[Federal Register Volume 63, Number 23 (Wednesday, February 4, 1998)]
[Rules and Regulations]
[Pages 5734-5735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2719]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 73
[FRL-5961-4]
Acid Rain Program; Auction Offerors to Set Minimum Prices in
Increments of $0.01
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.
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SUMMARY: Title IV of the Clean Air Act, as amended by the Clean Air Act
Amendments of 1990 (the Act), authorized the Environmental Protection
Agency (EPA) to establish the Acid Rain Program to reduce the adverse
health and ecological effects of acidic deposition. The program
utilizes an innovative system of marketable allowances that are
allocated to electric utilities. Title IV mandates that EPA hold yearly
auctions of allowances for a small portion of the total allowances
allocated each year. Private parties may also offer their allowances
for sale in the EPA auctions and specify a minimum sales price.
Currently, the regulations require that an offeror's minimum sales
price be in whole dollars (see 40 CFR part 73, Subpart E, Sec. 73.70 ).
No such restriction applies to auction bidders and since 1995, EPA has
allowed bidders to submit bids in increments of less than a dollar. The
restriction on minimum offer prices was originally intended to
facilitate administrative ease, but allowing minimum sales prices in
increments of $0.01 would not change the design, operation, or
administrative burden of the auctions in any way. In addition, it would
be consistent with the flexibility afforded auction bidders. Thus, EPA
is proposing to amend the current regulations to allow offerors to
submit their minimum offer price in increments of $0.01.
Because this rule revision was discussed in an Advance Notice of
Proposed Rulemaking (see the June 6, 1996 Federal Register, Vol. 61,
Number 110, pp. 28995-28998) and EPA received no adverse comments, this
revision is being issued as a direct final rule.
DATES: This direct final rule will be effective on March 11, 1998,
unless significant, adverse comments are received by March 6, 1998. If
significant, adverse comments are received on this direct final rule,
the direct final rule will be withdrawn through a notice in the Federal
Register.
FOR FURTHER INFORMATION CONTACT: Kenon Smith, U.S. Environmental
Protection Agency, Acid Rain Division (6204J), 401 M Street SW,
Washington, DC 20460, (202) 564-9164.
SUPPLEMENTARY INFORMATION: Any significant adverse comments received on
this direct final rule, by the date listed above, will be addressed in
a subsequent final rule. That final rule will be based on the rule
revision that is noticed as a proposed rule in the Proposed Rule
Section of this Federal Register and that is identical to this direct
final rule.
EPA's Acid Rain Program established an innovative, market-based
allowance trading system to reduce SO2 emissions, one of the
primary precursors of acid rain. Under this system, fossil fuel-fired
power plants, the principal emitters of SO2, were allotted
tradeable allowances based on their past fuel usage and emissions. Each
allowance entitles a boiler unit in a plant to emit 1 ton of
SO2 during or after the year specified in the allowance
serial number. At the end of the year, the number of allowances a unit
holds must equal or exceed the total emissions at that unit; otherwise,
stringent penalties will apply. After the year 2000, the total number
of allowances allocated each year will be about half of what the
utility industry emitted in 1980.
Allowances may be bought, sold, or banked like any other commodity.
If a unit has surplus allowances, it may sell them to units whose
emissions levels exceed their allowance supply, or it may bank the
allowances for future years.
Because the availability of allowances and allowance price
information is crucial to ensure the economic efficiency of the
emissions limitation program and facilitate the addition of new
electric-generating capacity, title IV mandates that EPA hold or
sponsor yearly auctions for a small portion of the total allowances
allocated each year. The Act also allows private holders of allowances
to use the auctions as a vehicle to sell excess allowances. Offerors
can set a minimum sales price to insure that their allowances will not
sell for less than that price. Both the auction bid prices and minimum
offer prices are revealed to the public each year to better inform the
allowance market.
Administrative Requirements
A. Executive Order 12866
Under Executive Order 12866, 58 FR 51735 (October 4, 1993), the
Administrator 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
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 entitlement, 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, it has been
determined that this rule is not a ``significant regulatory action''
because the rule does not meet any of the criteria listed above. As
such, this action was not submitted to OMB for review.
[[Page 5735]]
B. Unfunded Mandates Act
Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded
Mandates Act'') requires that the Agency prepare a budgetary impact
statement before promulgating a 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 203 requires the Agency to establish a plan for
obtaining input from and informing, educating, and advising any small
governments that may be significantly or uniquely affected by the rule.
Under section 205 of the Unfunded Mandates Act, the Agency must
identify and consider a reasonable number of regulatory alternatives
before promulgating a rule for which a budgetary impact statement must
be prepared. The Agency must select from those alternatives the least
costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule, unless the Agency explains why
this alternative is not selected or the selection of this alternative
is inconsistent with law.
Because this direct final 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.
C. Paperwork Reduction Act
This rule does not provide for any new collection of information.
Send comments regarding this collection of analysis or any other
aspect of this collection of information, including suggestions for
reducing the burden, to Chief, Information Policy Branch, EPA, 401 M
Street, S.W. (Mail Code 2136), Washington, DC 20460; and to the Office
of Information and Regulatory Affairs, Office of Management and Budget,
Washington, DC 20503, marked ``Attention: Desk Officer for EPA.''
D. Regulatory Flexibility Act
EPA has determined that it is not necessary to prepare a regulatory
flexibility analysis in connection with this final rule. EPA has also
determined that this rule will not have a significant economic impact
on a substantial number of small entities. Because this rule only
affects the minimum price one may specify when offering allowances for
sale in the allowance auction, the maximum economic impact it could
have is $0.99 per allowance offered. In the 1997 allowance auction, no
allowances were offered for sale in the private auction, so the
economic impact was nil.
E. Submission to Congress
Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business
Regulatory Enforcement Fairness Act of 1996, EPA submitted 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
General Accounting Office prior to publication of the rule in today's
Federal Register. This rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).
F. Miscellaneous
In accordance with section 117 of the Act, issuance of this rule
was preceded by consultation with any appropriate advisory committees,
independent experts, and federal departments and agencies.
List of Subjects in 40 CFR Part 73
Environmental protection, Acid rain, Air pollution control,
Electric utilities, Reporting and recordkeeping requirements, Sulfur
dioxide.
Dated: January 29, 1998.
Carol M. Browner,
Administrator, U.S. Environmental Protection Agency.
For the reasons set forth in the preamble, chapter I of title 40 of
the Code of Federal Regulations is amended as follows:
PART 73--[AMENDED]
1. The authority citation for part 73 continues to read as follows:
Authority: 42 U.S.C. 7601 and 7651, et seq.
2. Section 73.70 is amended by revising paragraph (c)(3) to read as
follows:
Sec. 73.70 Auctions.
* * * * *
(c) * * *
(3) Any minimum price; and
* * * * *
[FR Doc. 98-2719 Filed 2-3-98; 8:45 am]
BILLING CODE 6560-50-P
