

[Federal Register: September 26, 2007 (Volume 72, Number 186)]
[Rules and Regulations]               
[Page 54556-54562]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26se07-12]                         


[[Page 54556]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2007-0886; FRL-8473-3]

 
Approval and Promulgation of Implementation Plans; Arkansas; 
Clean Air Interstate Rule Nitrogen Oxides Ozone Season Trading Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is taking a direct final action to approve a revision to 
the Arkansas State Implementation Plan (SIP) submitted on August 10, 
2007, enacted at Regulation 19--Arkansas Plan of Implementation for Air 
Pollution Control; Chapter 14, Sections 19.1401-19.1404; and Chapter 
15, Section 19.1501. This revision addresses the requirements of EPA's 
Clean Air Interstate Rule (CAIR) Nitrogen Oxides (NOX) Ozone 
Season Trading Program, promulgated on May 12, 2005 and subsequently 
revised on April 28 and December 13, 2006. EPA is approving the SIP 
revision as fully implementing the CAIR NOX ozone season 
requirements for Arkansas. Therefore, as a consequence of this SIP 
approval, EPA will also withdraw the CAIR Federal Implementation Plan 
(CAIR FIP) concerning NOX ozone season emissions for 
Arkansas. The CAIR FIPs for all States in the CAIR region were 
promulgated on April 28, 2006 and subsequently revised on December 13, 
2006.
    The intended effect of this action is to reduce NOX 
emissions from the State of Arkansas that are contributing to 
nonattainment of the 8-hour ozone National Ambient Air Quality Standard 
(NAAQS or standard) in downwind states. This action is being taken 
under section 110 of the Federal Clean Air Act (the Act or CAA).

DATES: This rule is effective on November 26, 2007 without further 
notice, unless EPA receives relevant adverse comment by October 26, 
2007. If EPA receives such comment, EPA will publish a timely 
withdrawal in the Federal Register informing the public that this rule 
will not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
OAR-2007-0886, by one of the following methods:
    (1) http://www.regulations.gov: Follow the on-line instructions for 

submitting comments.
    (2) E-mail: Mr. Jeff Robinson at robinson.jeffrey@epa.gov. Please 
also cc the person listed in the FOR FURTHER INFORMATION CONTACT 
paragraph below.
    (3) U.S. EPA Region 6 ``Contact Us'' Web site: http://www.epa.gov/region6/r6coment.htm.
 Please click on ``6PD'' (Multimedia) and select 

``Air'' before submitting comments.
    (4) Fax: Mr. Jeff Robinson, Chief, Air Permits Section (6PD-R), at 
fax number 214-665-6762.
    (5) Mail: Mr. Jeff Robinson, Chief, Air Permits Section (6PD-R), 
Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, 
Texas 75202-2733.
    (6) Hand or Courier Delivery: Mr. Jeff Robinson, Chief, Air Permits 
Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, 
Suite 1200, Dallas, Texas 75202-2733. Such deliveries are accepted only 
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal 
holidays. Special arrangements should be made for deliveries of boxed 
information.
    Instructions: Direct your comments to Docket ID No. EPA-R06-OAR-
2007-0886. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 

provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information the 
disclosure of which is restricted by statute. Do not submit information 
through http://www.regulations.gov or e-mail, if you believe that it is CBI or otherwise protected from disclosure. The http://

http://www.regulations.gov Web site is an ``anonymous access'' system, which 

means that EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through http://www.regulations.gov
, your e-mail address will be automatically captured 

and included as part of the comment that is placed in the public docket 
and made available on the Internet. If you submit an electronic 
comment, EPA recommends that you include your name and other contact 
information in the body of your comment along with any disk or CD-ROM 
submitted. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment. Electronic files should avoid the use of 
special characters and any form of encryption and should be free of any 
defects or viruses. For additional information about EPA's public 
docket, visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm
.

    Docket: All documents in the docket are listed in the http://www.regulations.gov
 index. Although listed in the index, some 

information is not publicly available, e.g., CBI or other information 
the disclosure of which is restricted by statute. Certain other 
material, such as copyrighted material, will be publicly available only 
in hard copy. Publicly available docket materials are available either 
electronically in http://www.regulations.gov or in hard copy at the Air 

Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross 
Avenue, Suite 700, Dallas, Texas 75202-2733. The file will be made 
available by appointment for public inspection in the Region 6 FOIA 
Review Room between the hours of 8:30 a.m. and 4:30 p.m. weekdays 
except for legal holidays. Contact the person listed in the FOR FURTHER 
INFORMATION CONTACT section of this Federal Register to make an 
appointment. If possible, please make the appointment at least two 
working days in advance of your visit. A 15 cent per page fee will be 
charged for making photocopies of documents. On the day of the visit, 
please check in at the EPA Region 6 reception area on the seventh floor 
at 1445 Ross Avenue, Suite 700, Dallas, Texas.
    The State submittal related to this SIP revision, and which is part 
of the EPA docket, is also available for public inspection at the State 
Air Agency listed below during official business hours by appointment: 
Arkansas Department of Environmental Quality, Air Division, 8001 
National Drive, P.O. Box 8913, Little Rock, Arkansas 72219-8913.

FOR FURTHER INFORMATION CONTACT: If you have questions concerning 
today's action, please contact Ms. Adina Wiley, Air Permits Section 
(6PD-R), Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
Suite 1200, Dallas, TX 75202-2733. The telephone number is (214) 665-
2115. Ms. Wiley can also be reached via electronic mail at 
wiley.adina@epa.gov.


SUPPLEMENTARY INFORMATION: Throughout this document wherever any 
reference to ``we,'' ``us,'' or ``our'' is used, we mean EPA.

Table of Contents

I. What Action Is EPA Taking?
II. What Is the Regulatory History of CAIR and the CAIR FIPs?
III. What Are the General Requirements of CAIR and the CAIR FIPs?
IV. What Are the Types of CAIR SIP Submittals?
V. What Is EPA's Analysis of the Arkansas CAIR NOX Ozone 
Season SIP Submittal
    A. State Budget for NOX Ozone Season Allowance 
Allocations

[[Page 54557]]

    B. CAIR NOX Ozone Season Cap-and-Trade Program
    C. Applicability Provisions for Non-EGU NOX SIP Call 
Sources
    D. NOX Ozone Season Allowance Allocations
    E. Individual Opt-In Units
VI. Final Action
VII. Statutory and Executive Order Reviews

I. What Action Is EPA Taking?

    EPA is taking direct final action to approve a revision to 
Arkansas's SIP, submitted on August 10, 2007, enacted at Regulation 
19--Arkansas Plan of Implementation for Air Pollution Control; Chapter 
14, Sections 19.1401-19.1404; and Chapter 15, Section 19.1501. In its 
SIP revision, Arkansas would meet CAIR NOX ozone season 
requirements by requiring certain electric generating units (EGUs) to 
participate in the EPA-administered CAIR cap-and-trade program 
addressing NOX ozone season emissions. The SIP as revised 
that EPA is approving meets the applicable requirements of CAIR. Our 
detailed analysis of this SIP revision is in the Technical Support 
Document (TSD) for the Arkansas CAIR NOX Ozone Season 
Trading Program. The TSD is available as specified in the section of 
this document identified as ADDRESSES. As a consequence of the SIP 
approval, the Administrator of EPA will also issue a final rule to 
withdraw the FIP concerning NOX ozone season emissions for 
Arkansas. This action will delete and reserve 40 CFR 52.184 in part 52. 
The withdrawal of the CAIR FIP for Arkansas is a conforming amendment 
that must be made once the SIP is approved because EPA's authority to 
issue the FIP was premised on a deficiency in the SIP for Arkansas. 
Once the SIP is fully approved, EPA no longer has authority for the FIP 
since the deficiency has been corrected. Thus, EPA will not have the 
option of maintaining the FIP following the full SIP approval. 
Accordingly, EPA does not intend to offer an opportunity for a public 
hearing or an additional opportunity for written public comment on the 
withdrawal of the FIP.
    We are publishing this rule without prior proposal because we view 
this as a noncontroversial amendment and anticipate no relevant adverse 
comments. However, in the proposed rules section of this Federal 
Register publication, we are publishing a separate document that will 
serve as the proposal to approve the SIP revision if relevant adverse 
comments are received. This rule will be effective on November 26, 2007 
without further notice unless we receive relevant adverse comment by 
October 26, 2007. If we receive relevant adverse comments, we will 
publish a timely withdrawal in the Federal Register informing the 
public that the rule will not take effect. We will address all public 
comments in a subsequent final rule based on the proposed rule. We will 
not institute a second comment period on this action. Any parties 
interested in commenting must do so now. Please note that if we receive 
adverse comment on an amendment, paragraph, or section of this rule and 
if that provision may be severed from the remainder of the rule, we may 
adopt as final those provisions of the rule that are not the subject of 
an adverse comment.

II. What Is the Regulatory History of CAIR and the CAIR FIPs?

    The Clean Air Interstate Rule (CAIR) was published by EPA on May 
12, 2005 (70 FR 25162). In this rule, EPA determined that 28 States and 
the District of Columbia contribute significantly to nonattainment and 
interfere with maintenance of the national ambient air quality 
standards (NAAQS) for fine particles (PM2.5) and /or 8-hour 
ozone in downwind States in the eastern part of the country. As a 
result, EPA required those upwind States to revise their SIPs to 
include control measures that reduce emissions of SO2, which 
is a precursor to PM2.5 formation, and/or NOX, 
which is a precursor to both ozone and PM2.5 formation. For 
jurisdictions that contribute significantly to downwind 
PM2.5 nonattainment, CAIR sets annual State-wide emission 
reduction requirements (i.e., budgets) for SO2 and annual 
State-wide emission reduction requirements for NOX. 
Similarly, for jurisdictions that contribute significantly to 8-hour 
ozone nonattainment, CAIR sets State-wide emission reduction 
requirements for NOX for the ozone season (defined at 40 CFR 
97.302 as May 1st to September 30th). Under CAIR, States may implement 
these reduction requirements by participating in the EPA-administered 
cap-and-trade programs or by adopting any other control measures. 
Arkansas was found to significantly contribute to nonattainment of the 
8-hour ozone standard in Texas, resulting in Arkansas being subject to 
the NOX ozone season CAIR requirements.
    CAIR explains to subject States what must be included in SIPs to 
address the requirements of section 110(a)(2)(D) of the Clean Air Act 
(CAA) with regard to interstate transport with respect to the 8-hour 
ozone and PM2.5 NAAQS. EPA made national findings, effective 
on May 25, 2005, that the States had failed to submit SIPs meeting the 
requirements of section 110(a)(2)(D). The SIPs were due in July 2000, 3 
years after the promulgation of the 8-hour ozone and PM2.5 
NAAQS. These findings started a 2-year clock for EPA to promulgate a 
Federal Implementation Plan (FIP) to address the requirements of 
section 110(a)(2)(D). Under CAA section 110(c)(1), EPA may issue a FIP 
anytime after such findings are made and must do so within two years 
unless a SIP revision correcting the deficiency is approved by EPA 
before the FIP is promulgated.
    On April 28, 2006, EPA promulgated CAIR FIPs for all States covered 
by CAIR in order to ensure the emissions reductions required by CAIR 
are achieved on schedule (71 FR 25328). See 40 CFR 52.35 and 52.36. 
Each CAIR State is subject to the FIP until the State fully adopts, and 
EPA approves, a SIP revision meeting the requirements of CAIR. The CAIR 
FIPs require certain EGUs to participate in the EPA-administered CAIR 
SO2, NOX annual, and NOX ozone season 
trading programs, as appropriate, found at 40 CFR part 97. The CAIR FIP 
SO2, NOX annual, and NOX ozone season 
trading programs impose essentially the same requirements as, and are 
integrated with, the respective CAIR SIP trading programs. The 
integration of the CAIR FIP and SIP trading programs means that these 
trading programs will work together to create effectively a single 
trading program for each regulated pollutant (SO2, 
NOX annual, and NOX ozone season) in all States 
covered by the CAIR FIP or SIP trading program for that pollutant. The 
CAIR FIPs also allow States to submit abbreviated SIP revisions that, 
if approved by EPA, will automatically replace or supplement certain 
CAIR FIP provisions, while the CAIR FIPs remain in place for all other 
provisions.
    On April 28, 2006, EPA published two additional CAIR-related final 
rules that added the States of Delaware and New Jersey to the list of 
States subject to CAIR for PM2.5 and announced EPA's final 
decisions on reconsideration of five issues, without making any 
substantive changes to the CAIR requirements (71 FR 25288 and 71 FR 
25304, respectively). On December 13, 2006, EPA published minor, non-
substantive revisions that serve to clarify the CAIR and CAIR FIP 
regulations (71 FR 74792).

III. What Are the General Requirements of CAIR and the CAIR FIPs?

    CAIR establishes State-wide emission budgets for SO2 and 
NOX and is to be implemented in two phases. The first phase 
of NOX reductions starts in 2009 and continues through 2014, 
while the

[[Page 54558]]

first phase of SO2 reductions starts in 2010 and continues 
through 2014. The second phase of reductions for both NOX 
and SO2 starts in 2015 and continues thereafter. CAIR 
requires States to implement the budgets by either: (1) Requiring EGUs 
to participate in the EPA-administered cap-and-trade programs; or (2) 
adopting other control measures of the State's choosing and 
demonstrating that such control measures will result in compliance with 
the applicable State SO2 and NOX budgets.
    The May 12, 2005 and April 28, 2006 CAIR rules provide model rules 
that States must adopt (with certain limited changes, if desired) if 
they want to participate in the EPA-administered trading programs. The 
December 13, 2006, revisions to the CAIR and CAIR FIP regulations were 
non-substantive and, therefore, do not affect EPA's evaluation of a 
State's SIP revision.
    With two exceptions, only States that choose to meet the 
requirements of CAIR through methods that exclusively regulate EGUs are 
allowed to participate in the EPA-administered trading programs. One 
exception is for States that adopt the opt-in provisions of the model 
rules to allow non-EGUs individually to opt into the EPA-administered 
trading programs. The other exception is for States that include all 
non-EGUs from their NOX SIP Call trading programs in their 
CAIR NOX ozone season trading programs. Arkansas was not 
subject to the NOX SIP Call requirements; therefore this 
exception is not available to the State.

IV. What Are the Types of CAIR SIP Submittals?

    States have the flexibility to choose the type of control measures 
they will use to meet the requirements of CAIR. EPA anticipates that 
most States will choose to meet the CAIR requirements by selecting an 
option that requires EGUs to participate in the EPA-administered CAIR 
cap-and-trade programs. For such States, EPA has provided two 
approaches for submitting and obtaining approval for CAIR SIP 
revisions. States may submit full SIP revisions that adopt the model 
CAIR cap-and-trade rules. If approved, these SIP revisions will fully 
replace the State's CAIR FIPs. Alternatively, States may submit 
abbreviated SIP revisions. The provisions in the abbreviated SIP 
revision, if approved into a State's SIP, will not replace that State's 
CAIR FIP; however, the requirements for the CAIR FIPs at 40 CFR part 52 
incorporate the provisions of the Federal CAIR trading programs in 40 
CFR part 97. The Federal CAIR trading programs in 40 CFR part 97 
provide that whenever EPA approves an abbreviated SIP revision, the 
provisions in the abbreviated SIP revision will be used in place of or 
in conjunction with, as appropriate, the corresponding provisions in 40 
CFR part 97 of the State's CAIR FIP.
    A State submitting a full SIP revision may either adopt regulations 
that are substantively identical to the model rules or incorporate by 
reference the model rules. CAIR provides that States may only make 
limited changes to the model rules if the States want to participate in 
the EPA-administered trading programs. A full SIP revision may change 
the model rules only by altering their applicability and allowance 
allocation provisions to:
    (1) Include NOX SIP Call trading sources that are not 
EGUs under CAIR in the CAIR NOX Ozone Season Trading 
Program;
    (2) Provide for State allocation of NOX annual or ozone 
season allowances using a methodology chosen by the State;
    (3) Provide for State allocation of NOX annual 
allowances from the compliance supplement pool (CSP) using the State's 
choice of allowed, alternative methodologies; or
    (4) Allow units that are not otherwise CAIR units to opt 
individually into the CAIR SO2, NOX Annual, or 
NOX Ozone Season Trading Programs under the opt-in 
provisions in the model rules.

EPA's authority to issue the CAIR FIPs was premised on the deficiency 
of each State's SIP in addressing the CAIR requirements. EPA will not 
have the option of maintaining the CAIR FIP following approval of a 
full CAIR SIP revision. Therefore, an approved CAIR full SIP revision 
will replace the CAIR FIP requirements for NOX annual, 
NOX ozone season, or SO2 emissions, as 
applicable, for that State.

V. What Is EPA's Analysis of the Arkansas CAIR NOX Ozone 
Season SIP Submittal?

A. State Budget for NOX Ozone Season Allowance Allocations

    The CAIR NOX ozone season budgets for Arkansas were 
developed from historical heat input data for EGUs. Using these data, 
EPA calculated annual and ozone season regional heat input values, 
which were multiplied by 0.15 lb/mmBtu, for phase 1, and 0.125 lb/
mmBtu, for phase 2, to obtain regional NOX budgets for 2009-
2014 and for 2015 and thereafter, respectively. EPA derived the 
Arkansas NOX ozone season budgets from the regional budgets 
using Arkansas heat input data adjusted by fuel factors.
    The CAIR SIP requirements and the Arkansas CAIR NOX 
ozone season FIP establish the NOX ozone season budgets for 
Arkansas as 11,515 tons of NOX ozone season emissions for 
2009-2014 and 9,596 tons of NOX ozone season emissions in 
2015 and thereafter. Arkansas's rules at 19.1402 establish that the 
total amount of NOX ozone season allowances allocated per 
control period is as listed in 40 CFR 51.123 and 96.340; ensuring that 
the Arkansas allocation methodology will not allocate more allowances 
than the state NOX ozone season budget, consistent with 40 
CFR 51.123.

B. CAIR NOX Ozone Season Cap-and-Trade Program

    The CAIR NOX annual and ozone season FIPs for the States 
largely mirror the structure of the NOX SIP Call model-
trading rule in 40 CFR part 96 subparts A through I. While the 
provisions of the NOX annual and ozone season FIPs are 
similar, there are some differences. For example, the NOX 
Annual FIPs provide for a compliance supplement pool, under which 
allowances may be awarded for early reductions of NOX annual 
emissions.
    EPA used the CAIR model trading rules as the basis for the 
SO2, NOX annual, and NOX ozone season 
trading programs incorporated by reference into the States' CAIR FIPs. 
The CAIR FIP trading programs' rules are virtually identical to the 
CAIR model trading rules, with changes made to account for federal 
rather than state implementation. The CAIR model SO2, 
NOX annual, and NOX ozone season trading rules 
and the respective CAIR FIP trading programs are designed to work 
together as integrated SO2, NOX annual, and 
NOX ozone season trading programs.
    In the August 10, 2007, SIP revision, Arkansas chose to implement 
its CAIR NOX ozone season budgets by requiring EGUs to 
participate in the EPA-administered cap-and-trade program for 
NOX ozone season emissions. Arkansas has adopted a full SIP 
revision that incorporates by reference the CAIR model cap-and-trade 
rule for NOX ozone season emissions as published at 40 CFR 
part 96, subparts AAAA-HHHH on May 12, 2005, and further revised on 
April 28 and December 13, 2006. This SIP revision does not include 
subpart IIII, CAIR NOX Ozone Season Opt-in Units, and any 
references to opt-in units. This SIP revision provides an allowance 
allocation methodology that replaces 40 CFR part 96, subpart EEEE.

[[Page 54559]]

C. Applicability Provisions for Non-EGU NOX SIP Call Sources

    In general, the CAIR FIPs' trading programs apply to any 
stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired 
combustion turbine serving at any time, since the later of November 15, 
1990 or the start-up of the unit's combustion chamber, a generator with 
nameplate capacity of more than 25 MWe producing electricity for sale. 
Because Arkansas was not included in the NOX SIP Call 
trading program, Arkansas does not have or need the option of expanding 
the applicability provisions of the CAIR NOX Ozone Season 
Trading Program to include non-EGU NOX SIP Call sources.

D. NOX Ozone Season Allowance Allocations

    Under the NOX allowance allocation methodology in the 
CAIR model trading rules and in the CAIR FIP NOX ozone 
season trading programs, NOX ozone season allowances are 
allocated to units that have operated for five years, based on heat 
input data from a three-year period that are adjusted for fuel type by 
using fuel factors of 1.0 for coal, 0.6 for oil, and 0.4 for other 
fuels. The CAIR model trading rules and the CAIR FIP NOX 
ozone season trading program also provide a new unit set-aside from 
which units without five years of operation are allocated allowances 
based on the units' prior year emissions.
    The CAIR FIP provisions provide States with the flexibility to 
establish a different NOX allowance allocation methodology 
that will be used to allocate allowances to sources in a State if 
certain requirements are met concerning the timing of submission of 
units' allocations to the Administrator for recordation and the total 
amount of allowances allocated for each control period. In adopting 
alternative NOX allowance allocation methodologies, States 
have flexibility with regard to:
    (1) The cost to recipients of the allowances, which may be 
distributed for free or auctioned;
    (2) The frequency of allocations;
    (3) The basis for allocating allowances, which may be distributed, 
for example, based on historical heat input or electric and thermal 
output; and
    (4) The use of allowance set-asides and, if used, their size.

Consistent with the flexibility given to States in their CAIR FIP 
provisions, Arkansas has chosen to replace the provisions of the 
Arkansas CAIR NOX Ozone Season FIP concerning the allocation 
of NOX ozone season allowances with its own methodology. To 
address the concerns of interstate transport, the ADEQ initiated a 
stakeholder process to work with affected industry and EPA Region 6. As 
a result of the stakeholder process, ADEQ submitted a full CAIR 
NOX Ozone Season SIP revision on August 10, 2007. Section 
19.1401 incorporates by reference 40 CFR part 96, subparts AAAA-HHHH, 
with the exception of EEEE, as promulgated by EPA on May 12, 2005, and 
further revised on April 28 and December 13, 2006. Additionally, 
section 19.1401 states that Subpart IIII and all references to opt-in 
units are not incorporated into the Arkansas SIP. Sections 19.1402-
19.1404 of the Arkansas CAIR NOX Ozone Season Trading 
Program SIP revision establish the NOX ozone season 
allowance allocation methodology that is to be used in place of 40 CFR 
part 96, subpart EEEE.

    Section 19.1402 establishes that the Arkansas NOX Ozone 
Season budget is 11,515 tons per control period from 2009-2014 and 
9,596 tons per control period starting with the 2015 control period. 
These budgets are as listed in 40 CFR 51.123(q)(2) (11,515 tons in 
2009-2014 and 9,596 tons in 2015 and thereafter); ensuring that the 
Arkansas allocation methodology will not allocate more allowances than 
the state NOX ozone season budget.
    Section 19.1403 establishes the dates by which the ADEQ must submit 
NOX ozone season allocations to EPA for recordation in CAIR 
compliance accounts. Section 19.1403 is divided further based on unit 
operating history; 19.1403(A) provides the allowance allocation timing 
for the EGUs with a baseline gross electric generation as defined in 
19.1404(A), and 19.1403(B) provides the allowance allocation timing for 
the EGUs without a baseline gross electric generation. No later than 
April 30, 2007, the ADEQ will determine and submit to the EPA the CAIR 
NOX ozone season allowances for the control periods 2009, 
2010, and 2011, for EGUs with a baseline gross electric generation. 
Additionally for the EGUs with a baseline gross electric generation, 
the ADEQ will determine and submit to the EPA the CAIR NOX 
ozone season allowances by October 31, 2008, for the year 2012, and by 
October 31 of each year thereafter for the 4th year after the 
notification deadline. For EGUs without a baseline gross electric 
generation, the ADEQ will determine and submit to EPA the 
NOX ozone season allowance allocations by July 31 of the 
year for which the allowances are allocated.
    Baseline gross electric generation is determined in accordance with 
section 19.1404(A) for CAIR units that have operated each calendar year 
during a period of five or more calendar years. The baseline gross 
electric generation is the average of the three highest amounts of a 
CAIR unit's control period gross electrical output over the five years 
immediately preceding the year in which allocations are due to EPA. If 
a generator is served by two or more units, the gross electrical output 
of the generator will be apportioned to each unit based on the unit's 
share of the total control period heat input for that year.
    The ADEQ submitted a letter to the EPA dated June 7, 2007, to 
further explain section 19.1404(A). Once a unit has operated for five 
or more calendar years before the allocation submittal deadline and had 
a calculable baseline gross electric generation, the unit cannot be 
considered a non-baseline unit in the future. For example, if a unit 
operated from 2000-2006, the unit would have a calculable baseline 
gross electric generation used for the 2007, 2008, and 2009 control 
period allocations. If the unit shutdown or suspended operations for 
2007 and started operating again in 2008, the unit would still be 
considered a baseline unit. The year 2007 would have zero electric 
output recorded in the baseline calculation.
    Section 19.1404(C) establishes the allocation methodology for CAIR 
units with a baseline gross electric generation as calculated pursuant 
to section 19.1404(A). For each control period, the ADEQ will allocate 
to all units with a calculable baseline a total amount of allowances 
equal to 95% of the total ozone season budget established in 19.1402. 
These units will receive allowances proportional to their share of the 
total baseline gross electric generation for all such units; i.e., the 
ratio of the unit's baseline gross electric generation to the total 
baseline gross electric generation multiplied by the total amount of 
allowances allocated each control period to units with baseline data.
    Section 19.1404(D) establishes the allocation methodology for CAIR 
units without a calculable baseline. For these units, the ADEQ will 
establish a new unit set-aside for each control period equal to 5% of 
the total ozone season budget in section 19.1402. Starting with the 
later of the 2009 control period or the first control period after the 
control period in which the CAIR unit commences commercial operation, 
the Designated Representative for the non-baseline units may submit a 
request to the ADEQ for the set-aside allowances.

[[Page 54560]]

This request must be submitted to the ADEQ no later than January 1st of 
the first control period in which the new unit set-aside allowances are 
requested and after the date in which the new unit commences commercial 
operation. The request for allowances may not exceed the unit's total 
tons of NOX emissions during the previous control period.
    On or after February 1st of each control period, the ADEQ will 
determine the total amount of new unit set-aside allowances requested. 
If the total amount of allowances requested is less than the total new 
unit set-aside pool (5% of the overall state budget) the ADEQ will 
allocate the new unit set-aside allowances as requested to each unit. 
If the total amount of requested allowances is greater than the total 
new unit set-aside pool, the ADEQ will determine the allocations by 
multiplying the ratio of each unit's requested number of allowances to 
the total amount of requested allowances by the new unit set-aside 
amount. The ADEQ will then notify each unit's Designated Representative 
of the amount of new unit set-aside allowances the unit will receive.
    If there are allowances remaining in the new unit set-aside after 
the non-baseline units receive their allocations, the ADEQ will 
allocate these remaining allowances to units with baseline gross 
electric generation. The ADEQ will multiply the remaining number of 
allowances by the ratio of the baseline unit's allocation for that 
control period to the total amount of allowances allocated to the 
baseline units (95% of the overall state budget in section 19.1402).
    Section 19.1501 establishes the effective date of the revision to 
Regulation 19, Chapter 14, Sections 19.1401-19.1404 as ten days after 
filing with the Arkansas Secretary of State, the Arkansas State 
Library, and the Arkansas Bureau of Legislative Research.

E. Individual Opt-In Units

    The opt-in provisions of the CAIR model trading rules allow certain 
non-EGUs (i.e., boilers, combustion turbines, and other stationary 
fossil-fuel-fired devices) that do not meet the applicability criteria 
for a CAIR trading program to participate voluntarily in (i.e., opt 
into) the CAIR trading program. A non-EGU may opt into one or more of 
the CAIR trading programs. In order to qualify to opt into a CAIR 
trading program, a unit must vent all emissions through a stack and be 
able to meet monitoring, recordkeeping, and reporting requirements of 
40 CFR part 75. The owners and operators seeking to opt a unit into a 
CAIR trading program must apply for a CAIR opt-in permit. If the unit 
is issued a CAIR opt-in permit, the unit becomes a CAIR unit, is 
allocated allowances, and must meet the same allowance-holding and 
emissions monitoring and reporting requirements as other units subject 
to that CAIR trading program. The opt-in provisions provide for two 
methodologies for allocating allowances for opt-in units, one 
methodology that applies to opt-in units in general and a second 
methodology that allocates allowances only to opt-in units that the 
owners and operators intend to repower before January 1, 2015.
    States have several options concerning the opt-in provisions. 
States may adopt the CAIR opt-in provisions entirely or may adopt them 
but exclude one of the methodologies for allocating allowances. States 
may also decline to adopt the opt-in provisions.
    Arkansas has chosen not to allow non-EGUs to opt into the CAIR 
NOX Ozone Season Trading Program. Arkansas incorporated by 
reference the CAIR NOX Ozone Season Trading Program, 
published at 40 CFR part 96, subparts AAAA-HHHH on May 12, 2005, and 
further revised on April 28 and December 13, 2006. This SIP revision 
does not include subpart IIII, CAIR NOX Ozone Season Opt-in 
Units, and any references to opt-in units.

VI. Final Action

    We are approving Arkansas's CAIR NOX Ozone Season 
Trading Program SIP revision submitted on August 10, 2007, enacted at 
Regulation 19--Arkansas Plan of Implementation for Air Pollution 
Control; Chapter 14, Sections 19.1401-19.1404; and Chapter 15, Section 
19.1501. Under this SIP revision, Arkansas is choosing to participate 
in the EPA-administered cap-and-trade program for NOX ozone 
season emissions. Our technical analysis has shown that this SIP 
revision is consistent with the requirements of 40 CFR Part 51, 
including the specific CAIR NOX ozone season requirements at 
40 CFR 51.123 as published on May 12, 2005, and further revised on 
April 28 and December 13, 2006; and all applicable requirements of the 
CAA.
    As a consequence of this SIP approval, the Administrator of EPA 
will also issue, without providing an opportunity for a public hearing 
or an additional opportunity for written public comment, a final rule 
to withdraw the CAIR FIP concerning NOX ozone season 
emissions for Arkansas. This action will delete and reserve 40 CFR 
52.184 in part 52.

VII. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is not a ``significant regulatory action'' and therefore is not 
subject to review by the Office of Management and Budget. For this 
reason and because this action will not have a significant, adverse 
effect on the supply, distribution, or use of energy, this action is 
also not subject to Executive Order 13211, ``Actions Concerning 
Regulations That Significantly Affect Energy Supply, Distribution, or 
Use'' (66 FR 28355, May 22, 2001). This action merely approves state 
law as meeting Federal requirements and imposes no additional 
requirements beyond those imposed by state law. Accordingly, the 
Administrator certifies that this rule will not have a significant 
economic impact on a substantial number of small entities under the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule 
approves pre-existing requirements under state law and does not impose 
any additional enforceable duty beyond that required by state law, it 
does not contain any unfunded mandate or significantly or uniquely 
affect small governments, as described in the Unfunded Mandates Reform 
Act of 1995 (Pub. L. 104-4).
    This rule also does not have tribal implications because it will 
not have a substantial direct effect on one or more Indian tribes, on 
the relationship between the Federal Government and Indian tribes, or 
on the distribution of power and responsibilities between the Federal 
Government and Indian tribes, as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000). This action also does not have Federalism 
implications because it does not have substantial direct effects on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government, as specified in Executive Order 13132 (64 
FR 43255, August 10, 1999). This action merely approves a state rule 
implementing a Federal standard, and does not alter the relationship or 
the distribution of power and responsibilities established in the Act. 
The EPA interprets Executive Order 13045, ``Protection of Children from 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997), as applying only to those regulatory actions that concern health 
or safety risks such that the analysis required under section 5-501 of 
the Executive Order has the potential to influence the regulation. This 
rule is not subject to

[[Page 54561]]

Executive Order 13045 because it approves a state rule implementing a 
Federal standard. Executive Order 12898 (59 FR 7629, February 16, 1994) 
establishes federal executive policy on environmental justice. Because 
this rule merely approves a state rule implementing a Federal standard, 
EPA lacks the discretionary authority to modify today's regulatory 
decision on the basis of environmental justice considerations.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Act. In this 
context, in the absence of a prior existing requirement for the State 
to use voluntary consensus standards (VCS), EPA has no authority to 
disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the Act. Thus, the requirements of section 
12(d) of the National Technology Transfer and Advancement Act of 1995 
(15 U.S.C. 272 note) do not apply. This rule does not impose an 
information collection burden under the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
    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 rule 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 November 26, 2007. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this rule 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, Intergovernmental 
relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and 
recordkeeping requirements, Sulfur oxides.

    Dated: September 18, 2007.
Richard E. Greene,
Regional Administrator, EPA Region 6.

0
40 CFR part 52 is 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.

Subpart E--Arkansas

0
2. Section 52.170 is amended as follows:
0
a. In paragraph (c) the table entitled ``EPA-Approved Regulations in 
the Arkansas SIP'' is amended under Regulation No. 19--Regulations of 
the Arkansas Plan of Implementation for Air Pollution Control, by 
removing the existing entries for ``Chapter 14--Effective Date'' and 
``Reg. 19.1401'' and adding in its place new entries for ``Chapter 14--
CAIR NOX Ozone Season Trading Program General Provisions'' 
and new sub-entries for ``Reg. 19.1401'', ``Reg. 19.1402'', ``Reg. 
19.1403'', and ``Reg. 19.1404''.
0
b. In paragraph (c) the table entitled ``EPA-Approved Regulations in 
the Arkansas SIP'' is amended under Regulation No. 19--Regulations of 
the Arkansas Plan of Implementation for Air Pollution Control, by 
adding in numerical order a new entry for ``Chapter 15--Effective 
Date'' and a new sub-entry for ``Reg. 19.1501''.


Sec.  52.170  Identification of plan.

* * * * *
    (c) * * *

                                                      EPA-Approved Regulations in the Arkansas SIP
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      State
            State citation                   Title/subject         submittal/             EPA approval date                       Explanation
                                                                 effective date
--------------------------------------------------------------------------------------------------------------------------------------------------------
                              Regulation No. 19: Regulations the Arkansas Plan of Implementation for Air Pollution Control
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      * * * * * * *
                                          Chapter 14--CAIR NOX Ozone Season Trading Program General Provisions
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                      * * * * * * *
Reg. 19.1401.........................  Adoption of Regulations.      07/15/2007  09/26/2007 [Insert FR page number
                                                                                  where document begins].
Reg. 19.1402.........................  State Trading Budget....      07/15/2007  09/26/2007 [Insert FR page number
                                                                                  where document begins].
Reg. 19.1403.........................  Timing Requirements for       07/15/2007  09/26/2007 [Insert FR page number
                                        CAIR NOX Ozone Season                     where document begins].
                                        Allowance Allocations.
Reg. 19.1404.........................  CAIR NOX Ozone Season         07/15/2007  09/26/2007 [Insert FR page number
                                        Allowance Allocations.                    where document begins].
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 54562]]


                                                               Chapter 15--Effective Date
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reg. 19.1501.........................  Effective Date..........      07/15/2007  09/26/2007 [Insert FR page number
                                                                                  where document begins].

                                                                      * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *
 [FR Doc. E7-18966 Filed 9-25-07; 8:45 am]

BILLING CODE 6560-50-P
