
[Federal Register Volume 77, Number 147 (Tuesday, July 31, 2012)]
[Rules and Regulations]
[Pages 45252-45262]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-18091]



[[Page 45252]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 81

[EPA-R05-OAR-2009-0730; FRL-9702-9]


Approval and Promulgation of Implementation Plans and Designation 
of Areas for Air Quality Planning Purposes; Wisconsin; Redesignation of 
the Milwaukee-Racine Area to Attainment for 1997 8-Hour Ozone Standard

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving a request from the Wisconsin Department of 
Natural Resources (WDNR) to redesignate the Milwaukee-Racine area to 
attainment for the 1997 8-hour National Ambient Air Quality Standard 
(NAAQS or standard). The Milwaukee-Racine area includes Milwaukee, 
Ozaukee, Racine, Washington, Waukesha, and Kenosha Counties. WDNR 
submitted this request on September 11, 2009, and supplemented the 
submittal on November 16, 2011. These submittals also requested the 
redesignation of the Sheboygan area (Sheboygan County) to attainment 
for the 1997 8-hour ozone NAAQS. EPA proposed to approve the 
redesignation of both areas on February 9, 2012, and provided a 30-day 
review and comment period. EPA received comments submitted on behalf of 
Sierra Club and Midwest Environmental Defense Center and from the 
Wisconsin Manufacturers and Commerce. EPA is not taking final action on 
the Sheboygan redesignation request at this time because preliminary 
2012 ozone monitoring data indicate that the area has violated the 1997 
standard. In addition to approving the redesignation of the Milwaukee-
Racine area, EPA is taking several other related actions. EPA is 
approving, as a revision to the Wisconsin State Implementation Plan 
(SIP), the State's plan for maintaining the 1997 8-hour ozone standard 
through 2022 in the Milwaukee-Racine area. EPA is approving the 2005 
emissions inventories for the Milwaukee-Racine and Sheboygan areas as 
meeting the comprehensive emissions inventory requirement of the Clean 
Air Act (CAA or Act). Finally, EPA finds adequate and is approving the 
State's 2015 and 2022 Motor Vehicle Emission Budgets (MVEBs) for the 
Milwaukee-Racine area.

DATES: Effective Date: This rule is effective on July 31, 2012.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-R05-OAR-2009-0730. All documents in the docket are listed on 
the www.regulations.gov web site. Although listed in the index, some 
information is not publicly available, i.e., Confidential Business 
Information (CBI) 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 either 
electronically through www.regulations.gov or in hard copy at the 
Environmental Protection Agency, Region 5, Air and Radiation Division, 
77 West Jackson Boulevard, Chicago, Illinois 60604. This facility is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
Federal holidays. We recommend that you telephone Kathleen D'Agostino, 
Environmental Engineer, at (312) 886-1767 before visiting the Region 5 
office.

FOR FURTHER INFORMATION CONTACT: Kathleen D'Agostino, Environmental 
Engineer, Attainment Planning and Maintenance Section, Air Programs 
Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West 
Jackson Boulevard, Chicago, Illinois 60604, (312) 886-1767, 
dagostino.kathleen@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. This supplementary information 
section is arranged as follows:

I. What is the background for this rule?
II. What comments did we receive on the proposed rule?
III. What actions is EPA taking?
IV. Statutory and Executive Order Reviews

I. What is the background for this rule?

    On July 18, 1997 (62 FR 38856), EPA promulgated an 8-hour ozone 
standard of 0.08 parts per million (ppm). EPA published a final rule 
designating and classifying areas under the 1997 8-hour ozone NAAQS on 
April 30, 2004 (69 FR 23857). In that rulemaking, the Milwaukee-Racine 
area was designated as nonattainment for the 1997 8-hour ozone standard 
and classified as a moderate nonattainment area under subpart 2 of part 
D of the CAA (69 FR 23857, 23947).
    On September 11, 2009, WDNR requested redesignation of the 
Milwaukee-Racine and Sheboygan areas to attainment of the 1997 8-hour 
ozone standard based on ozone data for the period of 2006-2008. On 
November 16, 2011, WDNR supplemented the original ozone redesignation 
requests, revising the mobile source emission estimates using EPA's on-
road mobile source emissions model, MOVES, and extending the 
demonstration of maintenance of the ozone standard through 2022, with 
new MVEBs, but without relying on emission reductions resulting from 
implementation of EPA's Clean Air Interstate Rule (CAIR) or Cross-State 
Air Pollution Rule (CSAPR).
    On March 1, 2011 (76 FR 11080), EPA issued a final rulemaking 
determining that the Milwaukee-Racine and Sheboygan areas had attained 
the 1997 8-hour ozone NAAQS based on three years of complete, quality-
assured ozone data for the 2006-2008, 2007-2009, and 2008-2010 time 
periods.\1\
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    \1\ Certified ozone data for 2011 demonstrates that the areas 
continued to attain the 1997 8-hour ozone standard in 2011. EPA 
recognizes that the ozone data for 2007-2009 as well as the data for 
2010 and 2011 are impacted by emission reductions associated with 
the CAIR, which was promulgated in 2005, but remanded to EPA in 
2008. The fact that the data reflect some reductions associated with 
the remanded and therefore not permanent CAIR, however, is not an 
impediment to redesignation in the circumstances presented here 
where WDNR's demonstration and EPA's own modeling demonstrates that 
the areas do not need reductions associated with the CAIR to attain 
the 1997 ozone NAAQS.
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    On February 9, 2012 (77 FR 6727), EPA issued a rulemaking action 
proposing to approve Wisconsin's requests to redesignate the Milwaukee-
Racine and Sheboygan areas to attainment of the 1997 8-hour ozone 
standard, as well as proposing to approve Wisconsin's maintenance plans 
for the areas, volatile organic compound (VOC) and nitrogen oxides 
(NOX) MVEBs, and VOC and NOX emissions 
inventories. This proposed rulemaking sets forth the basis for 
determining that Wisconsin's redesignation request meets the CAA 
requirements for redesignation of the Milwaukee-Racine area to 
attainment for the 1997 8-hour ozone NAAQS. Air quality monitoring data 
in the Milwaukee-Racine and Sheboygan areas for 2007-2009, 2008-2010, 
and 2009-2011 show attainment of the 1997 8-hour ozone NAAQS. 
Preliminary data available for the Milwaukee area for 2012 are 
consistent with continued attainment. Preliminary 2012 data for the 
Sheboygan area, however, indicate that the area is currently violating 
the 1997 8-hour ozone standard. For this reason, EPA is not finalizing 
action on the State's request to redesignate the Sheboygan area at this 
time. The primary background for today's action is contained in EPA's 
February 9, 2012, proposal to approve Wisconsin's redesignation 
requests, and in EPA's March 1, 2011, final rulemaking determining that 
the areas have attained the 1997 8-hour ozone NAAQS, based on complete, 
quality-assured monitoring

[[Page 45253]]

data for 2006-2008, 2007-2009, and 2008-2010 time periods. In these 
rulemakings, we noted that under EPA regulations at 40 CFR 50.10 and 40 
CFR part 50 appendix I, the 1997 8-hour ozone standard is attained when 
the 3-year average of the annual fourth highest daily maximum 8-hour 
average ozone concentrations is less than or equal to 0.08 ppm at all 
ozone monitoring sites in the area. See 69 FR 23857 (April 30, 2004) 
for further information. To support the redesignation of an area to 
attainment of the NAAQS, the ozone data must be complete for the three 
attainment years. The data completeness requirement is met when the 3-
year average of days with valid ambient monitoring data is greater than 
90 percent, and no single year has less than 75 percent data 
completeness, as determined in accordance with appendix I of 40 CFR 
part 50. Under the CAA, EPA may redesignate a nonattainment area to 
attainment if sufficient, complete, quality-assured data are available 
demonstrating that the area has attained the standard and if the state 
meets the other CAA redesignation requirements specified in section 
107(d)(3)(E) and section 175A.
    The February 9, 2012, proposed redesignation rulemaking provides a 
detailed discussion of how Wisconsin's ozone redesignation request for 
the Milwaukee-Racine area meets the CAA requirements for redesignation 
to attainment. With the final approval of its VOC and NOX 
emissions inventories, and its VOC Reasonably Available Control 
Technology (RACT) regulations, Wisconsin has met all applicable CAA 
requirements for redesignation to attainment of the area for the 1997 
8-hour ozone NAAQS. Complete, quality-assured, and certified air 
quality monitoring data in the Milwaukee-Racine area for 2009-2011, and 
preliminary data for 2012, show that this area continues to attain the 
1997 8-hour ozone NAAQS. In the maintenance plan it submitted for this 
area, Wisconsin has demonstrated that attainment of the 1997 8-hour 
ozone NAAQS will be maintained in the Milwaukee-Racine area through 
2022, with or without the implementation of CAIR or CSAPR. In addition, 
modeling conducted by EPA during the CSAPR rulemaking demonstrates that 
in both 2012 and 2014, even without taking into account reductions 
associated solely with CAIR or CSAPR, the counties in the Milwaukee-
Racine nonattainment area will have air quality that attains the 1997 
ozone NAAQS. Finally, Wisconsin has adopted 2015 and 2022 MVEBs that 
are supported by Wisconsin's ozone maintenance demonstrations and 
Wisconsin has adopted an ozone maintenance plan.

II. What comments did we receive on the proposed rule?

    EPA provided a 30-day comment period for the February 9, 2012, 
proposed rule. During the comment period, Wisconsin Manufacturers and 
Commerce submitted comments in support of the actions and we received 
one set of comments objecting to the redesignation of the Milwaukee-
Racine area submitted on behalf of the Sierra Club and the Midwest 
Environmental Defense Center. The adverse comments are summarized and 
addressed below.
    Comment 1: The commenter asserts that the redesignation of the 
Milwaukee-Racine area to attainment of the 1997 8-hour ozone standard 
would violate the CAA because the State of Wisconsin and EPA have not 
ensured that nonattainment area New Source Review (NSR) would apply 
after redesignation. The commenter contends that such a situation 
conflicts with the language of section 107(d)(3)(E)(v) of the CAA, 
which requires the State to have met all requirements of part D of the 
CAA, since part D includes requirements for NSR. The commenter argues 
that the requirements of section 107(d)(3)(E)(v) make no sense if the 
State's NSR program is not required to apply in the area after 
redesignation. The commenter further argues that, at a minimum, a 
requirement for NSR should be included in the State's ozone maintenance 
plan as a contingency measure to be implemented if the area 
subsequently violates the 1997 8-hour ozone standard. The commenter 
contends that EPA cannot rely on certain policy memoranda to support 
its approval of the State's ozone redesignation request and ozone 
maintenance plan without the requirement for the implementation of the 
NSR program in the Milwaukee-Racine area after redesignation.
    Response 1: As clearly stated in EPA's October 14, 1994, policy 
memorandum from Mary D. Nichols entitled ``Part D New Source Review 
(part D NSR) Requirements for Areas Requesting Redesignation to 
Attainment,'' ``EPA believes it is reasonable to interpret `measure,' 
as used in section 175A(d), not to include part D NSR.'' Congress used 
the undefined term ``measure'' differently in different provisions of 
the Act, which indicates that the term is susceptible to more than one 
interpretation and that EPA has the discretion to interpret it in a 
reasonable manner in the context of section 175A. See Greenbaum v. EPA, 
370 F.3d 527, 535-38 (6th Cir. 2004). (Court ``find[s] persuasive the 
EPA's argument that the very nature of the NSR permit program supports 
its interpretation that it is not intended to be a contingency measure 
pursuant to section 175A(d).'') It is reasonable to interpret 
``measure'' to exclude part D NSR in this context because Prevention of 
Significant Deterioration (PSD), a program that is the corollary of 
part D NSR for attainment areas, goes into effect in lieu of part D NSR 
upon redesignation. PSD requires that new sources demonstrate that 
emissions from their construction and operation will not cause or 
contribute to a violation of any NAAQS or PSD increment. The State has 
demonstrated that the areas will be able to maintain the standard 
without Part D NSR in effect, and the State's PSD program will become 
effective in the areas upon redesignation to attainment. See the 
rationale set forth at length in the Nichols Memorandum. See also the 
discussions of why full approval and retention of NSR is not required 
in redesignation actions in the following redesignation rulemakings: 60 
FR 12459, 12467-12468 (March 7, 1995) (Detroit, MI); 61 FR 20458, 
20469-20470 (May 7, 1996) (Cleveland-Akron-Lorrain, OH); 66 FR 53665, 
53669 (October 23, 2001) (Louisville, KY); 61 FR 31831, 31836-31837 
(June 21, 1996) (Grand Rapids, MI); 73 FR 29436, 29440-29441 (May 21, 
2008) (Kewaunee County, WI); 77 FR 34819, 34826-34827 (June 12, 2012) 
(Illinois portion of St. Louis, MO-IL).
    Comment 2: The commenter contends that the State of Wisconsin does 
not have a complete PSD program. Therefore, the commenter argues that 
EPA cannot rely on Wisconsin's PSD program being effective and 
immediately applicable upon redesignation of the Milwaukee-Racine area. 
For this reason, and the argument set forth in comment 1 above, the 
commenter contends that Wisconsin's ozone redesignation request and 
ozone maintenance plan do not meet the requirements of section 
107(d)(3)(E) of the CAA.
    The commenter gives the following reasons (see Comments 2(a)-2(c)) 
for its assertion that Wisconsin's PSD and NSR programs are inadequate 
for purposes of redesignation to attainment.
    Comment 2(a): The commenter contends that Wisconsin's PSD program 
does not comply with the requirement in EPA's 1997 8-hour ozone 
implementation phase 2 rule that NOX be considered as an 
ozone precursor under PSD. The commenter argues that the definition in 
Wisconsin's NSR and PSD regulations specifies only VOC to

[[Page 45254]]

be regulated as an ozone precursor. The commenter claims that this 
allows new or modified sources to add or increase NOX 
emissions without analyzing their impacts on ozone levels. The 
commenter contends that EPA has recently found similar SIPs to be 
deficient on this basis, and cites EPA's rulemaking at 75 FR 79300 
(December 20, 2010, Mississippi PSD rules).
    Response 2(a): EPA believes that the commenter is mistaken in its 
view, and that in fact Wisconsin interprets and implements its NSR and 
PSD regulations to include NOX as a precursor for ozone. 
Wisconsin has an approved PSD program that includes ozone as a 
regulated NSR pollutant. See NR 405.02(25i), Wisconsin Administrative 
Code. While the commenter is correct in stating that Wisconsin's rule 
does not specifically list NOX as a precursor for ozone, the 
rule does define ``regulated NSR air contaminant'' to include ``any air 
contaminant for which a national ambient air quality standard has been 
promulgated and any constituents or precursors for the air contaminants 
identified by the administrator * * *.'' See NR 405.02(25i)(a). EPA has 
identified both VOCs and NOX as precursors to ozone in the 
definition of ``Regulated NSR Pollutant.'' See 40 CFR 
51.166(b)(49)(i)(a), 52.21(b)(50)(i)(a).
    Wisconsin also sets a table of significant emissions rates for 
individual pollutants in the definition of significant at NR 
405.02(27)(a). This table sets the significant emissions rate for ozone 
at 40 tons per year (tpy) of VOCs and separately sets the significant 
emissions rate for NOx at 40 tpy. Wisconsin interprets its 40 tpy 
significant emissions rate for nitrogen oxides contained in NR 
405.02(27)(a) to apply to require both NO2 and ozone air 
quality analyses when emissions meet or exceed that emissions rate. 
Therefore, an increase in NOX emissions of 40 tpy or more 
will trigger the requirements to: (1) Obtain a PSD permit for ozone; 
(2) to perform an air quality analysis that demonstrates that the 
proposed source or modification will not cause or contribute to a 
violation of the ozone NAAQS; and (3) to apply best available control 
technology (BACT) for NOX. Wisconsin has confirmed this 
interpretation in a May 18, 2012, letter (hereafter, ``Sponseller 
letter'') and a June 6, 2012, email from Bart Sponseller, Director of 
the Bureau of Air Management, WDNR to Douglas Aburano, Chief of the 
Attainment Planning and Maintenance Section, Air Programs Branch, EPA 
Region 5. Although EPA is requiring Wisconsin to make revisions to its 
PSD regulations to specifically address NOX as a precursor 
to ozone for infrastructure SIP purposes, this interpretation means 
that Wisconsin is, in practice, requiring air quality analyses for 
ozone under its state PSD regulations consistent with Federal PSD 
regulations.
    Accordingly, the fact that Wisconsin's approved PSD SIP does not 
yet explicitly identify NOX as a precursor to ozone as 
required by EPA's Phase 2 ozone implementation rule does not prevent 
the program from addressing and helping to assure maintenance of the 
ozone standard in accordance with CAA section 175A.
    EPA notes that Wisconsin is currently in the process of adopting 
permanent rules for submission to EPA to add NOX as an 
explicit precursor to ozone consistent with the Federal regulations. 
Irrespective of the State's ongoing regulatory actions, EPA concludes 
that the features of Wisconsin's currently approved PSD program cited 
by the commenter do not detract from the program's adequacy for 
purposes of maintenance of the standard and redesignation of the area. 
In light of the assurances provided to EPA in the Sponseller letter and 
email, Wisconsin's currently approved PSD program is adequate for 
purposes of assuring maintenance of the 1997 8-hour ozone standard as 
required by section 175A.
    Comment 2(b): The commenter asserts that the State of Wisconsin 
does not conduct ambient air quality analyses for ozone standard 
compliance when issuing PSD permits, and that WDNR does not model ozone 
impacts, nor does it conduct other analyses of ozone impacts when 
issuing permits. The commenter therefore argues that Wisconsin's PSD 
program does not ensure that new and modified sources will not cause 
additional ozone standard violations.
    Response 2(b): As discussed in response 2(a), Wisconsin has 
communicated to EPA that the State is implementing its existing 
regulations consistent with the requirements of the Federal PSD 
regulations that require an air quality analysis for ozone if a 
significant emissions rate of 40 tpy for VOC and/or NOX is 
reached or exceeded.
    Furthermore, Federal PSD regulations at 40 CFR 51.166(k), (l) and 
(m) and 40 CFR 52.21(k), (l) and (m) contain requirements for ambient 
impact analyses for proposed major stationary sources and major 
modifications to obtain a PSD permit. These requirements apply for 
ozone when such sources or modifications trigger PSD review for ozone, 
but do not necessarily require quantitative modeling for ozone in all 
cases.\2\ See Letter from Gina McCarthy, EPA Assistant Administrator, 
Office of Air and Radiation, to Robert Ukeiley (Jan. 4, 2012) at 2; In 
Re CF&I Steel, L.P. dba EVRAZ Rocky Mountain Steel, Petition Number 
VIII-2011-01 (Order on Petition) (May 31, 2012) at 21-22. The 
regulations at 40 CFR 51.166(l) state that for air quality models the 
SIP shall provide for procedures which specify that all applications of 
air quality modeling involved in this subpart shall be based on the 
applicable models, data bases, and other requirements specified in 
appendix W of part 51 (Guideline on Air Quality Models). Where an air 
quality model specified in appendix W of part 51 (Guideline on Air 
Quality Models) is inappropriate, the model may be modified or another 
model substituted. Such a modification or substitution of a model may 
be made on a case-by-case basis or, where appropriate, on a generic 
basis for a specific State program. Written approval of the 
Administrator must be obtained for any modification or substitution. In 
addition, use of a modified or substituted model must be subject to 
notice and opportunity for public comment under procedures set forth in 
Sec.  51.102. See also 40 CFR 52.21(l).
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    \2\ Wisconsin's rules at NR 405.09, NR 405.10 and NR 405.11 meet 
the requirements of 40 CFR 51.166(k), (l), and (m), respectively.
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    The above-referenced parts of 40 CFR part 51 and 52 contain the 
umbrella components for ambient air quality and source impact analyses 
for PSD permitting. PSD requirements for SIPs are found in 40 CFR 
51.166. As discussed above, sections 51.166(l) and 52.21(l), and 
Wisconsin rule NR 405.10, refer to 40 CFR part 51, appendix W for the 
appropriate method to utilize for the ambient impact assessment. 40 CFR 
part 51, appendix W is the Guideline on Air Quality Models and Section 
1.0.a. states that the Guideline recommends air quality modeling 
techniques that should be applied to State Implementation Plan (SIP) 
revisions for existing sources and to new source review (NSR), 
including prevention of significant deterioration (PSD). {footnotes not 
included{time}  Applicable only to criteria air pollutants, it is 
intended for use by EPA Regional Offices in judging the adequacy of 
modeling analyses performed by EPA, State and local agencies, and by 
industry. The Guideline is not intended to be a compendium of modeling 
techniques. Rather, it should serve as a common measure of acceptable 
technical analysis when support by sound scientific judgment.

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    Appendix W, section 5.2.1 includes the Guideline recommendations 
for models to be utilized in assessing ambient air quality impacts for 
ozone. Specifically, Section 5.2.1.c states that choice of methods used 
to assess the impact of an individual source depends on the nature of 
the source and its emissions. Thus, model users should consult with the 
Regional Office to determine the most suitable approach on a case-by-
case basis (subsection 3.2.2).
    Appendix W, section 5.2.1.c provides that the state and local 
permitting authorities and permitting applicants should work with the 
appropriate EPA Regional Office on a case-by-case basis to determine an 
adequate method for performing an air quality analysis for assessing 
ozone impacts. Due to the complexity of modeling ozone and the 
dependency on the regional characteristics of atmospheric conditions, 
EPA believes this is an appropriate approach, rather than specifying a 
method for assessing single source ozone impacts, which may not be 
appropriate in all circumstances.\3\ Instead, the choice of method 
``depends on the nature of the source and its emissions. Thus, model 
users should consult with the Regional Office to determine the most 
suitable approach on a case-by-case basis'' appendix W, section 
5.2.1.c. Thus, appendix W allows flexibility through the consultation 
process to determine either modeling based or other analysis techniques 
may be acceptable. Based on an evaluation of the source, its emissions 
and background ozone concentrations, an ozone impact analysis other 
than modeling may be required. Therefore, permitting authorities should 
consult and work with EPA Regional Offices as described in appendix W, 
including section 3.0.b and c, 3.2.2, and 3.3, to determine the 
appropriate approach to assess ozone impacts for each PSD required 
evaluation. Although EPA has not selected one particular preferred 
model in appendix A of appendix W (Summaries of Preferred Air Quality 
Models) for conducting ozone impact analyses for individual sources, 
permitting authorities in Wisconsin must comply with the appropriate 
PSD SIP requirements with respect to ozone.
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    \3\ EPA has explained that given the complexities of ozone 
formation, its judgment has been that it was not technically sound 
to designate with particularity specific models that must be used to 
assess the impacts of a single source on ozone concentrations, but 
rather has provided a consultation process in appendix W for 
determining particular models or other analytical techniques that 
should be used on a case-by-case basis. See Letter from Gina 
McCarthy, EPA Assistant Administrator, Office of Air and Radiation 
to Robert Ukeiley (Jan. 4, 2012) at 2. However, EPA granted a 
petition for rulemaking on January 4, 2012, stating that it would 
engage in a rulemaking process to consider whether updates to EPA's 
Guideline on Air Quality Models as published in appendix W are 
warranted, and, as appropriate, to incorporate new analytical 
techniques or models for ozone. Id at 1.
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    EPA has previously approved the State's PSD program.\4\ EPA expects 
Wisconsin to consult with staff in the Region 5 Office on a case-by-
case basis for permitting purposes to determine appropriate methods for 
assessing the impacts from specific sources on ozone concentrations. An 
example of such consultation is the permitting action for Aarrowcast, 
Inc. in Shawano, Wisconsin.
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    \4\ See, ``Approval and Promulgation of Implementation Plans; 
Wisconsin,'' 64 FR 28745 (May 27, 1999). While the Phase 2 Rule 
obligates states to make explicit regulatory changes in order to 
clarify and remove any ambiguity concerning the requirement that 
NOX be treated as a precursor to ozone in permitting 
contexts, the State has authority in its PSD SIP to treat 
NOX as a precursor to ozone in permitting decisions, and 
the State is correctly interpreting its PSD and NSR regulations with 
regard to inclusion of NOX as a precursor to ozone as 
discussed in Response 2(a).
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    Comment 2(c): The commenter contends that the Wisconsin SIP is 
deficient because it contains an unacceptable definition of ``major 
modification'' for purposes of NSR and PSD for sources involving fuel 
change. The commenter cites a June 17, 2009, letter from EPA to WDNR 
noting this definition problem in the Wisconsin SIP. The commenter 
asserts that because of this problem, emissions can increase as a 
result of non-exempt fuel changes without going through a PSD analysis, 
meaning that PSD provides no protection for the ozone NAAQS in some 
situations.
    Response 2(c): ``Major modification'' as it relates to PSD is 
generally defined in NR 405.02(21) of Wisconsin's SIP. The exemptions 
to ``physical change'' or ``change in the method of operation'' are 
contained at NR 405.02(21)(b). One exemption is the ability of a source 
capable of accommodating different types of fuels before 1975 to switch 
the type of fuel burned, unless prohibited by a restriction in a permit 
established after 1975.
    EPA regulations contained at 40 CFR 51.166(b)(2)(iii)(e)(1) and (2) 
specifically prescribe when use of an alternative fuel is not 
considered a physical change for purposes of defining a ``major 
modification.'' These regulations require that a physical change or 
change in the method shall not include use of an alternative fuel or 
raw material by a stationary source which the source was capable of 
accommodating before January 6, 1975, unless such change would be 
prohibited under any Federally enforceable permit condition which was 
established after January 6, 1975 pursuant to 40 CFR 52.21 or under 
regulations approved pursuant to 40 CFR part 51, subpart I, or 40 CFR 
51.166; or the source is approved to use the fuel under any permit 
issued under 40 CFR 52.21 or under regulations approved pursuant to 40 
CFR 51.166.
    The Wisconsin regulations set out the conditions for the fuel 
change exemption as follows:

    The source was capable of accommodating the alternative fuel or 
raw material before January 6, 1975, unless the change would be 
prohibited under any federally enforceable permit condition which 
was established after January 6, 1975 pursuant to this chapter or 
ch. NR 406 or 408 or under an operation permit issued pursuant to 
ch. NR 407.
    [Or, t]he source is approved to use the alternative fuel or raw 
material under any permit issued under this chapter or ch. NR 406, 
407, or 408. See NR 405.02(21)(b)(5).

    The Wisconsin rule is similar to the Federal rule, but differs by 
substituting references to Wisconsin Administrative Code sections, and 
omitting reference to permits issued under the Federal program at 40 
CFR 52.21.
    The commenter raised concerns that failure to cite Federal 
regulations results in the loss of prohibitions on fuel use exemptions 
that may have been contained in Federally-issued PSD permits, issued 
prior to EPA's approval of Wisconsin's PSD SIP, resulting in more 
exemptions to the definition of ``major modification'' than allowed by 
the Federal rules.
    WDNR states that under its title V operating permit program, all 
applicable requirements to a source are included in its operation 
permit. As a result, WDNR states that it clearly recognizes that 
requirements contained in a Federally-issued PSD permit would be 
applicable requirements to the source and that they would be included 
in the source's title V operating permit, therefore making the 
requirements fully enforceable under State and Federal law. WDNR has 
taken the position that this is a very narrow issue and has asserted 
that ``to its knowledge it is not aware of a single situation where an 
omission has occurred in practice.'' See Sponseller letter. While the 
commenter contends that emissions can ``increase from non-exempt fuel 
changes without going through a PSD analysis,'' the commenter has not 
provided information to support this assertion nor has he identified 
any instance where any such emissions increase has actually occurred.
    Although EPA is requiring Wisconsin to revise its PSD regulations 
to specifically address this issue for

[[Page 45256]]

infrastructure SIP purposes, EPA agrees with WDNR that this issue is a 
very narrow one, and that an omission in practice is perhaps 
nonexistent. EPA recognizes that in practice, WDNR has the authority 
and means to ensure adherence to the prohibitions on fuel use 
exemptions in certain instances, consistent with our own definition of 
``major modification.'' Therefore, EPA concludes that the features of 
Wisconsin's current PSD program cited by the commenter do not detract 
from the program's adequacy for purposes of maintenance of the standard 
and redesignation of the area.
    Comment 3: The commenter asserts that, besides PSD and NSR 
deficiencies, the Wisconsin SIP contains several other deficiencies 
that are contrary to the requirements of section 110 of the CAA.
    The commenter claims that the Wisconsin SIP contains a source 
startup and shutdown excess emissions exemption that EPA has found to 
be not approvable and in conflict with section 110 of the CAA. The 
commenter also asserts that the Wisconsin SIP contains ``illegal'' 
Director's Discretion provisions and that EPA has interpreted section 
110 as prohibiting such SIP provisions. The commenter claims that the 
Wisconsin Administrative Code contains such provisions at NR 436.03(2), 
NR 436.04, and NR 436.06. The commenter asserts that, historically, EPA 
has determined that it cannot approve SIPs as being adequate when they 
contain such Director's Discretion provisions that have the potential 
to change the stringency of the SIP.
    Response 3: The issue before EPA in the current rulemaking action 
is a redesignation for the Milwaukee-Racine area for the 1997 8-hour 
ozone standard, including the maintenance plan, and comprehensive 
emissions inventories. The SIP provisions identified by the commenter 
are not currently being proposed for revision as part of the 
redesignation submittals. Because the rules cited by the commenter are 
not pending before EPA and/or are not the subject of this rulemaking 
action, EPA did not undertake a full SIP review of the individual 
provisions. It has long been established that EPA may rely on prior SIP 
approvals in approving a redesignation request plus any additional 
measures it may approve in conjunction with a redesignation action. See 
e.g., page 3 of the September 4, 1992, memorandum from John Calcagni 
entitled ``Procedures for Processing Requests to Redesignate Areas to 
Attainment'' (Calcagni Memorandum); Wall v. EPA, 265 F.3d 426 (6th Cir. 
2001); Southwestern Pennsylvania Growth Alliance v. Browner, 144 F.3d 
984 (6th Cir. 1998); 68 FR 25413, 25426 (May 12, 2003) (St. Louis 
redesignation). The CAA does not require EPA in the context of a 
redesignation to attainment to revisit and address existing SIP 
provisions, and envisions that EPA may address such issues separately 
and outside the context of action on a redesignation request.
    The CAA provides other avenues and mechanisms to address specific 
substantive deficiencies in existing SIPs. These statutory tools allow 
EPA to take appropriate tailored action, depending upon the nature and 
severity of the alleged SIP deficiency. Section 110(k)(5) authorizes 
EPA to issue a ``SIP call'' whenever the Agency determines that a 
state's SIP is substantially inadequate to attain or maintain the 
NAAQS, to mitigate interstate transport, or otherwise to comply with 
the CAA.\5\ Section 110(k)(6) authorizes EPA to correct errors in past 
actions, such as past approvals of SIP submissions.\6\
---------------------------------------------------------------------------

    \5\ For example, EPA has recently issued a SIP call in Utah to 
rectify a specific SIP deficiency related to a startup, shutdown and 
malfunction issue. See, ``Finding of Substantial Inadequacy of 
Implementation Plan; Call for Utah State Implementation Plan 
Revision,'' 74 FR 21639 (April 18, 2011).
    \6\ EPA has recently utilized this authority to correct errors 
in past actions on SIP submissions related to PSD programs. See, 
``Limitation of Approval of Prevention of Significant Deterioration 
Provisions Concerning Greenhouse Gas Emitting-Sources in State 
Implementation Plans; Final Rule,'' 75 FR 82,536 (December 30, 
2010). EPA has previously used its authority under CAA 110(k)(6) to 
remove numerous other SIP provisions that the Agency determined it 
had approved in error. See, e.g., 61 FR 38664 (July 25, 1996) and 62 
FR 34641 (June 27, 1997) (corrections to American Samoa, Arizona, 
California, Hawaii, and Nevada SIPs); 69 FR 67062 (November 16, 
2004) (corrections to California SIP); and 74 FR 57051 (November 3, 
2009) (corrections to Arizona and Nevada SIPs).
---------------------------------------------------------------------------

    Comment 4: The commenter argues that EPA has not demonstrated that 
the reduction in ozone pollution in the Milwaukee-Racine area is due to 
permanent and enforceable emission reductions. The bases for the 
commenter's assertion are set forth in comments 4(a) through (f).
    Comment 4a: The commenter asserts that comparing 2005 and 2008 
emissions in the Milwaukee-Racine ozone nonattainment area is not an 
adequate method to demonstrate that the ozone air quality improvement 
in this area is due to the implementation of permanent and enforceable 
emission control measures, in keeping with section 107(d)(3)(E)(iii) of 
the CAA. The commenter contends that the calculated change in VOC and 
NOX emissions between 2005 and 2008 does not show that the 
emission changes were due to permanent and enforceable emission 
reductions, as opposed to temporary emission reductions and/or emission 
reductions due to factory output slowdowns (under utilization of 
factory capacity) or recession-related output and transportation 
declines.
    To support the commenter's assertion, the commenter compares 2008 
permitted (allowable) NOX emissions for electric power 
plants in the Milwaukee-Racine area with the total point source 
NOX emissions documented by EPA for this area in EPA's 
Milwaukee-Racine area ozone redesignation proposed rule. The commenter 
shows that the permitted NOX emissions from only the 
electric power plants in the Milwaukee-Racine area exceed the actual 
2008 NOX emissions for all point sources in the Milwaukee-
Racine area reported by EPA in the proposed rule for the redesignation 
of the Milwaukee-Racine area to attainment of the 1997 8-hour ozone 
standard, 77 FR 6738. The commenter contends that the comparison of 
permitted NOX emissions (electric generating plants) and 
actual, reported NOX emissions (all point sources) shows 
that facilities can lawfully emit at much higher rates. Therefore, the 
commenter asserts that EPA has not properly considered permanent and 
enforceable emission reductions.
    Response 4a: EPA's longstanding practice and policy \7\ provide for 
states to demonstrate permanent and enforceable emissions reductions by 
comparing nonattainment area emissions occurring during the 
nonattainment period with emissions in the area during the attainment 
period. Therefore, selecting 2008 as a representative attainment year, 
and comparing emissions for this year to those of a representative year 
during the nonattainment period, 2005, is an appropriate and long-
established approach to demonstrate that emission reductions occurred 
in the area between the years of nonattainment and attainment. These 
reductions, therefore, can be seen to account for the observed air 
quality improvement.
---------------------------------------------------------------------------

    \7\ See Calcagni memorandum, pp. 4 and 8-9.
---------------------------------------------------------------------------

    As discussed in the proposed rule at 77 FR 6727, 6737-6738 
(February 9, 2012), Wisconsin and upwind areas have implemented a 
number of permanent and enforceable regulatory control measures which 
have reduced emissions and resulted in a corresponding improvement in 
air quality. These controls include regulations to control 
NOX emissions at electric utilities and large industrial 
combustion sources and establish NOX emissions standards for 
new sources;

[[Page 45257]]

Tier 2 emission standards for vehicles; and the nonroad diesel rule. In 
addition a broad range of emission sectors were required to reduce 
ozone precursors as a result of being subject to Federal new source 
performance standards, national emissions standards for hazardous air 
pollutants, and maximum achievable control technology standards with 
compliance requirements that take effect over the relevant time period. 
Further, Federal control measures as well as the NOX SIP 
Call have resulted in reduced ozone precursors being transported into 
the area. While the commenter expressed concerns that the emissions 
reductions may be temporary and/or due to factory output slowdowns 
(underutilization of factory capacity) or recession-related output and 
transportation declines, the commenter has made no demonstration that 
this is the case.
    With regard to consideration of actual versus allowable/permitted 
emission levels, longstanding practice and EPA policy support the use 
of actual emissions when demonstrating permanent and enforceable 
emission reductions.\8\ Changes in actual emissions are more reflective 
of emission reductions that in reality contribute to improvements in 
monitored ozone concentrations. Sources seldom, if ever, emit at 
maximum allowable emission levels, and assuming that all sources 
simultaneously operate at maximum capacity would result in a gross 
overestimation of emission levels. For this reason, EPA believes actual 
emissions are the appropriate emission levels to consider when 
comparing nonattainment year emissions with attainment year emissions.
---------------------------------------------------------------------------

    \8\ See Calcagni Memorandum, pp. 4 and 8-9.
---------------------------------------------------------------------------

    Comment 4b: The commenter contends that neither EPA nor the State 
of Wisconsin made any calculation of the amounts of emission reduction 
that actually resulted from the implementation of permanent and 
enforceable emission controls. The commenter asserts that there was no 
connection between the reported change in actual emissions and the 
enforceable emission reduction requirements implemented in the 
Milwaukee-Racine area.
    The commenter objects to EPA's listing of implemented emission 
control requirements as a demonstration that such emission control 
requirements have resulted in the observed ozone air quality 
improvement in the Milwaukee-Racine area. The commenter states that EPA 
has not estimated the emission impacts of each of the implemented 
emission control requirements and contends that EPA has not tied such 
emissions impacts to the reported change in actual emissions between 
2005 and 2008.
    Response 4b: EPA's conclusion here is fully supported by the facts 
and applicable legal criteria. EPA's longstanding practice and policy 
\9\ provides for states to demonstrate permanent and enforceable 
emissions reductions by comparing nonattainment area emissions 
occurring during the nonattainment period with emissions in the area 
during the attainment period. See response 4a.
---------------------------------------------------------------------------

    \9\ See Calcagni memorandum, pp. 4 and 8-9.
---------------------------------------------------------------------------

    Therefore, selecting 2008 as a representative attainment year, and 
comparing emissions for this year to those for a representative year 
during the nonattainment period, 2005, is an appropriate and long-
established approach to establish that emission reductions occurred in 
the area between the years of nonattainment and attainment. These 
emission reductions, therefore, can be seen to account for the observed 
air quality improvement.
    In developing the attainment year emissions inventory, the State 
took into account permanent and enforceable emissions control programs 
being implemented when estimating emissions. The change in emissions 
from 2005 to 2008 is shown in Table 4 in the proposed rule (77 FR 6727, 
6738).
    For point sources, the State's emissions estimates factored in 
process information, operation information and control factors. 
Wisconsin adopted NOX RACT regulations to control 
NOX emissions at electric utilities and large industrial 
combustion sources and established NOX emissions standards 
for new sources. The regulation of existing sources was estimated to 
achieve a 30 ton per day (tpd) reduction in NOX by 2003 and 
a 55 tpd reduction by 2007, i.e., approximately a 25 tpd reduction 
between 2003, a nonattainment year and 2007, an attainment year.
    For area sources, emissions are strongly associated with population 
levels. Therefore, although controls were considered in area source 
calculations, emissions grew slightly between 2005 and 2008 as a result 
of population growth.
    Reductions in VOC and NOX emissions have occurred as a 
result of Federal mobile source emission control measures, with 
additional emission reductions expected to occur over the maintenance 
period. These measures include Tier 2 Emission Standards for Vehicles 
and Gasoline Sulfur Standards, the Heavy-Duty Diesel Engine Rule, and 
the Nonroad Diesel Rule. Emissions reductions from these permanent and 
enforceable programs were quantified by the State in its calculation of 
the nonroad and onroad mobile sector emissions inventories.
    For nonroad mobile sources, it is standard and accepted practice 
for states to estimate emissions using an EPA-approved emissions model. 
Wisconsin ran EPA's approved emissions model, National Mobile Inventory 
Model (NMIM), which estimates emissions while taking into account the 
effect of Federal nonroad mobile control programs and fleet turnover. 
The NMIM model showed that between 2005 and 2008, total nonroad VOC and 
NOX emissions in the Milwaukee-Racine area were reduced by 
approximately 17 percent and 10 percent, respectively. The emissions 
estimates generated by NMIM quantify permanent and enforceable 
emissions reductions from nonroad mobile control programs; it is not 
necessary for the state to identify the portion of these reductions 
attributable to each individual control measure.
    For onroad mobile sources, it is standard and accepted practice for 
states to estimate emissions using an EPA-approved emissions model and 
daily vehicle miles traveled data. Wisconsin ran EPA's approved onroad 
mobile emissions model, MOVES2010a, which takes into account the effect 
of Federal motor vehicle control programs and fleet turnover when 
calculating emissions estimates. Between 2005 and 2008, onroad VOC and 
NOX emissions in the Milwaukee-Racine area were reduced by 
approximately 22 percent and 21 percent, respectively. The emissions 
estimates generated by the MOVES model quantify permanent and 
enforceable emissions reductions from all Federal motor vehicle control 
programs; it is not necessary for the state to identify the portion of 
these reductions attributable to each individual control measure.
    Permanent and enforceable emissions reductions in upwind areas also 
contributed to attainment of the 1997 8-hour ozone standard in the 
Milwaukee-Racine area. While Wisconsin did not quantify these upwind 
emissions reductions by state, overall emissions reductions estimates, 
by program, are available. Under the NOX SIP Call, ozone 
season NOX emissions were reduced by approximately 68,000 
\10\ tons between 2005 and 2008. In addition, permanent and enforceable 
reductions in VOC and NOX emissions have

[[Page 45258]]

occurred in upwind areas from Federal motor vehicle control programs. 
Overall emissions reductions from the implementation of these programs 
have been estimated as follows: Tier 2 Emission Standards for Vehicles 
and Gasoline Sulfur Standards, 69-95 percent reduction in 
NOX and 12-18 percent reduction in VOCs, depending on 
vehicle class; the Heavy-Duty Diesel Engine Rule, 95 percent reduction 
in NOX; and the Nonroad Diesel Rule, 90 percent reduction in 
NOX. Some of these emission reductions occurred by the 
attainment period and additional emission reductions will occur during 
the maintenance period as the fleet turns over.
---------------------------------------------------------------------------

    \10\ See 2008 NOx Budget Trading Program Progress Report, http://www.epa.gov/airmarkets/progress/NBP_4.html.
---------------------------------------------------------------------------

    It is not necessary for every change in emissions between the 
nonattainment year and the attainment year to be permanent and 
enforceable. Rather, the improvement in air quality necessary for the 
area to attain the relevant NAAQS must be reasonably attributable to 
permanent and enforceable reductions in emissions. In summary, the 
State has identified a number of permanent and enforceable regulatory 
control measures which have been implemented in Wisconsin as well as in 
upwind areas and has documented significant emissions reductions 
resulting from these programs. These documented permanent and 
enforceable emissions reductions in combination with four three-year 
periods of monitoring data showing that the Milwaukee-Racine area is 
attaining the 1997 8-hour ozone NAAQS (2006-2008, 2007-2009, 2008-2010, 
and 2009-2011) represents an adequate demonstration that the 
improvement in air quality can reasonably be attributed to the 
significant reduction in emissions resulting from permanent and 
enforceable emissions control programs.
    Comment 4c: The commenter objects to EPA's statement that emission 
reductions resulted from Wisconsin's implementation of the Rate-Of-
Progress (ROP) plan under the previous 1-hour ozone standard. The 
commenter claims that the ROP plan was implemented well before 2005, 
the base year of EPA's emission comparison, and that implementation 
preceded the years the area violated the 1997 8-hour ozone standard.
    Response 4c: The commenter's objection is unfounded. EPA mentioned 
Wisconsin's ROP plan under the 1-hour ozone standard in the context of 
its discussion of Wisconsin's stationary source NOX emission 
control rules. See 77 FR 6737. Wisconsin estimated that the State's 
stationary NOX emission control rules, which include 
emission controls applied at electric utilities and large industrial 
combustion sources, would produce NOX emission reductions 
between 2005 and 2007. Wisconsin estimated that these emission controls 
would achieve a 30 tpd reduction in NOX emissions by 2003 
and a 55 tpd reduction by 2007, i.e., approximately a 25 tpd additional 
reduction between 2003 and 2007.
    The fact that the State adopted the NOX control rules in 
the State's ROP plan under the 1-hour ozone standard and that it began 
implementing the ROP plan prior to 2005 does not preclude 
NOX emission reductions from these NOX control 
rules from occurring after 2005. The implementation of these rules was 
phased in over time, resulting in additional emission reductions for a 
number of years after the State's adoption of the NOX 
emissions control regulations.
    Comment 4d: The commenter objects to EPA's citing of EPA's 2004 
non-road diesel engine rule and 2000 and 2007 heavy duty diesel rules 
without acknowledging that the emissions reduction estimates for these 
rules are national calculations of the possible emission impacts once 
the rules are fully implemented. The commenter argues that, since these 
rules rely on fleet turnover, they did not result in major emission 
reductions between 2005 and 2008. The commenter believes that EPA erred 
in not making an emission reduction estimate for the local impacts of 
these rules during the period of 2005-2008.
    Response 4d: There is no basis for EPA to conclude that the Federal 
diesel emission controls cited by the commenter have had a smaller 
impact, on a percentage emission reduction basis, in the Milwaukee-
Racine area than in other parts of the United States. EPA has cited 
national emission reduction estimates on a percentage basis for these 
controls, with the implication that similar emission reduction 
percentages have occurred in the Milwaukee-Racine area. The commenter 
has provided no independent emission reduction estimates localized to 
the Milwaukee-Racine area to refute EPA's assumption that such emission 
reductions have occurred in the Milwaukee-Racine area. Lacking such 
estimates, EPA continues to believe that the Federal diesel emission 
control requirements have resulted in reduced NOX and VOC 
emissions in the Milwaukee-Racine area, resulting in lower peak ozone 
concentrations in this area.
    Furthermore, for nonroad mobile sources, it is a standard and 
accepted practice for states to estimate emissions using an EPA-
approved emissions model. Wisconsin ran EPA's approved emissions model, 
NMIM, which takes into account the affect of Federal nonroad mobile 
control programs and fleet turnover when calculating emissions 
estimates. Between 2005 and 2008, total nonroad VOC and NOX 
emissions in the Milwaukee-Racine area were reduced by approximately 17 
percent and 10 percent, respectively.
    For onroad mobile sources, it is standard and accepted practice for 
states to estimate emissions using an EPA-approved emissions model and 
daily vehicle miles traveled data. Wisconsin ran EPA's approved onroad 
mobile emissions model, MOVES2010a, which takes into account the affect 
of Federal motor vehicle control programs and fleet turnover when 
calculating emissions estimates. Between 2005 and 2008, onroad VOC and 
NOX emissions in the Milwaukee-Racine area were reduced by 
approximately 22 percent and 21 percent, respectively.
    Comment 4e: The commenter objects to EPA's reference to the 
NOX SIP Call since EPA failed to mention that Wisconsin 
sources were not included in this regulation. The commenter asserts 
that the NOX emission reductions resulting for sources 
upwind of the Milwaukee-Racine area are not permanent and enforceable 
because the NOX SIP Call has been replaced and its 
replacement has been stayed by the United States Court of Appeals for 
the District of Columbia Circuit (D.C. Appeals Court). Finally, the 
commenter argues that the NOX SIP Call cannot be relied on 
to produce permanent and enforceable NOX emission reductions 
because the NOX SIP Call provides for the use of a cap-and-
trade emission control program, which the D.C. Appeals Court has held 
cannot satisfy area-specific statutory emission control requirements. 
NRDC v. EPA, 571 F.3d 1245, 1257 (D.C. Cir. 2009).
    Response 4e: The commenter's assertion that EPA failed to mention 
that Wisconsin sources were not covered by the NOX SIP Call 
is incorrect. The proposal included a footnote explicitly noting that 
the State of Wisconsin was not included in the NOX SIP Call 
(77 FR 6732 n.3). EPA also did not propose to rely on and is not 
relying on any reductions associated with the NOX SIP Call 
in the State of Wisconsin or in the Milwaukee-Racine ozone 
nonattainment area. With regard to NOX emission reductions 
in the Milwaukee-Racine ozone nonattainment area, we note here that 
Wisconsin has adopted and implemented NOX RACT rules for 
major NOX sources in the Milwaukee-Racine ozone 
nonattainment area. These NOX RACT rules were approved into 
the

[[Page 45259]]

Wisconsin SIP by the EPA on October 19, 2010, 75 FR 64155. Wisconsin's 
NOX RACT rules became effective on August 1, 2007, and 
required source compliance with the rules by May 1, 2009. Although 
sources had until May 1, 2009, to fully comply with the NOX 
RACT rules, EPA believes that some sources began implementation of the 
required NOX emission controls well ahead of this 
implementation deadline, resulting in NOX emission 
reductions in the Milwaukee-Racine ozone nonattainment area by 2008. 
These NOX emission controls are permanent and enforceable.
    While the NOX SIP Call did not cover the State of 
Wisconsin, it did require the District of Columbia and 22 states to 
reduce emissions of NOX and, as EPA noted in the proposal, 
these reductions resulted in lower concentrations of transported ozone 
entering the Milwaukee-Racine area. 77 FR 6737. Because the area is 
impacted by the transport of ozone and its precursors, upwind 
reductions in NOX resulting from the NOX SIP Call 
are relevant to these redesignation actions. EPA disagrees with the 
commenter's position that NOX emission reductions in areas 
upwind of the Milwaukee-Racine area and associated with the 
NOX SIP Call cannot be considered to be permanent and 
enforceable. The commenter's first argument--that the NOX 
emission reductions are not permanent and enforceable because the 
NOX SIP Call has been replaced--is based on a 
misunderstanding of the relationship between CAIR and the 
NOX SIP Call. While the CAIR ozone-season trading program 
replaced the ozone-season NOX trading program developed in 
the NOX SIP Call (70 FR 25290), nothing in the CAIR relieved 
states of their NOX SIP Call obligations. In fact, in the 
preamble to CAIR, EPA emphasized that the states and certain units 
covered by the NOX SIP Call but not CAIR must still satisfy 
the requirements of the NOX SIP Call. EPA provided guidance 
regarding how such states could meet these obligations.\11\ EPA did not 
suggest that states could disregard their NOX SIP Call 
obligations. (70 FR 25290). For states covered by the NOX 
SIP Call, the CAIR NOX ozone season program provides a way 
to continue to meet the NOX SIP Call obligations for 
electric generating units (EGUs) and large non-electric generating 
units (nonEGUs). In addition, the anti-backsliding provisions of 40 CFR 
51.905(f) specifically provide that the provisions of the 
NOX SIP Call, including the statewide NOX 
emission budgets, continue to apply.
---------------------------------------------------------------------------

    \11\ EPA guidance regarding the NOX SIP Call 
transition to CAIR can be found at http://www.epa.gov/airmarkets/progsregs/cair/faq-10.html. EPA guidance regarding the 
NOX SIP Call transition for the CSAPR can be found at 
http://www.epa.gov/crossstaterule/faqs.html.
---------------------------------------------------------------------------

    In sum, the requirements of the NOX SIP Call remain in 
force. They are permanent and enforceable as are state regulations 
developed to implement the requirements of the NOX SIP Call. 
Further, the fact that the CSAPR which was to replace CAIR was stayed 
by the D.C. Appeals Court is not relevant since neither CAIR nor the 
CSAPR replace the requirements of the NOX SIP Call, and EPA 
has determined that the area does not need any additional reductions 
from CAIR or the CSAPR to remain in attainment.
    EPA also disagrees with the commenter's argument that the emission 
reductions in upwind areas associated with the NOX SIP Call 
cannot be considered permanent and enforceable because the 
NOX SIP Call provides for a trading program. There is no 
support for the commenter's argument that EPA must ignore all emission 
reductions in upwind areas that were achieved by the NOX SIP 
Call simply because the mechanism used to achieve the emission 
reductions is an emissions trading program. As a general matter, 
trading programs establish mandatory caps on emissions and permanently 
reduce the total emissions allowed by sources subject to the programs. 
The emission caps and associated controls are enforced through the 
associated SIP rules or Federal Implementation Plans (FIPs). Any 
purchase of allowances and increase in emissions by a utility 
necessitates a corresponding sale of allowances and results in an 
emission reduction by another utility. Given the regional nature of 
ozone formation and transport, the emission reductions will have an air 
quality benefit that will compensate, at least in part, for the impact 
of any emission increase.
    In addition, the case cited by the commenter, NRDC v. EPA, 571 F.3d 
1245 (DC Cir. 2009), does not support the commenter's position. The 
case addressed EPA's determination that the CAA nonattainment area RACT 
requirement was satisfied by the NOX SIP Call trading 
program. The court held that, because EPA had not demonstrated that the 
trading program would result in sufficient emission reductions within a 
nonattainment area, its determination that the program satisfied RACT 
was not supported. Id. 1256-58. The court explicitly noted that EPA 
might be able to reinstate the provision providing that compliance with 
the NOX SIP Call satisfies NOX RACT for EGUs for 
particular nonattainment areas if, upon conducting a technical 
analysis, it could demonstrate that the NOX SIP Call results 
in greater emissions reductions in a nonattainment area than would be 
achieved if RACT-level controls were installed in that area. Id. at 
1258. In this case, EPA did not assume that the NOX SIP Call 
led to any reductions within the nonattainment area. As such, the NRDC 
v. EPA decision is not relevant here.
    Comment 4f: The commenter asserts that neither EPA nor the State of 
Wisconsin have attempted to demonstrate the connection between the 
reported emission reductions and the observed ozone air quality 
improvement in the Milwaukee-Racine area. No modeling or other 
acceptable analyses, including temporal analyses of emission changes 
and ozone changes, have been done to demonstrate that the emission 
reductions are responsible for the observed air quality improvement. No 
correlation between emission changes and ozone changes has been 
established. Therefore, EPA has failed to prove that permanent and 
enforceable emission reductions have caused the observed ozone air 
quality improvement in the Milwaukee-Racine area.
    Response 4f: EPA's conclusion that the ozone improvement in the 
Milwaukee-Racine area is due to the implementation of emission controls 
is fully supported by the facts and applicable legal criteria. As 
discussed in greater detail in response 4(b), EPA's longstanding 
practice and policy provides for states to demonstrate permanent and 
enforceable emissions reductions by comparing nonattainment area 
emissions occurring during the nonattainment period with the emissions 
in the area during the attainment period. Therefore, selecting 2008 as 
a representative attainment year, and comparing emissions for this year 
to those for a representative year during the nonattainment period, 
2005, is an appropriate and long-established approach that demonstrates 
the occurrence of emission reductions in the area between the years of 
nonattainment and attainment. These emission reductions, therefore, can 
be seen to account for the observed air quality improvement.
    With respect to the commenter's assertion that EPA has not 
conducted analyses to prove that emission reductions between 2005 and 
2008 led to reduced ozone concentrations, as noted above, comparing 
emissions for a representative nonattainment year to emissions for a 
representative attainment year is such a demonstration. The CAA does 
not specifically require the use of modeling in making any such 
demonstration and it has not been the general practice to do so. The 
State has

[[Page 45260]]

identified a number of permanent and enforceable regulatory control 
measures that have been implemented in Wisconsin as well as in upwind 
areas, and has documented significant emissions reductions resulting 
from these programs. These documented permanent and enforceable 
emissions reductions in combination with four three-year periods of 
monitoring data showing that the Milwaukee-Racine area is attaining the 
1997 8-hour ozone NAAQS (2006-2008, 2007-2009, 2008-2010, and 2009-
2011) represents an adequate demonstration that the improvement in air 
quality can reasonably be attributed to the significant reduction in 
emissions resulting from permanent and enforceable emissions control 
programs.
    Comment 5: The commenter contends that EPA has not conducted an 
adequate analysis of the effect the ozone redesignation will have on 
other NAAQS. The commenter claims that EPA has failed to comply with 
the requirements of section 110(l), which requires EPA to conduct such 
an analysis whenever it approves a revision in a state air quality 
plan.
    Response 5: Section 110(l) provides in part: ``the Administrator 
shall not approve a revision of a plan if the revision would interfere 
with any applicable requirement concerning attainment and reasonable 
further progress * * *, or any other applicable requirement of this 
chapter.'' As a general matter, EPA must and does consider section 
110(l) requirements for every SIP revision, including whether the 
revision would ``interfere with'' any applicable requirement. See, 
e.g., 70 FR 53, 57 (January 3, 2005); 70 FR 17029, 17033 (April 4, 
2005); 70 FR 28429, 28431 (May 18, 2005); and 70 FR 58119, 58134 
(October 5, 2005). The Wisconsin maintenance plan and redesignation for 
the 1997 8-hour ozone standard do not revise or remove any existing 
emissions limit for any NAAQS, nor do they alter any existing control 
requirements. On that basis, EPA concludes that the redesignation will 
not interfere with attainment or maintenance of any air quality 
standards. The commenter does not provide any information to 
demonstrate that approval of this redesignation would have any impact 
on the area's ability to comply with the any NAAQS. In fact, the 
maintenance plan provided with the State's submission demonstrates a 
decline in ozone precursor emissions over the timeframe of the initial 
maintenance period. As a result, the redesignation will not relax any 
existing rules or limits, nor will the redesignation alter the status 
quo air quality. The commenter has not provided any reason that the 
redesignation might interfere with attainment of any standard or with 
satisfaction of any other requirement of the CAA, and EPA finds no 
basis under section 110(l) for EPA to disapprove the SIP revision.

III. What actions is EPA taking?

    EPA is approving a request from the State of Wisconsin to 
redesignate the Milwaukee-Racine area to attainment of the 1997 8-hour 
ozone standard. EPA is also taking several other related actions. EPA 
is approving, as a revision to the Wisconsin SIP, the State's plan for 
maintaining the 1997 8-hour ozone standard through 2022 in the area. 
EPA is approving the 2005 emissions inventories as meeting the 
comprehensive emissions inventory requirement of the CAA for the 
Milwaukee-Racine and Sheboygan areas. Finally, EPA finds adequate and 
is approving the State's 2015 and 2022 MVEBs for the Milwaukee-Racine 
area.
    In accordance with 5 U.S.C. 553(d), EPA finds there is good cause 
for these actions to become effective immediately upon publication. 
This is because a delayed effective date is unnecessary due to the 
nature of a redesignation to attainment, which relieves the area from 
certain CAA requirements that would otherwise apply to it. The 
immediate effective date for this action is authorized under both 5 
U.S.C. 553(d)(1), which provides that rulemaking actions may become 
effective less than 30 days after publication if the rule ``grants or 
recognizes an exemption or relieves a restriction,'' and section 
553(d)(3), which allows an effective date less than 30 days after 
publication ``as otherwise provided by the agency for good cause found 
and published with the rule.'' The purpose of the 30-day waiting period 
prescribed in section 553(d) is to give affected parties a reasonable 
time to adjust their behavior and prepare before the final rule takes 
effect. Today's rule, however, does not create any new regulatory 
requirements such that affected parties would need time to prepare 
before the rule takes effect. Rather, today's rule relieves the state 
of planning requirements for this 8-hour ozone nonattainment area. For 
these reasons, EPA finds good cause under 5 U.S.C. 553(d)(3) for these 
actions to become effective on the date of publication of these 
actions.

IV. Statutory and Executive Order Reviews

    Under the CAA, redesignation of an area to attainment and the 
accompanying approval of a maintenance plan under section 107(d)(3)(E) 
are actions that affect the status of a geographical area and do not 
impose any additional regulatory requirements on sources beyond those 
imposed by state law. A redesignation to attainment does not in and of 
itself create any new requirements, but rather results in the 
applicability of requirements contained in the CAA for areas that have 
been redesignated to attainment. Moreover, the Administrator is 
required to approve a SIP submission that complies with the provisions 
of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 
CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to 
approve state choices, provided that they meet the criteria of the CAA. 
These actions do not impose additional requirements beyond those 
imposed by state law and the CAA. For that reason, these actions:
     Are not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Do not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Are certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Do not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Do not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Are not an economically significant regulatory action 
based on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Are not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Are not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     Do not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as 
specified by

[[Page 45261]]

Executive Order 13175 (65 FR 67249, November 9, 2000), because 
redesignation is an action that affects the status of a geographical 
area and does not impose any new regulatory requirements on tribes, 
impact any existing sources of air pollution on tribal lands, nor 
impair the maintenance of ozone national ambient air quality standards 
in tribal lands. However, because there are tribal lands located in 
Milwaukee County, we provided the affected tribe with the opportunity 
to consult with EPA on the redesignation. The affected tribe raised no 
concerns with the redesignation.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this action and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by October 1, 2012. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this action for the purposes of judicial review nor 
does it extend the time within which a petition for judicial review may 
be filed, and shall not postpone the effectiveness of such rule or 
action. This action may not be challenged later in proceedings to 
enforce its requirements. (See section 307(b)(2).)

List of Subjects

40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Volatile organic compounds.

40 CFR Part 81

    Air pollution control, Environmental protection, National parks, 
Wilderness areas.

    Dated: July 11, 2012.
Susan Hedman,
Regional Administrator, Region 5.

    Therefore, 40 CFR parts 52 and 81 are amended as follows:

PART 52--[AMENDED]

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

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


0
2. Section 52.2585 is amended by adding paragraphs (z) and (aa) to read 
as follows:


Sec.  52.2585  Control strategy: Ozone.

* * * * *
    (z) Approval--Wisconsin submitted 2005 VOC and NOX 
emissions inventories for the Milwaukee-Racine and Sheboygan areas on 
September 11, 2009, and supplemented the submittal on November 16, 
2011. Wisconsin's 2005 inventories satisfy the emissions inventory 
requirements of section 182(a)(1) of the Clean Air Act for the 
Milwaukee-Racine and Sheboygan areas under the 1997 8-hour ozone 
standard.
    (aa) Approval--On September 11, 2009, Wisconsin submitted a request 
to redesignate the Milwaukee-Racine area to attainment of the 1997 8-
hour ozone standard. The state supplemented this submittal on November 
16, 2011. As part of the redesignation request, the State submitted a 
maintenance plan as required by section 175A of the Clean Air Act. 
Elements of the section 175 maintenance plan include a contingency plan 
and an obligation to submit a subsequent maintenance plan revision in 8 
years as required by the Clean Air Act. The ozone maintenance plan also 
establishes 2015 and 2022 Motor Vehicle Emission Budgets (MVEBs) for 
the area. The 2015 MVEBs for the Milwaukee-Racine area is 21.08 tpd for 
VOC and 51.22 tpd for NOX. The 2022 MVEBs for the Milwaukee-
Racine area is 15.98 tpd for VOC and 31.91 tpd for NOX.

PART 81--[AMENDED]

0
3. The authority citation for part 81 continues to read as follows:

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


0
4. Section 81.350 is amended by revising the entries for Milwaukee-
Racine, WI in the table entitled Wisconsin--1997 8-Hour Ozone NAAQS 
(Primary and Secondary) to read as follows:


Sec.  81.350  Wisconsin.

* * * * *

                           Wisconsin--1997 8-Hour Ozone NAAQS (Primary and Secondary)
----------------------------------------------------------------------------------------------------------------
                                               Designation \a\                    Category/classification
          Designated area          -----------------------------------------------------------------------------
                                       Date \1\              Type             Date \1\              Type
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Milwaukee-Racine, WI:
    Kenosha County................         7/31/12  Attainment...........
    Milwaukee County..............
    Ozaukee County................
    Racine County.................
    Washington County.............
    Waukesha County...............
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
\a\ Includes Indian Country located in each county or area, except as otherwise specified.
\1\ This date is June 15, 2004, unless otherwise noted.


[[Page 45262]]

* * * * *
[FR Doc. 2012-18091 Filed 7-30-12; 8:45 am]
BILLING CODE 6560-50-P


