Approval and Promulgation of Air Quality Implementation Plans; Connecticut, Massachusetts and Rhode Island; Nitrogen Oxides Budget and Allowance Trading Program

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

EPA is approving and promulgating State Implementation Plan (SIP) revisions submitted by the States of Connecticut, Massachusetts and Rhode Island. The SIP revisions for each of these states establishes a nitrogen oxides budget and trading program in response to EPA's regulation “Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone,” otherwise known as the “ NO_X SIP Call.” The SIP revision for each of the States includes a narrative description and regulation establishing a statewide NO_X budget and NO_X allowance trading program for large electricity generating and industrial sources beginning in the year 2003. The Massachusetts SIP also included revisions to existing regulations to assure consistency with the NO_X budget and allowance trading program.

The intended effect of these actions is to approve these SIP strengthening measures for the Connecticut, Massachusetts and Rhode Island ozone SIP's. This action is being taken in accordance with section 110 of the Clean Air Act (CAA). Further, we determined that the submittal from each of these three states meets the air quality objective of the NO_X SIP call requirements and we will take action in a future rulemaking on whether these submittals meet all the applicable NO_X SIP call requirements.

DATES:

This rule is effective on January 26, 2001.

ADDRESSES:

Copies of the documents relevant to this action are available for public inspection during normal business hours, by appointment at the Office of Ecosystem Protection, U.S. Environmental Protection Agency, EPA-New England, One Congress Street, 11th floor, Boston, MA. Copies of the documents specific to the SIP approval for CT are available at the Bureau of Air Management, Department of Environmental Protection, State Office Building, 79 Elm Street, Hartford, CT 06106-1630. Copies of the documents specific to the SIP approval for Massachusetts are available at the Division of Air Quality Control, Department of Environmental Protection, One Winter Street, 8th Floor, Boston, MA 02108. Copies of the documents specific to the SIP approval for Rhode Island are available at the Office of Air Resources, Department of Environmental Management, 235 Promenade Street, Providence, RI 02908-5767.

FOR FURTHER INFORMATION CONTACT:

Dan Brown at (617) 918-1532 or via E-mail at brown.dan@epa.gov.

SUPPLEMENTARY INFORMATION:

We published a Notice of Proposed Rulemaking (NPR) for the State of Connecticut, Massachusetts and Rhode Island in the Federal Register on July 12, 2000 (at 65 FR 42900, 65 FR 42907, and 65 FR 42913 for CT, MA and RI, respectively). The NPR proposed approval and promulgation of each States SIP revision for a Nitrogen Oxides Budget and Allowance Trading Program.

The formal SIP revision was submitted by Connecticut in September 1999 and included CT's NO_X control regulation, section 22a-174-22b, “Post-2002 Nitrogen Oxides ( NO_X) Budget Program,” and the CT's SIP narrative, “Connecticut State Implementation Plan Revision to Implement the NO_X SIP Call,” September 1999. The formal SIP revision was submitted by Massachusetts in November 1999 and included MA's NO_X control regulation, 310 CMR 7.28, “ NO_X Allowance Trading Program,” and the SIP narrative materials: “Background Document and Technical Support for Public Hearings on the Proposed Revisions to State Implementation Plan for Ozone,” July 1999; “Supplemental Background Document for Public Hearings on Modification to the July 1999 Proposal to Revise the State Implementation Plan for Ozone, including Proposed 310 CMR 7.28.” Massachusetts' submittal also included amendments to 310 CMR 7.19, “Reasonably Available Control Technology (RACT) for sources of Oxides of Nitrogen ( NO_X),” and 310 CMR 7.27, “ NO_X Allowance Program,” which allowed for consistent requirements and a smooth transition to the program under 310 CMR 7.28 in 2003. The formal SIP revision was submitted by Rhode Island in October 1999 and included RI's NO_X control regulation, Regulation No. 41, “Nitrogen Oxides Allowance Program,” and the SIP narrative materials, “ NO_X State Implementation Plan (SIP) Call Narrative.”

Connecticut, Massachusetts and Rhode Island submitted these SIP revisions in order to strengthen their one-hour ozone SIP and to comply with the NO_X SIP call. The NO_X SIP call originally required 23 jurisdictions, including CT, MA and RI, to meet statewide NO_X emission budgets during each ozone season, i.e., May 1 to October 1 beginning in 2003. Implementation of the NO_X SIP call will reduce the amount of ground level ozone that is transported across the eastern United States. The NO_X SIP Call originally set out a schedule that required the affected states to adopt regulations by September 30, 1999, and implement control strategies by May 1, 2003.

To assist the states in their efforts to meet the SIP Call, the NO_X SIP Call final rulemaking included a model NO_X allowance trading regulation, called “NO_X Budget Trading Program for State Implementation Plans,” (40 CFR Part 96), that could be used by states to develop their regulations. The NO_X SIP Call notice explained that if states developed an allowance trading regulation consistent with the EPA model rule, they could participate in a regional allowance trading program that would be administered by the EPA. See 63 FR 57458-57459. An allowance trading program, commonly referred to as a “cap and trade” program, is a market-based program that uses market forces to reduce the overall cost of compliance for pollution sources, such as power plants, while maintaining emission reductions and environmental benefits. The NO_X SIP call and model NO_X allowance trading regulation is further explained in the NPR and will not be restated here. The October 27, 1998 Federal Register notice contains a full description of the EPA's model NO_X budget trading program. See 63 FR 57514-57538 and 40 CFR Part 96.

A. Why Are We Fully Approving the CT, MA and RI SIP Revisions?

We evaluated the CT, MA and RI NO_X SIP Call submittals using EPA's “NO_X SIP Call Checklist,” (the checklist), issued on April 9, 1999. The checklist reflects and follows the requirements of the NO_X SIP Call set forth in 40 CFR 51.121 and 51.122 and outlines the criteria that we used to determine the completeness and approvability of these SIP submittals. As noted in the checklist, the key elements of an approvable SIP submittal under the NO_X SIP Call are: a budget demonstration; enforceable measures for control; legal authority to implement and enforce the control measures; compliance dates and schedules; monitoring, recordkeeping, and emissions reporting; as well as elements that apply to states that choose to adopt an emissions trading rule in response to the NO_X SIP Call. In addition to the SIP checklist, we used the October 1998 final NO_X SIP Call rulemaking notice and subsequent technical amendments to the NO_X SIP Call, published May 14, 1999 (64 FR 26298) and March 2, 2000 (65 FR 11222), to evaluate the approvability of the CT, MA and RI SIP submittals. We also used section 110 of the CAA, Implementation Plans, to evaluate the approvability of the submittals as a revision to the SIP for each of the three states.

The NPR provides a full description of each states SIP revision. Briefly, the Connecticut SIP submittal included the following:

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

The Massachusetts SIP submittal included the following:

• Adopted control regulations which require emission reductions beginning in 2003, i.e., 310 CMR 7.28;
• A description of how the state intends to use the compliance supplement pool, i.e., as part of the control regulation;
• A baseline inventory of NO_X mass emissions from EGUs, non-EGUs, area, highway and non-road mobile sources in the year 2007 as published in the May 14, 1999, technical amendments to the NO_X SIP Call, i.e., as part of the SIP narrative;
• A 2007 projected inventory (budget) reflecting NO_X reductions achieved by the state control measures contained in the submittal, i.e., as part of the SIP narrative; and
• A commitment to meet the annual, triennial, and 2007 reporting requirements, i.e., as part of the SIP narrative.
• Revisions to 310 CMR 7.19, “Reasonably Available Control Technology (RACT) for sources of Oxides of Nitrogen ( NO_X),” and 310 CMR 7.27, “ NO_X Allowance Program.”

And the Rhode Island SIP submittal included the following:

• Adopted control regulations which require emission reductions beginning in 2003, i.e., Regulation No. 41;
• A description of how the state intends to use the compliance supplement pool, i.e., as part of the control regulation;
• A baseline inventory of NO_X mass emissions from EGUs, non-EGUs, area, highway and non-road mobile sources in the year 2007 as published in the May 14, 1999, technical amendments to the NO_X SIP Call, i.e., as part of the SIP narrative;
• A 2007 projected inventory (budget) reflecting NO_X reductions achieved by the state control measures contained in the submittal, i.e., as part of the SIP narrative; and
• A commitment to meet the annual, triennial, and 2007 reporting requirements, i.e., as part of the SIP narrative.

We evaluated these SIP submittals and found them to be fully approvable. For each of these three states the respective submittals will strengthen the SIPs for reducing ground level ozone by providing NO_X reductions beginning in 2003. The submittals also meet the air quality objectives of the NO_X SIP Call. The submittals contained the information necessary to demonstrate that CT, MA and RI have the legal authority to implement and enforce the control measures, as well as a description of how each of these states intends to use the compliance supplement pool. Furthermore, the submittals demonstrate that the compliance dates and schedules, and the monitoring, record keeping and emission reporting requirements will be met.

In the July 12, 2000 NPR we requested comments on our proposed rulemaking to fully approve the SIP submittals for each of these three states (at 65 FR 42900, 65 FR 42907, and 65 FR 42913 for CT, MA and RI, respectively). The specific requirements of the SIP revisions and the rationale for our action is fully explained in the NPR and will not be restated here. The comment period for the proposed rulemakings ended on August 11, 2000. We did not received any comments on our proposed rulemaking and evaluation of the SIP submittals and we are fully approving the CT, MA and RI SIP submittals with this final rulemaking.

B. Why Are We Considering the NO_X SIP Call Submittals From CT, MA, and RI at the Same Time?

In February 1999, CT, MA, RI, and EPA signed a memorandum of understanding (i.e., “the Three State MOU”) agreeing to redistribute the EGU portions of the three states' budgets, as well as the compliance supplement pool allocations, amongst themselves. Therefore, it is necessary to consider the adopted 2007 emission budgets and adopted NO_X reducing measures in CT, MA and RI together to approve any individual state SIP submittal as meeting the air quality objectives of the NO_X SIP Call.

Under the Three State MOU, the combined 2007 controlled emission level and compliance supplement pool did not change for the three states, only the individual state EGU allocations and supplement pools were redistributed to provide additional flexibility among these three states. EPA supports this concept because such a redistribution is no different than the effects of trading. For a detailed discussion of why EPA supports the concept that states can collectively redistribute their NO_X SIP Call budgets, see the proposed Three State MOU notice, 64 FR 49989, September 15, 1999.

As described in the NPR, comparing the most recent technical amendments to the NO_X SIP Call budgets to the adopted and submitted NO_X SIP Call related measures from CT, MA and RI, the adopted measures in the three states will reduce more NO_X from the EGU and non-EGU sectors than the NO_X SIP Call notices have required. Given the fact that together the three states' regulations achieve at least the same NO_X reduction and allocate fewer than required compliance supplement pool allocations, EPA finds that the NO_X SIP Call SIP submittals from the three states collectively meet the air quality objectives of the NO_X SIP Call as published to date.

C. What Is the Remaining Issue Associated With the CT, MA and RI NO_X SIP Call Submittals?

The March 2, 2000 technical corrections to the NO_X SIP call changed the 2007 baselines and budgets for the highway and non-EGU sub-inventories in CT, MA, and RI after the three states had submitted their NO_X SIP call budgets. Furthermore, on March 3, 2000, the D.C. Circuit ruled on Michigan v. EPA, affirming many aspects of the NO_X SIP Call and remanding certain other portions to the Agency (e.g., the definition of an EGU and the control assumptions for internal combustion engines). The portion of the SIP Call upheld by the Court is being referred to as Phase I of the NO_X SIP call. The Phase I submissions cover all of the NO_X SIP Call requirements except for a small part of the EGU portion and the large internal combustion engine portion of the budget. The second phase of the NO_X SIP call will address the aspects of the NO_X SIP call the court remanded to the Agency. Any additional emission reductions required as a result of a final Phase II portion of the statewide emissions budget is expected to be a relatively small supplement to the SIPs (e.g., representing less than 10 percent of total reductions required by the SIP Call). The Phase II budgets are expected to be proposed in the near future.

For Connecticut, Massachusetts and Rhode Island, the Phase I baseline and budget emissions are based on the March 2, 2000 baseline and budget emissions and we do not anticipate a significant change with the forthcoming Phase II emission budgets for these three states. However, the baseline and budget NO_X emissions submitted by Connecticut, Massachusetts and Rhode Island were based on the May 14, 1999 emission baseline and budget which was the most up-to-date budget at the time of the State's submittals. Therefore, the SIP baseline and budget emissions are not consistent with the revised March 2, 2000 NO_X budgets allocated for these three states. However, the total emission reductions (i.e., the difference between the emission baseline and budget) from implementing the CT, MA and RI SIPs are greater than the emission reduction required in Phase I. Nevertheless, because of the inconsistency in the NO_X budgets for these three states, we could not fully approve the SIP revisions as meeting the NO_X SIP call, rather, we are fully approving the SIP revisions as SIP strengthening measures which meet the air quality objectives of the NO_X SIP call. Connecticut, Massachusetts and Rhode Island will need to submit a revision to their emission baseline and budgets making them consistent with the Phase I emission baseline and budget numbers for the submittals to be fully approvable as meeting Phase I of the NO_X SIP call. In addition, CT, MA and RI may be further required to revise its NO_X SIP Call program due to potential forthcoming changes to the Phase II NO_X SIP Call budget requirements. At such time as EPA publishes new Phase II emission budget requirements, CT, MA and RI will be informed as to what, if any, changes are needed to assure their respective NO_X budgets are consistent with the final NO_X SIP call budgets.

Final Action

We are fully approving the revisions to the Connecticut, Massachusetts and Rhode Island SIP's as strengthening measures for the three states one-hour ground level ozone SIP's. Specifically we are approving Connecticut's regulation 22a-174-22b and supporting material; Massachusetts' regulation 310 CMR 7.28, amendments to 310 CMR 7.19 and 7.27, and supporting material; and Rhode Islands regulation 41 and supporting material. We have determined the SIP revisions for these three states meet the air quality objectives of the NO_X SIP call requirements EPA has published to date. This rulemaking is effective on January 26, 2001. After EPA recalculates the final 2007 emission budget and CT, MA and RI make any necessary revisions to assure their respective 2007 emission budgets are consistent with the EPA's final budget, we will take action in a separate notice on whether the SIP submittals meet the applicable NO_X SIP call requirements.

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

Administrative Requirements

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the 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). For the same reason, this rule also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

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

The Congressional Review Act, 5 U.S.C. section 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 Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 26, 2001. 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 in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Carbon monoxide
• Hydrocarbons
• Incorporation by reference
• Intergovernmental relations
• Nitrogen dioxide
• Ozone
• Particulate matter
• Reporting and recordkeeping requirements
• Sulfur oxides

Part 52 of chapter I, title 40 of the Code of Federal Regulations is amended as follows:

PART 52—[AMENDED]

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

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

Subpart H—Connecticut

2. Section 52.370 is amended by adding paragraph (c)(86) to read as follows:

3. In § 52.385 the Table 52.385 is amended by adding an entry in numerical order for “22a-174-22b” to read as follows:

Subpart W—Massachusetts

4. Section 52.1120 is amended by adding paragraph (c)(124) to read as follows:

5. In § 52.1167 the Table 52.1167 is amended by:

a. Adding new entries in numerical order for “310 CMR 7.19(13)(b)” and “310 CMR 7.28,” and

b. Adding a new entry “310 CMR 7.27” under existing “310 CMR 7.27.”

The additions read as follows:

Subpart OO—Rhode Island

6. Section 52.2070 is amended by:

a. Adding in numerical order a new entry for “Air Pollution Control Regulation 41” to the table in paragraph (c).

b. Adding in State submittal date order new entries for “October 1, 1999 letter from Rhode Island Department of Environmental Management”, “NO_X State Implementation Plan (SIP) Call Narrative” and “November 19, 1999, letter from Rhode Island Department of Environmental Management” to the table in paragraph (e).

(e) * * *