[Federal Register Volume 64, Number 92 (Thursday, May 13, 1999)]
[Rules and Regulations]
[Pages 25834-25842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12007]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 72 and 73
[FRL-6341-2]
RIN 2060-A127
Revisions to the Permits and Sulfur Dioxide Allowance System
Regulations Under Title IV of the Clean Air Act: Compliance
Determination
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: Title IV of the Clean Air Act (the Act), as amended by the
Clean Air Act Amendments of 1990, authorized the Environmental
Protection Agency (EPA or Agency) to establish the Acid Rain Program.
The program sets emissions limitations to reduce acidic particles and
deposition and their serious, adverse effects on natural resources,
ecosystems, materials, visibility, and public health.
The allowance trading component of the Acid Rain Program allows
utilities to achieve sulfur dioxide emissions reductions in the most
cost-effective way. Utilities trade allowances and EPA records
ownership and trades of allowances in the Allowance Tracking System for
use in determining compliance at the end of each year. On January 11,
1993, EPA initially promulgated the regulations governing Acid Rain
Program permitting and allowance trading. Today's action revises
certain provisions in the regulations concerning the deduction of
allowances for determining compliance. The revisions will improve the
operation of the Allowance Tracking System and the allowance market
generally, while still preserving the Act's environmental goals.
EFFECTIVE DATE: June 14, 1999.
ADDRESSES: Docket. Docket No. A-98-15, containing supporting
information used in developing the proposed rule, is available for
public inspection and copying between 8:30 a.m. and 3:30 p.m., Monday
through Friday, at EPA's Air Docket Section, Waterside Mall, room 1500,
1st Floor, 401 M Street, S.W., Washington, DC 20460. EPA may charge a
reasonable fee for copying.
FOR FURTHER INFORMATION CONTACT: Donna Deneen, Permits and Allowance
Market Branch, Acid Rain Division (6204J), U.S. Environmental
Protection Agency, 401 M Street S.W., Washington, DC 20460 (202-564-
9089).
SUPPLEMENTARY INFORMATION: This preamble contains all of the responses
to public comments received on the revisions finalized in today's
action.
The information in this preamble is organized as follows:
I. Affected Entities
II. Background
III. Public Participation
IV. Summary of Comments and Responses
A. Allowance Deductions From Other Units at the Same Source
B. Role of Authorized Account Representative
C. Effective Date of Rule Revisions
D. Impacts of Rule Revisions on Acid Rain Permits
V. Administrative Requirements
A. Docket
B. Executive Order 12866: Regulatory Planning and Review
C. Executive Order 12875: Enhancing Intergovernmental
Partnerships
D. Executive Order 13084: Consultation and Coordination with
Indian Tribal Governments
E. Unfunded Mandates Act
F. Paperwork Reduction Act
G. Regulatory Flexibility
H. Applicability of Executive Order 13045: Children's Health
Protection
I. National Technology Transfer and Advancement Act
J. Congressional Review Act
I. Affected Entities
Entities potentially affected by this action are fossil-fuel fired
boilers or turbines that serve generators producing electricity,
generating steam, or cogenerating electricity and steam. Regulated
categories and entities include:
------------------------------------------------------------------------
Category Examples of regulated entities
------------------------------------------------------------------------
Industry: SIC 49--Electric, Gas and Electric service providers,
Sanitary Services. boilers from a wide range of
industries.
------------------------------------------------------------------------
EPA does not intend this table to be exhaustive, but rather to
provide a guide for readers regarding entities likely to be regulated
by this action. This table lists the types of entities that EPA is now
aware could potentially be affected by this action. This action could
also affect other types of entities not listed in the table. To
determine whether this action affects your facility, you should
carefully examine the applicability criteria in Sec. 72.6 and Sec. 74.2
and the exemptions in Secs. 72.7, 72.8, and 72.14 of title 40 of the
Code of Federal Regulations. If you have questions regarding the
applicability of this action to a particular entity, consult the
persons listed in the preceding FOR FURTHER INFORMATION CONTACT
section.
II. Background
On January 11, 1993, EPA promulgated the regulations that
implemented the major provisions of title IV of the Clean Air Act (CAA
or the Act), including the Permits rule (40 CFR part 72) and the Sulfur
Dioxide Allowance System rule (40 CFR part 73). Since promulgation,
these rules have applied to three compliance years, 1995, 1996, and
1997, for which the rules required affected units to meet annual
allowance holding requirements. During this time, the Agency has gained
experience in implementing the requirements and also discovered ways it
could improve the operation of the Allowance Tracking System and
allowance market. On August 3, 1998, EPA proposed changes to certain
provisions in 40 CFR parts 72 and 73 to make these improvements. 63 FR
41358 (1998). These proposed changes related to the allowance transfer
deadline, compliance determinations, and the signature requirements for
allowance transfer requests. EPA finalized the proposed changes to the
allowance transfer deadline and signature requirements for allowance
transfer requests on December 11, 1998. 63 FR 68401 (1998). Today's
action finalizes changes related to the deduction of allowances for
compliance determinations.
III. Public Participation
EPA proposed revisions to 40 CFR parts 72 and 73 in the Federal
Register on August 3, 1998. 63 FR 41358. The notice invited public
comments. EPA
[[Page 25835]]
received and granted a request to extend the comment period by 15 days
from September 2, 1998 to September 17, 1998.
EPA offered to hold a public hearing upon request, but no one made
such a request and EPA did not hold a hearing. However, after the close
of the comment period, EPA held several meetings with all parties that
submitted comments, in order to clarify the parties' comments and
positions on the issues raised on the notice of proposed rule-making.
The parties subsequently submitted late comments further explaining
their positions. Copies of memoranda describing the new information
received by EPA at the post-comment period meetings are in the
rulemaking docket.
IV. Summary of Comments and Responses
During the comment period, EPA received seven letters (or ``initial
comments'') regarding the proposed revisions to the compliance
determination provisions in the regulations.1 Several months
after the comment period, EPA received three additional letters (or
``late comments'') from the same commenters concerning the provisions.
All of the commenters were representatives of utility companies or
groups of utility companies. A copy of each comment received is in the
rulemaking docket.
---------------------------------------------------------------------------
\1\ Although EPA received five of the seven comment letters one
to five days after the close of the comment period, EPA is
responding to all seven comment letters.
---------------------------------------------------------------------------
EPA carefully considered all of the comments and, where
appropriate, made changes reflected in the final regulations. The
following sections contain a summary of the comments received and the
Agency's responses.
A. Allowance Deductions From Other Units at the Same Source
After the allowance transfer deadline, EPA determines whether each
affected unit is in compliance with the requirement to hold allowances
at least equal to the unit's sulfur dioxide emissions for the previous
year. See 40 CFR 72.9(c)(1)(i). Units that do not meet the requirement
are subject to the excess emissions and offset plan requirements in 40
CFR part 77.
On August 3, 1998, EPA proposed revisions that would change how it
deducts allowances and determines the amount of excess emissions at a
unit at the end of a compliance year. Under the proposed revisions, EPA
would allow reduction (but not complete avoidance) of excess emissions
that a unit would otherwise have after deductions for compliance under
Sec. 73.35(b)(2). EPA would allow excess emissions to be reduced at a
unit by allowing deductions of up to a certain number of allowances for
that unit from the allowance accounts of other units at the same source
that had unused allowances. The proposed revisions included a formula
for calculating the allowance deductions allowed from other units'
accounts. The formula would result in the unit making an excess
emissions penalty payment equal to about three times the allowance
price of the allowances needed to offset the unit's excess emissions in
the absence of allowance deductions from other units' accounts. The
Agency proposed these changes because EPA was concerned that a utility
could become subject to an enormous penalty payment for making
inadvertent, minor errors when accounting for allowances at the end of
the year even if the utility had enough allowances among the units at
the source.
All the commenters expressed general support of EPA's decision to
propose rule changes that would allow utilities to reduce the effects
of inadvertent, minor errors in accounting for allowances. The specific
approach proposed by EPA for doing this, however, generated a variety
of comments. The following discussion addresses these comments.
Comment: Several commenters stated in their initial comments that
the proposed provision limiting the use of unused allowances to those
held by other units at the same source was inconsistent with section
403(d)(2) of the Act.2 The commenters argued that section
403(d)(2) authorizes ``aggregation of allowances among units with the
same designated representative'' for purposes of determining compliance
with the requirement to hold allowances covering a unit's annual
SO2 emissions. Comments of UARG at 7 (September 16, 1998).
While section 403(d)(1) requires the Administrator to promulgate
regulations establishing a system for issuing, recording, and tracking
allowances, section 403(d)(2) provides:
\2\ These commenters subsequently stated, in late comments, that
the Agency would satisfy all their concerns if, among other things,
EPA increased the amount of allowances potentially deducted from
other units at the same source beyond the amount provided in the
proposed revisions. Because regulations implementing the Acid Rain
Program must be consistent with title IV, EPA is addressing here the
issue of statutory consistency.
---------------------------------------------------------------------------
In order to insure electric reliability, such regulations shall
not prohibit or affect temporary increases and decreases in
emissions within utility systems, power pools, or utilities entering
into allowance pool agreements, that result from their operations,
including emergencies and central dispatch, and such temporary
emissions increases and decreases shall not require transfer of
allowances among units nor shall it require recordation. The owners
or operators of such units shall act through a designated
representative. Notwithstanding the preceding sentence, the total
tonnage of emissions in any calendar year (calculated at the end
thereof) from all units in such a utility system, power pool, or
allowance pool agreements shall not exceed the total allowances for
such units for the calendar year concerned. 42 U.S.C. 7651b(d)(2).
Commenters claimed that the last sentence of this section requires EPA
to allow units with a common designated representative and included in
the same utility system, power pool, or allowance pool to aggregate
their allowances for use in determining whether these units hold
allowances at least equal to their annual SO2 emissions. The
commenters noted that EPA acknowledges that title IV requires
allowances to be held for a unit but does not specify the account in
which the allowances must be held. According to these commenters, EPA
should revise Sec. 73.34 to allow a designated representative to cover
a unit's emissions with allowances from any accounts for which he or
she is the designated representative. The commenters argued that EPA
should allow this regardless of whether the accounts are for units at
the same source.
One of the commenters added that EPA's position that plant owners
must fill thousands of unit compliance subaccounts with an exact or an
excess number of allowances in order to avoid a penalty is unproductive
both for EPA and plant owners. The commenter stated that EPA should
give the designated representative the option of naming the unit's
compliance subaccount as the primary allowance source and general
accounts as secondary and tertiary accounts from which EPA could deduct
allowances at year end.
Response: EPA disagrees with the commenters who asserted that the
provision limiting the use of unused allowances to those held by other
units at the same source is inconsistent with section 403(d)(2) of the
Act. As discussed below, EPA maintains that the same-source
limitation--coupled with the limit on the number of allowances a unit
can use from another unit--are consistent with the pervasive unit-by-
unit orientation of title IV (including section 403(d)(2)).3
See also
[[Page 25836]]
63 FR 41362 (consistency with section 403(g), 411, and 414). Further,
to the extent allowing a unit to use any allowances from another unit
is a departure from a strict unit-by-unit approach, the same-source
limitation closely restricts any such departure by allowing a unit to
use only allowances held for units that are at the same geographic
location, i.e., the same plant.
---------------------------------------------------------------------------
\3\ To the extent some commenters asserted section 403(d)(2)
authorizes, rather than requires, the Agency to allow the use of
allowances from units at other sources, EPA interprets the provision
to mean that the Agency is neither required nor authorized to allow
the use of such allowances.
---------------------------------------------------------------------------
As explained in the preamble of the proposed rule, title IV
incorporates a pervasive unit-by-unit orientation, particularly with
regard to SO2 emissions. Title IV requires: determination of
applicability of the Acid Rain Program unit-by-unit; allocation of
allowances and setting of SO2 emissions limitations
generally unit-by-unit; determination of excess emissions and penalties
unit-by-unit; and monitoring of emissions generally unit-by-unit. See
63 FR 41360.
Maintaining that section 403(d)(2) similarly reflects this unit-by-
unit orientation, EPA rejects the commenters' interpretation that
section 403(d)(2) requires the Agency to allow designated
representatives to use allowances from units at other sources. The last
sentence of section 403(d)(2) is ambiguous, but EPA maintains that a
reasonable interpretation is that this section requires a unit-by-unit
orientation in compliance. The first sentence of the section states
that the allowance system regulations shall not prohibit temporary
changes in emissions by units included in utility systems, power pools,
or allowance pools and that such changes will not require allowance
transfers. The second sentence requires that all owners or operators of
such units act through a designated representative. The third sentence
states that total annual emissions from ``all'' such units cannot
``exceed the total allowances for such units'' for the year involved.
Id.
This reference in the third sentence to ``all'' units either could
mean each and every unit in a particular utility system, power pool, or
allowance pool or could mean all units in the aggregate in such a
system or pool. Thus, the statutory language could arguably support
either of two possible interpretations: (1) Total annual emissions for
each unit in a particular utility system, power pool, or allowance pool
must not exceed the unit's total allowances; or (2) the aggregate
annual emissions of all the units in the utility system, power pool, or
allowance pool must not exceed the aggregate allowances for all these
units. While the commenters support the second interpretation, EPA has
consistently followed the first interpretation. See 56 FR 63002, 63049-
50 (1991) (explaining that section 403(d)(2) does not ``require or
authorize'' pool-wide compliance). For the following reasons, EPA
continues to adopt the first interpretation.
First, as discussed above, title IV incorporates a unit-by-unit
orientation. While these other provisions of title IV may not be
determinative of the proper interpretation of section 403(d)(2), EPA
maintains it is reasonable to interpret section 403(d)(2) to reflect
the same unit-by-unit orientation that Congress adopted in the major
statutory provisions governing the Acid Rain Program. The commenters'
interpretation would represent a significant departure from the other
provisions of title IV.
Second, contrary to the commenters' claim, the legislative history
of title IV supports EPA's interpretation, rather than the commenters'
interpretation, of section 403(d)(2). The most authoritative document
in the legislative history, the Conference Report that accompanied the
Clean Air Act Amendments of 1990, states that section 403(d):
Makes it clear that allowances are annual; temporary increases and
decreases in emissions within utility systems or power pools do not
require allowance transfers or recordation so long as the total
tonnage emitted in any year matches allowances held for that year.
Thus, utilities must ``true up'' at year end to ensure that
allowances match emissions for each unit. Conference Report, House
Rep. No. 101-952, 101st Cong. 2d Sess. at 343 (October 26, 1990)
(emphasis added).
In short, the Conference Report indicates that, at the end of each
year, allowances must cover emissions for each unit in a utility system
or pool, not for all units in the system or pool on an aggregate basis.
Ignoring the Conference Report, the commenters instead focused on
comparing the enacted provisions of title IV with provisions of an
earlier House version (H.R. 3030) of title IV. The House bill (in
section 503(d)(4) of H.R. 3030) required promulgation of regulations
for a system of issuing, recording, and tracking allowances and stated
that:
In order to insure electric reliability, such regulations shall not
prohibit or affect temporary increases and decreases in emissions
within utility systems or power pools that result from their
operations, including emergencies and central dispatch, and such
temporary emissions increases and decreases shall not require
transfer of allowances among units nor shall it require recordation.
Notwithstanding the preceding sentence, the total tonnage of
emissions in any calendar year (calculated at the end thereof) from
each unit involved shall not exceed the allowances allocated to the
unit for the calendar year concerned and issued to the owner or
operator of the unit for that year, plus or minus allowances
transferred to or from the unit for such calendar year or carried
forward to that year from prior years. House Rep. No. 101-490, 101st
Cong. 2d Sess. at 629-30 (May 17, 1990).
In the House Committee Report accompanying the House bill, the
House Committee on Commerce and Energy explained this House bill
provision using language subsequently adopted word-for-word in the
Conference Report (quoted above) to explain section 403(d)(2) of the
final version of title IV. See House Rep. No. 101-490 at 373-74. In
particular, the House Report explained that utilities must ensure at
the end of each year that ``allowances match emissions for each unit.''
Id. at 374. The fact that the Conference Committee explained section
403(d)(2) using, word-for-word, the House Committee's explanation of
unit-by-unit compliance provided under the House bill indicates that
Congress intended to continue to require unit-by-unit compliance in
section 403(d)(2). This also shows that Congress did not intend the
language differences between section 403(d)(2) and the comparable House
bill provision to alter the requirement for unit-by-unit compliance.
Thus, the Conference Report and House Committee Report belie the
importance the commenters place on the difference between the reference
in section 403(d)(2) to total emissions and total allowances for ``all
units'' in a utility system, power pool, or allowance pool agreements
and the reference in the House bill to emissions and allowances of
``each unit.''
Rather than addressing the Conference Report or the House Committee
Report, the commenters based their argument on a floor statement of one
member of the House of Representatives. The Courts do not generally
consider Congressmen's floor statements alone as providing
authoritative explanations of Congressional intent. See, e.g., Garcia
v. U.S, 469 U.S. 70, 76 and 78 (1984); Brock v. Pierce, 476 U.S. 253,
263 (1986); and U.S. v. McGoff, 831 F.2d 1071, 1090-91 (D.C. Cir.
1987).
Moreover, the floor statement on which the commenters rely does not
support their interpretation of section 403(d)(2). In the statement
cited by the commenters, Congressman Oxley stated:
[[Page 25837]]
Barriers to allowance transactions may take any number of forms,
and the Administrator must use great care to avoid doing anything to
help erect those barriers. That is why the conference committee has
streamlined the process whereby a utility or utilities can pool
allowances so as to operate within the confines of the law. Under
provisions of the allowance tracking system, we have provided for
the creating of allowance pools. Owners or operators need only
record with the Administrator that they intend to enter into such
agreements. Once in place, these voluntary pooling agreements can
operate to reduce the number of actual transfers of allowances and,
thus, the overall compliance burden. For example, utilities or
operating companies can keep and share one set of allowance books to
accommodate their emission allowance requirements. Here, as
elsewhere, it is necessary to keep the volume of information that
buyers and sellers are required to provide to a minimum, lest the
system breakdown in the face of heavy trading. A Legislative History
of the Clean Air Act Amendments of 1990, Vol. 1 at 1418 (1990)
(quoting from House debate on the Conference Report and bill on
October 26, 1990).
The Congressman's statement addresses the use of allowance pools to
reduce ``[b]arriers to allowance transactions,'' not the use of
allowance pools to show compliance with the requirement to hold
allowances at least equal to each unit's annual SO2
emissions. Id. The ability to hold allowances in a single account for
all units in a utility system, power pool, or allowance pool reduces
the number of allowance transfers submitted to the Administrator for
recordation in the Allowance Tracking System. Once such an allowance
account is established, a utility system, power pool, or allowance pool
can, for internal bookkeeping purposes, move allowances among any of
the units in the utility system, power pool, or allowance pool
throughout the year and, for purposes of the Allowance Tracking System,
hold the allowances in the same account (i.e., a general account for
the utility system, power pool, or allowance pool). See 40 CFR 73.31(c)
(providing for the establishing of ``general accounts'' by ``any
person''). However, this does not negate the requirement that, for
compliance purposes, the designated representative must ultimately
transfer the allowances to each unit's individual allowance account by
the allowance transfer deadline. In fact, this is just the sort of
annual ``true up'' for each unit that Congress described in the
Conference Report.
In short, EPA concludes that its long-standing interpretation of
the ambiguous language in section 403(d)(2) is a reasonable reading of
the statutory language and is consistent with other provisions of title
IV and with the legislative history.
Today's final rule is consistent with the requirement, reflected in
section 403(d)(2), that each unit have allowances covering its
emissions. The rule restricts the number of allowances that can be held
for a unit by other units and requires that these other units must be
at the same source. As a result, EPA believes that there is still
strong incentive for owners and operators to hold sufficient allowances
in an affected unit's account and that owners and operators will
routinely comply on a unit-by-unit basis and only use allowances from
other units at the source in unusual circumstances, e.g., to correct an
inadvertent error. Of course, the allowances that a unit uses from
other units must be from the same geographic location, i.e., the same
plant. See 63 FR 41362-41363 (explaining that, in effect, common stack
units can already use allowances from other units, but only at the same
plant, under Sec. 73.35(e)). EPA therefore maintains that today's final
rule is consistent with section 403(d)(2) and strikes a reasonable
balance between the unit-by-unit orientation of title IV and compliance
flexibility to reduce excess emission penalty payments where units fail
to hold enough allowances because of inadvertent, minor errors.
The same-source restriction in the final rule is not only
consistent with title IV, but also is practical to implement. The
restriction ensures that only one designated representative is involved
in the deduction of allowances from other units' compliance
subaccounts. The limitation thereby minimizes the changes necessary to
existing contracts involving allowance agreements among different
owners of units.
Finally, in response to the commenter that supported allowing a
designated representative the option of naming a unit's primary,
secondary, and tertiary accounts from which EPA would deduct
allowances, EPA notes that the allowance account tracking necessary to
implement the approach would be far too complicated and unwieldy. Such
a time and resource intensive approach would likely cause significant
and unacceptable delays in EPA's ability to perform timely end of year
accounting and unfreeze allowance accounts. After the allowance
transfer deadline, allowances that are useable for the compliance year
must be frozen until EPA completes the process of deducting allowances
to cover each unit's emissions.
Comment: Several commenters stated in initial comments that units
should be able to use available allowances from other unit accounts
after the allowance transfer deadline to avoid all excess emissions.
They argued that the language in section 403(d)(2), quoted and
discussed above, reflects Congress' intent that EPA allow full
offsetting. One of these commenters argued that allowing the use of
allowances from other unit accounts to avoid excess emissions
completely would not compromise the Acid Rain Program's unit-by-unit
orientation because EPA would deduct allowances from the affected
unit's compliance subaccount first, before allowing deductions from
other units at the same source. The commenter also pointed out that
under the proposed rule, the consequences of making an inadvertent
error (such as transposing figures in allowance serial numbers in an
allowance transfer form so the transaction transfers an insufficient
number of allowances to a unit) could widely vary, depending on the
exact error made. Suggesting that the penalties should not differ for
the same type of error, the commenter argued that allowing units to
avoid excess emissions with all available allowances at other unit
accounts would address this concern.
Response: EPA rejects the commenters' views that EPA must allow the
full use, instead of the limited use, of allowances in other units'
compliance subaccounts. As discussed above, the Act has a pervasive
unit-by-unit orientation and, therefore, the final rule allows the
designated representative to use, for a unit that would otherwise have
excess emissions, a large portion (but not all) of the needed
allowances from the compliance subaccounts of other units at the same
source. Further, for the reasons detailed above, EPA rejects the
commenters' interpretation of section 403(d)(2).
In response to the commenter who claimed that allowing the complete
avoidance of excess emissions would not compromise the unit-by-unit
orientation of title IV, EPA does not agree. Allowing units to use
allowances from other unit compliance subaccounts to avoid completely
excess emissions and the resulting excess emissions penalty payment
provides owners and operators with little or no incentive to ensure
that the individual account for each of their units holds sufficient
allowances at the end of each year. While the flexibility to deduct
allowances from other units is aimed at minor, inadvertent errors,
owners and operators can use this flexibility when any errors occur. 63
FR 41363. Providing this flexibility without any significant, excess
emissions penalty
[[Page 25838]]
payment would likely discourage efforts to ensure unit-by-unit
compliance and encourage routine use of allowances from other units at
the same source.
In response to the same commenter's concerns that under EPA's
proposal the amount of a unit's allowance deficiency and the resulting
penalty payment resulting from an inadvertent error could vary widely
depending on the specific error, EPA notes that this potential variance
already exists under the current rule. The proposed rule--and to a
greater extent, today's final rule--actually reduces the potential
variance by reducing the penalty payment for minor, inadvertent errors.
By reducing the potential penalties, the final rule helps to alleviate
the problem of widely divergent penalties. As discussed above, EPA
believes that the final rule thus balances the unit-by-unit orientation
of title IV with increased compliance flexibility.
Comment: EPA received several initial and late comments on the
formula, in proposed Sec. 73.35(b)(3)(i), for calculation of the
maximum allowances available for a unit for deduction from other unit
accounts. The proposed formula would use a ratio of three times the
average allowance price for the year to the excess emissions penalty
per ton in order to limit deductions from other unit accounts.
Notwithstanding the ratio, the proposed formula also would not allow
deductions from other unit accounts that would bring excess emissions
below 10 tons. This would establish a minimum penalty where the formula
is used.
In their initial comments, several commenters raised objections to
the formula. After objecting to any limitation being placed on the
number of allowances that could be deducted, one commenter stated that
if EPA adopted such a limitation, the Agency should revise the formula
to allow use of more allowances from other unit accounts. Specifically,
this commenter recommended revising the formula to change the ratio of
three times the allowance price to the excess emissions penalty to a
ratio of one times the allowance price to the excess emissions penalty.
The commenter also recommended, notwithstanding the formula, imposing a
10 percent cap as the maximum amount of allowances that a unit could
not use from other units' accounts to offset a unit's emissions. The
commenter claimed that this approach would result in utilities planning
to comply under the existing unit-by-unit approach to avoid the
financial penalty represented by even a limited discount factor.
A second commenter argued in initial comments that, because minor
accounting mistakes would typically result in less than 10 tons of
excess emissions, EPA's proposed formula and 10-ton minimum penalty was
arbitrary and capricious. This commenter further claimed that if EPA
did not revise the proposal to allow the use of unlimited allowances
from other unit accounts, EPA should at least revise the formula to
penalize the first excess emission ton much less than the eleventh
excess emission ton. In a third set of initial comments, another
commenter stated that EPA should revise the formula to allow deduction
of any needed allowances from other unit accounts without penalty if
less than 10 tons of excess emissions occurred. A fourth commenter
characterized the formula as too complicated.
As noted above, EPA held several post-comment period meetings with
all parties that submitted initial comments. During these meetings, the
parties and EPA discussed the initial comments and their views
concerning issues, raised in the preamble of the proposed rule, about
the proposed formula. In particular, the participants addressed
reducing or removing the allowance-price-to-excess-emissions-penalty
ratio, retaining the 10-ton minimum, and adding a percentage cap on the
amount of allowances that a unit could not use from other units'
accounts to offset a unit's emissions. The participants discussed these
issues in the context of alternative scenarios for the formula, all of
which were logical outgrowths of the proposed rule. As a result of
these discussions, the commenters submitted late comments to the Agency
on these issues to supplement their views. EPA has taken these late
comments into consideration in developing the final rule.
Response: The proposed formula generally would make it four times
as expensive to not hold enough allowances in a unit account than to
hold enough allowances in the unit's account, as of the allowance
transfer deadline.4 EPA agrees that, in light of the kinds
of errors the revisions are meant to address (i.e., inadvertent, minor
ones), the penalty payment, after application of the proposed formula,
could still be excessive. Therefore, EPA believes that it should modify
the proposed formula to allow the deduction of more allowances from
other units at the same source.
---------------------------------------------------------------------------
\4\ Under the proposed revisions, a unit that simply complied
with the allowance holding requirement would use one allowance for
each ton of emissions (e.g., 100 allowances for 100 tons of
SO2). However, if the unit failed to comply with the
allowance holding requirement using its own allowances, the unit
would use one allowance (i.e., from either another unit account or a
future year account under the offset provisions in Sec. 77.3) for
each ton of emissions (e.g., 100 allowances for 100 tons of
SO2), plus its owners and operators would be subject to
an excess emissions penalty payment approximately equal to the cost
of three allowances for each ton of emissions (e.g., the cost of 300
allowances).
---------------------------------------------------------------------------
EPA considered the suggestion, in initial comments, of increasing
the allowances allowed to be deducted from other unit accounts by
changing the proposed formula so that it contains a ratio of one times
the average allowance price to the excess emissions penalty, instead of
three times the average allowance price to the excess emissions
penalty. EPA agrees that such a change would result in a total penalty
payment that is more in line with the gravity of making an inadvertent,
minor error. Nevertheless, EPA is concerned that making only this
change would fail to address comments that the deduction formula is
overly complicated. EPA maintains that the penalty formula will be more
effective if it is simpler and easier to apply.
EPA and the commenters discussed a simplified formula for
calculation of penalties in the post-comment meeting on December 3,
1998. In late comments, commenters stated that if EPA adopted this
simplified formula, the Agency would satisfy their concerns about the
proposed formula. Under the simplified formula, the owner or operator
of a unit may use from the compliance subaccounts of other units at the
same source up to 95 percent of the allowances needed after using all
the allowances in the unit's own compliance subaccount. However, the
simplified formula retains the 10-ton minimum on the amount of excess
emissions remaining after using allowances from other units' accounts.
The simplified formula has a result comparable to that of the
formula suggested in initial comments that would reduce the ratio in
the proposal from three to one times the average allowance price to the
excess emissions penalty. Under 1998 market conditions, both the
commenter's suggested formula and the simplified formula would result
in allowing deduction of 95 percent of the allowances needed by a unit
from other unit accounts (i.e., using the 1998 average allowance price
of $117 and an excess emissions penalty of $2581 per ton of excess
emissions). While the average allowance price and excess emissions
penalty may change each year, resulting in a disparity in the
allowances calculated under the commenter's suggested formula and the
[[Page 25839]]
formula in the final rule,5 EPA believes this is not a
significant concern. EPA sees no overwhelming reason to ensure the
penalty payment increases as average allowance price increases, as long
as the penalty payment for excess emissions remains significant and
provides owners and operators with a strong incentive to comply with
the allowance holding requirements on a unit-by-unit basis.
---------------------------------------------------------------------------
\5\ As of December 1998, the market price of an allowance was
about $190, an amount which, if it had been the average allowance
price for 1998, would have resulted in 93 percent of a unit's needed
allowances to be deducted from other unit accounts.
---------------------------------------------------------------------------
Under both the proposed formula and the simplified formula, the
excess emissions remaining after deductions from other unit accounts
are subject to the excess emissions penalty of $2000 per ton, as
adjusted by the Consumer Price Index.
In light of the late comments unanimously supporting the simplified
formula discussed in the December 3, 1998 post-comment period meeting,
EPA has decided to modify the proposal and adopt the simplified
formula. Use of the simplified formula will increase, by an amount
comparable to the amount suggested in initial comments, the number of
allowances that can be deducted from other unit accounts. EPA believes
that the simplified formula will achieve the objectives intended by the
proposed formula, but will be far easier for both the utilities and EPA
to use to calculate the amount of excess emissions.
As noted above, the simplified formula retains the 10-ton minimum
on the amount of excess emissions that remains after deducting
allowances from other units' accounts. EPA believes the restriction is
necessary to ensure that, for units with 10 or more tons of emissions
exceeding the allowances in their unit accounts (before deducting from
other unit accounts), the penalty remains significant. This will
provide owners and operators with a strong incentive to meet their
allowance holding requirements on a unit-by-unit basis. EPA also notes
that, under the final rule, a unit having the minimum 10 tons of excess
emissions (after the formula is applied) for 1998 will be subject to a
penalty payment of $25,810, about the same maximum penalty that can be
assessed per day of violation under sections 113(b) and (d) in the
Clean Air Act.
B. Role of Authorized Account Representative
Comment: EPA received several comments on two options, presented in
the proposal, concerning the role of the authorized account
representative (who also is, for any affected unit, the designated
representative) in deducting allowances from other unit accounts.
Option 1 would prescribe the unit accounts for, and order of, such
deductions but allow the authorized account representative, before the
allowance transfer deadline, to tell EPA not to make any deductions
from other unit accounts. Option 2 would allow the authorized account
representative to specify, within 15 days of receiving notice from the
Agency of a unit's failure to hold sufficient allowances, the serial
numbers of the allowances to deduct and the compliance subaccounts from
which to deduct those allowances. All of the commenters supported
Option 2. One commenter argued that Option 2 is consistent with section
403(d)(2) in the Act which states that owners and operators must ``act
through a designated representative'' and language in Parts 72 and 73
of the current regulations that authorize designated representatives to
specify by serial number the allowances deducted from compliance.
Several commenters also noted Option 2 was preferable because it would
avoid potential allowance surrender issues that could arise where units
at a source are jointly owned.
Response: In light of the comments received, the Agency has chosen
Option 2 over Option 1 for the final rule. As pointed out in the
comments, Option 2 will provide owners and operators with more
flexibility because the authorized account representative can specify
any unused allowance for deduction, as long as a unit at the same
source holds the allowance. This flexibility makes it unnecessary for
owners and operators to renegotiate their allowance agreements in order
to take into account the Agency-mandated pattern in Option 1 for
allowance deduction from other unit accounts. EPA recognizes that
Option 2 may delay its end-of-year compliance determinations and the
unfreezing of allowance accounts. 63 FR 41362. However, EPA believes
the benefits of Option 2, highlighted by the commenters, outweigh the
drawbacks of such a delay. In adopting Option 2, EPA made a few, minor
word changes to the proposed revisions of Secs. 72.2 and 73.35 in order
to make the rule easier to understand.
C. Effective Date of Rule Revisions
Comment: One commenter, in a late comment, urged the Agency to
finalize the rule in a manner that would allow the compliance
determination revisions to apply to the 1998 compliance year.
Response: Today's rule will apply to all compliance years for which
the excess emissions penalty payment deadline under Sec. 77.6(a)(3)
(i.e., July 1) is on or after the effective date of today's rule.
Section 77.6(a)(3) requires submission of the payment within 30 days of
notice by the Administrator of completion of its process for
determining end-of-year compliance, but not later than July 1. EPA
anticipates that July 1 will be the applicable deadline for the 1998
compliance year. EPA believes that the penalty payment deadline should
be the cut-off date because that deadline is the date on which the
designated representative must determine, and notify EPA of, the
specific number of tons of excess emissions at a unit. Today's rule can
change the amount of a unit's excess emissions and so should apply only
if it is effective before the July 1 deadline for determining excess
emissions for the compliance year.
EPA considered applying today's rule revisions only to those
compliance years for which the annual compliance certification and
excess emissions offset plan deadline (60 days after the end of the
year) is on or after the effective date of the revisions. This
approach, however, would prevent use of the new provisions for the 1998
compliance year and would serve no useful purpose. Neither the annual
compliance certification nor the excess emissions offset plan requires
the designated representative to state the specific number of tons of
excess emissions at a unit. Instead, the designated representative must
indicate whether a unit held enough allowances in its compliance
subaccount and, if not, whether EPA should deduct immediately (i.e., as
soon as EPA completes its determination of end-of-year compliance)
allowances to offset the unit's excess emissions. EPA must deduct
offsetting allowances immediately unless the designated representative
makes the unusual showing that the deduction would jeopardize electric
reliability. See 40 CFR 72.90(c)(1) and 77.3(d). Since any unit having
excess emissions under the current rule will still have excess
emissions under today's rule, the required information in the annual
compliance certification and offset plan is the same under either rule.
Therefore, it is unnecessary to limit the application of the revisions
to only compliance years for which the annual compliance certification
and excess emissions offset plan deadline (60 days after the end of the
year) is on or after the effective date of the revisions. Today's rule
will
[[Page 25840]]
instead apply to all compliance years for which the July 1 excess
emissions penalty payment deadline is on or after the effective date of
the revisions. The 1998 compliance year will therefore be the first
year to which the rule will apply.
D. Impacts of Rule Revisions on Acid Rain Permits
EPA designed today's revisions to become effective without changing
the contents of existing acid rain permits and the State regulations
for issuing acid rain permits. With the exception of changes in the
definitions of ``compliance subaccount'' and ``current year
subaccount,'' all of today's revisions are in 40 CFR part 73. As
explained in the preamble to the proposed rule (63 FR 41364), it is
unnecessary for State permitting authorities to revise the acid rain
permits they have issued or regulations they have adopted to reflect
today's final revisions to 40 CFR part 73.
Similarly, the revisions can go into effect without State
permitting authorities revising acid rain permits or regulations to
reflect the revised definitions of ``compliance subaccount'' and
``current year subaccount'' in 40 CFR part 72. Even if a State issued
an acid rain permit before today's revision of the definitions become
effective, the Agency will apply the final revised definitions, along
with the revisions in 40 CFR part 73, to the units covered by the
permit. The Agency will use the revised definitions in determining end-
of-year compliance for all calendar years for which the July 1 excess
emissions penalty payment deadline is on or after the effective date of
the revised definitions.
Moreover, the revised definitions will not affect the permitting
activities of State permitting authorities under 40 CFR part 72.
Instead, the revised definitions affect EPA's operation of the
Allowance Tracking System under 40 CFR part 73.
While EPA will apply the revised definitions in Sec. 72.2, State
permitting authorities should revise their own regulations to reflect
the new definitions. This will avoid any potential confusion on the
part of regulated entities and the public as to how EPA determines end-
of-year compliance.
V. Administrative Requirements
A. Docket
A docket is an organized and complete file of all the information
considered by EPA in the development of this rulemaking. The docket is
a dynamic file since EPA and participants add material throughout the
rulemaking development. The docketing system allows members of the
public and industries involved to identify and locate documents readily
so that they can effectively participate in the rulemaking process.
Along with the preambles of the proposed and final rule (which include
EPA responses to significant comments), the contents of the docket will
serve as the record in case of judicial review to the extent provided
in section 307(d)(7)(A) of the Act.
B. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Executive Order
defines ``significant regulatory action'' as one that is likely to
result in a rule that may:
(1) have an annual effect on the economy of $100 million or more
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or
(4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, OMB has determined
that today's rule is not a ``significant regulatory action.''
C. Executive Order 12875: Enhancing Intergovernmental Partnerships
Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and that creates a mandate upon a State, local
or tribal government, unless the Federal government provides the funds
necessary to pay the direct compliance costs incurred by those
governments or unless EPA consults with those governments. If EPA
complies by consulting, Executive Order 12875 requires EPA provide to
the Office of Management and Budget a description of the extent of
EPA's prior consultation with representatives of affected State, local
and tribal governments, the nature of their concerns, copies of any
written communications from the governments, and a statement supporting
the need to issue the regulation. In addition, Executive Order 12875
requires EPA to develop an effective process permitting elected
officials and other representatives of State, local and tribal
governments ``to provide meaningful and timely input in the development
of regulatory proposals containing significant unfunded mandates.''
Today's rule does not create a new mandate on State, local or
tribal governments. It modifies an existing mandate in a way that
imposes no additional duties and no additional costs on these entities.
Accordingly, the requirements of section 1(a) of Executive Order 12875
do not apply to this rule.
D. Executive Order 13084: Consultation and Coordination With Indian
Tribal Governments
Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments or unless EPA consults with
those governments. If EPA complies by consulting, EPA must provide to
the Office of Management and Budget, in a separately identified section
of the preamble to the rule, a description of the extent of EPA's prior
consultation with representatives of affected tribal governments, a
summary of the nature of their concerns, and a statement supporting the
need to issue the regulation. In addition, Executive Order 13084
requires EPA to develop an effective process permitting elected and
other representatives of Indian tribal governments ``to provide
meaningful and timely input in the development of regulatory policies
on matters that significantly or uniquely affect their communities.''
Today's rule does not significantly or uniquely affect, or impose
any substantial direct compliance costs on, the communities of Indian
tribal governments. The rule does not impose any enforceable duties on
these entities. Accordingly, the requirements of section 3(b) of
Executive Order 13084 do not apply to this rule.
E. Unfunded Mandates Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for
[[Page 25841]]
federal agencies to assess the effects of their regulatory actions on
State, local, and tribal governments and the private sector. Under
section 202 of UMRA, EPA generally must prepare a written statement,
including a cost-benefit analysis, before promulgating a proposed or
final rule that includes a federal mandate that may result in
expenditure by State, local, and tribal governments, in aggregate, or
by the private sector, of $100 million or more in any one year. Section
205 generally requires that, before promulgating a rule for which a
written statement must be prepared, EPA must identify and consider a
reasonable number of regulatory alternatives and adopt the least
costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative if the
Administrator explains why that alternative was not adopted. Finally,
section 203 requires that, before establishing any regulatory
requirements that may significantly or uniquely affect small
governments, EPA must have developed a small government agency plan.
The plan must provide for notifying any potentially affected small
governments to have meaningful and timely input in the development of
EPA regulatory proposals with significant federal intergovernmental
mandates, and informing, educating, and advising small governments on
compliance with the regulatory requirements.
Because today's rule is estimated to result in the expenditure by
State, local, and tribal governments or the private sector of less than
$100 million in any one year, the Agency has not prepared a budgetary
impact statement or specifically addressed the selection of the least
costly, most cost-effective, or least burdensome alternative. Because
small governments will not be significantly or uniquely affected by
this rule, the Agency is not required to develop a plan with regard to
small governments.
Today's final revisions to parts 72 and 73 will potentially reduce
the burden on regulated entities by providing more flexible allowance
holding requirements. The revisions will not otherwise have any
significant impact on State, local, and tribal governments.
F. Paperwork Reduction Act
Today's final revisions to parts 72 and 73 will not impose any new
information collection burden subject to the Paperwork Reduction Act
(44 U.S.C. 3501, et seq.). OMB has previously approved the relevant
information collection requirements contained in parts 72 and 73 under
the provisions of the Paperwork Reduction Act and has assigned OMB
control number 2060-0258. 58 FR 3590, 3650 (1993).
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
Copies of the previously approved ICR may be obtained from the
Director, Regulatory Information Division; EPA; 401 M St. SW (mail code
2137); Washington, DC 20460 or by calling (202) 564-2740. Include the
ICR and/or OMB number in any correspondence.
G. Regulatory Flexibility
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, et seq.,
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small not-for-profit
enterprises, and small government jurisdictions.
As discussed above, today's final revisions will reduce the burden
on regulated entities by adding flexibility to the regulations. For
this reason, EPA has determined that this rule will not have a
significant economic impact on a substantial number of small entities.
H. Applicability of Executive Order 13045: Children's Health Protection
Executive Order 13045 (62 FR 19885, April 29, 1997) applies to any
rule if EPA determines (1) that the rule is economically significant as
defined under Executive Order 12866, and (2) that the environmental
health or safety risk addressed by the rule has a disproportionate
effect on children. If the regulatory action meets both criteria, EPA
must evaluate the environmental health or safety effects of the planned
rule on children and explain why the planned regulation is preferable
to other potentially effective and reasonably feasible alternatives
considered by EPA.
This final action is not subject to Executive Order 13045, because
the action is not economically significant as defined by Executive
Order 12866 and does not address an environmental health or safety risk
having a disproportionate effect on children.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d)(15 U.S.C. 272
note), directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, or business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA requires EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
Today's final rule does not involve any technical standards that
would require Agency consideration of voluntary consensus standards
pursuant to section 12(d) of the NTTAA.
J. Congressional Review Act
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 rule is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective 30 days after publication in the
Federal Register.
List of Subjects in 40 CFR Parts 72 and 73
Environmental protection, Acid rain, Administrative practice and
procedure,
[[Page 25842]]
Air pollution control, Compliance plans, Electric utilities, Penalties,
Reporting and recordkeeping requirements, Sulfur dioxide.
Dated: May 5, 1999.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, title 40, chapter I of the
Code of Federal Regulations is amended as follows:
PART 72--[AMENDED]
1. The authority citation for part 72 continues to read as follows:
Authority: 42 U.S.C. 7601 and 7651, et seq.
2. Section 72.2 is amended by:
a. Removing from the definition of ``Compliance subaccount'' the
words ``by the unit'' whenever they appear and the word ``unit's''
after the words ``meeting the''; and
b. Removing from the definition of ``Current year subaccount'' the
words ``by the unit'' and replacing the word ``its'' with the word
``the''.
3. Section 72.40 is amended by adding to paragraph (a)(1) the words
``, or in the compliance subaccount of another affected unit at the
same source to the extent provided in Sec. 73.35(b)(3),'' after the
words ``under Sec. 73.34(c) of this chapter)''.
PART 73--[AMENDED]
4. The authority citation for part 73 continues to read as follows:
Authority: 42 U.S.C. 7601 and 7651, et seq.
5. Section 73.35 is amended by revising paragraph (a)(2) and adding
paragraph (b)(3) to read as follows:
Sec. 73.35 Compliance.
(a) * * *
(2) Such allowance is:
(i) Recorded in the unit's compliance subaccount; or
(ii) Transferred to the unit's compliance subaccount, with the
transfer submitted correctly pursuant to subpart D of this part for
recordation in the compliance subaccount for the unit by not later than
the allowance transfer deadline in the calendar year following the year
for which compliance is being established; or
(iii) Held in the compliance subaccount of another affected unit at
the same source in accordance with paragraph (b)(3) of this section.
(b) * * *
(3)(i) If, after the Administrator completes the deductions under
paragraph (b)(2) of this section for all affected units at the same
source, a unit would otherwise have excess emissions and one or more
other affected units at the source would otherwise have unused
allowances in their compliance subaccounts and available for such other
units under paragraph (a)(1) and (a)(2)(i) and (ii) of this section for
the year for which compliance is being established, the Administrator
will notify in writing the authorized account representative. The
Administrator will state that the authorized account representative may
specify in writing which of such allowances to deduct up to the amount
calculated as follows, in order to reduce the tons of excess emissions
otherwise at the unit:
Maximum deduction from other units = 0.95 x Excess emissions
if no deduction from other units
Where:
``Maximum deduction from other units'' is the maximum number of
allowances that may be deducted for the year for which compliance is
being established, for the unit otherwise having excess emissions,
from the compliance subaccounts of other units at the same source,
rounded to the nearest allowance.
``Excess emissions if no deduction from other units'' is the
tons of excess emissions that the unit would otherwise have if no
allowances were deducted for the unit from other units under this
paragraph (b)(3)(i) or paragraph (b)(3)(ii) of this section.
(ii) Notwithstanding paragraph (b)(3)(i) of this section, if the
amount calculated results in less than 10 tons of excess emissions, the
maximum deduction from other units shall be adjusted so that 10 tons of
excess emissions, or the tons of excess emissions that would result if
no allowances could be deducted from other units, whichever is less,
remain for the unit.
(iii) If the authorized account representative submits within 15
days of receipt of a notification under paragraph (b)(3)(i) of this
section a written request specifying allowances to deduct in accordance
with paragraphs (b)(3)(i) and (ii) of this section, the Administrator
will deduct such allowances, and reduce the tons of excess emissions
otherwise at the unit by an equal amount, up to the amount calculated
under paragraphs (b)(3)(i) and (ii) of this section.
* * * * *
[FR Doc. 99-12007 Filed 5-12-99; 8:45 am]
BILLING CODE 6560-50-P
