c. Removing and reserving paragraph (a)(3);
0
d. In paragraphs (a)(4)(i) and (ii) and (a)(5)(i) and (ii), adding 
``for 2017 through 2020'' before ``is'';
0
e. In paragraphs (a)(6)(i) through (iii) and (a)(7)(i) through (iii), 
adding ``for 2017 and thereafter'' before ``is'';
0
f. In paragraphs (a)(8)(i) and (ii), (a)(9)(i) through (iii), 
(a)(10)(i) and (ii), and (a)(11)(i) through (iii), adding ``for 2017 
through 2020'' before ``is'';
0
g. In paragraphs (a)(12)(i) through (iii) and (a)(13)(i) and (ii), 
adding ``for 2017 and thereafter'' before ``is'';
0
h. In paragraphs (a)(14)(i) and (ii), (a)(15)(i) through (iii), and 
(a)(16)(i) and (ii), adding ``for 2017 through 2020'' before ``is'';
0
i. In paragraphs (a)(17)(i) through (iii), adding ``for 2017 and 
thereafter'' before ``is'';
0
j. In paragraphs (a)(18)(i) and (ii), adding ``for 2017 through 2020'' 
before ``is'';
0
k. In paragraphs (a)(19)(i) and (ii) and (a)(20)(i) through (iii), 
adding ``for 2017 and thereafter'' before ``is'';
0
l. In paragraphs (a)(21)(i) and (ii) and (a)(22)(i) and (ii), adding 
``for 2017 through 2020'' before ``is'';
0
m. In paragraphs (a)(23)(i) through (iii), adding ``for 2017 and 
thereafter'' before ``is'';
0
n. In paragraph (b) introductory text, removing ``2017 and thereafter'' 
and adding in its place ``the years indicated'';
0
o. In paragraph (b)(1), adding ``for 2017 and thereafter'' before 
``is'';
0
p. Removing and reserving paragraph (b)(3);
0
q. In paragraphs (b)(4) and (5), adding ``for 2017 through 2020'' 
before ``is'';
0
r. In paragraphs (b)(6) and (7), adding ``for 2017 and thereafter'' 
before ``is'';
0
s. In paragraphs (b)(8) through (11), adding ``for 2017 through 2020'' 
before ``is'';
0
t. In paragraphs (b)(12) and (13), adding ``for 2017 and thereafter'' 
before ``is'';
0
u. In paragraphs (b)(14) through (16), adding ``for 2017 through 2020'' 
before ``is'';
0
v. In paragraph (b)(17), adding ``for 2017 and thereafter'' before 
``is'';
0
w. In paragraph (b)(18), adding ``for 2017 through 2020'' before 
``is'';
0
x. In paragraphs (b)(19) and (20), adding ``for 2017 and thereafter'' 
before ``is'';
0
y. In paragraphs (b)(21) and (22), adding ``for 2017 through 2020'' 
before ``is''; and
0
z. In paragraph (b)(23), adding ``for 2017 and thereafter'' before 
``is''.


0
96. Amend Sec.  97.811 by:
0
a. Redesignating paragraph (b)(1)(i) as paragraph (b)(1)(i)(A), and in 
the newly redesignated paragraph, removing ``By June 1, 2017 and June 1 
of each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2017 through 2020,'', and removing `` and (12),'' and adding 
in its place ``and (12) and Sec. Sec.  97.806(b)(2) and 97.830 through 
97.835,'';
0
b. Adding paragraph (b)(1)(i)(B);
0
c. In paragraph (b)(1)(ii)(A), removing ``Sec.  97.812(a)(2) through 
(7) and (12) and Sec. Sec.  97.806(b)(2) and 97.830 through 97.835.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(1)(i)(A) or (B) of this section, as applicable.'';
0
d. Revising paragraph (b)(1)(ii)(B);
0
e. In paragraph (b)(1)(iii), removing ``such control period contains'' 
and adding in its place ``a control period before 2021 contains'';
0
f. In paragraph (b)(1)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(1)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
g. Redesignating paragraph (b)(2)(i) as paragraph (b)(2)(i)(A), and in 
the newly redesignated paragraph, removing ``By June 1, 2017 and June 1 
of each year thereafter,'' and adding in its place ``By June 1 of each 
year from 2017 through 2020,'', and removing ``and (12),'' and adding 
in its place ``and (12) and Sec. Sec.  97.806(b)(2) and 97.830 through 
97.835,'';
0
h. Adding paragraph (b)(2)(i)(B);
0
i. In paragraph (b)(2)(ii)(A), removing ``Sec.  97.812(b)(2) through 
(7) and (12) and Sec. Sec.  97.806(b)(2) and 97.830 through 97.835.'' 
and adding in its place ``the provisions referenced in paragraph 
(b)(2)(i)(A) or (B) of this section, as applicable.'';
0
j. Revising paragraph (b)(2)(ii)(B);
0
k. In paragraph (b)(2)(iii), removing ``such control period contains'' 
and adding in its place ``a control period before 2021 contains'';

[[Page 23201]]

0
l. In paragraph (b)(2)(v), removing ``of this section,'' and adding in 
its place ``of this section for a control period before 2021, or in 
paragraph (b)(2)(ii) of this section for a control period in 2021 or 
thereafter,'';
0
m. In paragraph (c)(1) introductory text, removing ``Sec.  52.38(b)(6), 
(7), (8), or (9)'' and adding in its place ``Sec.  52.38(b)(7), (8), or 
(9)'', and removing ``Sec.  52.38(b)(6), (8), or (9)'' and adding in 
its place ``Sec.  52.38(b)(8) or (9)'';
0
n. In paragraph (c)(1)(i)(A) and (B), removing ``Sec.  52.38(b)(6), 
(7), (8), or (9)'' and adding in its place ``Sec.  52.38(b)(7), (8), or 
(9)'';
0
o. In paragraph (c)(1)(ii), removing ``Sec.  52.38(b)(6), (8), or (9)'' 
and adding in its place ``Sec.  52.38(b)(8) or (9)'';
0
p. In paragraph (c)(5)(i)(A), adding ``(or a subsequent control 
period)'' before ``for the State'';
0
q. In paragraph (c)(5)(i)(B), removing ``Sec.  52.38(b)(6), (8), or 
(9)'' and adding in its place ``Sec.  52.38(b)(8) or (9)'', and adding 
``(or a subsequent control period)'' before ``in accordance with such 
SIP revision'';
0
r. In paragraph (c)(5)(ii)(A), adding ``(or a subsequent control 
period)'' before the semicolon at the end of the paragraph;
0
s. In paragraph (c)(5)(ii)(B), removing ``Sec.  52.38(b)(6), (8), or 
(9)'' and adding in its place ``Sec.  52.38(b)(8) or (9)'', and adding 
``(or a subsequent control period)'' before ``in accordance with such 
SIP revision'';
0
t. In paragraph (c)(5)(iii), adding ``(or a subsequent control 
period)'' before the period at the end of the paragraph; and
0
u. Adding paragraph (d).
    The additions and revisions read as follows:


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

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Ozone Season 
Group 2 allowance allocation to each CSAPR NOX Ozone Season 
Group 2 unit in a State, in accordance with Sec.  97.812(a)(2) through 
(7), (10), and (12) and Sec. Sec.  97.806(b)(2) and 97.830 through 
97.835, for the control period in the year before the year of the 
applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(1)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(1)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(1)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(1)(ii)(A) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (B) By March 1, 2022 and March 1 of each year thereafter, the 
Administrator will calculate the CSAPR NOX Ozone Season 
Group 2 allowance allocation to each CSAPR NOX Ozone Season 
Group 2 unit in Indian country within the borders of a State, in 
accordance with Sec.  97.812(b)(2) through (7), (10), and (12) and 
Sec. Sec.  97.806(b)(2) and 97.830 through 97.835, for the control 
period in the year before the year of the applicable calculation 
deadline under this paragraph and will promulgate a notice of data 
availability of the results of the calculations.
    (ii) * * *
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(i)(A) or (B) of this section, as 
applicable. By August 1 immediately after the promulgation of each 
notice of data availability required in paragraph (b)(2)(i)(A) of this 
section, or by May 1 immediately after the promulgation of each notice 
of data availability required in paragraph (b)(2)(i)(B) of this 
section, the Administrator will promulgate a notice of data 
availability of the results of the calculations incorporating any 
adjustments that the Administrator determines to be necessary and the 
reasons for accepting or rejecting any objections submitted in 
accordance with paragraph (b)(2)(ii)(A) of this section.
* * * * *
    (d) Recall of CSAPR NOX Ozone Season Group 2 allowances 
allocated for control periods after 2020. (1) Notwithstanding any other 
provision of this subpart, part 52 of this chapter, or any SIP revision 
approved under Sec.  52.38(b) of this chapter, the provisions of this 
paragraph and paragraphs (d)(2) through (7) of this section shall apply 
with regard to each CSAPR NOX Ozone Season Group 2 allowance 
that was allocated for a control period after 2020 to any unit 
(including a permanently retired unit qualifying for an exemption under 
Sec.  97.805) in a State listed in Sec.  52.38(b)(2)(iv) of this 
chapter (or Indian country within the borders of such a State) and that 
was initially recorded in the compliance account for the source that 
includes the unit, whether such CSAPR NOX Ozone Season Group 
2 allowance was allocated pursuant to this subpart or pursuant to a SIP 
revision approved under Sec.  52.38(b) of this chapter and whether such 
CSAPR NOX Ozone Season Group 2 allowance remains in such 
compliance account or has been transferred to another Allowance 
Management System account.
    (2)(i) For each CSAPR NOX Ozone Season Group 2 allowance 
described in paragraph (d)(1) of this section that was allocated for a 
given control period and initially recorded in a given source's 
compliance account, one CSAPR NOX Ozone Season Group 2 
allowance that was allocated for the same or an earlier control period 
and initially recorded in the same or any other Allowance Management 
System account must be surrendered in accordance with the procedures in 
paragraphs (d)(3) and (4) of this section.
    (ii)(A) The surrender requirement under paragraph (d)(2)(i) of this 
section corresponding to each CSAPR NOX Ozone Season Group 2 
allowance described in paragraph (d)(1) of this section initially 
recorded in a given source's compliance account shall apply to such 
source's current owners and operators, except as provided in paragraph 
(d)(2)(ii)(B) of this section.
    (B) If the owners and operators of a given source as of a given 
date assumed ownership and operational control of the source through a 
transaction that did not also provide rights to direct the use or 
transfer of a given CSAPR NOX Ozone Season Group 2 allowance 
described in paragraph (d)(1) of this section with regard to such 
source (whether recordation of such CSAPR NOX Ozone Season 
Group 2 allowance in the source's compliance account occurred before 
such transaction or was anticipated to occur after such transaction), 
then the surrender requirement under paragraph (d)(2)(i) of this 
section corresponding to such CSAPR NOX Ozone Season Group 2 
allowance shall apply to the most recent former owners and operators of 
the source before the occurrence of such a transaction.
    (C) The Administrator will not adjudicate any private legal dispute 
among the owners and operators of a

[[Page 23202]]

source or among the former owners and operators of a source, including 
any disputes relating to the requirements to surrender CSAPR 
NOX Ozone Season Group 2 allowances for the source under 
paragraph (d)(2)(i) of this section.
    (3)(i) As soon as practicable on or after June 29, 2021, the 
Administrator will send a notification to the designated representative 
for each source described in paragraph (d)(1) of this section 
identifying the amounts of CSAPR NOX Ozone Season Group 2 
allowances allocated for each control period after 2020 and recorded in 
the source's compliance account and the corresponding surrender 
requirements for the source under paragraph (d)(2)(i) of this section.
    (ii) As soon as practicable on or after July 14, 2021, the 
Administrator will deduct from the compliance account for each source 
described in paragraph (d)(1) of this section CSAPR NOX 
Ozone Season Group 2 allowances eligible to satisfy the surrender 
requirements for the source under paragraph (d)(2)(i) of this section 
until all such surrender requirements for the source are satisfied or 
until no more CSAPR NOX Ozone Season Group 2 allowances 
eligible to satisfy such surrender requirements remain in such 
compliance account.
    (iii) As soon as practicable after completion of the deductions 
under paragraph (d)(3)(ii) of this section, the Administrator will 
identify for each source described in paragraph (d)(1) of this section 
the amounts, if any, of CSAPR NOX Ozone Season Group 2 
allowances allocated for each control period after 2020 and recorded in 
the source's compliance account for which the corresponding surrender 
requirements under paragraph (d)(2)(i) of this section have not been 
satisfied and will send a notification concerning such identified 
amounts to the designated representative for the source.
    (iv) With regard to each source for which unsatisfied surrender 
requirements under paragraph (d)(2)(i) of this section remain after the 
deductions under paragraph (d)(3)(ii) of this section:
    (A) Except as provided in paragraph (d)(3)(iv)(B) of this section, 
not later than September 15, 2021, the owners and operators of the 
source shall hold sufficient CSAPR NOX Ozone Season Group 2 
allowances eligible to satisfy such unsatisfied surrender requirements 
under paragraph (d)(2)(i) of this section in the source's compliance 
account.
    (B) With regard to any portion of such unsatisfied surrender 
requirements that apply to former owners and operators of the source 
pursuant to paragraph (d)(2)(ii)(B) of this section, not later than 
September 15, 2021, such former owners and operators shall hold 
sufficient CSAPR NOX Ozone Season Group 2 allowances 
eligible to satisfy such portion of the unsatisfied surrender 
requirements under paragraph (d)(2)(i) of this section either in the 
source's compliance account or in another Allowance Management System 
account identified to the Administrator on or before such date in a 
submission by the authorized account representative for such account.
    (C) As soon as practicable on or after September 15, 2021, the 
Administrator will deduct from the Allowance Management System account 
identified in accordance with paragraph (d)(3)(iv)(A) or (B) of this 
section CSAPR NOX Ozone Season Group 2 allowances eligible 
to satisfy the surrender requirements for the source under paragraph 
(d)(2)(i) of this section until all such surrender requirements for the 
source are satisfied or until no more CSAPR NOX Ozone Season 
Group 2 allowances eligible to satisfy such surrender requirements 
remain in such account.
    (v) When making deductions under paragraph (d)(3)(ii) or (iv) of 
this section to address the surrender requirements under paragraph 
(d)(2)(i) of this section for a given source:
    (A) The Administrator will make deductions to address any surrender 
requirements with regard to first the 2021 control period, then the 
2022 control period, then the 2023 control period, and finally the 2024 
control period.
    (B) When making deductions to address the surrender requirements 
with regard to a given control period, the Administrator will first 
deduct CSAPR NOX Ozone Season Group 2 allowances allocated 
for such given control period and will then deduct CSAPR NOX 
Ozone Season Group 2 allowances allocated for each successively earlier 
control period in sequence.
    (C) When deducting CSAPR NOX Ozone Season Group 2 
allowances allocated for a given control period from a given Allowance 
Management System account, the Administrator will first deduct CSAPR 
NOX Ozone Season Group 2 allowances initially recorded in 
the account under Sec.  97.821 (if the account is a compliance account) 
in the order of recordation and will then deduct CSAPR NOX 
Ozone Season Group 2 allowances recorded in the account under Sec.  
97.526(d) or Sec.  97.823 in the order of recordation.
    (4)(i) To the extent the surrender requirements under paragraph 
(d)(2)(i) of this section corresponding to any CSAPR NOX 
Ozone Season Group 2 allowances allocated for a control period after 
2020 and initially recorded in a given source's compliance account have 
not been fully satisfied through the deductions under paragraph (d)(3) 
of this section, as soon as practicable on or after November 15, 2021, 
the Administrator will deduct such initially recorded CSAPR 
NOX Ozone Season Group 2 allowances from any Allowance 
Management System accounts in which such CSAPR NOX Ozone 
Season Group 2 allowances are held, making such deductions in any order 
determined by the Administrator, until all such surrender requirements 
for such source have been satisfied or until all such CSAPR 
NOX Ozone Season Group 2 allowances have been deducted, 
except as provided in paragraph (d)(4)(ii) of this section.
    (ii) If no person with an ownership interest in a given CSAPR 
NOX Ozone Season Group 2 allowance as of January 31, 2021 
was an owner or operator of the source in whose compliance account such 
CSAPR NOX Ozone Season Group 2 allowance was initially 
recorded, was a direct or indirect parent or subsidiary of an owner or 
operator of such source, or was directly or indirectly under common 
ownership with an owner or operator of such source, the Administrator 
will not deduct such CSAPR NOX Ozone Season Group 2 
allowance under paragraph (d)(4)(i) of this section. For purposes of 
this paragraph, each owner or operator of a source shall be deemed to 
be a person with an ownership interest in any CSAPR NOX 
Ozone Season Group 2 allowance held in that source's compliance 
account. The limitation established by this paragraph on the 
deductibility of certain CSAPR NOX Ozone Season Group 2 
allowances under paragraph (d)(4)(i) of this section shall not be 
construed as a waiver of the surrender requirements under paragraph 
(d)(2)(i) of this section corresponding to such CSAPR NOX 
Ozone Season Group 2 allowances.
    (iii) Not less than 45 days before the planned date for any 
deductions under paragraph (d)(4)(i) of this section, the Administrator 
will send a notification to the authorized account representative for 
the Allowance Management System account from which such deductions will 
be made identifying the CSAPR NOX Ozone Season Group 2 
allowances to be deducted and the data upon which the Administrator has 
relied and specifying a process for submission of any objections to 
such data. Any objections must be submitted to the Administrator not 
later than 15 days before the planned date for such

[[Page 23203]]

deductions as indicated in such notification.
    (5) To the extent the surrender requirements under paragraph 
(d)(2)(i) of this section corresponding to any CSAPR NOX 
Ozone Season Group 2 allowances allocated for a control period after 
2020 and initially recorded in a given source's compliance account have 
not been fully satisfied through the deductions under paragraphs (d)(3) 
and (4) of this section:
    (i) The persons identified in accordance with paragraph (d)(2)(ii) 
of this section with regard to such source and each such CSAPR 
NOX Ozone Season Group 2 allowance shall pay any fine, 
penalty, or assessment or comply with any other remedy imposed under 
the Clean Air Act; and
    (ii) Each such CSAPR NOX Ozone Season Group 2 allowance, 
and each day in such control period, shall constitute a separate 
violation of this subpart and the Clean Air Act.
    (6) The Administrator will record in the appropriate Allowance 
Management System accounts all deductions of CSAPR NOX Ozone 
Season Group 2 allowances under paragraphs (d)(3) and (4) of this 
section.
    (7)(i) Each submission, objection, or other written communication 
from a designated representative, authorized account representative, or 
other person to the Administrator under paragraph (d)(2), (3), or (4) 
of this section shall be sent electronically to the email address 
CSAPR@epa.gov. Each such communication from a designated representative 
must contain the certification statement set forth in Sec.  97.814(a), 
and each such communication from the authorized account representative 
for a general account must contain the certification statement set 
forth in Sec.  97.820(c)(2)(ii).
    (ii) Each notification from the Administrator to a designated 
representative or authorized account representative under paragraph 
(d)(3) or (4) of this section will be sent electronically to the email 
address most recently received by the Administrator for such 
representative. In any such notification, the Administrator may provide 
information by means of a reference to a publicly accessible website 
where the information is available.


0
98. Amend Sec.  97.812 by:
0
a. Adding a paragraph heading to paragraph (a) introductory text;
0
b. In paragraph (a)(1)(i), removing ``Sec.  97.811(a)(1);'' and adding 
in its place ``Sec.  97.811(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.830(b) not later 
than September 30 of the year of the control period;'';
0
c. In paragraph (a)(1)(iii), removing ``control period; or'' and adding 
in its place ``control period, for allocations for a control period 
before 2021, or that operate during such control period, for 
allocations for a control period in 2021 or thereafter; or'';
0
d. In paragraph (a)(3) introductory text, removing ``later'' and adding 
in its place ``latest'';
0
e. Revising paragraph (a)(3)(ii);
0
f. In paragraph (a)(3)(iv), removing ``resumes operation.'' and adding 
in its place ``resumes operation, for allocations for a control period 
before 2021, or the control period in which the unit resumes operation, 
for allocations for a control period in 2021 or thereafter.'';
0
g. In paragraph (a)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for allocations for a 
control period before 2021, or the unit's total tons of NOX 
emissions during the control period, for allocations for a control 
period in 2021 or thereafter.'';
0
h. In paragraph (a)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
i. In paragraph (a)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
j. In paragraph (a)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 
2021, if, after completion'';
0
k. In paragraph (a)(10), removing ``for such control period, any 
unallocated'' and adding in its place ``for a control period before 
2021, or under paragraphs (a)(2) through (7) and (12) of this section 
for a control period in 2021 or thereafter, any unallocated'';
0
l. Redesignating paragraph (a)(11) as paragraph (a)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
m. Adding paragraph (a)(11)(ii);
0
n. Revising paragraph (a)(12);
0
o. Adding a paragraph heading to paragraph (b) introductory text and 
removing ``located'' before ``in Indian country'';
0
p. In paragraph (b)(1)(i), removing ``Sec.  97.811(a)(1); or'' and 
adding in its place ``Sec.  97.811(a)(1) and that have deadlines for 
certification of monitoring systems under Sec.  97.830(b) not later 
than September 30 of the year of the control period; or'';
0
q. Revising paragraph (b)(3)(ii);
0
r. In paragraph (b)(4)(i), removing ``preceding control period.'' and 
adding in its place ``preceding control period, for allocations for a 
control period before 2021, or the unit's total tons of NOX 
emissions during the control period, for allocations for a control 
period in 2021 or thereafter.'';
0
s. In paragraph (b)(5), adding ``allocation amounts of'' after ``sum of 
the'';
0
t. In paragraph (b)(8), removing ``The Administrator'' and adding in 
its place ``For a control period before 2021, the Administrator'';
0
u. In paragraph (b)(9) introductory text, removing ``If, after 
completion'' and adding in its place ``For a control period before 
2021, if, after completion'';
0
v. In paragraph (b)(10) introductory text, removing ``for such control 
period, any unallocated'' and adding in its place ``for a control 
period before 2021, or under paragraphs (b)(2) through (7) and (12) of 
this section for a control period in 2021 or thereafter, any 
unallocated'';
0
w. In paragraph (b)(10)(ii), removing ``Sec.  52.38(b)(6), (8), or 
(9)'' and adding in its place ``Sec.  52.38(b)(8) or (9)'';
0
x. Redesignating paragraph (b)(11) as paragraph (b)(11)(i) and in the 
newly redesignated paragraph, removing ``The Administrator'' and adding 
in its place ``For a control period before 2021, the Administrator'';
0
y. Adding paragraph (b)(11)(ii); and
0
z. Revising paragraph (b)(12).
    The additions and revisions read as follows:


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

    (a) Allocations from new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR NOX Ozone Season Group 2 unit commences commercial 
operation, for allocations for a control period before 2021; or
    (B) The control period containing the deadline for certification of 
the CSAPR NOX Ozone Season Group 2 unit's monitoring systems 
under Sec.  97.830(b), for allocations for a control period in 2021 or 
thereafter;
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.811(b)(1)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 2 allowances 
allocated under paragraphs (a)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone

[[Page 23204]]

Season Group 2 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (a)(2) through 
(11) of this section, if the calculations of allocations from a new 
unit set-aside for a control period before 2021 under paragraph (a)(7) 
of this section, paragraphs (a)(6) and (a)(9)(iv) of this section, or 
paragraphs (a)(6), (a)(9)(iii), and (a)(10) of this section, or for a 
control period in 2021 or thereafter under paragraph (a)(7) of this 
section or paragraphs (a)(6) and (10) of this section, would otherwise 
result in total allocations from such new unit set-aside unequal to the 
total amount of such new unit set-aside, then the Administrator will 
adjust the results of such calculations as follows. The Administrator 
will list the CSAPR NOX Ozone Season Group 2 units in 
descending order based on such units' allocation amounts under 
paragraph (a)(7), (a)(9)(iv), or (a)(10) of this section, as 
applicable, and, in cases of equal allocation amounts, in alphabetical 
order of the relevant sources' names and numerical order of the 
relevant units' identification numbers, and will adjust each unit's 
allocation amount under such paragraph upward or downward by one CSAPR 
NOX Ozone Season Group 2 allowance (but not below zero) in 
the order in which the units are listed, and will repeat this 
adjustment process as necessary, until the total allocations from such 
new unit set-aside equal the total amount of such new unit set-aside.
    (b) Allocations from Indian country new unit set-asides. * * *
* * * * *
    (3) * * *
    (ii)(A) The first control period after the control period in which 
the CSAPR NOX Ozone Season Group 2 unit commences commercial 
operation, for allocations for a control period before 2021; or
    (B) The control period containing the deadline for certification of 
the CSAPR NOX Ozone Season Group 2 unit's monitoring systems 
under Sec.  97.830(b), for allocations for a control period in 2021 or 
thereafter.
* * * * *
    (11) * * *
    (ii) For a control period in 2021 or thereafter, the Administrator 
will notify the public, through the promulgation of the notices of data 
availability described in Sec.  97.811(b)(2)(i), (ii), and (v), of the 
amount of CSAPR NOX Ozone Season Group 2 allowances 
allocated under paragraphs (b)(2) through (7), (10), and (12) of this 
section for such control period to each CSAPR NOX Ozone 
Season Group 2 unit eligible for such allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period before 2021 under 
paragraph (b)(7) of this section or paragraphs (b)(6) and (b)(9)(iv) of 
this section, or for a control period in 2021 or thereafter under 
paragraph (b)(7) of this section, would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR NOX Ozone Season Group 
2 units in descending order based on such units' allocation amounts 
under paragraph (b)(7) or (b)(9)(iv) of this section, as applicable, 
and, in cases of equal allocation amounts, in alphabetical order of the 
relevant sources' names and numerical order of the relevant units' 
identification numbers, and will adjust each unit's allocation amount 
under such paragraph upward or downward by one CSAPR NOX 
Ozone Season Group 2 allowance (but not below zero) in the order in 
which the units are listed, and will repeat this adjustment process as 
necessary, until the total allocations from such Indian country new 
unit set-aside equal the total amount of such Indian country new unit 
set-aside.


Sec.  97.820  [Amended]

0
98. Amend Sec.  97.820 by:
0
a. In paragraph (c)(1)(ii)(D), adding ``; and'' after the closing 
quotation mark; and
0
b. In paragraph (c)(3)(iii)(B), removing ``to NOX'' and 
adding in its place ``to CSAPR NOX''.

0
99. Amend Sec.  97.821 by:
0
a. In paragraphs (c), (d), and (e), removing ``Sec.  52.38(b)(6), (8), 
or (9)'' and adding in its place ``Sec.  52.38(b)(8) or (9)'';
0
b. In paragraph (f), removing ``By July 1, 2021'' and adding in its 
place ``By July 1, 2022'', removing ``Sec.  52.38(b)(6), (8), or (9)'' 
and adding in its place ``Sec.  52.38(b)(8) or (9)'', and removing ``in 
the fourth year'' and adding in its place ``in the third year'';
0
c. Redesignating paragraph (g) as paragraph (g)(1), and in the newly 
redesignated paragraph, removing ``By August 1, 2017 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2017 through 2020,'' and removing ``Sec.  52.38(b)(6), (8), 
or (9)'' and adding in its place ``Sec.  52.38(b)(8) or (9)'';
0
d. Adding paragraph (g)(2);
0
e. Redesignating paragraph (h) as paragraph (h)(1) and in the newly 
redesignated paragraph, removing ``By August 1, 2017 and August 1 of 
each year thereafter,'' and adding in its place ``By August 1 of each 
year from 2017 through 2020,'';
0
f. Adding paragraph (h)(2);
0
g. In paragraphs (i) and (j), removing ``By February 15, 2018 and 
February 15 of each year thereafter,'' and adding in its place ``By 
February 15 of each year from 2018 through 2021,''; and
0
h. In paragraph (k), removing ``Sec.  52.38(b)(6), (8), or (9)'' and 
adding in its place ``Sec.  52.38(b)(8) or (9)''.
    The additions read as follows:


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

* * * * *
    (g) * * *
    (2) By May 1, 2022 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 2 source's compliance account the CSAPR NOX Ozone 
Season Group 2 allowances allocated to the CSAPR NOX Ozone 
Season Group 2 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 2 
allowances auctioned to CSAPR NOX Ozone Season Group 2 
units, in accordance with Sec.  97.812(a), or with a SIP revision 
approved under Sec.  52.38(b)(8) or (9) of this chapter, for the 
control period in the year before the year of the applicable 
recordation deadline under this paragraph.
    (h) * * *
    (2) By May 1, 2022 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 2 source's compliance account the CSAPR NOX Ozone 
Season Group 2 allowances allocated to the CSAPR NOX Ozone 
Season Group 2 units at the source in accordance with Sec.  97.812(b) 
for the control period in the year before the year of the applicable 
recordation deadline under this paragraph.
* * * * *

0
100. Amend Sec.  97.824 by:
0
a. Adding a paragraph heading to paragraph (c);
0
b. Revising paragraph (c)(1); and
0
c. In paragraph (c)(2)(ii), removing ``Sec.  97.526(c),'' and adding in 
its place ``Sec.  97.526(d),''.
    The addition and revision read as follows:


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

* * * * *

[[Page 23205]]

    (c) Selection of CSAPR NOX Ozone Season Group 2 
allowances for deduction--(1) Identification by serial number. The 
designated representative for a source may request that specific CSAPR 
NOX Ozone Season Group 2 allowances, identified by serial 
number, in the source's compliance account be deducted for emissions or 
excess emissions for a control period in a given year in accordance 
with paragraph (b) or (d) of this section. In order to be complete, 
such request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the CSAPR 
NOX Ozone Season Group 2 source and the appropriate serial 
numbers.
* * * * *

0
101. Amend Sec.  97.825 by:
0
a. Revising paragraphs (b)(1) introductory text and (b)(1)(ii);
0
b. Removing paragraphs (b)(2) introductory text and (b)(2)(i) and (ii) 
and redesignating paragraphs (b)(2)(iii) introductory text and 
(b)(2)(iii)(A) and (B) as paragraphs (b)(2) introductory text and 
(b)(2)(i) and (ii), respectively;
0
c. In newly redesignated paragraph (b)(2) introductory text, removing 
``the notice of data availability required in paragraph (b)(2)(ii) of 
this section and the calculations referenced by the relevant notice'' 
and adding in its place ``each notice'';
0
d. In newly redesignated paragraph (b)(2)(i), removing ``the relevant 
notice required under paragraph (b)(1)(ii) of this section and 
referenced in the notice required under paragraph (b)(2)(ii) of this 
section'' and adding in its place ``such notice'';
0
e. In newly redesignated paragraph (b)(2)(ii), removing 
``(b)(2)(iii)(A)'' and adding in its place ``(b)(2)(i)'' each time it 
appears, and adding ``results of the'' before ``calculations 
incorporating any adjustments'';
0
f. In paragraphs (b)(3), (b)(4)(i), (b)(5), (b)(6) introductory text, 
and (b)(6)(i), removing ``(b)(2)(iii)(B)'' and adding in its place 
``(b)(2)(ii)'' each time it appears;
0
g. Removing and reserving paragraph (b)(6)(ii); and
0
h. In paragraph (b)(6)(iii) introductory text, removing ``paragraphs 
(b)(6)(i) and (ii)'' and adding in its place ``paragraph (b)(6)(i)''.
    The revisions read as follows:


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

* * * * *
    (b) * * *
    (1) By June 1 of each year from 2018 through 2021 and August 1 of 
each year thereafter, the Administrator will:
* * * * *
    (ii) For the set of any States (and Indian country within the 
borders of such States) for which the results of the calculations 
required in paragraph (b)(1)(i) of this section indicate that total 
NOX emissions exceed the respective State assurance levels 
for such control period--
    (A) Calculate, for each such State (and Indian country within the 
borders of such State) and such control period and each common 
designated representative for such control period for a group of one or 
more base CSAPR NOX Ozone Season Group 2 sources and units 
in such State (and such Indian country), the common designated 
representative's share of the total NOX emissions from all 
base CSAPR NOX Ozone Season Group 2 units at base CSAPR 
NOX Ozone Season Group 2 sources in such State (and such 
Indian country), the common designated representative's assurance 
level, and the amount (if any) of CSAPR NOX Ozone Season 
Group 2 allowances that the owners and operators of such group of 
sources and units must hold in accordance with the calculation formula 
in Sec.  97.806(c)(2)(i); and
    (B) Promulgate a notice of data availability of the results of the 
calculations required in paragraphs (b)(1)(i) and (b)(1)(ii)(A) of this 
section, including separate calculations of the NOX 
emissions from each base CSAPR NOX Ozone Season Group 2 
source in each such State (and Indian country within the borders of 
such State).
* * * * *

0
102. Amend Sec.  97.826 by:
0
a. Revising the section heading;
0
b. In paragraph (b), removing ``Sec.  97.811(c),'' and adding in its 
place ``Sec.  97.811(c) or (d),'', and removing ``Sec.  97.828.'' and 
adding in its place ``Sec.  97.828 or paragraph (c) or (d) of this 
section.''; and
0
c. Adding paragraphs (c), (d), and (e).
    The revision and additions read as follows:


Sec.  97.826  Banking and conversion.

* * * * *
    (c) At any time after the allowance transfer deadline for the last 
control period for which a State NOX Ozone Season Group 2 
trading budget is set forth in Sec.  97.810(a) for a given State and 
after completion of the procedures under paragraphs (d)(1) and (2) of 
this section, the Administrator may record a transfer of any CSAPR 
NOX Ozone Season Group 2 allowances held in the compliance 
account for a source in such State (or Indian country within the 
borders of such State) to a general account identified or established 
by the Administrator with the source's designated representative as the 
authorized account representative and with the owners and operators of 
the source (as indicated on the certificate of representation for the 
source) as the persons represented by the authorized account 
representative. The Administrator will notify the designated 
representative not less than 15 days before making such a transfer.
    (d) Notwithstanding any other provision of this subpart, part 52 of 
this chapter, or any SIP revision approved under Sec.  52.38(b)(8) or 
(9) of this chapter:
    (1) By August 13, 2021, the Administrator will temporarily suspend 
acceptance of CSAPR NOX Ozone Season Group 2 allowance 
transfers submitted under Sec.  97.822 and, before resuming acceptance 
of such transfers, will take the following actions:
    (i) The Administrator will determine each of the following values:
    (A) The total amount of CSAPR NOX Ozone Season Group 2 
allowances allocated for the control periods in 2017 through 2020 
attributable to the States listed in Sec.  52.38(b)(2)(iv) of this 
chapter (and Indian country within the borders of such States), 
computed as the sum of the State NOX Ozone Season Group 2 
trading budgets under Sec.  97.810(a) for such States for all such 
control periods plus the product of 1.5 multiplied by the sum of the 
variability limits under Sec.  97.810(b) for such States for the 
control period in 2017.
    (B) The total tons of NOX emissions reported in 
accordance with Sec. Sec.  97.806(b) and 97.830 through 97.835 for all 
CSAPR NOX Ozone Season Group 2 units at CSAPR NOX 
Ozone Season Group 2 sources in the States listed in Sec.  
52.38(b)(2)(iv) of this chapter (and Indian country within the borders 
of such States) for the control periods in 2017 through 2020.
    (C) The full-season CSAPR NOX Ozone Season Group 3 
allowance bank target, computed as the sum for all States listed in 
Sec.  52.38(b)(2)(v) of this chapter of the variability limits under 
Sec.  97.1010(b) for such States for the control period in 2022.
    (D) A conversion factor, computed as the quotient, rounded down to 
the nearest whole number, of the remainder of the total amount of CSAPR 
NOX Ozone Season Group 2 allowances determined under 
paragraph (d)(1)(i)(A) of this section minus the total tons of 
NOX emissions determined under paragraph (d)(1)(i)(B) of 
this section divided by the full-season CSAPR NOX

[[Page 23206]]

Ozone Season Group 3 allowance bank target determined under paragraph 
(d)(1)(i)(C) of this section.
    (E) The adjusted CSAPR NOX Ozone Season Group 3 
allowance bank target, computed as the product, rounded to the nearest 
allowance, of the full-season CSAPR NOX Ozone Season Group 3 
allowance bank target determined under paragraph (d)(1)(i)(C) of this 
section multiplied by a fraction whose numerator is the number of days 
from June 29, 2021 through September 30, 2021, inclusive, and whose 
denominator is 153.
    (ii) The Administrator will allocate CSAPR NOX Ozone 
Season Group 3 allowances for the control period in 2021 to sources in 
States listed in Sec.  52.38(b)(2)(v) of this chapter (and Indian 
country within the borders of such States) as follows:
    (A) The Administrator will determine for each such source the 
source's maximum share, computed as the quotient, rounded down to the 
nearest whole number, of the amount of CSAPR NOX Ozone 
Season Group 2 allowances allocated for control periods before 2021 
held in the source's compliance account divided by the conversion 
factor determined under paragraph (d)(1)(i)(D) of this section.
    (B) The Administrator will determine a source allocation scaling 
factor, computed as the lesser of 1.0000 or the quotient, expressed to 
four decimal places, of the adjusted CSAPR NOX Ozone Season 
Group 3 allowance bank target determined under paragraph (d)(1)(i)(E) 
of this section divided by the sum for all such sources of the maximum 
shares under paragraph (d)(1)(ii)(A) of this section.
    (C) The Administrator will allocate to each such source an amount 
of CSAPR NOX Ozone Season Group 3 allowances computed as the 
product, rounded to the nearest allowance, of such source's maximum 
share under paragraph (d)(1)(ii)(A) of this section multiplied by the 
source allocation scaling factor determined under paragraph 
(d)(1)(ii)(B) of this section.
    (iii) If the sum for all sources of the allocations under paragraph 
(d)(1)(ii)(C) of this section is less than the adjusted CSAPR 
NOX Ozone Season Group 3 allowance bank target determined 
under paragraph (d)(1)(i)(E) of this section, the Administrator will 
allocate CSAPR NOX Ozone Season Group 3 allowances for the 
control period in 2021 to general accounts as follows:
    (A) The Administrator will determine for each general account the 
account's maximum share, computed as the quotient, rounded down to the 
nearest whole number, of the amount of CSAPR NOX Ozone 
Season Group 2 allowances allocated for control periods before 2021 
held in the account divided by the conversion factor determined under 
paragraph (d)(1)(i)(D) of this section.
    (B) The Administrator will determine a general account allocation 
scaling factor, computed as the lesser of 1.0000 or the quotient, 
expressed to four decimal places, of the remainder of the adjusted 
CSAPR NOX Ozone Season Group 3 allowance bank target 
determined under paragraph (d)(1)(i)(E) of this section minus the sum 
for all sources of the allocations under paragraph (d)(1)(ii)(C) of 
this section divided by the sum for all general accounts of the maximum 
shares under paragraph (d)(1)(iii)(A) of this section.
    (C) The Administrator will allocate to each general account an 
amount of CSAPR NOX Ozone Season Group 3 allowances computed 
as the product, rounded to the nearest allowance, of such account's 
maximum share under paragraph (d)(1)(iii)(A) of this section multiplied 
by the general account allocation scaling factor determined under 
paragraph (d)(1)(iii)(B) of this section.
    (iv) For the compliance account of each source, and for each 
general account, to which an amount of CSAPR NOX Ozone 
Season Group 3 allowances greater than zero is allocated under 
paragraph (d)(1)(ii)(C) or (d)(1)(iii)(C) of this section, 
respectively:
    (A) The Administrator will determine the amount of CSAPR 
NOX Ozone Season Group 2 allowances required to be deducted 
from the account, computed as the product of the amount of CSAPR 
NOX Ozone Season Group 3 allowances allocated to the source 
or general account under paragraph (d)(1)(ii)(C) or (d)(1)(iii)(C) of 
this section multiplied by the conversion factor determined under 
paragraph (d)(1)(i)(D) of this section. The Administrator will deduct 
CSAPR NOX Ozone Season Group 2 allowances allocated for 
control periods before 2021 from the account on a first-in, first-out 
basis in the order set forth in Sec.  97.824(c)(2)(i) and (ii).
    (B) The Administrator will record in the account the allocations of 
CSAPR NOX Ozone Season Group 3 allowances under paragraph 
(d)(1)(ii)(C) or (d)(1)(iii)(C) of this section and the deductions of 
CSAPR NOX Ozone Season Group 2 allowances under paragraph 
(d)(1)(iv)(A) of this section.
    (2)(i) During the period beginning February 1, 2022 and ending 
February 28, 2022, the designated representative for a source in a 
State listed in Sec.  52.38(b)(2)(v) of this chapter (or Indian country 
within the borders of such a State) may request that the Administrator 
allocate additional CSAPR NOX Ozone Season Group 3 
allowances for the control period in 2021 to the source pursuant to 
paragraph (d)(2)(ii) of this section. Any such request shall be 
submitted to the Administrator electronically at the email address 
CSAPR@epa.gov.
    (ii) For each source covered by a request under paragraph (d)(2)(i) 
of this section, as soon as practicable on or after March 1, 2022, the 
Administrator will deduct from the source's compliance account, on a 
first-in, first-out basis in the order set forth in Sec.  
97.824(c)(2)(i) and (ii), the maximum number of sets of 18 CSAPR 
NOX Ozone Season Group 2 allowances allocated for control 
periods before 2021 available in the compliance account. The 
Administrator will then allocate to the source one CSAPR NOX 
Ozone Season Group 3 allowance for the control period in 2021 for each 
set of 18 CSAPR NOX Ozone Season Group 2 allowances 
deducted. The Administrator will record the allocations and deductions 
under this paragraph in the source's compliance account.
    (3) After the Administrator has carried out the procedures set 
forth in paragraph (d)(1) of this section, upon any determination that 
would otherwise result in the initial recordation of a given number of 
CSAPR NOX Ozone Season Group 2 allowances in the compliance 
account for a source in a State listed in Sec.  52.38(b)(2)(v) of this 
chapter (or Indian country within the borders of such a State), the 
Administrator will not record such CSAPR NOX Ozone Season 
Group 2 allowances but instead will allocate and record in such account 
an amount of CSAPR NOX Ozone Season Group 3 allowances for 
the control period in 2021 computed as the quotient, rounded up to the 
nearest allowance, of such given number of CSAPR NOX Ozone 
Season Group 2 allowances divided by the conversion factor determined 
under paragraph (d)(1)(i)(D) of this section.
    (e) Notwithstanding any other provision of this subpart or any SIP 
revision approved under Sec.  52.38(b)(8) or (9) of this chapter, CSAPR 
NOX Ozone Season Group 3 allowances may be used to satisfy 
requirements to hold CSAPR NOX Ozone Season Group 2 
allowances under this subpart as follows, provided that nothing in this 
paragraph alters the time as of which any such allowance holding 
requirement must be met or limits any consequence of a failure to 
timely meet any such allowance holding requirement:
    (1) Except as provided in paragraph (e)(2) of this section, after 
the

[[Page 23207]]

Administrator has carried out the procedures set forth in paragraph 
(d)(1) of this section, the owner or operator of a CSAPR NOX 
Ozone Season Group 2 source in a State listed in Sec.  52.38(b)(2)(iv) 
of this chapter (or Indian country within the borders of such a State) 
may satisfy a requirement to hold a given number of CSAPR 
NOX Ozone Season Group 2 allowances for the control period 
in a year from 2017 through 2020 by holding instead, in a general 
account established for this sole purpose, an amount of CSAPR 
NOX Ozone Season Group 3 allowances for the control period 
in 2021 (or any later control period for which the allowance transfer 
deadline defined in Sec.  97.1002 has passed) computed as the quotient, 
rounded up to the nearest allowance, of such given number of CSAPR 
NOX Ozone Season Group 2 allowances divided by the 
conversion factor determined under paragraph (d)(1)(i)(D) of this 
section.
    (2) CSAPR NOX Ozone Season Group 3 allowances may not be 
used to satisfy requirements to surrender CSAPR NOX Ozone 
Season Group 2 allowances under Sec.  97.811(d).


Sec.  97.831  [Amended]

0
103. In Sec.  97.831, amend paragraph (d)(3) introductory text by 
removing in the last sentence the word ``with''.

Subpart FFFFF--Texas SO2 Trading Program

0
104. Amend Sec.  97.902 by:
0
a. Revising the definition of ``Allowance transfer deadline'';
0
b. In the definition of ``Common designated representative'', removing 
``April'' and adding in its place ``July'';
0
c. In the definition of ``CSAPR NOX Ozone Season Group 2 
Trading Program'', removing ``(b)(2)(i) and (iii), (b)(6) through (11), 
and (b)(13)'' and adding in its place ``(b)(2)(iii) and (iv), and 
(b)(7) through (9), (13), (14), and (16)'', and removing ``Sec.  
52.38(b)(6) or (9)'' and adding in its place ``Sec.  52.38(b)(9)''; and
0
d. Adding in alphabetical order a definition for ``Nitrogen oxides''.
    The revision and additions read as follows:


Sec.  97.902  Definitions.

* * * * *
    Allowance transfer deadline means, for a control period before 
2021, midnight of March 1 immediately after such control period or, for 
a control period in 2021 or thereafter, midnight of June 1 immediately 
after such control period (or if such March 1 or June 1 is not a 
business day, midnight of the first business day thereafter) and is the 
deadline by which a Texas SO2 Trading Program allowance 
transfer must be submitted for recordation in a Texas SO2 
Trading Program source's compliance account in order to be available 
for use in complying with the source's Texas SO2 Trading 
Program emissions limitation for such control period in accordance with 
Sec. Sec.  97.906 and 97.924.
* * * * *
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
* * * * *


Sec.  97.905  [Amended]

0
105. In Sec.  97.905, amend paragraph (b) by removing the paragraph 
heading.

0
106. Amend Sec.  97.911 by:
0
a. Adding a paragraph heading to paragraph (a); and
0
b. In Table 1 to paragraph (a)(1), revising the column headings and the 
table entries for ``Big Brown Unit 1'', ``Big Brown Unit 2'', ``Coleto 
Creek Unit 1'', Graham Unit 2'', Martin Lake Unit 1'', Martin Lake Unit 
2'', Martin Lake Unit 3'', Monticello Unit 1'', ``Monticello Unit 2'', 
``Monticello Unit 3'', ``Sandow Unit 4'', and ``Stryker Unit ST2''.
    The addition reads as follows:


Sec.  97.911  Texas SO2 Trading Program allowance allocations.

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

                       Table 1 to Paragraph (a)(1)--Texas SO2 Trading Program Allocations
----------------------------------------------------------------------------------------------------------------
                                                                Texas SO2
                                                                 trading
      Texas SO2 trading program units           ORIS code        program         Affiliated  ownership  group
                                                               allocation
                                                                 (tons)
----------------------------------------------------------------------------------------------------------------
Big Brown Unit 1...........................            3497           8,473  Vistra.
Big Brown Unit 2...........................            3497           8,559  Vistra.
Coleto Creek Unit 1........................            6178           9,057  Vistra.
 
                                                  * * * * * * *
Graham Unit 2..............................            3490             226  Vistra.
 
                                                  * * * * * * *
Martin Lake Unit 1.........................            6146          12,024  Vistra.
Martin Lake Unit 2.........................            6146          11,580  Vistra.
Martin Lake Unit 3.........................            6146          12,236  Vistra.
Monticello Unit 1..........................            6147           8,598  Vistra.
Monticello Unit 2..........................            6147           8,795  Vistra.
Monticello Unit 3..........................            6147          12,216  Vistra.
 
                                                  * * * * * * *
Sandow Unit 4..............................            6648           8,370  Vistra.
 
                                                  * * * * * * *
Stryker Unit ST2...........................            3504             145  Vistra.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------


[[Page 23208]]

* * * * *


Sec.  97.912  [Amended]

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


Sec.  97.920  [Amended]

0
108. Amend Sec.  97.920 by:
0
a. In paragraph (c)(1)(ii)(D), adding ``; and'' after the closing 
quotation mark; and
0
b. In paragraph (d), removing ``paragraphs (a), (b), and (c)'' and 
adding in its place ``paragraph (a), (b), or (c)''.

0
109. Amend Sec.  97.921 by:
0
a. Redesignating paragraph (b) as paragraph (b)(1) and in the newly 
redesignated paragraph, removing ``By July 1, 2019,'' and adding in its 
place ``By July 1, 2019 and July 1, 2020,'';
0
b. Adding paragraph (b)(2); and
0
c. In paragraph (c), removing ``By February 15, 2020 and February 15'' 
and adding in its place ``By February 15 of 2020 and 2021 and May 1'', 
and removing ``control period in the year'' and adding in its place 
``control period in the year before the year''.
    The addition reads as follows:


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

* * * * *
    (b) * * *
    (2) By July 1, 2022 and July 1 of each year thereafter, the 
Administrator will record in each Texas SO2 Trading Program 
source's compliance account the Texas SO2 Trading Program 
allowances allocated to the Texas SO2 Trading Program units 
at the source in accordance with Sec.  97.911(a) for the control period 
in the third year after the year of the applicable recordation deadline 
under this paragraph, unless provided otherwise in the Administrator's 
approval of a SIP revision replacing the provisions of this subpart.
* * * * *


0
110. Amend Sec.  97.924 by adding a paragraph heading to paragraph (c) 
and revising paragraph (c)(1) to read as follows:


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

* * * * *
    (c) Selection of Texas SO2 Trading Program allowances for 
deduction--(1) Identification by serial number. The designated 
representative for a source may request that specific Texas 
SO2 Trading Program allowances, identified by serial number, 
in the source's compliance account be deducted for emissions or excess 
emissions for a control period in a given year in accordance with 
paragraph (b) or (d) of this section. In order to be complete, such 
request shall be submitted to the Administrator by the allowance 
transfer deadline for such control period and include, in a format 
prescribed by the Administrator, the identification of the Texas 
SO2 Trading Program source and the appropriate serial 
numbers.
* * * * *

0
111. Amend Sec.  97.925 by:
0
a. In paragraph (b)(1) introductory text, removing ``June'' and adding 
in its place ``August'' each time it appears;
0
b. In paragraph (b)(1)(i), removing ``Sec.  97.906(c)(2)(iii).'' and 
adding in its place ``Sec.  97.906(c)(2)(iii); and'';
0
c. Adding paragraph (b)(1)(ii);
0
d. Removing paragraphs (b)(2) introductory text and (b)(2)(i) and (ii) 
and redesignating paragraphs (b)(2)(iii) introductory text and 
(b)(2)(iii)(A) and (B) as paragraphs (b)(2) introductory text and 
(b)(2)(i) and (ii), respectively;
0
e. In newly redesignated paragraph (b)(2) introductory text, removing 
``the notice'' and adding in its place ``each notice'', and removing 
``(b)(2)(ii)'' and adding in its place ``(b)(1)(ii)'';
0
f. In newly redesignated paragraph (b)(2)(i), removing ``the notice 
required under paragraph (b)(2)(ii) of this section'' and adding in its 
place ``such notice'';
0
g. In newly redesignated paragraph (b)(2)(ii), removing 
``(b)(2)(iii)(A)'' and adding in its place ``(b)(2)(i)'' each time it 
appears, and adding ``results of the'' before ``calculations 
incorporating any adjustments'';
0
h. In paragraph (b)(3), removing ``the notice'' and adding in its place 
``each notice'', and removing ``(b)(2)(iii)(B)'' and adding in its 
place ``(b)(2)(ii)''; and
0
i. In paragraphs (b)(4)(i), (b)(5), (b)(6) introductory text, and 
(b)(6)(i), removing ``(b)(2)(iii)(B)'' and adding in its place 
``(b)(2)(ii)'' each time it appears.
    The addition reads as follows:


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

* * * * *
    (b) * * *
    (1) * * *
    (ii) If the results of the calculations required in paragraph 
(b)(1)(i) of this section indicate that total SO2 emissions 
exceed the State assurance level for such control period--
    (A) Calculate, for such control period and each common designated 
representative for such control period for a group of one or more Texas 
SO2 Trading Program sources and units, the common designated 
representative's share of the total SO2 emissions from all 
Texas SO2 Trading Program units at Texas SO2 
Trading Program sources, the common designated representative's 
assurance level, and the amount (if any) of Texas SO2 
Trading Program allowances that the owners and operators of such group 
of sources and units must hold in accordance with the calculation 
formula in Sec.  97.906(c)(2)(i); and
    (B) Promulgate a notice of data availability of the results of the 
calculations required in paragraphs (b)(1)(i) and (b)(1)(ii)(A) of this 
section, including separate calculations of the SO2 
emissions from each Texas SO2 Trading Program source.
* * * * *


Sec.  97.932  [Amended]

0
112. In Sec.  97.932, amend paragraph (a) by removing ``subpart D or 
appendix D to part 75'' and adding in its place ``subpart D of, or 
appendix D to, part 75''.

0
113. Add subpart GGGGG, consisting of Sec. Sec.  97.1001 through 
97.1035, to read as follows:
Subpart GGGGG--CSAPR NOX Ozone Season Group 3 Trading Program
Sec.
97.1001 Purpose.
97.1002 Definitions.
97.1003 Measurements, abbreviations, and acronyms.
97.1004 Applicability.
97.1005 Retired unit exemption.
97.1006 Standard requirements.
97.1007 Computation of time.
97.1008 Administrative appeal procedures.
97.1009 [Reserved]
97.1010 State NOX Ozone Season Group 3 trading budgets, 
new unit set-asides, Indian country new unit set-asides, and 
variability limits.
97.1011 Timing requirements for CSAPR NOX Ozone Season 
Group 3 allowance allocations.
97.1012 CSAPR NOX Ozone Season Group 3 allowance 
allocations to new units.
97.1013 Authorization of designated representative and alternate 
designated representative.
97.1014 Responsibilities of designated representative and alternate 
designated representative.
97.1015 Changing designated representative and alternate designated 
representative; changes in owners and operators; changes in units at 
the source.
97.1016 Certificate of representation.
97.1017 Objections concerning designated representative and 
alternate designated representative.
97.1018 Delegation by designated representative and alternate 
designated representative.

[[Page 23209]]

97.1019 [Reserved]
97.1020 Establishment of compliance accounts, assurance accounts, 
and general accounts.
97.1021 Recordation of CSAPR NOX Ozone Season Group 3 
allowance allocations and auction results.
97.1022 Submission of CSAPR NOX Ozone Season Group 3 
allowance transfers.
97.1023 Recordation of CSAPR NOX Ozone Season Group 3 
allowance transfers.
97.1024 Compliance with CSAPR NOX Ozone Season Group 3 
emissions limitation.
97.1025 Compliance with CSAPR NOX Ozone Season Group 3 
assurance provisions.
97.1026 Banking.
97.1027 Account error.
97.1028 Administrator's action on submissions.
97.1029 [Reserved]
97.1030 General monitoring, recordkeeping, and reporting 
requirements.
97.1031 Initial monitoring system certification and recertification 
procedures.
97.1032 Monitoring system out-of-control periods.
97.1033 Notifications concerning monitoring.
97.1034 Recordkeeping and reporting.
97.1035 Petitions for alternatives to monitoring, recordkeeping, or 
reporting requirements.

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


Sec.  97.1001  Purpose.

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


Sec.  97.1002  Definitions.

    The terms used in this subpart shall have the meanings set forth in 
this section as follows, provided that any term that includes the 
acronym ``CSAPR'' shall be considered synonymous with a term that is 
used in a SIP revision approved by the Administrator under Sec.  52.38 
or Sec.  52.39 of this chapter and that is substantively identical 
except for the inclusion of the acronym ``TR'' in place of the acronym 
``CSAPR'':
    Acid Rain Program means a multi-state SO2 and 
NOX air pollution control and emission reduction program 
established by the Administrator under title IV of the Clean Air Act 
and parts 72 through 78 of this chapter.
    Administrator means the Administrator of the United States 
Environmental Protection Agency or the Director of the Clean Air 
Markets Division (or its successor determined by the Administrator) of 
the United States Environmental Protection Agency, the Administrator's 
duly authorized representative under this subpart.
    Allocate or allocation means, with regard to CSAPR NOX 
Ozone Season Group 3 allowances, the determination by the 
Administrator, State, or permitting authority, in accordance with this 
subpart, Sec.  97.526(d), Sec.  97.826(d), and any SIP revision 
submitted by the State and approved by the Administrator under Sec.  
52.38(b)(10), (11), or (12) of this chapter, of the amount of such 
CSAPR NOX Ozone Season Group 3 allowances to be initially 
credited, at no cost to the recipient, to:
    (1) A CSAPR NOX Ozone Season Group 3 unit;
    (2) A new unit set-aside;
    (3) An Indian country new unit set-aside; or
    (4) An entity not listed in paragraphs (1) through (3) of this 
definition;
    (5) Provided that, if the Administrator, State, or permitting 
authority initially credits, to a CSAPR NOX Ozone Season 
Group 3 unit qualifying for an initial credit, a credit in the amount 
of zero CSAPR NOX Ozone Season Group 3 allowances, the CSAPR 
NOX Ozone Season Group 3 unit will be treated as being 
allocated an amount (i.e., zero) of CSAPR NOX Ozone Season 
Group 3 allowances.
    Allowance Management System means the system by which the 
Administrator records allocations, auctions, transfers, and deductions 
of CSAPR NOX Ozone Season Group 3 allowances under the CSAPR 
NOX Ozone Season Group 3 Trading Program. Such allowances 
are allocated, auctioned, recorded, held, transferred, or deducted only 
as whole allowances.
    Allowance Management System account means an account in the 
Allowance Management System established by the Administrator for 
purposes of recording the allocation, auction, holding, transfer, or 
deduction of CSAPR NOX Ozone Season Group 3 allowances.
    Allowance transfer deadline means, for a control period in a given 
year, midnight of June 1 immediately after such control period (or if 
such June 1 is not a business day, midnight of the first business day 
thereafter) and is the deadline by which a CSAPR NOX Ozone 
Season Group 3 allowance transfer must be submitted for recordation in 
a CSAPR NOX Ozone Season Group 3 source's compliance account 
in order to be available for use in complying with the source's CSAPR 
NOX Ozone Season Group 3 emissions limitation for such 
control period in accordance with Sec. Sec.  97.1006 and 97.1024.
    Alternate designated representative means, for a CSAPR 
NOX Ozone Season Group 3 source and each CSAPR 
NOX Ozone Season Group 3 unit at the source, the natural 
person who is authorized by the owners and operators of the source and 
all such units at the source, in accordance with this subpart, to act 
on behalf of the designated representative in matters pertaining to the 
CSAPR NOX Ozone Season Group 3 Trading Program. If the CSAPR 
NOX Ozone Season Group 3 source is also subject to the Acid 
Rain Program, CSAPR NOX Annual Trading Program, or CSAPR 
SO2 Group 1 Trading Program, then this natural person shall 
be the same natural person as the alternate designated representative 
as defined in the respective program.
    Assurance account means an Allowance Management System account, 
established by the Administrator under Sec.  97.1025(b)(3) for certain 
owners and operators of a group of one or more base CSAPR 
NOX Ozone Season Group 3 sources and units in a given State 
(and Indian country within the borders of such State), in which are 
held CSAPR NOX Ozone Season Group 3 allowances available for 
use for a control period in a given year in complying with the CSAPR 
NOX Ozone Season Group 3 assurance provisions in accordance 
with Sec. Sec.  97.1006 and 97.1025.
    Auction means, with regard to CSAPR NOX Ozone Season 
Group 3 allowances, the sale to any person by a State or permitting 
authority, in accordance with a SIP revision submitted by the State and 
approved by the Administrator under Sec.  52.38(b)(11) or (12) of this 
chapter, of such CSAPR NOX Ozone Season Group 3 allowances 
to be initially recorded in an Allowance Management System account.
    Authorized account representative means, for a general account, the 
natural person who is authorized, in accordance with this subpart, to 
transfer and otherwise dispose of CSAPR NOX Ozone Season 
Group 3 allowances held in the general account and, for a CSAPR 
NOX Ozone Season Group 3 source's compliance account, the 
designated representative of the source.
    Automated data acquisition and handling system or DAHS means the 
component of the continuous emission monitoring system, or other 
emissions monitoring system approved for use under this subpart, 
designed to interpret and convert individual output signals from 
pollutant concentration monitors, flow monitors, diluent gas monitors, 
and other component parts of the

[[Page 23210]]

monitoring system to produce a continuous record of the measured 
parameters in the measurement units required by this subpart.
    Base CSAPR NOX Ozone Season Group 3 source means a source that 
includes one or more base CSAPR NOX Ozone Season Group 3 
units.
    Base CSAPR NOX Ozone Season Group 3 unit means a CSAPR 
NOX Ozone Season Group 3 unit, provided that any unit that 
would not be a CSAPR NOX Ozone Season Group 3 unit under 
Sec.  97.1004(a) and (b) is not a base CSAPR NOX Ozone 
Season Group 3 unit notwithstanding the provisions of any SIP revision 
approved by the Administrator under Sec.  52.38(b)(11) or (12) of this 
chapter.
    Biomass means--
    (1) Any organic material grown for the purpose of being converted 
to energy;
    (2) Any organic byproduct of agriculture that can be converted into 
energy; or
    (3) Any material that can be converted into energy and is 
nonmerchantable for other purposes, that is segregated from other 
material that is nonmerchantable for other purposes, and that is:
    (i) A forest-related organic resource, including mill residues, 
precommercial thinnings, slash, brush, or byproduct from conversion of 
trees to merchantable material; or
    (ii) A wood material, including pallets, crates, dunnage, 
manufacturing and construction materials (other than pressure-treated, 
chemically-treated, or painted wood products), and landscape or right-
of-way tree trimmings.
    Boiler means an enclosed fossil- or other-fuel-fired combustion 
device used to produce heat and to transfer heat to recirculating 
water, steam, or other medium.
    Bottoming-cycle unit means a unit in which the energy input to the 
unit is first used to produce useful thermal energy, where at least 
some of the reject heat from the useful thermal energy application or 
process is then used for electricity production.
    Business day means a day that does not fall on a weekend or a 
federal holiday.
    Certifying official means a natural person who is:
    (1) For a corporation, a president, secretary, treasurer, or vice-
president of the corporation in charge of a principal business function 
or any other person who performs similar policy- or decision-making 
functions for the corporation;
    (2) For a partnership or sole proprietorship, a general partner or 
the proprietor respectively; or
    (3) For a local government entity or State, federal, or other 
public agency, a principal executive officer or ranking elected 
official.
    Clean Air Act means the Clean Air Act, 42 U.S.C. 7401, et seq.
    Coal means ``coal'' as defined in Sec.  72.2 of this chapter.
    Cogeneration system means an integrated group, at a source, of 
equipment (including a boiler, or combustion turbine, and a generator) 
designed to produce useful thermal energy for industrial, commercial, 
heating, or cooling purposes and electricity through the sequential use 
of energy.
    Cogeneration unit means a stationary, fossil-fuel-fired boiler or 
stationary, fossil-fuel-fired combustion turbine that is a topping-
cycle unit or a bottoming-cycle unit:
    (1) Operating as part of a cogeneration system; and
    (2) Producing on an annual average basis--
    (i) For a topping-cycle unit,
    (A) Useful thermal energy not less than 5 percent of total energy 
output; and
    (B) Useful power that, when added to one-half of useful thermal 
energy produced, is not less than 42.5 percent of total energy input, 
if useful thermal energy produced is 15 percent or more of total energy 
output, or not less than 45 percent of total energy input, if useful 
thermal energy produced is less than 15 percent of total energy output; 
or
    (ii) For a bottoming-cycle unit, useful power not less than 45 
percent of total energy input;
    (3) Provided that the requirements in paragraph (2) of this 
definition shall not apply to a calendar year referenced in paragraph 
(2) of this definition during which the unit did not operate at all;
    (4) Provided that the total energy input under paragraphs (2)(i)(B) 
and (2)(ii) of this definition shall equal the unit's total energy 
input from all fuel, except biomass if the unit is a boiler; and
    (5) Provided that, if, throughout its operation during the 12-month 
period or a calendar year referenced in paragraph (2) of this 
definition, a unit is operated as part of a cogeneration system and the 
cogeneration system meets on a system-wide basis the requirement in 
paragraph (2)(i)(B) or (2)(ii) of this definition, the unit shall be 
deemed to meet such requirement during that 12-month period or calendar 
year.
    Combustion turbine means an enclosed device comprising:
    (1) If the device is simple cycle, a compressor, a combustor, and a 
turbine and in which the flue gas resulting from the combustion of fuel 
in the combustor passes through the turbine, rotating the turbine; and
    (2) If the device is combined cycle, the equipment described in 
paragraph (1) of this definition and any associated duct burner, heat 
recovery steam generator, and steam turbine.
    Commence commercial operation means, with regard to a unit:
    (1) To have begun to produce steam, gas, or other heated medium 
used to generate electricity for sale or use, including test 
generation, except as provided in Sec.  97.1005.
    (i) For a unit that is a CSAPR NOX Ozone Season Group 3 
unit under Sec.  97.1004 on the later of January 1, 2005 or the date 
the unit commences commercial operation as defined in the introductory 
text of paragraph (1) of this definition and that subsequently 
undergoes a physical change or is moved to a new location or source, 
such date shall remain the date of commencement of commercial operation 
of the unit, which shall continue to be treated as the same unit.
    (ii) For a unit that is a CSAPR NOX Ozone Season Group 3 
unit under Sec.  97.1004 on the later of January 1, 2005 or the date 
the unit commences commercial operation as defined in the introductory 
text of paragraph (1) of this definition and that is subsequently 
replaced by a unit at the same or a different source, such date shall 
remain the replaced unit's date of commencement of commercial 
operation, and the replacement unit shall be treated as a separate unit 
with a separate date for commencement of commercial operation as 
defined in paragraph (1) or (2) of this definition as appropriate.
    (2) Notwithstanding paragraph (1) of this definition and except as 
provided in Sec.  97.1005, for a unit that is not a CSAPR 
NOX Ozone Season Group 3 unit under Sec.  97.1004 on the 
later of January 1, 2005 or the date the unit commences commercial 
operation as defined in the introductory text of paragraph (1) of this 
definition, the unit's date for commencement of commercial operation 
shall be the date on which the unit becomes a CSAPR NOX 
Ozone Season Group 3 unit under Sec.  97.1004.
    (i) For a unit with a date for commencement of commercial operation 
as defined in the introductory text of paragraph (2) of this definition 
and that subsequently undergoes a physical change or is moved to a 
different location or source, such date shall remain the date of 
commencement of commercial operation of the unit,

[[Page 23211]]

which shall continue to be treated as the same unit.
    (ii) For a unit with a date for commencement of commercial 
operation as defined in the introductory text of paragraph (2) of this 
definition and that is subsequently replaced by a unit at the same or a 
different source, such date shall remain the replaced unit's date of 
commencement of commercial operation, and the replacement unit shall be 
treated as a separate unit with a separate date for commencement of 
commercial operation as defined in paragraph (1) or (2) of this 
definition as appropriate.
    Common designated representative means, with regard to a control 
period in a given year, a designated representative where, as of July 1 
immediately after the allowance transfer deadline for such control 
period, the same natural person is authorized under Sec. Sec.  
97.1013(a) and 97.1015(a) as the designated representative for a group 
of one or more base CSAPR NOX Ozone Season Group 3 sources 
and units in a State (and Indian country within the borders of such 
State).
    Common designated representative's assurance level means, with 
regard to a specific common designated representative and a State (and 
Indian country within the borders of such State) and control period in 
a given year for which the State assurance level is exceeded as 
described in Sec.  97.1006(c)(2)(iii):
    (1) The amount (rounded to the nearest allowance) equal to the sum 
of the total amount of CSAPR NOX Ozone Season Group 3 
allowances allocated for such control period to the group of one or 
more base CSAPR NOX Ozone Season Group 3 units in such State 
(and such Indian country) having the common designated representative 
for such control period and the total amount of CSAPR NOX 
Ozone Season Group 3 allowances purchased by an owner or operator of 
such base CSAPR NOX Ozone Season Group 3 units in an auction 
for such control period and submitted by the State or the permitting 
authority to the Administrator for recordation in the compliance 
accounts for such base CSAPR NOX Ozone Season Group 3 units 
in accordance with the CSAPR NOX Ozone Season Group 3 
allowance auction provisions in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(11) or (12) of this chapter, 
multiplied by the sum of the State NOX Ozone Season Group 3 
trading budget under Sec.  97.1010(a) and the State's variability limit 
under Sec.  97.1010(b) for such control period, and divided by the 
greater of such State NOX Ozone Season Group 3 trading 
budget or the sum of all amounts of CSAPR NOX Ozone Season 
Group 3 allowances for such control period allocated to or purchased in 
the State's auction for all such base CSAPR NOX Ozone Season 
Group 3 units;
    (2) Provided that--
    (i) The allocations of CSAPR NOX Ozone Season Group 3 
allowances for any control period taken into account for purposes of 
this definition shall exclude any CSAPR NOX Ozone Season 
Group 3 allowances allocated for such control period under Sec.  
97.526(d) or Sec.  97.826(d); and
    (ii) For purposes of this definition for the control period in 2021 
only, for each State the amount of the State NOX Ozone 
Season Group 3 trading budget shall be deemed to be increased by the 
supplemental amount of CSAPR NOX Ozone Season Group 3 
allowances determined for the State under Sec.  97.1010(d) and the 
amount of the State's variability limit shall be deemed to be increased 
by the product (rounded to the nearest allowance) of 0.21 multiplied by 
the supplemental amount of CSAPR NOX Ozone Season Group 3 
allowances determined for the State under Sec.  97.1010(d).
    Common designated representative's share means, with regard to a 
specific common designated representative for a control period in a 
given year and a total amount of NOX emissions from all base 
CSAPR NOX Ozone Season Group 3 units in a State (and Indian 
country within the borders of such State) during such control period, 
the total tonnage of NOX emissions during such control 
period from the group of one or more base CSAPR NOX Ozone 
Season Group 3 units in such State (and such Indian country) having the 
common designated representative for such control period.
    Common stack means a single flue through which emissions from 2 or 
more units are exhausted.
    Compliance account means an Allowance Management System account, 
established by the Administrator for a CSAPR NOX Ozone 
Season Group 3 source under this subpart, in which any CSAPR 
NOX Ozone Season Group 3 allowance allocations to the CSAPR 
NOX Ozone Season Group 3 units at the source are recorded 
and in which are held any CSAPR NOX Ozone Season Group 3 
allowances available for use for a control period in a given year in 
complying with the source's CSAPR NOX Ozone Season Group 3 
emissions limitation in accordance with Sec. Sec.  97.1006 and 97.1024.
    Continuous emission monitoring system or CEMS means the equipment 
required under this subpart to sample, analyze, measure, and provide, 
by means of readings recorded at least once every 15 minutes and using 
an automated data acquisition and handling system (DAHS), a permanent 
record of NOX emissions, stack gas volumetric flow rate, 
stack gas moisture content, and O2 or CO2 
concentration (as applicable), in a manner consistent with part 75 of 
this chapter and Sec. Sec.  97.1030 through 97.1035. The following 
systems are the principal types of continuous emission monitoring 
systems:
    (1) A flow monitoring system, consisting of a stack flow rate 
monitor and an automated data acquisition and handling system and 
providing a permanent, continuous record of stack gas volumetric flow 
rate, in standard cubic feet per hour (scfh);
    (2) A NOX concentration monitoring system, consisting of 
a NOX pollutant concentration monitor and an automated data 
acquisition and handling system and providing a permanent, continuous 
record of NOX emissions, in parts per million (ppm);
    (3) A NOX emission rate (or NOX-diluent) 
monitoring system, consisting of a NOX pollutant 
concentration monitor, a diluent gas (CO2 or O2) 
monitor, and an automated data acquisition and handling system and 
providing a permanent, continuous record of NOX 
concentration, in parts per million (ppm), diluent gas concentration, 
in percent CO2 or O2, and NOX emission 
rate, in pounds per million British thermal units (lb/mmBtu);
    (4) A moisture monitoring system, as defined in Sec.  75.11(b)(2) 
of this chapter and providing a permanent, continuous record of the 
stack gas moisture content, in percent H2O;
    (5) A CO2 monitoring system, consisting of a 
CO2 pollutant concentration monitor (or an O2 
monitor plus suitable mathematical equations from which the 
CO2 concentration is derived) and an automated data 
acquisition and handling system and providing a permanent, continuous 
record of CO2 emissions, in percent CO2; and
    (6) An O2 monitoring system, consisting of an 
O2 concentration monitor and an automated data acquisition 
and handling system and providing a permanent, continuous record of 
O2, in percent O2.
    Control period means the period starting May 1 of a calendar year, 
except as provided in Sec.  97.1006(c)(3), and ending on September 30 
of the same year, inclusive.
    CSAPR NOX Annual Trading Program means a multi-state NOX 
air pollution control and emission reduction program

[[Page 23212]]

established in accordance with subpart AAAAA of this part and Sec.  
52.38(a) of this chapter (including such a program that is revised in a 
SIP revision approved by the Administrator under Sec.  52.38(a)(3) or 
(4) of this chapter or that is established in a SIP revision approved 
by the Administrator under Sec.  52.38(a)(5) of this chapter), as a 
means of mitigating interstate transport of fine particulates and 
NOX.
    CSAPR NOX Ozone Season Group 2 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under subpart EEEEE of this part or Sec.  97.526(d), or by a State or 
permitting authority under a SIP revision approved by the Administrator 
under Sec.  52.38(b)(7), (8), or (9) of this chapter, to emit one ton 
of NOX during a control period of the specified calendar 
year for which the authorization is allocated or auctioned or of any 
calendar year thereafter under the CSAPR NOX Ozone Season 
Group 2 Trading Program.
    CSAPR NOX Ozone Season Group 2 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with subpart EEEEE of this part and Sec.  
52.38(b)(1), (b)(2)(iii) and (iv), and (b)(7) through (9), (13), (14), 
and (16) of this chapter (including such a program that is revised in a 
SIP revision approved by the Administrator under Sec.  52.38(b)(7) or 
(8) of this chapter or that is established in a SIP revision approved 
by the Administrator under Sec.  52.38(b)(9) of this chapter), as a 
means of mitigating interstate transport of ozone and NOX.
    CSAPR NOX Ozone Season Group 3 allowance means a limited 
authorization issued and allocated or auctioned by the Administrator 
under this subpart, Sec.  97.526(d), or Sec.  97.826(d), or by a State 
or permitting authority under a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10), (11), or (12) of this chapter, 
to emit one ton of NOX during a control period of the 
specified calendar year for which the authorization is allocated or 
auctioned or of any calendar year thereafter under the CSAPR 
NOX Ozone Season Group 3 Trading Program.
    CSAPR NOX Ozone Season Group 3 allowance deduction or deduct CSAPR 
NOX Ozone Season Group 3 allowances means the permanent 
withdrawal of CSAPR NOX Ozone Season Group 3 allowances by the 
Administrator from a compliance account (e.g., in order to account for 
compliance with the CSAPR NOX Ozone Season Group 3 emissions 
limitation) or from an assurance account (e.g., in order to account for 
compliance with the assurance provisions under Sec. Sec.  97.1006 and 
97.1025).
    CSAPR NOX Ozone Season Group 3 allowances held or hold CSAPR NOX 
Ozone Season Group 3 allowances means the CSAPR NOX Ozone 
Season Group 3 allowances treated as included in an Allowance 
Management System account as of a specified point in time because at 
that time they:
    (1) Have been recorded by the Administrator in the account or 
transferred into the account by a correctly submitted, but not yet 
recorded, CSAPR NOX Ozone Season Group 3 allowance transfer 
in accordance with this subpart; and
    (2) Have not been transferred out of the account by a correctly 
submitted, but not yet recorded, CSAPR NOX Ozone Season 
Group 3 allowance transfer in accordance with this subpart.
    CSAPR NOX Ozone Season Group 3 emissions limitation means, for a 
CSAPR NOX Ozone Season Group 3 source, the tonnage of 
NOX emissions authorized in a control period in a given year 
by the CSAPR NOX Ozone Season Group 3 allowances available 
for deduction for the source under Sec.  97.1024(a) for such control 
period.
    CSAPR NOX Ozone Season Group 3 source means a source that includes 
one or more CSAPR NOX Ozone Season Group 3 units.
    CSAPR NOX Ozone Season Group 3 Trading Program means a multi-state 
NOX air pollution control and emission reduction program 
established in accordance with this subpart and Sec.  52.38(b)(1), 
(b)(2)(v), and (b)(10) through (14) and (17) of this chapter (including 
such a program that is revised in a SIP revision approved by the 
Administrator under Sec.  52.38(b)(10) or (11) of this chapter or that 
is established in a SIP revision approved by the Administrator under 
Sec.  52.38(b)(12) of this chapter), as a means of mitigating 
interstate transport of ozone and NOX.
    CSAPR NOX Ozone Season Group 3 unit means a unit that is subject to 
the CSAPR NOX Ozone Season Group 3 Trading Program.
    CSAPR SO2 Group 1 Trading Program means a multi-state 
SO2 air pollution control and emission reduction program 
established in accordance with subpart CCCCC of this part and Sec.  
52.39(a), (b), (d) through (f), and (j) through (l) of this chapter 
(including such a program that is revised in a SIP revision approved by 
the Administrator under Sec.  52.39(d) or (e) of this chapter or that 
is established in a SIP revision approved by the Administrator under 
Sec.  52.39(f) of this chapter), as a means of mitigating interstate 
transport of fine particulates and SO2.
    Designated representative means, for a CSAPR NOX Ozone 
Season Group 3 source and each CSAPR NOX Ozone Season Group 
3 unit at the source, the natural person who is authorized by the 
owners and operators of the source and all such units at the source, in 
accordance with this subpart, to represent and legally bind each owner 
and operator in matters pertaining to the CSAPR NOX Ozone 
Season Group 3 Trading Program. If the CSAPR NOX Ozone 
Season Group 3 source is also subject to the Acid Rain Program, CSAPR 
NOX Annual Trading Program, or CSAPR SO2 Group 1 
Trading Program, then this natural person shall be the same natural 
person as the designated representative as defined in the respective 
program.
    Emissions means air pollutants exhausted from a unit or source into 
the atmosphere, as measured, recorded, and reported to the 
Administrator by the designated representative, and as modified by the 
Administrator:
    (1) In accordance with this subpart; and
    (2) With regard to a period before the unit or source is required 
to measure, record, and report such air pollutants in accordance with 
this subpart, in accordance with part 75 of this chapter.
    Excess emissions means any ton of emissions from the CSAPR 
NOX Ozone Season Group 3 units at a CSAPR NOX 
Ozone Season Group 3 source during a control period in a given year 
that exceeds the CSAPR NOX Ozone Season Group 3 emissions 
limitation for the source for such control period.
    Fossil fuel means--
    (1) Natural gas, petroleum, coal, or any form of solid, liquid, or 
gaseous fuel derived from such material; or
    (2) For purposes of applying the limitation on ``average annual 
fuel consumption of fossil fuel'' in Sec.  97.1004(b)(2)(i)(B) and 
(b)(2)(ii), natural gas, petroleum, coal, or any form of solid, liquid, 
or gaseous fuel derived from such material for the purpose of creating 
useful heat.
    Fossil-fuel-fired means, with regard to a unit, combusting any 
amount of fossil fuel in 2005 or any calendar year thereafter.
    General account means an Allowance Management System account, 
established under this subpart, that is not a compliance account or an 
assurance account.
    Generator means a device that produces electricity.
    Heat input means, for a unit for a specified period of unit 
operating time, the product (in mmBtu) of the gross calorific value of 
the fuel (in mmBtu/lb) fed into the unit multiplied by the fuel

[[Page 23213]]

feed rate (in lb of fuel/time) and unit operating time, as measured, 
recorded, and reported to the Administrator by the designated 
representative and as modified by the Administrator in accordance with 
this subpart and excluding the heat derived from preheated combustion 
air, recirculated flue gases, or exhaust.
    Heat input rate means, for a unit, the quotient (in mmBtu/hr) of 
the amount of heat input for a specified period of unit operating time 
(in mmBtu) divided by unit operating time (in hr) or, for a unit and a 
specific fuel, the amount of heat input attributed to the fuel (in 
mmBtu) divided by the unit operating time (in hr) during which the unit 
combusts the fuel.
    Indian country means ``Indian country'' as defined in 18 U.S.C. 
1151.
    Life-of-the-unit, firm power contractual arrangement means a unit 
participation power sales agreement under which a utility or industrial 
customer reserves, or is entitled to receive, a specified amount or 
percentage of nameplate capacity and associated energy generated by any 
specified unit and pays its proportional amount of such unit's total 
costs, pursuant to a contract:
    (1) For the life of the unit;
    (2) For a cumulative term of no less than 30 years, including 
contracts that permit an election for early termination; or
    (3) For a period no less than 25 years or 70 percent of the 
economic useful life of the unit determined as of the time the unit is 
built, with option rights to purchase or release some portion of the 
nameplate capacity and associated energy generated by the unit at the 
end of the period.
    Maximum design heat input rate means, for a unit, the maximum 
amount of fuel per hour (in Btu/hr) that the unit is capable of 
combusting on a steady state basis as of the initial installation of 
the unit as specified by the manufacturer of the unit.
    Monitoring system means any monitoring system that meets the 
requirements of this subpart, including a continuous emission 
monitoring system, an alternative monitoring system, or an excepted 
monitoring system under part 75 of this chapter.
    Nameplate capacity means, starting from the initial installation of 
a generator, the maximum electrical generating output (in MWe, rounded 
to the nearest tenth) that the generator is capable of producing on a 
steady state basis and during continuous operation (when not restricted 
by seasonal or other deratings) as of such installation as specified by 
the manufacturer of the generator or, starting from the completion of 
any subsequent physical change in the generator resulting in an 
increase in the maximum electrical generating output that the generator 
is capable of producing on a steady state basis and during continuous 
operation (when not restricted by seasonal or other deratings), such 
increased maximum amount (in MWe, rounded to the nearest tenth) as of 
such completion as specified by the person conducting the physical 
change.
    Natural gas means ``natural gas'' as defined in Sec.  72.2 of this 
chapter.
    Newly affected CSAPR NOX Ozone Season Group 3 unit means a unit 
that was not a CSAPR NOX Ozone Season Group 3 unit when it 
began operating but that thereafter becomes a CSAPR NOX 
Ozone Season Group 3 unit.
    Nitrogen oxides means all oxides of nitrogen except nitrous oxide 
(N2O), reported on an equivalent molecular weight basis as 
nitrogen dioxide (NO2).
    Operate or operation means, with regard to a unit, to combust fuel.
    Operator means, for a CSAPR NOX Ozone Season Group 3 
source or a CSAPR NOX Ozone Season Group 3 unit at a source 
respectively, any person who operates, controls, or supervises a CSAPR 
NOX Ozone Season Group 3 unit at the source or the CSAPR 
NOX Ozone Season Group 3 unit and shall include, but not be 
limited to, any holding company, utility system, or plant manager of 
such source or unit.
    Owner means, for a CSAPR NOX Ozone Season Group 3 source 
or a CSAPR NOX Ozone Season Group 3 unit at a source 
respectively, any of the following persons:
    (1) Any holder of any portion of the legal or equitable title in a 
CSAPR NOX Ozone Season Group 3 unit at the source or the 
CSAPR NOX Ozone Season Group 3 unit;
    (2) Any holder of a leasehold interest in a CSAPR NOX 
Ozone Season Group 3 unit at the source or the CSAPR NOX 
Ozone Season Group 3 unit, provided that, unless expressly provided for 
in a leasehold agreement, ``owner'' shall not include a passive lessor, 
or a person who has an equitable interest through such lessor, whose 
rental payments are not based (either directly or indirectly) on the 
revenues or income from such CSAPR NOX Ozone Season Group 3 
unit; and
    (3) Any purchaser of power from a CSAPR NOX Ozone Season 
Group 3 unit at the source or the CSAPR NOX Ozone Season 
Group 3 unit under a life-of-the-unit, firm power contractual 
arrangement.
    Permanently retired means, with regard to a unit, a unit that is 
unavailable for service and that the unit's owners and operators do not 
expect to return to service in the future.
    Permitting authority means ``permitting authority'' as defined in 
Sec. Sec.  70.2 and 71.2 of this chapter.
    Potential electrical output capacity means, for a unit (in MWh/yr), 
33 percent of the unit's maximum design heat input rate (in Btu/hr), 
divided by 3,413 Btu/kWh, divided by 1,000 kWh/MWh, and multiplied by 
8,760 hr/yr.
    Receive or receipt of means, when referring to the Administrator, 
to come into possession of a document, information, or correspondence 
(whether sent in hard copy or by authorized electronic transmission), 
as indicated in an official log, or by a notation made on the document, 
information, or correspondence, by the Administrator in the regular 
course of business.
    Recordation, record, or recorded means, with regard to CSAPR 
NOX Ozone Season Group 3 allowances, the moving of CSAPR 
NOX Ozone Season Group 3 allowances by the Administrator 
into, out of, or between Allowance Management System accounts, for 
purposes of allocation, auction, transfer, or deduction.
    Reference method means any direct test method of sampling and 
analyzing for an air pollutant as specified in Sec.  75.22 of this 
chapter.
    Replacement, replace, or replaced means, with regard to a unit, the 
demolishing of a unit, or the permanent retirement and permanent 
disabling of a unit, and the construction of another unit (the 
replacement unit) to be used instead of the demolished or retired unit 
(the replaced unit).
    Sequential use of energy means:
    (1) The use of reject heat from electricity production in a useful 
thermal energy application or process; or
    (2) The use of reject heat from a useful thermal energy application 
or process in electricity production.
    Serial number means, for a CSAPR NOX Ozone Season Group 
3 allowance, the unique identification number assigned to each CSAPR 
NOX Ozone Season Group 3 allowance by the Administrator.
    Solid waste incineration unit means a stationary, fossil-fuel-fired 
boiler or stationary, fossil-fuel-fired combustion turbine that is a 
``solid waste incineration unit'' as defined in section 129(g)(1) of 
the Clean Air Act.
    Source means all buildings, structures, or installations located in 
one or more contiguous or adjacent properties under common control of 
the same person or persons. This definition

[[Page 23214]]

does not change or otherwise affect the definition of ``major source'', 
``stationary source'', or ``source'' as set forth and implemented in a 
title V operating permit program or any other program under the Clean 
Air Act.
    State means one of the States that is subject to the CSAPR 
NOX Ozone Season Group 3 Trading Program pursuant to Sec.  
52.38(b)(1), (b)(2)(v), and (b)(10) through (14) and (17) of this 
chapter.
    Submit or serve means to send or transmit a document, information, 
or correspondence to the person specified in accordance with the 
applicable regulation:
    (1) In person;
    (2) By United States Postal Service; or
    (3) By other means of dispatch or transmission and delivery;
    (4) Provided that compliance with any ``submission'' or ``service'' 
deadline shall be determined by the date of dispatch, transmission, or 
mailing and not the date of receipt.
    Topping-cycle unit means a unit in which the energy input to the 
unit is first used to produce useful power, including electricity, 
where at least some of the reject heat from the electricity production 
is then used to provide useful thermal energy.
    Total energy input means, for a unit, total energy of all forms 
supplied to the unit, excluding energy produced by the unit. Each form 
of energy supplied shall be measured by the lower heating value of that 
form of energy calculated as follows:

LHV = HHV-10.55(W + 9H)

Where:

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

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


Sec.  97.1003  Measurements, abbreviations, and acronyms.

    Measurements, abbreviations, and acronyms used in this subpart are 
defined as follows:
Btu--British thermal unit
CO2--carbon dioxide
CSAPR--Cross-State Air Pollution Rule
H2O--water
hr--hour
kWh--kilowatt-hour
lb--pound
mmBtu--million Btu
MWe--megawatt electrical
MWh--megawatt-hour
NOX--nitrogen oxides
O2--oxygen
ppm--parts per million
scfh--standard cubic feet per hour
SIP--State implementation plan
SO2--sulfur dioxide
TR--Transport Rule
yr--year


Sec.  97.1004  Applicability.

    (a) Except as provided in paragraph (b) of this section:
    (1) The following units in a State (and Indian country within the 
borders of such State) shall be CSAPR NOX Ozone Season Group 
3 units, and any source that includes one or more such units shall be a 
CSAPR NOX Ozone Season Group 3 source, subject to the 
requirements of this subpart: Any stationary, fossil-fuel-fired boiler 
or stationary, fossil-fuel-fired combustion turbine serving at any 
time, on or after January 1, 2005, a generator with nameplate capacity 
of more than 25 MWe producing electricity for sale.
    (2) If a stationary boiler or stationary combustion turbine that, 
under paragraph (a)(1) of this section, is not a CSAPR NOX 
Ozone Season Group 3 unit begins to combust fossil fuel or to serve a 
generator with nameplate capacity of more than 25 MWe producing 
electricity for sale, the unit shall become a CSAPR NOX 
Ozone Season Group 3 unit as provided in paragraph (a)(1) of this 
section on the first date on which it both combusts fossil fuel and 
serves such generator.
    (b) Any unit in a State (and Indian country within the borders of 
such State) that otherwise is a CSAPR NOX Ozone Season Group 
3 unit under paragraph (a) of this section and that meets the 
requirements set forth in paragraph (b)(1)(i) or (b)(2)(i) of this 
section shall not be a CSAPR NOX Ozone Season Group 3 unit:
    (1)(i) Any unit:
    (A) Qualifying as a cogeneration unit throughout the later of 2005 
or the 12-month period starting on the date the unit first produces 
electricity and continuing to qualify as a cogeneration unit throughout 
each calendar year ending after the later of 2005 or such 12-month 
period; and
    (B) Not supplying in 2005 or any calendar year thereafter more than 
one-third of the unit's potential electrical output capacity or 219,000 
MWh, whichever is greater, to any utility power distribution system for 
sale.
    (ii) If, after qualifying under paragraph (b)(1)(i) of this section 
as not being a CSAPR NOX Ozone Season Group 3 unit, a unit 
subsequently no longer meets all the requirements of paragraph 
(b)(1)(i) of this section, the unit shall become a CSAPR NOX 
Ozone Season Group 3 unit starting on the earlier of January 1 after 
the first calendar year during which the unit first no longer qualifies 
as a cogeneration unit or January 1 after the first calendar year 
during which the unit no longer meets the requirements of paragraph 
(b)(1)(i)(B) of this section. The unit shall thereafter continue to be 
a CSAPR NOX Ozone Season Group 3 unit.
    (2)(i) Any unit:
    (A) Qualifying as a solid waste incineration unit throughout the 
later of 2005 or the 12-month period starting on the date the unit 
first produces electricity and continuing to qualify as a solid waste 
incineration unit throughout each calendar year ending

[[Page 23215]]

after the later of 2005 or such 12-month period; and
    (B) With an average annual fuel consumption of fossil fuel for the 
first 3 consecutive calendar years of operation starting no earlier 
than 2005 of less than 20 percent (on a Btu basis) and an average 
annual fuel consumption of fossil fuel for any 3 consecutive calendar 
years thereafter of less than 20 percent (on a Btu basis).
    (ii) If, after qualifying under paragraph (b)(2)(i) of this section 
as not being a CSAPR NOX Ozone Season Group 3 unit, a unit 
subsequently no longer meets all the requirements of paragraph 
(b)(2)(i) of this section, the unit shall become a CSAPR NOX 
Ozone Season Group 3 unit starting on the earlier of January 1 after 
the first calendar year during which the unit first no longer qualifies 
as a solid waste incineration unit or January 1 after the first 3 
consecutive calendar years after 2005 for which the unit has an average 
annual fuel consumption of fossil fuel of 20 percent or more. The unit 
shall thereafter continue to be a CSAPR NOX Ozone Season 
Group 3 unit.
    (c) A certifying official of an owner or operator of any unit or 
other equipment may submit a petition (including any supporting 
documents) to the Administrator at any time for a determination 
concerning the applicability, under paragraphs (a) and (b) of this 
section or a SIP revision approved under Sec.  52.38(b)(11) or (12) of 
this chapter, of the CSAPR NOX Ozone Season Group 3 Trading 
Program to the unit or other equipment.
    (1) Petition content. The petition shall be in writing and include 
the identification of the unit or other equipment and the relevant 
facts about the unit or other equipment. The petition and any other 
documents provided to the Administrator in connection with the petition 
shall include the following certification statement, signed by the 
certifying official: ``I am authorized to make this submission on 
behalf of the owners and operators of the unit or other equipment for 
which the submission is made. I certify under penalty of law that I 
have personally examined, and am familiar with, the statements and 
information submitted in this document and all its attachments. Based 
on my inquiry of those individuals with primary responsibility for 
obtaining the information, I certify that the statements and 
information are to the best of my knowledge and belief true, accurate, 
and complete. I am aware that there are significant penalties for 
submitting false statements and information or omitting required 
statements and information, including the possibility of fine or 
imprisonment.''
    (2) Response. The Administrator will issue a written response to 
the petition and may request supplemental information determined by the 
Administrator to be relevant to such petition. The Administrator's 
determination concerning the applicability, under paragraphs (a) and 
(b) of this section, of the CSAPR NOX Ozone Season Group 3 
Trading Program to the unit or other equipment shall be binding on any 
State or permitting authority unless the Administrator determines that 
the petition or other documents or information provided in connection 
with the petition contained significant, relevant errors or omissions.


Sec.  97.1005  Retired unit exemption.

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


Sec.  97.1006  Standard requirements.

    (a) Designated representative requirements. The owners and 
operators shall comply with the requirement to have a designated 
representative, and may have an alternate designated representative, in 
accordance with Sec. Sec.  97.1013 through 97.1018.
    (b) Emissions monitoring, reporting, and recordkeeping 
requirements. (1) The owners and operators, and the designated 
representative, of each CSAPR NOX Ozone Season Group 3 
source and each CSAPR NOX Ozone Season Group 3 unit at the 
source shall comply with the monitoring, reporting, and recordkeeping 
requirements of Sec. Sec.  97.1030 through 97.1035.
    (2) The emissions data determined in accordance with Sec. Sec.  
97.1030 through 97.1035 shall be used to calculate allocations of CSAPR 
NOX Ozone Season Group 3 allowances under Sec. Sec.  
97.1011(a)(2) and (b) and 97.1012 and to determine compliance with the 
CSAPR NOX Ozone Season Group 3 emissions limitation and 
assurance provisions under paragraph (c) of this section, provided 
that, for each monitoring location from which mass emissions are 
reported, the mass emissions amount used in calculating such 
allocations and determining such compliance shall be the mass emissions 
amount for the monitoring location determined in accordance with 
Sec. Sec.  97.1030 through 97.1035 and rounded to the nearest ton, with 
any fraction of a ton less than 0.50 being deemed to be zero.
    (c) NOX emissions requirements--(1) CSAPR NOX Ozone Season Group 3 
emissions limitation. (i) As of the allowance transfer deadline for a 
control period in a given year, the owners and operators of each CSAPR 
NOX Ozone Season Group 3 source and each CSAPR 
NOX Ozone Season Group 3 unit at the source shall hold, in 
the source's compliance account, CSAPR NOX Ozone Season 
Group 3 allowances available for deduction for such control period 
under Sec.  97.1024(a) in an amount not less than the tons of total 
NOX emissions for such control period from all CSAPR 
NOX Ozone Season Group 3 units at the source.

[[Page 23216]]

    (ii) If total NOX emissions during a control period in a 
given year from the CSAPR NOX Ozone Season Group 3 units at 
a CSAPR NOX Ozone Season Group 3 source are in excess of the 
CSAPR NOX Ozone Season Group 3 emissions limitation set 
forth in paragraph (c)(1)(i) of this section, then:
    (A) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 3 unit at the source shall hold the 
CSAPR NOX Ozone Season Group 3 allowances required for 
deduction under Sec.  97.1024(d); and
    (B) The owners and operators of the source and each CSAPR 
NOX Ozone Season Group 3 unit at the source shall pay any 
fine, penalty, or assessment or comply with any other remedy imposed, 
for the same violations, under the Clean Air Act, and each ton of such 
excess emissions and each day of such control period shall constitute a 
separate violation of this subpart and the Clean Air Act.
    (2) CSAPR NOX Ozone Season Group 3 assurance provisions. (i) If 
total NOX emissions during a control period in a given year 
from all base CSAPR NOX Ozone Season Group 3 units at base 
CSAPR NOX Ozone Season Group 3 sources in a State (and 
Indian country within the borders of such State) exceed the State 
assurance level, then the owners and operators of such sources and 
units in each group of one or more sources and units having a common 
designated representative for such control period, where the common 
designated representative's share of such NOX emissions 
during such control period exceeds the common designated 
representative's assurance level for the State and such control period, 
shall hold (in the assurance account established for the owners and 
operators of such group) CSAPR NOX Ozone Season Group 3 
allowances available for deduction for such control period under Sec.  
97.1025(a) in an amount equal to two times the product (rounded to the 
nearest whole number), as determined by the Administrator in accordance 
with Sec.  97.1025(b), of multiplying--
    (A) The quotient of the amount by which the common designated 
representative's share of such NOX emissions exceeds the 
common designated representative's assurance level divided by the sum 
of the amounts, determined for all common designated representatives 
for such sources and units in the State (and Indian country within the 
borders of such State) for such control period, by which each common 
designated representative's share of such NOX emissions 
exceeds the respective common designated representative's assurance 
level; and
    (B) The amount by which total NOX emissions from all 
base CSAPR NOX Ozone Season Group 3 units at base CSAPR 
NOX Ozone Season Group 3 sources in the State (and Indian 
country within the borders of such State) for such control period 
exceed the State assurance level.
    (ii) The owners and operators shall hold the CSAPR NOX 
Ozone Season Group 3 allowances required under paragraph (c)(2)(i) of 
this section, as of midnight of November 1 (if it is a business day), 
or midnight of the first business day thereafter (if November 1 is not 
a business day), immediately after the year of such control period.
    (iii) Total NOX emissions from all base CSAPR 
NOX Ozone Season Group 3 units at base CSAPR NOX 
Ozone Season Group 3 sources in a State (and Indian country within the 
borders of such State) during a control period in a given year exceed 
the State assurance level if such total NOX emissions exceed 
the sum, for such control period, of the State NOX Ozone 
Season Group 3 trading budget under Sec.  97.1010(a), the State's 
variability limit under Sec.  97.1010(b), and, for the control period 
in 2021 only, the product (rounded to the nearest allowance) of 1.21 
multiplied by the supplemental amount of CSAPR NOX Ozone 
Season Group 3 allowances determined for the State under Sec.  
97.1010(d).
    (iv) It shall not be a violation of this subpart or of the Clean 
Air Act if total NOX emissions from all base CSAPR 
NOX Ozone Season Group 3 units at base CSAPR NOX 
Ozone Season Group 3 sources in a State (and Indian country within the 
borders of such State) during a control period exceed the State 
assurance level or if a common designated representative's share of 
total NOX emissions from the base CSAPR NOX Ozone 
Season Group 3 units at base CSAPR NOX Ozone Season Group 3 
sources in a State (and Indian country within the borders of such 
State) during a control period exceeds the common designated 
representative's assurance level.
    (v) To the extent the owners and operators fail to hold CSAPR 
NOX Ozone Season Group 3 allowances for a control period in 
a given year in accordance with paragraphs (c)(2)(i) through (iii) of 
this section:
    (A) The owners and operators shall pay any fine, penalty, or 
assessment or comply with any other remedy imposed under the Clean Air 
Act; and
    (B) Each CSAPR NOX Ozone Season Group 3 allowance that 
the owners and operators fail to hold for such control period in 
accordance with paragraphs (c)(2)(i) through (iii) of this section and 
each day of such control period shall constitute a separate violation 
of this subpart and the Clean Air Act.
    (3) Compliance periods. (i) A CSAPR NOX Ozone Season 
Group 3 unit shall be subject to the requirements under paragraph 
(c)(1) of this section for the control period starting on the later of 
May 1, 2021 or the deadline for meeting the unit's monitor 
certification requirements under Sec.  97.1030(b) and for each control 
period thereafter.
    (ii) A base CSAPR NOX Ozone Season Group 3 unit shall be 
subject to the requirements under paragraph (c)(2) of this section for 
the control period starting on the later of May 1, 2021 or the deadline 
for meeting the unit's monitor certification requirements under Sec.  
97.1030(b) and for each control period thereafter.
    (4) Vintage of CSAPR NOX Ozone Season Group 3 allowances held for 
compliance. (i) A CSAPR NOX Ozone Season Group 3 allowance 
held for compliance with the requirements under paragraph (c)(1)(i) of 
this section for a control period in a given year must be a CSAPR 
NOX Ozone Season Group 3 allowance that was allocated or 
auctioned for such control period or a control period in a prior year.
    (ii) A CSAPR NOX Ozone Season Group 3 allowance held for 
compliance with the requirements under paragraphs (c)(1)(ii)(A) and 
(c)(2)(i) through (iii) of this section for a control period in a given 
year must be a CSAPR NOX Ozone Season Group 3 allowance that 
was allocated or auctioned for a control period in a prior year or the 
control period in the given year or in the immediately following year.
    (5) Allowance Management System requirements. Each CSAPR 
NOX Ozone Season Group 3 allowance shall be held in, 
deducted from, or transferred into, out of, or between Allowance 
Management System accounts in accordance with this subpart.
    (6) Limited authorization. A CSAPR NOX Ozone Season 
Group 3 allowance is a limited authorization to emit one ton of 
NOX during the control period in one year. Such 
authorization is limited in its use and duration as follows:
    (i) Such authorization shall only be used in accordance with the 
CSAPR NOX Ozone Season Group 3 Trading Program; and
    (ii) Notwithstanding any other provision of this subpart, the 
Administrator has the authority to terminate or limit the use and 
duration of such authorization to the extent the Administrator 
determines is necessary

[[Page 23217]]

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


Sec.  97.1007  Computation of time.

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


Sec.  97.1008  Administrative appeal procedures.

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


Sec.  97.1009  [Reserved]


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

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

                Table 1 to Paragraph (a)--State NOX Ozone Season Group 3 Trading Budgets by Year
                                                     [Tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                     2024 and
                      State                            2021            2022            2023         thereafter
----------------------------------------------------------------------------------------------------------------
Illinois........................................           9,102           9,102           8,179           8,059
Indiana.........................................          13,051          12,582          12,553           9,564
Kentucky........................................          15,300          14,051          14,051          14,051
Louisiana.......................................          14,818          14,818          14,818          14,818
Maryland........................................           1,499           1,266           1,266           1,348
Michigan........................................          12,727          12,290           9,975           9,786
New Jersey......................................           1,253           1,253           1,253           1,253
New York........................................           3,416           3,416           3,421           3,403

[[Page 23218]]

 
Ohio............................................           9,690           9,773           9,773           9,773
Pennsylvania....................................           8,379           8,373           8,373           8,373
Virginia........................................           4,516           3,897           3,980           3,663
West Virginia...................................          13,334          12,884          12,884          12,884
----------------------------------------------------------------------------------------------------------------


                              Table 2 to Paragraph (a)--New Unit Set-Asides by Year
                                                     [Tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                     2024 and
                      State                            2021            2022            2023         thereafter
----------------------------------------------------------------------------------------------------------------
Illinois........................................             265             265             248             244
Indiana.........................................             262             254             249             190
Kentucky........................................             309             283             283             283
Louisiana.......................................             430             430             430             430
Maryland........................................             135             115             115             122
Michigan........................................             500             482             388             382
New Jersey......................................              27              27              27              27
New York........................................             168             168             168             167
Ohio............................................             291             290             290             290
Pennsylvania....................................             335             339             339             339
Virginia........................................             185             161             166             150
West Virginia...................................             266             261             261             261
----------------------------------------------------------------------------------------------------------------


                      Table 3 to Paragraph (a)--Indian Country New Unit Set-Asides by Year
                                                     [Tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                     2024 and
                      State                            2021            2022            2023         thereafter
----------------------------------------------------------------------------------------------------------------
Illinois........................................
Indiana.........................................
Kentucky........................................
Louisiana.......................................              15              15              15              15
Maryland........................................
Michigan........................................              13              12              10              10
New Jersey......................................
New York........................................               3               3               3               3
Ohio............................................
Pennsylvania....................................
Virginia........................................
West Virginia...................................
----------------------------------------------------------------------------------------------------------------

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

                              Table 4 to Paragraph (b)--Variability Limits by Year
                                                     [Tons]
----------------------------------------------------------------------------------------------------------------
                                                                                                     2024 and
                      State                            2021            2022            2023         thereafter
----------------------------------------------------------------------------------------------------------------
Illinois........................................           1,911           1,911           1,718           1,692
Indiana.........................................           2,741           2,642           2,636           2,008
Kentucky........................................           3,213           2,951           2,951           2,951
Louisiana.......................................           3,112           3,112           3,112           3,112
Maryland........................................             315             266             266             283
Michigan........................................           2,673           2,581           2,095           2,055
New Jersey......................................             263             263             263             263
New York........................................             717             717             718             715
Ohio............................................           2,035           2,052           2,052           2,052
Pennsylvania....................................           1,760           1,758           1,758           1,758
Virginia........................................             948             818             836             769
West Virginia...................................           2,800           2,706           2,706           2,706
----------------------------------------------------------------------------------------------------------------


[[Page 23219]]

    (c) Each State NOX Ozone Season Group 3 trading budget 
in this section includes any tons in a new unit set-aside or Indian 
country new unit set-aside but does not include any tons in a 
variability limit.
    (d) For the control period in 2021 only, the Administrator will 
determine for each State a supplemental amount of CSAPR NOX 
Ozone Season Group 3 allowances computed as the product (rounded to the 
nearest allowance) of the remainder of the State NOX Ozone 
Season Group 2 trading budget for the control period in 2020 under 
Sec.  97.810(a) minus the State NOX Ozone Season Group 3 
trading budget for the control period in 2021 under paragraph (a) of 
this section multiplied by a fraction whose numerator is the number of 
days from May 1, 2021 through June 28, 2021, inclusive, and whose 
denominator is 153.


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

    (a) Existing units. (1) CSAPR NOX Ozone Season Group 3 
allowances are allocated, for the control periods in 2021 and each year 
thereafter, as provided in a notice of data availability issued by the 
Administrator. Providing an allocation to a unit in such notice does 
not constitute a determination that the unit is a CSAPR NOX 
Ozone Season Group 3 unit, and not providing an allocation to a unit in 
such notice does not constitute a determination that the unit is not a 
CSAPR NOX Ozone Season Group 3 unit. For the control period 
in 2021, a unit's allocation under this paragraph will include the 
unit's share (if any) of the supplemental amount of CSAPR 
NOX Ozone Season Group 3 allowances determined for the State 
in which the unit is located under Sec.  97.1010(d).
    (2) Notwithstanding paragraph (a)(1) of this section, if a unit 
provided an allocation in the notice of data availability issued under 
paragraph (a)(1) of this section does not operate, starting after 2020, 
during the control period in two consecutive years, such unit will not 
be allocated the CSAPR NOX Ozone Season Group 3 allowances 
provided in such notice for the unit for the control periods in the 
fifth year after the first such year and in each year after that fifth 
year. All CSAPR NOX Ozone Season Group 3 allowances that 
would otherwise have been allocated to such unit will be allocated to 
the new unit set-aside for the State where such unit is located and for 
the respective years involved. If such unit resumes operation, the 
Administrator will allocate CSAPR NOX Ozone Season Group 3 
allowances to the unit in accordance with paragraph (b) of this 
section.
    (b) New units--(1) New unit set-asides. (i) By March 1, 2022 and 
March 1 of each year thereafter, the Administrator will calculate the 
CSAPR NOX Ozone Season Group 3 allowance allocation to each 
CSAPR NOX Ozone Season Group 3 unit in a State, in 
accordance with Sec.  97.1012(a)(2) through (7), (10), and (12) and 
Sec. Sec.  97.1006(b)(2) and 97.1030 through 97.1035, for the control 
period in the year before the year of the applicable calculation 
deadline under this paragraph and will promulgate a notice of data 
availability of the results of the calculations.
    (ii) For each notice of data availability required in paragraph 
(b)(1)(i) of this section, the Administrator will provide an 
opportunity for submission of objections to the calculations referenced 
in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(1)(i) of this 
section and shall be limited to addressing whether the calculations 
(including the identification of the CSAPR NOX Ozone Season 
Group 3 units) are in accordance with the provisions referenced in 
paragraph (b)(1)(i) of this section.
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(1)(i) of this section. By May 1 immediately 
after the promulgation of each notice of data availability required in 
paragraph (b)(1)(i) of this section, the Administrator will promulgate 
a notice of data availability of the results of the calculations 
incorporating any adjustments that the Administrator determines to be 
necessary and the reasons for accepting or rejecting any objections 
submitted in accordance with paragraph (b)(1)(ii)(A) of this section.
    (iii) [Reserved]
    (iv) [Reserved]
    (v) To the extent any CSAPR NOX Ozone Season Group 3 
allowances are added to the new unit set-aside after promulgation of 
each notice of data availability required in paragraph (b)(1)(ii) of 
this section, the Administrator will promulgate additional notices of 
data availability, as deemed appropriate, of the allocation of such 
CSAPR NOX Ozone Season Group 3 allowances in accordance with 
Sec.  97.1012(a)(10).
    (2) Indian country new unit set-asides. (i) By March 1, 2022 and 
March 1 of each year thereafter, the Administrator will calculate the 
CSAPR NOX Ozone Season Group 3 allowance allocation to each 
CSAPR NOX Ozone Season Group 3 unit in Indian country within 
the borders of a State, in accordance with Sec.  97.1012(b)(2) through 
(7), (10), and (12) and Sec. Sec.  97.1006(b)(2) and 97.1030 through 
97.1035, for the control period in the year before the year of the 
applicable calculation deadline under this paragraph and will 
promulgate a notice of data availability of the results of the 
calculations.
    (ii) For each notice of data availability required in paragraph 
(b)(2)(i) of this section, the Administrator will provide an 
opportunity for submission of objections to the calculations referenced 
in such notice.
    (A) Objections shall be submitted by the deadline specified in each 
notice of data availability required in paragraph (b)(2)(i) of this 
section and shall be limited to addressing whether the calculations 
(including the identification of the CSAPR NOX Ozone Season 
Group 3 units) are in accordance with the provisions referenced in 
paragraph (b)(2)(i) of this section.
    (B) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(i) of this section. By May 1 immediately 
after the promulgation of each notice of data availability required in 
paragraph (b)(2)(i) of this section, the Administrator will promulgate 
a notice of data availability of the results of the calculations 
incorporating any adjustments that the Administrator determines to be 
necessary and the reasons for accepting or rejecting any objections 
submitted in accordance with paragraph (b)(2)(ii)(A) of this section.
    (iii) [Reserved]
    (iv) [Reserved]
    (v) To the extent any CSAPR NOX Ozone Season Group 3 
allowances are added to the Indian country new unit set-aside after 
promulgation of each notice of data availability required in paragraph 
(b)(2)(ii) of this section, the Administrator will promulgate 
additional notices of data availability, as deemed appropriate, of the 
allocation of such CSAPR NOX Ozone Season Group 3 allowances 
in accordance with Sec.  97.1012(b)(10).
    (c) Units incorrectly allocated CSAPR NOX Ozone Season Group 3 
allowances. (1) For each control period in 2021 and thereafter, if the 
Administrator determines that CSAPR NOX Ozone Season Group 3 
allowances were allocated under paragraph (a) of this section, or under 
a provision of a SIP revision approved under Sec.  52.38(b)(10), (11), 
or (12) of this chapter, where such control period and the recipient 
are covered by the provisions of paragraph

[[Page 23220]]

(c)(1)(i) of this section or were allocated under Sec.  97.1012(a)(2) 
through (7) and (12) and (b)(2) through (7) and (12), or under a 
provision of a SIP revision approved under Sec.  52.38(b)(11) or (12) 
of this chapter, where such control period and the recipient are 
covered by the provisions of paragraph (c)(1)(ii) of this section, then 
the Administrator will notify the designated representative of the 
recipient and will act in accordance with the procedures set forth in 
paragraphs (c)(2) through (5) of this section:
    (i)(A) The recipient is not actually a CSAPR NOX Ozone 
Season Group 3 unit under Sec.  97.1004 as of May 1, 2021 and is 
allocated CSAPR NOX Ozone Season Group 3 allowances for such 
control period or, in the case of an allocation under a provision of a 
SIP revision approved under Sec.  52.38(b)(10), (11), or (12) of this 
chapter, the recipient is not actually a CSAPR NOX Ozone 
Season Group 3 unit as of May 1, 2021 and is allocated CSAPR 
NOX Ozone Season Group 3 allowances for such control period 
that the SIP revision provides should be allocated only to recipients 
that are CSAPR NOX Ozone Season Group 3 units as of May 1, 
2021; or
    (B) The recipient is not located as of May 1 of the control period 
in the State from whose NOX Ozone Season Group 3 trading 
budget the CSAPR NOX Ozone Season Group 3 allowances 
allocated under paragraph (a) of this section, or under a provision of 
a SIP revision approved under Sec.  52.38(b)(10), (11), or (12) of this 
chapter, were allocated for such control period.
    (ii) The recipient is not actually a CSAPR NOX Ozone 
Season Group 3 unit under Sec.  97.1004 as of May 1 of such control 
period and is allocated CSAPR NOX Ozone Season Group 3 
allowances for such control period or, in the case of an allocation 
under a provision of a SIP revision approved under Sec.  52.38(b)(11) 
or (12) of this chapter, the recipient is not actually a CSAPR 
NOX Ozone Season Group 3 unit as of May 1 of such control 
period and is allocated CSAPR NOX Ozone Season Group 3 
allowances for such control period that the SIP revision provides 
should be allocated only to recipients that are CSAPR NOX 
Ozone Season Group 3 units as of May 1 of such control period.
    (2) Except as provided in paragraph (c)(3) or (4) of this section, 
the Administrator will not record such CSAPR NOX Ozone 
Season Group 3 allowances under Sec.  97.1021.
    (3) If the Administrator already recorded such CSAPR NOX 
Ozone Season Group 3 allowances under Sec.  97.1021 and if the 
Administrator makes the determination under paragraph (c)(1) of this 
section before making deductions for the source that includes such 
recipient under Sec.  97.1024(b) for such control period, then the 
Administrator will deduct from the account in which such CSAPR 
NOX Ozone Season Group 3 allowances were recorded an amount 
of CSAPR NOX Ozone Season Group 3 allowances allocated for 
the same or a prior control period equal to the amount of such already 
recorded CSAPR NOX Ozone Season Group 3 allowances. The 
authorized account representative shall ensure that there are 
sufficient CSAPR NOX Ozone Season Group 3 allowances in such 
account for completion of the deduction.
    (4) If the Administrator already recorded such CSAPR NOX 
Ozone Season Group 3 allowances under Sec.  97.1021 and if the 
Administrator makes the determination under paragraph (c)(1) of this 
section after making deductions for the source that includes such 
recipient under Sec.  97.1024(b) for such control period, then the 
Administrator will not make any deduction to take account of such 
already recorded CSAPR NOX Ozone Season Group 3 allowances.
    (5)(i) With regard to the CSAPR NOX Ozone Season Group 3 
allowances that are not recorded, or that are deducted as an incorrect 
allocation, in accordance with paragraphs (c)(2) and (3) of this 
section for a recipient under paragraph (c)(1)(i) of this section, the 
Administrator will:
    (A) Transfer such CSAPR NOX Ozone Season Group 3 
allowances to the new unit set-aside for such control period (or a 
subsequent control period) for the State from whose NOX 
Ozone Season Group 3 trading budget the CSAPR NOX Ozone 
Season Group 3 allowances were allocated; or
    (B) If the State has a SIP revision approved under Sec.  
52.38(b)(11) or (12) of this chapter covering such control period, 
include such CSAPR NOX Ozone Season Group 3 allowances in 
the portion of the State NOX Ozone Season Group 3 trading 
budget that may be allocated for such control period (or a subsequent 
control period) in accordance with such SIP revision.
    (ii) With regard to the CSAPR NOX Ozone Season Group 3 
allowances that were not allocated from the Indian country new unit 
set-aside for such control period and that are not recorded, or that 
are deducted as an incorrect allocation, in accordance with paragraphs 
(c)(2) and (3) of this section for a recipient under paragraph 
(c)(1)(ii) of this section, the Administrator will:
    (A) Transfer such CSAPR NOX Ozone Season Group 3 
allowances to the new unit set-aside for such control period (or a 
subsequent control period); or
    (B) If the State has a SIP revision approved under Sec.  
52.38(b)(11) or (12) of this chapter covering such control period, 
include such CSAPR NOX Ozone Season Group 3 allowances in 
the portion of the State NOX Ozone Season Group 3 trading 
budget that may be allocated for such control period (or a subsequent 
control period) in accordance with such SIP revision.
    (iii) With regard to the CSAPR NOX Ozone Season Group 3 
allowances that were allocated from the Indian country new unit set-
aside for such control period and that are not recorded, or that are 
deducted as an incorrect allocation, in accordance with paragraphs 
(c)(2) and (3) of this section for a recipient under paragraph 
(c)(1)(ii) of this section, the Administrator will transfer such CSAPR 
NOX Ozone Season Group 3 allowances to the Indian country 
new unit set-aside for such control period (or a subsequent control 
period).


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

    (a) Allocations from new unit set-asides. For each control period 
in 2021 and thereafter and for the CSAPR NOX Ozone Season 
Group 3 units in each State, the Administrator will allocate CSAPR 
NOX Ozone Season Group 3 allowances to the CSAPR 
NOX Ozone Season Group 3 units as follows:
    (1) The CSAPR NOX Ozone Season Group 3 allowances will 
be allocated to the following CSAPR NOX Ozone Season Group 3 
units, except as provided in paragraph (a)(10) of this section:
    (i) CSAPR NOX Ozone Season Group 3 units that are not 
allocated an amount of CSAPR NOX Ozone Season Group 3 
allowances in the notice of data availability issued under Sec.  
97.1011(a)(1) and that have deadlines for certification of monitoring 
systems under Sec.  97.1030(b) not later than September 30 of the year 
of the control period;
    (ii) CSAPR NOX Ozone Season Group 3 units whose 
allocation of an amount of CSAPR NOX Ozone Season Group 3 
allowances for such control period in the notice of data availability 
issued under Sec.  97.1011(a)(1) is covered by Sec.  97.1011(c)(2) or 
(3);
    (iii) CSAPR NOX Ozone Season Group 3 units that are 
allocated an amount of CSAPR NOX Ozone Season Group 3 
allowances for such control period in the notice of data availability 
issued under Sec.  97.1011(a)(1), which allocation is terminated for 
such control period pursuant to Sec.  97.1011(a)(2), and that operate 
during such control period; or
    (iv) [Reserved]

[[Page 23221]]

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

[[Page 23222]]

(b)(1) of this section, an allocation of CSAPR NOX Ozone 
Season Group 3 allowances for the later of the following control 
periods and for each subsequent control period:
    (i) The control period in 2021; and
    (ii) The control period containing the deadline for certification 
of the CSAPR NOX Ozone Season Group 3 unit's monitoring 
systems under Sec.  97.1030(b).
    (4)(i) The allocation to each CSAPR NOX Ozone Season 
Group 3 unit described in paragraph (b)(1)(i) of this section and for 
each control period described in paragraph (b)(3) of this section will 
be an amount equal to the unit's total tons of NOX emissions 
during the control period.
    (ii) The Administrator will adjust the allocation amount in 
paragraph (b)(4)(i) of this section in accordance with paragraphs 
(b)(5) through (7) and (12) of this section.
    (5) The Administrator will calculate the sum of the allocation 
amounts of CSAPR NOX Ozone Season Group 3 allowances 
determined for all such CSAPR NOX Ozone Season Group 3 units 
under paragraph (b)(4)(i) of this section in Indian country within the 
borders of the State for such control period.
    (6) If the amount of CSAPR NOX Ozone Season Group 3 
allowances in the Indian country new unit set-aside for the State for 
such control period is greater than or equal to the sum under paragraph 
(b)(5) of this section, then the Administrator will allocate the amount 
of CSAPR NOX Ozone Season Group 3 allowances determined for 
each such CSAPR NOX Ozone Season Group 3 unit under 
paragraph (b)(4)(i) of this section.
    (7) If the amount of CSAPR NOX Ozone Season Group 3 
allowances in the Indian country new unit set-aside for the State for 
such control period is less than the sum under paragraph (b)(5) of this 
section, then the Administrator will allocate to each such CSAPR 
NOX Ozone Season Group 3 unit the amount of the CSAPR 
NOX Ozone Season Group 3 allowances determined under 
paragraph (b)(4)(i) of this section for the unit, multiplied by the 
amount of CSAPR NOX Ozone Season Group 3 allowances in the 
Indian country new unit set-aside for such control period, divided by 
the sum under paragraph (b)(5) of this section, and rounded to the 
nearest allowance.
    (8) [Reserved]
    (9) [Reserved]
    (10) If, after completion of the procedures under paragraphs (b)(2) 
through (7) and (12) of this section for a control period, any 
unallocated CSAPR NOX Ozone Season Group 3 allowances remain 
in the Indian country new unit set-aside for the State for such control 
period, the Administrator will:
    (i) Transfer such unallocated CSAPR NOX Ozone Season 
Group 3 allowances to the new unit set-aside for the State for such 
control period; or
    (ii) If the State has a SIP revision approved under Sec.  
52.38(b)(11) or (12) of this chapter covering such control period, 
include such unallocated CSAPR NOX Ozone Season Group 3 
allowances in the portion of the State NOX Ozone Season 
Group 3 trading budget that may be allocated for such control period in 
accordance with such SIP revision.
    (11) The Administrator will notify the public, through the 
promulgation of the notices of data availability described in Sec.  
97.1011(b)(2)(i), (ii), and (v), of the amount of CSAPR NOX 
Ozone Season Group 3 allowances allocated under paragraphs (b)(2) 
through (7), (10), and (12) of this section for such control period to 
each CSAPR NOX Ozone Season Group 3 unit eligible for such 
allocation.
    (12) Notwithstanding the requirements of paragraphs (b)(2) through 
(11) of this section, if the calculations of allocations from an Indian 
country new unit set-aside for a control period in a given year under 
paragraph (b)(7) of this section would otherwise result in total 
allocations from such Indian country new unit set-aside unequal to the 
total amount of such Indian country new unit set-aside, then the 
Administrator will adjust the results of such calculations as follows. 
The Administrator will list the CSAPR NOX Ozone Season Group 
3 units in descending order based on such units' allocation amounts 
under paragraph (b)(7) of this section and, in cases of equal 
allocation amounts, in alphabetical order of the relevant sources' 
names and numerical order of the relevant units' identification 
numbers, and will adjust each unit's allocation amount under such 
paragraph upward or downward by one CSAPR NOX Ozone Season 
Group 3 allowance (but not below zero) in the order in which the units 
are listed, and will repeat this adjustment process as necessary, until 
the total allocations from such Indian country new unit set-aside equal 
the total amount of such Indian country new unit set-aside.


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

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

[[Page 23223]]

issued to the alternate designated representative by the Administrator 
regarding the source or any such unit.
    (c) Except in this section, Sec.  97.1002, and Sec. Sec.  97.1014 
through 97.1018, whenever the term ``designated representative'' (as 
distinguished from the term ``common designated representative'') is 
used in this subpart, the term shall be construed to include the 
designated representative or any alternate designated representative.


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

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


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

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


Sec.  97.1016  Certificate of representation.

    (a) A complete certificate of representation for a designated 
representative or an alternate designated representative shall include 
the following elements in a format prescribed by the Administrator:
    (1) Identification of the CSAPR NOX Ozone Season Group 3 
source, and each CSAPR NOX Ozone Season Group 3 unit at the 
source, for which the certificate of representation is submitted, 
including source name, source category and NAICS code (or, in the 
absence of a NAICS code, an equivalent code), State, plant code, 
county, latitude and longitude, unit identification number and type, 
identification number and nameplate capacity (in MWe, rounded to the 
nearest tenth) of each generator served by each such unit, actual or 
projected date of commencement of commercial operation, and a statement 
of whether such source is located in Indian country. If a projected 
date of commencement of commercial operation is provided, the actual 
date of commencement of commercial operation shall be provided when 
such information becomes available;
    (2) The name, address, email address (if any), telephone number, 
and facsimile transmission number (if any) of the designated 
representative and any alternate designated representative;
    (3) A list of the owners and operators of the CSAPR NOX 
Ozone Season Group

[[Page 23224]]

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


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

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


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

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

[[Page 23225]]

appropriate. The superseding notice of delegation may replace any 
previously identified agent, add a new agent, or eliminate entirely any 
delegation of authority.
    (e) Any electronic submission covered by the certification in 
paragraph (c)(4)(i) of this section and made in accordance with a 
notice of delegation effective under paragraph (d) of this section 
shall be deemed to be an electronic submission by the designated 
representative or alternate designated representative submitting such 
notice of delegation.
    (f) A notice of delegation submitted under paragraph (c) of this 
section, Sec.  97.518(c), or Sec.  97.818(c) that complies with the 
provisions of paragraph (c) of this section except that it contains the 
terms ``40 CFR 97.518(d)'' and ``40 CFR 97.518'' or the terms ``40 CFR 
97.818(d)'' and ``40 CFR 97.818'' in place of the terms ``40 CFR 
97.1018(d)'' and ``40 CFR 97.1018'', respectively, in the required 
certification statements will be considered a valid notice of 
delegation submitted under paragraph (c) of this section, and the 
certification statements included in such notice of delegation will be 
interpreted for purposes of this subpart as if the terms ``40 CFR 
97.1018(d)'' and ``40 CFR 97.1018'' appeared in place of the terms ``40 
CFR 97.518(d)'' and ``40 CFR 97.518'' or the terms ``40 CFR 97.818(d)'' 
and ``40 CFR 97.818'', respectively.


Sec.  97.1019  [Reserved]


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

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

[[Page 23226]]

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

[[Page 23227]]

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


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

    (a) By July 29, 2021, the Administrator will record in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source in 
accordance with Sec.  97.1011(a) for the control period in 2021.
    (b) By July 29, 2021, the Administrator will record in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source in 
accordance with Sec.  97.1011(a) for the control period in 2022, unless 
the State in which the source is located notifies the Administrator in 
writing by June 29, 2021 of the State's intent to submit to the 
Administrator a complete SIP revision by September 1, 2021 meeting the 
requirements of Sec.  52.38(b)(10)(i) through (iv) of this chapter.
    (1) If, by September 1, 2021 the State does not submit to the 
Administrator such complete SIP revision, the Administrator will record 
by September 15, 2021 in each CSAPR NOX Ozone Season Group 3 
source's compliance account the CSAPR NOX Ozone Season Group 
3 allowances allocated to the CSAPR NOX Ozone Season Group 3 
units at the source in accordance with Sec.  97.1011(a) for the control 
period in 2022.
    (2) If the State submits to the Administrator by September 1, 2021 
and the Administrator approves by March 1, 2022 such complete SIP 
revision, the Administrator will record by March 1, 2022 in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source as 
provided in such approved, complete SIP revision for the control period 
in 2022.
    (3) If the State submits to the Administrator by September 1, 2021 
and the Administrator does not approve by March 1, 2022 such complete 
SIP

[[Page 23228]]

revision, the Administrator will record by March 1, 2022 in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source in 
accordance with Sec.  97.1011(a) for the control period in 2022.
    (c) By July 1, 2022, the Administrator will record in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source, or in 
each appropriate Allowance Management System account the CSAPR 
NOX Ozone Season Group 3 allowances auctioned to CSAPR 
NOX Ozone Season Group 3 units, in accordance with Sec.  
97.1011(a), or with a SIP revision approved under Sec.  52.38(b)(11) or 
(12) of this chapter, for the control periods in 2023 and 2024.
    (d) By July 1, 2023, the Administrator will record in each CSAPR 
NOX Ozone Season Group 3 source's compliance account the 
CSAPR NOX Ozone Season Group 3 allowances allocated to the 
CSAPR NOX Ozone Season Group 3 units at the source, or in 
each appropriate Allowance Management System account the CSAPR 
NOX Ozone Season Group 3 allowances auctioned to CSAPR 
NOX Ozone Season Group 3 units, in accordance with Sec.  
97.1011(a), or with a SIP revision approved under Sec.  52.38(b)(11) or 
(12) of this chapter, for the control periods in 2025 and 2026.
    (e) [Reserved]
    (f) By July 1, 2024 and July 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 3 source's compliance account the CSAPR NOX Ozone 
Season Group 3 allowances allocated to the CSAPR NOX Ozone 
Season Group 3 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 3 
allowances auctioned to CSAPR NOX Ozone Season Group 3 
units, in accordance with Sec.  97.1011(a), or with a SIP revision 
approved under Sec.  52.38(b)(11) or (12) of this chapter, for the 
control period in the third year after the year of the applicable 
recordation deadline under this paragraph.
    (g) By May 1, 2022 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 3 source's compliance account the CSAPR NOX Ozone 
Season Group 3 allowances allocated to the CSAPR NOX Ozone 
Season Group 3 units at the source, or in each appropriate Allowance 
Management System account the CSAPR NOX Ozone Season Group 3 
allowances auctioned to CSAPR NOX Ozone Season Group 3 
units, in accordance with Sec.  97.1012(a), or with a SIP revision 
approved under Sec.  52.38(b)(11) or (12) of this chapter, for the 
control period in the year before the year of the applicable 
recordation deadline under this paragraph.
    (h) By May 1, 2022 and May 1 of each year thereafter, the 
Administrator will record in each CSAPR NOX Ozone Season 
Group 3 source's compliance account the CSAPR NOX Ozone 
Season Group 3 allowances allocated to the CSAPR NOX Ozone 
Season Group 3 units at the source in accordance with Sec.  97.1012(b) 
for the control period in the year before the year of the applicable 
recordation deadline under this paragraph.
    (i) [Reserved]
    (j) [Reserved]
    (k) By the date 15 days after the date on which any allocation or 
auction results, other than an allocation or auction results described 
in paragraphs (a) through (h) of this section, of CSAPR NOX 
Ozone Season Group 3 allowances to a recipient is made by or are 
submitted to the Administrator in accordance with Sec.  97.1011 or 
Sec.  97.1012 or with a SIP revision approved under Sec.  52.38(b)(11) 
or (12) of this chapter, the Administrator will record such allocation 
or auction results in the appropriate Allowance Management System 
account.
    (l) When recording the allocation or auction of CSAPR 
NOX Ozone Season Group 3 allowances to a CSAPR 
NOX Ozone Season Group 3 unit or other entity in an 
Allowance Management System account, the Administrator will assign each 
CSAPR NOX Ozone Season Group 3 allowance a unique 
identification number that will include digits identifying the year of 
the control period for which the CSAPR NOX Ozone Season 
Group 3 allowance is allocated or auctioned.
    (m) Notwithstanding any other provision of this subpart, if, as of 
the otherwise applicable deadline for recording any CSAPR 
NOX Ozone Season Group 3 allowances in any CSAPR 
NOX Ozone Season Group 3 source's compliance account under 
any other provision of this section, the Administrator has not 
completed all deductions of CSAPR NOX Ozone Season Group 2 
allowances required for the source under Sec.  97.811(d), such 
otherwise applicable deadline shall not apply, and the Administrator 
instead will record such CSAPR NOX Ozone Season Group 3 
allowances in the source's compliance account as expeditiously as 
practicable after the Administrator has completed all deductions of 
CSAPR NOX Ozone Season Group 2 allowances required for the 
source under Sec.  97.811(d).


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

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


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

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

[[Page 23229]]

Season Group 3 allowance transfer under paragraphs (a) and (b) of the 
section, the Administrator will notify the authorized account 
representatives of both the transferor and transferee accounts.
    (e) Within 10 business days of receipt of a CSAPR NOX 
Ozone Season Group 3 allowance transfer that is not correctly submitted 
under Sec.  97.1022, the Administrator will notify the authorized 
account representatives of both accounts subject to the transfer of:
    (1) A decision not to record the transfer; and
    (2) The reasons for such non-recordation.


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

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


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

    (a) Availability for deduction. CSAPR NOX Ozone Season 
Group 3 allowances are available to be deducted for compliance with the 
CSAPR NOX Ozone Season Group 3 assurance provisions for a 
control period in a given year by the owners and operators of a group 
of one or more base CSAPR NOX Ozone Season Group 3 sources 
and units in a State (and Indian country within the borders of such 
State) only if the CSAPR NOX Ozone Season Group 3 
allowances:
    (1) Were allocated or auctioned for a control period in a prior 
year or the control period in the given year or in the immediately 
following year; and
    (2) Are held in the assurance account, established by the 
Administrator for such owners and operators of such group of base CSAPR 
NOX Ozone Season Group 3 sources and units in such State 
(and Indian country within the borders of such State) under paragraph 
(b)(3) of this section, as of the deadline established in paragraph 
(b)(4) of this section.
    (b) Deductions for compliance. The Administrator will deduct CSAPR 
NOX Ozone Season Group 3 allowances available under 
paragraph (a) of this section for compliance with the CSAPR 
NOX Ozone Season Group 3 assurance provisions for a State 
for a control period in a given year in accordance with the following 
procedures:
    (1) By August 1, 2022 and August 1 of each year thereafter, the 
Administrator will:
    (i) Calculate, for each State (and Indian country within the 
borders of such State), the total NOX emissions from all 
base CSAPR NOX Ozone Season Group 3 units at base CSAPR 
NOX Ozone Season Group 3 sources in the State (and Indian 
country within the borders of such State) during the control period in 
the year before the year of this calculation deadline and the amount, 
if any, by which such total NOX emissions exceed the State 
assurance level as described in Sec.  97.1006(c)(2)(iii); and
    (ii) For the set of any States (and Indian country within the 
borders of such States) for which the results of the calculations 
required in paragraph (b)(1)(i) of this section indicate that total 
NOX emissions exceed the respective State assurance levels 
for such control period--
    (A) Calculate, for each such State (and Indian country within the 
borders of such State) and such control period and each common 
designated representative for such control period for a group of one or 
more base CSAPR NOX Ozone Season Group 3 sources and units 
in such State (and such Indian country), the common designated 
representative's share of the total NOX emissions from all 
base CSAPR NOX Ozone Season Group 3 units at base CSAPR 
NOX

[[Page 23230]]

Ozone Season Group 3 sources in such State (and such Indian country), 
the common designated representative's assurance level, and the amount 
(if any) of CSAPR NOX Ozone Season Group 3 allowances that 
the owners and operators of such group of sources and units must hold 
in accordance with the calculation formula in Sec.  97.1006(c)(2)(i); 
and
    (B) Promulgate a notice of data availability of the results of the 
calculations required in paragraphs (b)(1)(i) and (b)(1)(ii)(A) of this 
section, including separate calculations of the NOX 
emissions from each base CSAPR NOX Ozone Season Group 3 
source in each such State (and Indian country within the borders of 
such State).
    (2) The Administrator will provide an opportunity for submission of 
objections to the calculations referenced by each notice of data 
availability required in paragraph (b)(1)(ii) of this section.
    (i) Objections shall be submitted by the deadline specified in such 
notice and shall be limited to addressing whether the calculations 
referenced in such notice are in accordance with Sec.  
97.1006(c)(2)(iii), Sec. Sec.  97.1006(b) and 97.1030 through 97.1035, 
the definitions of ``common designated representative'', ``common 
designated representative's assurance level'', and ``common designated 
representative's share'' in Sec.  97.1002, and the calculation formula 
in Sec.  97.1006(c)(2)(i).
    (ii) The Administrator will adjust the calculations to the extent 
necessary to ensure that they are in accordance with the provisions 
referenced in paragraph (b)(2)(i) of this section. By October 1 
immediately after the promulgation of such notice, the Administrator 
will promulgate a notice of data availability of the results of the 
calculations incorporating any adjustments that the Administrator 
determines to be necessary and the reasons for accepting or rejecting 
any objections submitted in accordance with paragraph (b)(2)(i) of this 
section.
    (3) For any State (and Indian country within the borders of such 
State) referenced in each notice of data availability required in 
paragraph (b)(2)(ii) of this section as having base CSAPR 
NOX Ozone Season Group 3 units with total NOX 
emissions exceeding the State assurance level for a control period in a 
given year, the Administrator will establish one assurance account for 
each set of owners and operators referenced, in the notice of data 
availability required under paragraph (b)(2)(ii) of this section, as 
all of the owners and operators of a group of base CSAPR NOX 
Ozone Season Group 3 sources and units in the State (and Indian country 
within the borders of such State) having a common designated 
representative for such control period and as being required to hold 
CSAPR NOX Ozone Season Group 3 allowances.
    (4)(i) As of midnight of November 1 immediately after the 
promulgation of each notice of data availability required in paragraph 
(b)(2)(ii) of this section, the owners and operators described in 
paragraph (b)(3) of this section shall hold in the assurance account 
established for them and for the appropriate base CSAPR NOX 
Ozone Season Group 3 sources, base CSAPR NOX Ozone Season 
Group 3 units, and State (and Indian country within the borders of such 
State) under paragraph (b)(3) of this section a total amount of CSAPR 
NOX Ozone Season Group 3 allowances, available for deduction 
under paragraph (a) of this section, equal to the amount such owners 
and operators are required to hold with regard to such sources, units 
and State (and Indian country within the borders of such State) as 
calculated by the Administrator and referenced in such notice.
    (ii) Notwithstanding the allowance-holding deadline specified in 
paragraph (b)(4)(i) of this section, if November 1 is not a business 
day, then such allowance-holding deadline shall be midnight of the 
first business day thereafter.
    (5) After November 1 (or the date described in paragraph (b)(4)(ii) 
of this section) immediately after the promulgation of each notice of 
data availability required in paragraph (b)(2)(ii) of this section and 
after the recordation, in accordance with Sec.  97.1023, of CSAPR 
NOX Ozone Season Group 3 allowance transfers submitted by 
midnight of such date, the Administrator will determine whether the 
owners and operators described in paragraph (b)(3) of this section 
hold, in the assurance account for the appropriate base CSAPR 
NOX Ozone Season Group 3 sources, base CSAPR NOX 
Ozone Season Group 3 units, and State (and Indian country within the 
borders of such State) established under paragraph (b)(3) of this 
section, the amount of CSAPR NOX Ozone Season Group 3 
allowances available under paragraph (a) of this section that the 
owners and operators are required to hold with regard to such sources, 
units, and State (and Indian country within the borders of such State) 
as calculated by the Administrator and referenced in the notice 
required in paragraph (b)(2)(ii) of this section.
    (6) Notwithstanding any other provision of this subpart and any 
revision, made by or submitted to the Administrator after the 
promulgation of the notice of data availability required in paragraph 
(b)(2)(ii) of this section for a control period in a given year, of any 
data used in making the calculations referenced in such notice, the 
amounts of CSAPR NOX Ozone Season Group 3 allowances that 
the owners and operators are required to hold in accordance with Sec.  
97.1006(c)(2)(i) for such control period shall continue to be such 
amounts as calculated by the Administrator and referenced in such 
notice required in paragraph (b)(2)(ii) of this section, except as 
follows:
    (i) If any such data are revised by the Administrator as a result 
of a decision in or settlement of litigation concerning such data on 
appeal under part 78 of this chapter of such notice, or on appeal under 
section 307 of the Clean Air Act of a decision rendered under part 78 
of this chapter on appeal of such notice, then the Administrator will 
use the data as so revised to recalculate the amounts of CSAPR 
NOX Ozone Season Group 3 allowances that owners and 
operators are required to hold in accordance with the calculation 
formula in Sec.  97.1006(c)(2)(i) for such control period with regard 
to the base CSAPR NOX Ozone Season Group 3 sources, base 
CSAPR NOX Ozone Season Group 3 units, and State (and Indian 
country within the borders of such State) involved, provided that such 
litigation under part 78 of this chapter, or the proceeding under part 
78 of this chapter that resulted in the decision appealed in such 
litigation under section 307 of the Clean Air Act, was initiated no 
later than 30 days after promulgation of such notice required in 
paragraph (b)(2)(ii) of this section.
    (ii) [Reserved]
    (iii) If the revised data are used to recalculate, in accordance 
with paragraph (b)(6)(i) of this section, the amount of CSAPR 
NOX Ozone Season Group 3 allowances that the owners and 
operators are required to hold for such control period with regard to 
the base CSAPR NOX Ozone Season Group 3 sources, base CSAPR 
NOX Ozone Season Group 3 units, and State (and Indian 
country within the borders of such State) involved--
    (A) Where the amount of CSAPR NOX Ozone Season Group 3 
allowances that the owners and operators are required to hold increases 
as a result of the use of all such revised data, the Administrator will 
establish a new, reasonable deadline on which the owners and operators 
shall hold the additional amount of CSAPR NOX Ozone Season 
Group 3 allowances in the assurance account established by the

[[Page 23231]]

Administrator for the appropriate base CSAPR NOX Ozone 
Season Group 3 sources, base CSAPR NOX Ozone Season Group 3 
units, and State (and Indian country within the borders of such State) 
under paragraph (b)(3) of this section. The owners' and operators' 
failure to hold such additional amount, as required, before the new 
deadline shall not be a violation of the Clean Air Act. The owners' and 
operators' failure to hold such additional amount, as required, as of 
the new deadline shall be a violation of the Clean Air Act. Each CSAPR 
NOX Ozone Season Group 3 allowance that the owners and 
operators fail to hold as required as of the new deadline, and each day 
in such control period, shall be a separate violation of the Clean Air 
Act.
    (B) For the owners and operators for which the amount of CSAPR 
NOX Ozone Season Group 3 allowances required to be held 
decreases as a result of the use of all such revised data, the 
Administrator will record, in all accounts from which CSAPR 
NOX Ozone Season Group 3 allowances were transferred by such 
owners and operators for such control period to the assurance account 
established by the Administrator for the appropriate base CSAPR 
NOX Ozone Season Group 3 sources, base CSAPR NOX 
Ozone Season Group 3 units, and State (and Indian country within the 
borders of such State) under paragraph (b)(3) of this section, a total 
amount of the CSAPR NOX Ozone Season Group 3 allowances held 
in such assurance account equal to the amount of the decrease. If CSAPR 
NOX Ozone Season Group 3 allowances were transferred to such 
assurance account from more than one account, the amount of CSAPR 
NOX Ozone Season Group 3 allowances recorded in each such 
transferor account will be in proportion to the percentage of the total 
amount of CSAPR NOX Ozone Season Group 3 allowances 
transferred to such assurance account for such control period from such 
transferor account.
    (C) Each CSAPR NOX Ozone Season Group 3 allowance held 
under paragraph (b)(6)(iii)(A) of this section as a result of 
recalculation of requirements under the CSAPR NOX Ozone 
Season Group 3 assurance provisions for such control period must be a 
CSAPR NOX Ozone Season Group 3 allowance allocated for a 
control period in a year before or the year immediately following, or 
in the same year as, the year of such control period.


Sec.  97.1026  Banking.

    (a) A CSAPR NOX Ozone Season Group 3 allowance may be 
banked for future use or transfer in a compliance account or a general 
account in accordance with paragraph (b) of this section.
    (b) Any CSAPR NOX Ozone Season Group 3 allowance that is 
held in a compliance account or a general account will remain in such 
account unless and until the CSAPR NOX Ozone Season Group 3 
allowance is deducted or transferred under Sec.  97.1011(c), Sec.  
97.1023, Sec.  97.1024, Sec.  97.1025, Sec.  97.1027, or Sec.  97.1028 
or paragraph (c) of this section.
    (c) At any time after the allowance transfer deadline for the last 
control period for which a State NOX Ozone Season Group 3 
trading budget is set forth in Sec.  97.1010(a) for a given State, the 
Administrator may record a transfer of any CSAPR NOX Ozone 
Season Group 3 allowances held in the compliance account for a source 
in such State (or Indian country within the borders of such State) to a 
general account identified or established by the Administrator with the 
source's designated representative as the authorized account 
representative and with the owners and operators of the source (as 
indicated on the certificate of representation for the source) as the 
persons represented by the authorized account representative. The 
Administrator will notify the designated representative not less than 
15 days before making such a transfer.


Sec.  97.1027  Account error.

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


Sec.  97.1028  Administrator's action on submissions.

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


Sec.  97.1029  [Reserved]


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

    The owners and operators, and to the extent applicable, the 
designated representative, of a CSAPR NOX Ozone Season Group 
3 unit, shall comply with the monitoring, recordkeeping, and reporting 
requirements as provided in this subpart and subpart H of part 75 of 
this chapter. For purposes of applying such requirements, the 
definitions in Sec.  97.1002 and in Sec.  72.2 of this chapter shall 
apply, the terms ``affected unit,'' ``designated representative,'' and 
``continuous emission monitoring system'' (or ``CEMS'') in part 75 of 
this chapter shall be deemed to refer to the terms ``CSAPR 
NOX Ozone Season Group 3 unit,'' ``designated 
representative,'' and ``continuous emission monitoring system'' (or 
``CEMS'') respectively as defined in Sec.  97.1002, and the term 
``newly affected unit'' shall be deemed to mean ``newly affected CSAPR 
NOX Ozone Season Group 3 unit''. The owner or operator of a 
unit that is not a CSAPR NOX Ozone Season Group 3 unit but 
that is monitored under Sec.  75.72(b)(2)(ii) of this chapter shall 
comply with the same monitoring, recordkeeping, and reporting 
requirements as a CSAPR NOX Ozone Season Group 3 unit.
    (a) Requirements for installation, certification, and data 
accounting. The owner or operator of each CSAPR NOX Ozone 
Season Group 3 unit shall:
    (1) Install all monitoring systems required under this subpart for 
monitoring NOX mass emissions and individual unit heat input 
(including all systems required to monitor NOX emission 
rate, NOX concentration, stack gas moisture content, stack 
gas flow rate, CO2 or O2 concentration, and fuel 
flow rate, as applicable, in accordance with Sec. Sec.  75.71 and 75.72 
of this chapter);
    (2) Successfully complete all certification tests required under 
Sec.  97.1031 and meet all other requirements of this subpart and part 
75 of this chapter applicable to the monitoring systems under paragraph 
(a)(1) of this section; and
    (3) Record, report, and quality-assure the data from the monitoring 
systems under paragraph (a)(1) of this section.
    (b) Compliance deadlines. Except as provided in paragraph (e) of 
this section, the owner or operator of a CSAPR NOX Ozone 
Season Group 3 unit shall meet the monitoring system certification and 
other requirements of paragraphs (a)(1) and (2) of this section on or 
before the latest of the following dates and shall record, report, and 
quality-assure the data from the

[[Page 23232]]

monitoring systems under paragraph (a)(1) of this section on and after 
the latest of the following dates:
    (1) May 1, 2021;
    (2) 180 calendar days after the date on which the unit commences 
commercial operation; or
    (3) Where data for the unit are reported on a control period basis 
under Sec.  97.1034(d)(1)(ii)(B), and where the compliance date under 
paragraph (b)(2) of this section is not in a month from May through 
September, May 1 immediately after the compliance date under paragraph 
(b)(2) of this section.
    (4) The owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit for which construction of a new stack or flue or 
installation of add-on NOX emission controls is completed 
after the applicable deadline under paragraph (b)(1), (2), or (3) of 
this section shall meet the requirements of Sec.  75.4(e)(1) through 
(4) of this chapter, except that:
    (i) Such requirements shall apply to the monitoring systems 
required under Sec.  97.1030 through Sec.  97.1035, rather than the 
monitoring systems required under part 75 of this chapter;
    (ii) NOX emission rate, NOX concentration, 
stack gas moisture content, stack gas volumetric flow rate, and 
O2 or CO2 concentration data shall be determined 
and reported, rather than the data listed in Sec.  75.4(e)(2) of this 
chapter; and
    (iii) Any petition for another procedure under Sec.  75.4(e)(2) of 
this chapter shall be submitted under Sec.  97.1035, rather than Sec.  
75.66 of this chapter.
    (c) Reporting data. The owner or operator of a CSAPR NOX 
Ozone Season Group 3 unit that does not meet the applicable compliance 
date set forth in paragraph (b) of this section for any monitoring 
system under paragraph (a)(1) of this section shall, for each such 
monitoring system, determine, record, and report maximum potential (or, 
as appropriate, minimum potential) values for NOX 
concentration, NOX emission rate, stack gas flow rate, stack 
gas moisture content, fuel flow rate, and any other parameters required 
to determine NOX mass emissions and heat input in accordance 
with Sec.  75.31(b)(2) or (c)(3) of this chapter, section 2.4 of 
appendix D to part 75 of this chapter, or section 2.5 of appendix E to 
part 75 of this chapter, as applicable.
    (d) Prohibitions. (1) No owner or operator of a CSAPR 
NOX Ozone Season Group 3 unit shall use any alternative 
monitoring system, alternative reference method, or any other 
alternative to any requirement of this subpart without having obtained 
prior written approval in accordance with Sec.  97.1035.
    (2) No owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit shall operate the unit so as to discharge, or allow to be 
discharged, NOX to the atmosphere without accounting for all 
such NOX in accordance with the applicable provisions of 
this subpart and part 75 of this chapter.
    (3) No owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit shall disrupt the continuous emission monitoring system, 
any portion thereof, or any other approved emission monitoring method, 
and thereby avoid monitoring and recording NOX mass 
discharged into the atmosphere or heat input, except for periods of 
recertification or periods when calibration, quality assurance testing, 
or maintenance is performed in accordance with the applicable 
provisions of this subpart and part 75 of this chapter.
    (4) No owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit shall retire or permanently discontinue use of the 
continuous emission monitoring system, any component thereof, or any 
other approved monitoring system under this subpart, except under any 
one of the following circumstances:
    (i) During the period that the unit is covered by an exemption 
under Sec.  97.1005 that is in effect;
    (ii) The owner or operator is monitoring emissions from the unit 
with another certified monitoring system approved, in accordance with 
the applicable provisions of this subpart and part 75 of this chapter, 
by the Administrator for use at that unit that provides emission data 
for the same pollutant or parameter as the retired or discontinued 
monitoring system; or
    (iii) The designated representative submits notification of the 
date of certification testing of a replacement monitoring system for 
the retired or discontinued monitoring system in accordance with Sec.  
97.1031(d)(3)(i).
    (e) Long-term cold storage. The owner or operator of a CSAPR 
NOX Ozone Season Group 3 unit is subject to the applicable 
provisions of Sec.  75.4(d) of this chapter concerning units in long-
term cold storage.


Sec.  97.1031  Initial monitoring system certification and 
recertification procedures.

    (a) The owner or operator of a CSAPR NOX Ozone Season 
Group 3 unit shall be exempt from the initial certification 
requirements of this section for a monitoring system under Sec.  
97.1030(a)(1) if the following conditions are met:
    (1) The monitoring system has been previously certified in 
accordance with part 75 of this chapter; and
    (2) The applicable quality-assurance and quality-control 
requirements of Sec.  75.21 of this chapter and appendices B, D, and E 
to part 75 of this chapter are fully met for the certified monitoring 
system described in paragraph (a)(1) of this section.
    (b) The recertification provisions of this section shall apply to a 
monitoring system under Sec.  97.1030(a)(1) that is exempt from initial 
certification requirements under paragraph (a) of this section.
    (c) If the Administrator has previously approved a petition under 
Sec.  75.17(a) or (b) of this chapter for apportioning the 
NOX emission rate measured in a common stack or a petition 
under Sec.  75.66 of this chapter for an alternative to a requirement 
in Sec.  75.12 or Sec.  75.17 of this chapter, the designated 
representative shall resubmit the petition to the Administrator under 
Sec.  97.1035 to determine whether the approval applies under the CSAPR 
NOX Ozone Season Group 3 Trading Program.
    (d) Except as provided in paragraph (a) of this section, the owner 
or operator of a CSAPR NOX Ozone Season Group 3 unit shall 
comply with the following initial certification and recertification 
procedures for a continuous monitoring system (i.e., a continuous 
emission monitoring system and an excepted monitoring system under 
appendices D and E to part 75 of this chapter) under Sec.  
97.1030(a)(1). The owner or operator of a unit that qualifies to use 
the low mass emissions excepted monitoring methodology under Sec.  
75.19 of this chapter or that qualifies to use an alternative 
monitoring system under subpart E of part 75 of this chapter shall 
comply with the procedures in paragraph (e) or (f) of this section 
respectively.
    (1) Requirements for initial certification. The owner or operator 
shall ensure that each continuous monitoring system under Sec.  
97.1030(a)(1) (including the automated data acquisition and handling 
system) successfully completes all of the initial certification testing 
required under Sec.  75.20 of this chapter by the applicable deadline 
in Sec.  97.1030(b). In addition, whenever the owner or operator 
installs a monitoring system to meet the requirements of this subpart 
in a location where no such monitoring system was previously installed, 
initial certification in accordance with Sec.  75.20 of this chapter is 
required.
    (2) Requirements for recertification. Whenever the owner or 
operator makes a replacement, modification, or change in any certified 
continuous emission monitoring system under Sec.  97.1030(a)(1) that 
may significantly affect the ability of the system to accurately 
measure or

[[Page 23233]]

record NOX mass emissions or heat input rate or to meet the 
quality-assurance and quality-control requirements of Sec.  75.21 of 
this chapter or appendix B to part 75 of this chapter, the owner or 
operator shall recertify the monitoring system in accordance with Sec.  
75.20(b) of this chapter. Furthermore, whenever the owner or operator 
makes a replacement, modification, or change to the flue gas handling 
system or the unit's operation that may significantly change the stack 
flow or concentration profile, the owner or operator shall recertify 
each continuous emission monitoring system whose accuracy is 
potentially affected by the change, in accordance with Sec.  75.20(b) 
of this chapter. Examples of changes to a continuous emission 
monitoring system that require recertification include replacement of 
the analyzer, complete replacement of an existing continuous emission 
monitoring system, or change in location or orientation of the sampling 
probe or site. Any fuel flowmeter system, and any excepted 
NOX monitoring system under appendix E to part 75 of this 
chapter, under Sec.  97.1030(a)(1) are subject to the recertification 
requirements in Sec.  75.20(g)(6) of this chapter.
    (3) Approval process for initial certification and recertification. 
For initial certification of a continuous monitoring system under Sec.  
97.1030(a)(1), paragraphs (d)(3)(i) through (v) of this section apply. 
For recertifications of such monitoring systems, paragraphs (d)(3)(i) 
through (iv) of this section and the procedures in Sec.  75.20(b)(5) 
and (g)(7) of this chapter (in lieu of the procedures in paragraph 
(d)(3)(v) of this section) apply, provided that in applying paragraphs 
(d)(3)(i) through (iv) of this section, the words ``certification'' and 
``initial certification'' are replaced by the word ``recertification'' 
and the word ``certified'' is replaced by the word ``recertified''.
    (i) Notification of certification. The designated representative 
shall submit to the appropriate EPA Regional Office and the 
Administrator written notice of the dates of certification testing, in 
accordance with Sec.  97.1033.
    (ii) Certification application. The designated representative shall 
submit to the Administrator a certification application for each 
monitoring system. A complete certification application shall include 
the information specified in Sec.  75.63 of this chapter.
    (iii) Provisional certification date. The provisional certification 
date for a monitoring system shall be determined in accordance with 
Sec.  75.20(a)(3) of this chapter. A provisionally certified monitoring 
system may be used under the CSAPR NOX Ozone Season Group 3 
Trading Program for a period not to exceed 120 days after receipt by 
the Administrator of the complete certification application for the 
monitoring system under paragraph (d)(3)(ii) of this section. Data 
measured and recorded by the provisionally certified monitoring system, 
in accordance with the requirements of part 75 of this chapter, will be 
considered valid quality-assured data (retroactive to the date and time 
of provisional certification), provided that the Administrator does not 
invalidate the provisional certification by issuing a notice of 
disapproval within 120 days of the date of receipt of the complete 
certification application by the Administrator.
    (iv) Certification application approval process. The Administrator 
will issue a written notice of approval or disapproval of the 
certification application to the owner or operator within 120 days of 
receipt of the complete certification application under paragraph 
(d)(3)(ii) of this section. In the event the Administrator does not 
issue such a notice within such 120-day period, each monitoring system 
that meets the applicable performance requirements of part 75 of this 
chapter and is included in the certification application will be deemed 
certified for use under the CSAPR NOX Ozone Season Group 3 
Trading Program.
    (A) Approval notice. If the certification application is complete 
and shows that each monitoring system meets the applicable performance 
requirements of part 75 of this chapter, then the Administrator will 
issue a written notice of approval of the certification application 
within 120 days of receipt.
    (B) Incomplete application notice. If the certification application 
is not complete, then the Administrator will issue a written notice of 
incompleteness that sets a reasonable date by which the designated 
representative must submit the additional information required to 
complete the certification application. If the designated 
representative does not comply with the notice of incompleteness by the 
specified date, then the Administrator may issue a notice of 
disapproval under paragraph (d)(3)(iv)(C) of this section.
    (C) Disapproval notice. If the certification application shows that 
any monitoring system does not meet the performance requirements of 
part 75 of this chapter or if the certification application is 
incomplete and the requirement for disapproval under paragraph 
(d)(3)(iv)(B) of this section is met, then the Administrator will issue 
a written notice of disapproval of the certification application. Upon 
issuance of such notice of disapproval, the provisional certification 
is invalidated by the Administrator and the data measured and recorded 
by each uncertified monitoring system shall not be considered valid 
quality-assured data beginning with the date and hour of provisional 
certification (as defined under Sec.  75.20(a)(3) of this chapter).
    (D) Audit decertification. The Administrator may issue a notice of 
disapproval of the certification status of a monitor in accordance with 
Sec.  97.1032(b).
    (v) Procedures for loss of certification. If the Administrator 
issues a notice of disapproval of a certification application under 
paragraph (d)(3)(iv)(C) of this section or a notice of disapproval of 
certification status under paragraph (d)(3)(iv)(D) of this section, 
then:
    (A) The owner or operator shall substitute the following values, 
for each disapproved monitoring system, for each hour of unit operation 
during the period of invalid data specified under Sec.  
75.20(a)(4)(iii), Sec.  75.20(g)(7), or Sec.  75.21(e) of this chapter 
and continuing until the applicable date and hour specified under Sec.  
75.20(a)(5)(i) or (g)(7) of this chapter:
    (1) For a disapproved NOX emission rate (i.e., 
NOX-diluent) system, the maximum potential NOX 
emission rate, as defined in Sec.  72.2 of this chapter.
    (2) For a disapproved NOX pollutant concentration 
monitor and disapproved flow monitor, respectively, the maximum 
potential concentration of NOX and the maximum potential 
flow rate, as defined in sections 2.1.2.1 and 2.1.4.1 of appendix A to 
part 75 of this chapter.
    (3) For a disapproved moisture monitoring system and disapproved 
diluent gas monitoring system, respectively, the minimum potential 
moisture percentage and either the maximum potential CO2 
concentration or the minimum potential O2 concentration (as 
applicable), as defined in sections 2.1.5, 2.1.3.1, and 2.1.3.2 of 
appendix A to part 75 of this chapter.
    (4) For a disapproved fuel flowmeter system, the maximum potential 
fuel flow rate, as defined in section 2.4.2.1 of appendix D to part 75 
of this chapter.
    (5) For a disapproved excepted NOX monitoring system 
under appendix E to part 75 of this chapter, the fuel-specific maximum 
potential NOX emission rate, as defined in Sec.  72.2 of 
this chapter.
    (B) The designated representative shall submit a notification of 
certification retest dates and a new

[[Page 23234]]

certification application in accordance with paragraphs (d)(3)(i) and 
(ii) of this section.
    (C) The owner or operator shall repeat all certification tests or 
other requirements that were failed by the monitoring system, as 
indicated in the Administrator's notice of disapproval, no later than 
30 unit operating days after the date of issuance of the notice of 
disapproval.
    (e) The owner or operator of a unit qualified to use the low mass 
emissions (LME) excepted methodology under Sec.  75.19 of this chapter 
shall meet the applicable certification and recertification 
requirements in Sec. Sec.  75.19(a)(2) and 75.20(h) of this chapter. If 
the owner or operator of such a unit elects to certify a fuel flowmeter 
system for heat input determination, the owner or operator shall also 
meet the certification and recertification requirements in Sec.  
75.20(g) of this chapter.
    (f) The designated representative of each unit for which the owner 
or operator intends to use an alternative monitoring system approved by 
the Administrator under subpart E of part 75 of this chapter shall 
comply with the applicable notification and application procedures of 
Sec.  75.20(f) of this chapter.


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

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


Sec.  97.1033  Notifications concerning monitoring.

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


Sec.  97.1034  Recordkeeping and reporting.

    (a) General provisions. The designated representative shall comply 
with all recordkeeping and reporting requirements in paragraphs (b) 
through (e) of this section, the applicable recordkeeping and reporting 
requirements under Sec.  75.73 of this chapter, and the requirements of 
Sec.  97.1014(a).
    (b) Monitoring plans. The owner or operator of a CSAPR 
NOX Ozone Season Group 3 unit shall comply with the 
requirements of Sec.  75.73(c) and (e) of this chapter.
    (c) Certification applications. The designated representative shall 
submit an application to the Administrator within 45 days after 
completing all initial certification or recertification tests required 
under Sec.  97.1031, including the information required under Sec.  
75.63 of this chapter.
    (d) Quarterly reports. The designated representative shall submit 
quarterly reports, as follows:
    (1)(i) If a CSAPR NOX Ozone Season Group 3 unit is 
subject to the Acid Rain Program or the CSAPR NOX Annual 
Trading Program or if the owner or operator of such unit chooses to 
report on an annual basis under this subpart, then the designated 
representative shall meet the requirements of subpart H of part 75 of 
this chapter (concerning monitoring of NOX mass emissions) 
for such unit for the entire year and report the NOX mass 
emissions data and heat input data for such unit for the entire year.
    (ii) If a CSAPR NOX Ozone Season Group 3 unit is not 
subject to the Acid Rain Program or the CSAPR NOX Annual 
Trading Program, then the designated representative shall either:
    (A) Meet the requirements of subpart H of part 75 of this chapter 
for such unit for the entire year and report the NOX mass 
emissions data and heat input data for such unit for the entire year in 
accordance with paragraph (d)(1)(i) of this section; or
    (B) Meet the requirements of subpart H of part 75 of this chapter 
(including the requirements in Sec.  75.74(c) of this chapter) for such 
unit for the control period and report the NOX mass 
emissions data and heat input data (including the data described in 
Sec.  75.74(c)(6) of this chapter) for such unit only for the control 
period of each year.
    (2) The designated representative shall report the NOX 
mass emissions data and heat input data for a CSAPR NOX 
Ozone Season Group 3 unit, in an electronic quarterly report in a 
format prescribed by the Administrator, for each calendar quarter 
indicated under paragraph (d)(1) of this section beginning by the 
latest of:
    (i) The calendar quarter covering May 1, 2021 through June 30, 
2021;
    (ii) The calendar quarter corresponding to the earlier of the date 
of provisional certification or the applicable deadline for initial 
certification under Sec.  97.1030(b); or
    (iii) For a unit that reports on a control period basis under 
paragraph (d)(1)(ii)(B) of this section, if the calendar quarter under 
paragraph (d)(2)(ii) of this section does not include a month from May 
through September, the calendar quarter covering May 1 through June 30 
immediately after the calendar quarter under paragraph (d)(2)(ii) of 
this section.
    (3) The designated representative shall submit each quarterly 
report to the Administrator within 30 days after the end of the 
calendar quarter covered by the report. Quarterly reports shall be 
submitted in the manner specified in Sec.  75.73(f) of this chapter.
    (4) For CSAPR NOX Ozone Season Group 3 units that are 
also subject to the Acid Rain Program, CSAPR NOX Annual 
Trading Program, or CSAPR SO2 Group 1 Trading Program, 
quarterly reports shall include the applicable data and information 
required by subparts F through H of part 75 of this chapter as 
applicable, in addition to the NOX mass emission data, heat 
input data, and other information required by this subpart.
    (5) The Administrator may review and conduct independent audits of 
any quarterly report in order to determine whether the quarterly report 
meets the requirements of this subpart and part 75 of this chapter, 
including the requirement to use substitute data.

[[Page 23235]]

    (i) The Administrator will notify the designated representative of 
any determination that the quarterly report fails to meet any such 
requirements and specify in such notification any corrections that the 
Administrator believes are necessary to make through resubmission of 
the quarterly report and a reasonable time period within which the 
designated representative must respond. Upon request by the designated 
representative, the Administrator may specify reasonable extensions of 
such time period. Within the time period (including any such 
extensions) specified by the Administrator, the designated 
representative shall resubmit the quarterly report with the corrections 
specified by the Administrator, except to the extent the designated 
representative provides information demonstrating that a specified 
correction is not necessary because the quarterly report already meets 
the requirements of this subpart and part 75 of this chapter that are 
relevant to the specified correction.
    (ii) Any resubmission of a quarterly report shall meet the 
requirements applicable to the submission of a quarterly report under 
this subpart and part 75 of this chapter, except for the deadline set 
forth in paragraph (d)(3) of this section.
    (e) Compliance certification. The designated representative shall 
submit to the Administrator a compliance certification (in a format 
prescribed by the Administrator) in support of each quarterly report 
based on reasonable inquiry of those persons with primary 
responsibility for ensuring that all of the unit's emissions are 
correctly and fully monitored. The certification shall state that:
    (1) The monitoring data submitted were recorded in accordance with 
the applicable requirements of this subpart and part 75 of this 
chapter, including the quality assurance procedures and specifications;
    (2) For a unit with add-on NOX emission controls and for 
all hours where NOX data are substituted in accordance with 
Sec.  75.34(a)(1) of this chapter, the add-on emission controls were 
operating within the range of parameters listed in the quality 
assurance/quality control program under appendix B to part 75 of this 
chapter and the substitute data values do not systematically 
underestimate NOX emissions; and
    (3) For a unit that is reporting on a control period basis under 
paragraph (d)(1)(ii)(B) of this section, the NOX emission 
rate and NOX concentration values substituted for missing 
data under subpart D of part 75 of this chapter are calculated using 
only values from a control period and do not systematically 
underestimate NOX emissions.


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

    (a) The designated representative of a CSAPR NOX Ozone 
Season Group 3 unit may submit a petition under Sec.  75.66 of this 
chapter to the Administrator, requesting approval to apply an 
alternative to any requirement of Sec. Sec.  97.1030 through 97.1034.
    (b) A petition submitted under paragraph (a) of this section shall 
include sufficient information for the evaluation of the petition, 
including, at a minimum, the following information:
    (1) Identification of each unit and source covered by the petition;
    (2) A detailed explanation of why the proposed alternative is being 
suggested in lieu of the requirement;
    (3) A description and diagram of any equipment and procedures used 
in the proposed alternative;
    (4) A demonstration that the proposed alternative is consistent 
with the purposes of the requirement for which the alternative is 
proposed and with the purposes of this subpart and part 75 of this 
chapter and that any adverse effect of approving the alternative will 
be de minimis; and
    (5) Any other relevant information that the Administrator may 
require.
    (c) Use of an alternative to any requirement referenced in 
paragraph (a) of this section is in accordance with this subpart only 
to the extent that the petition is approved in writing by the 
Administrator and that such use is in accordance with such approval.

[FR Doc. 2021-05705 Filed 4-23-21; 8:45 am]
 BILLING CODE 6560-50-P


