98-11475. Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport

[Federal Register Volume 63, Number 83 (Thursday, April 30, 1998)]
[Proposed Rules]
[Pages 24058-24077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11475]

[[Page 24057]]

_______________________________________________________________________

Part VII

Environmental Protection Agency

_______________________________________________________________________

40 CFR Part 52

Findings of Significant Contribution and Rulemaking on Section 126
Petitions for Purposes of Reducing Interstate Ozone Transport; Proposed
Rule

Federal Register / Vol. 63, No. 83 / Thursday, April 30, 1998 /
Proposed Rules

[[Page 24058]]

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[FRL-6006-1]
RIN 2060-AH88

Findings of Significant Contribution and Rulemaking on Section
126 Petitions for Purposes of Reducing Interstate Ozone Transport

AGENCY: Environmental Protection Agency (EPA).

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: In accordance with sections 126 and 110(a)(2)(D) of the Clean
Air Act (CAA), EPA plans to take rulemaking action on petitions filed
by eight Northeastern States seeking to mitigate what they describe as
significant transport of one of the main precursors of ozone smog,
nitrogen oxides (NOX), across State boundaries. Each
petition specifically requests that EPA make a finding that
NOX emissions from certain major stationary sources
significantly contribute to ozone nonattainment problems in the
petitioning State. If EPA makes such a finding, EPA would be authorized
to establish Federal emissions limits for the sources. The petitions
recommend control levels for EPA to consider. The eight Northeastern
States that filed petitions are Connecticut, Maine, Massachusetts, New
Hampshire, New York, Pennsylvania, Rhode Island, and Vermont.
This notice announces the Agency's schedule for rulemaking on the
section 126 petitions, provides EPA's preliminary identification of
sources named in the petitions that significantly contribute to
nonattainment problems in the petitioning States, provides EPA's
preliminary assessment of the types of recommended emission limitations
and compliance schedules set forth in the petitions, and discusses
legal and policy issues raised under section 126.
The transport of ozone is important because ozone has long been
recognized, in both clinical and epidemiological research, to affect
public health. There is a wide range of ozone-induced health effects,
including decreased lung function (primarily in children active
outdoors), increased respiratory symptoms (particularly in highly
sensitive individuals), increased hospital admissions and emergency
room visits for respiratory causes (among children and adults with pre-
existing respiratory disease such as asthma), increased inflammation of
the lung, and possible long-term damage to the lungs.

DATES: The EPA is establishing an informal 30-day comment period for
today's advance notice of proposed rulemaking (ANPR), ending on June 1,
1998. Please direct correspondence to the address specified below. See
SUPPLEMENTARY INFORMATION for further information on the ANPR comment
period.
A public hearing for the future proposed rulemaking on the section
126 petitions will be held on October 28 and 29, 1998.

ADDRESSES: Documents relevant to this action are available for
inspection at the Air and Radiation Docket and Information Center
(6101), Attention: Docket A-97-43, U.S. Environmental Protection
Agency, 401 M Street SW, room M-1500, Washington, DC 20460, telephone
(202) 260-7548, between 8:00 a.m. and 4:00 p.m., Monday through Friday,
excluding legal holidays. A reasonable copying fee may be charged for
copying.
Written comments should be submitted to this address. Comments and
data may also be submitted electronically by following the instructions
under SUPPLEMENTARY INFORMATION of this document. No confidential
business information should be submitted through e-mail.
The public hearing on the future proposed rulemaking on the section
126 petitions will be held on October 28 and 29, 1998 at the EPA
Auditorium at 401 M Street SW, Washington, DC 20460.

FOR FURTHER INFORMATION CONTACT: Carla Oldham, Office of Air Quality
Planning and Standards, Air Quality Strategies and Standards Division,
MD-15, Research Triangle Park, NC, 27711, telephone (919) 541-3347.

SUPPLEMENTARY INFORMATION:

Comment Period

This ANPR gives EPA's preliminary assessment of the petitions and
raises a number of legal and policy issues related to the section 126
provisions. If comments are submitted within 30 days of publication of
this notice, EPA will have adequate time to take the comments into
account in the deliberative process for the rulemaking proposal. As
discussed in Section V of this notice, under a proposed consent decree,
EPA must publish the section 126 rulemaking proposal in the Federal
Register by September 30 of this year. A formal comment period and
public hearing will be provided for the proposal. The EPA will respond
to comments on this ANPR, if any comment is appropriate, when it
responds to comments on the proposal.

Availability of Related Information

The official record for this rulemaking, as well as the public
version, has been established under docket number A-97-43 (including
comments and data submitted electronically as described below). The
eight petitions are contained in this docket. A public version of this
record, including printed, paper versions of electronic comments, which
does not include any information claimed as confidential business
information, is available for inspection from 8 a.m. to 4 p.m., Monday
through Friday, excluding legal holidays. The official rulemaking
record is located at the address in ADDRESSES at the beginning of this
document. Electronic comments can be sent directly to EPA at: A-and-R-
Docket@epamail.epa.gov. Electronic comments must be submitted as an
ASCII file avoiding the use of special characters and any form of
encryption. Comments and data will also be accepted on disks in
WordPerfect in 5.1 file format or ASCII file format. All comments and
data in electronic form must be identified by the docket number A-97-
43. Electronic comments on this ANPR rule may be filed online at many
Federal Depository Libraries.
The EPA is conducting a separate rulemaking action that contain
actions and information related to this ANPR, ``Finding of Significant
Contribution and Rulemaking for Certain States in the Ozone Transport
Assessment Group Region for Purposes of Reducing Regional Transport of
Ozone,'' (see 62 FR 60318; November 7, 1997 and a supplemental proposal
being published in late April or early May 1998.) Documents related to
these proposals are available for inspection in Docket No. A-96-56 at
the address and times given above. This rulemaking action is hereafter
referred to as the proposed NOX State implementation plan
(SIP) call (proposed NOX SIP call). The proposed
NOX SIP call and associated documents are located at http://
www.epa.gov/ttn/oarpg.otagsip.html.
Additional information relevant to this ANPR concerning the Ozone
Transport Assessment Group (OTAG) is available on the Agency's Office
of Air Quality Planning and Standards' (OAQPS) Technology Transfer
Network (TTN) via the web at http://www.epa.gov/ttn/. If assistance is
needed in accessing the system, call the help desk at (919) 541-5384 in
Research Triangle Park, NC. Documents related to OTAG can be downloaded
directly from OTAG's webpage at http://

[[Page 24059]]

www.epa.gov/ttn/otag. The OTAG's technical data are located at http://
www.iceis.mcnc.org/OTAGDC.

Outline

I. Background
A. Ozone Transport, Ozone Transport Commission NOX
Memorandum of Understanding (OTC NOX MOU), OTAG, the
Proposed NOX SIP Call, and the Revised Ozone National
Ambient Air Quality Standard (NAAQS)
B. Section 126
C. Summary of Section 126 Petitions
D. Relationship to NOX SIP Call
E. Proposed Rulemaking Schedule
II. Preliminary Analysis of Significant Contribution
A. Background
B. Regional Ozone and Interstate Transport
C. Collective Contribution to Nonattainment
D. Weight of Evidence Approach and Findings of Significant
Contribution
E. Technical Approach to Preliminary Analysis of Petitions
F. Results of Preliminary Assessment of Section 126 Petitions
III. Preliminary Assessment of Emissions Limitations and Compliance
Schedules
A. Remedies Recommended in Petitions
B. EPA's Analytic Approach
C. Intent to Implement Controls Through Cap-and-Trade Program
IV. Legal and Policy Issues
A. Issues Involving Significant Contribution
B. Issues Involving Trading
C. Cost-Effectiveness Issues
D. Legal Issues
V. Schedule for Rulemaking Action of Section 126 Petitions
VI. Impact on Small Entities

I. Background

A. Ozone Transport, Ozone Transport Commission NOX
Memorandum of Understanding (OTC NOX MOU), OTAG, the
Proposed NOX SIP Call, and the Revised Ozone National
Ambient Air Quality Standard (NAAQS)

Today's action occurs against a background of a major national
effort, spanning at least the last 10 years, to analyze and take steps
to mitigate the problem of the transport of ozone and its precursors
across State boundaries. This effort has grown more intensive in the
past several years with the approval of the OTC NOX MOU by
11 of the Northeastern States and the District of Columbia included in
the OTC, the completion of the OTAG process, and the publication of
EPA's proposed NOX SIP call. In addition, in July 1997, EPA
issued a revised NAAQS for ozone, which is determined over an 8-hour
period (the 8-hr standard). This new 8-hr standard must now be taken
into account, along with the pre-existing 1-hr standard, in resolving
transport issues. These issues and events are detailed in the proposed
NOX SIP call (62 FR 60318) and familiarity with that notice
is assumed for purposes of today's notice.

B. Section 126

Today's action focuses on section 126 of the CAA. Subsection (a) of
section 126 requires, among other things, that SIPs require major
proposed new (or modified) sources to notify nearby States for which
the air pollution levels may be affected by the fact that such sources
have been permitted to commence construction. Subsection (b) provides:

Any State or political subdivision may petition the
Administrator for a finding that any major source or group of
stationary sources emits or would emit any air pollutant in
violation of the prohibition of section 110(a)(2)(D)(ii) * * * or
this section.

Subsection (c) of section 126 states that--

[I]t shall be a violation of this section and the applicable
implementation plan in such State [in which the source is located or
intends to locate]--
(1) for any major proposed new (or modified) source with respect
to which a finding has been made under subsection (b) of this
section to be constructed or to operate in violation of the
prohibition of section 110(a)(2)(D)(ii) * * * or this section, or
(2) for any major existing source to operate more than three
months after such finding has been made with respect to it.

However, subsection (c) further provides that EPA may permit the
continued operation of such major existing sources beyond the 3-month
period, if such sources comply with EPA-promulgated emissions limits
within 3 years of the date of the finding.
Section 110(a)(2)(D) provides the requirement that a SIP contain
adequate provisions--

(i) prohibiting, consistent with the provisions of this title,
any source or other type of emissions activity within the State from
emitting any air pollutant in amounts which will--
(I) contribute significantly to nonattainment in, or interfere
with maintenance by, any other State with respect to [any] national
* * * ambient air quality standard, or
(II) interfere with measures required to be included in the
applicable implementation plan for any other State under part C to
prevent significant deterioration of air quality or to protect
visibility.
(ii) insuring compliance with the applicable requirements of
sections 126 and 115 (relating to interstate and international
pollution abatement) * * *

For purposes of today's ANPR, it is EPA's preliminary view that,
with respect to existing stationary sources, sections 126(b)-(c) and
110(a)(2)(D), read together, authorize a downwind State to petition EPA
for a finding that emissions from major stationary sources upwind of
the State contribute significantly to nonattainment, or interfere with
maintenance, of a NAAQS in the State. If EPA grants the requested
finding, EPA must directly regulate the sources. Sources would have to
comply with the emissions limits within 3 years from the finding. The
EPA acknowledges that others have urged different readings of sections
126(b)-(c) and 110(a)(2)(D), and EPA solicits comments thereon, as
described in Section IV below.
In a letter dated August 8, 1997, to Michael J. Walls, Chief,
Environmental Protection Bureau, Office of Attorney General, State of
New Hampshire, from Mary D. Nichols, Assistant Administrator for Air
and Radiation, EPA provided preliminary and general guidance concerning
section 126 and the process of submitting petitions (Nichols letter).
This letter has been placed in the docket for today's action.
In Section IV of this notice, below, EPA discusses legal and policy
issues raised under section 126 and requests comments on the various
issues.

C. Summary of Section 126 Petitions

On August 14-15, 1997, EPA received eight section 126 petitions
submitted individually by eight Northeastern States. The petitioning
States are Connecticut, Maine, Massachusetts, New Hampshire, New York,
Pennsylvania, Rhode Island, and Vermont. Each petition requests EPA to
make a finding that certain major stationary sources in upwind States
contribute significantly to nonattainment, or interfere with
maintenance, in the petitioning State. All of the petitions seek a
finding and relief under the 1-hr standard; Massachusetts,
Pennsylvania, and Vermont also seek a finding and relief with respect
to the 8-hr standard.
The petitions vary as to the type and geographic location of the
sources identified as significant contributors. Some petitions identify
specific sources, others list source categories. The sources and source
categories include electric generating plants, fossil fuel-fired
boilers and other indirect heat exchangers, and certain other related
stationary sources that emit NOX. All the petitions target
sources in the Midwest; some also target sources in the South and
Northeast.
The petitions also vary as to the level of controls they recommend
be applied to the sources to mitigate the transport problem. Several
recommend EPA establish a 0.15 lb/mmBtu NOX

[[Page 24060]]

emission limitation implemented through a cap-and-trade program. The
petitions are described in greater detail in Sections II and III of
this notice.
All of the petitions rely, in part, on OTAG analyses for technical
support. In addition, the States submitted a variety of other technical
analyses which include computerized urban airshed modeling, wind
trajectory analyses, results of a transport study by the Northeast
States for Coordinated Air Use Management, and culpability analyses.

D. Relationship to NOX SIP Call

The sources, or groups of sources, identified in the petitions may
also be subject to State-adopted emission limitations and control
schedules in response to a separate rulemaking action on regional ozone
transport--the NOX SIP call.
In the proposed NOX SIP call, EPA made a proposed
determination that NOX emissions from 22 eastern States and
the District of Columbia significantly contribute to nonattainment
problems in downwind States with respect to both the long-standing 1-hr
NAAQS and the new 8-hr NAAQS. The EPA proposed that these jurisdictions
be required to revise their SIPs to reduce Statewide NOX
emissions to a specified level. The proposal is designed to assure that
SIPs meet the requirements of section 110(a)(2)(D), which mandates that
SIPs contain adequate provisions prohibiting emissions that
significantly contribute to downwind nonattainment.
The proposed NOX SIP call is the result of technical
analyses and recommendations by the OTAG, a group comprised of EPA and
the 37 eastern-most States in the Nation, as well as industry and
environmental groups. Because the NOX SIP call process
overlaps considerably with the section 126 petition process, EPA
believes it is important to coordinate the two actions as much as
possible.

E. Proposed Rulemaking Schedule

Section 126(b) requires EPA to make the requested finding, or deny
the petition, within 60 days of receipt. It also requires EPA to
provide a public hearing for the petition. In addition, EPA's action
under section 126 is subject to the procedural requirements of section
307(d) of the Act. One of these requirements is notice-and-comment
rulemaking. Section 307(d) provides for a time extension, under certain
circumstances, for rulemakings subject to that provision. Specifically,
it allows statutory deadlines that require promulgation in less than 6
months from proposal to be extended to not more than 6 months from
proposal to afford the public and the Agency adequate opportunity to
carry out the purposes of section 307(d). In three notices dated
October 22, 1997 (62 FR 55769), November 20, 1997 (62 FR 6194), and
January 2, 1998 (63 FR 26), EPA ultimately extended the deadline for
action to December 18, 1997.
On February 25, 1998, the eight petitioning States filed a
complaint in the U.S. District Court for the Southern District of New
York to compel EPA to take action on the States' section 126 petitions.
The EPA and the eight States filed a proposed consent decree that would
establish a schedule for acting on the petitions. Pursuant to CAA
section 113(g), the EPA has solicited comments on the proposed consent
decree, by notice dated March 5, 1998 (63 FR 10874). The comment period
closed April 6, 1998.
The schedule recommended in the proposed consent decree would
require EPA to take final action on at least the technical merits of
the petitions by April 30, 1999. The recommendation would further
provide for an alternative schedule under which EPA could delay final
action on the petitions until May 1, 2000. The section 126 rulemaking
schedule is described in more detail in Section V of this notice.

II. Preliminary Analysis of Significant Contribution

A. Background

This section describes EPA's preliminary analysis of whether the
sources identified in the section 126 petitions significantly
contribute to nonattainment problems in the eight petitioning States.
The EPA is relying on information included in the proposed
NOX SIP call on significant contribution for this analysis.
The proposed NOX SIP call significance determination was
based upon a ``weight of evidence'' approach in which a range of
technical information was evaluated against a set of factors, as
described below. This section presents: (1) General information on the
importance of transport to ozone formation, (2) the collective nature
of the contribution of man-made emissions to ozone formation, (3)
factors considered in the weight of evidence approach and findings of
significant contribution in the proposed NOX SIP call, and
(4) analysis of these findings relative to each of the petitions.

B. Regional Ozone and Interstate Transport

The importance of interstate transport to the regional ozone
problem and contributions from upwind States to downwind States is
supported by numerous studies of air quality measurements and modeling
analyses. In general, ozone episodes occur on many spatial and temporal
scales ranging from localized subregional events lasting a day or two,
up to regionwide episodes lasting as long as 10-14 days. The frequency
of localized versus regional episodes depends on the characteristics of
the large-scale meteorological patterns which control the weather in a
particular summer season. In some cases, local controls alone are not
sufficient to reduce ozone during regionwide episodes since a
substantial amount of ozone may be transported into the area from
upwind sources.
The National Research Council report, ``Rethinking the Ozone
Problem in Urban and Regional Air Pollution,'' ¹ cites
numerous studies of widespread ozone episodes during summertime
meteorological conditions in the East. These episodes typically occur
when a large, slow-moving, high pressure system envelopes all, or a
large portion of, the Eastern United States. The relatively clear skies
normally associated with such weather systems favor high temperatures
and strong sunlight, which enhances the formation of high ozone
concentrations. In addition, the wind flow patterns can lead to a build
up of ozone concentrations and the potential for long-range ozone
transport. Specifically, winds are generally light in the center of
high pressure systems so that areas under the center may have near-
stagnation conditions resulting in the formation of high ozone levels.
As the high pressure system moves eastward, winds become stronger on
the ``backside'' which increases the potential for these high ozone
levels to be transported to more distant downwind locations. Over
several days, the emissions from numerous small, medium, and large
cities, major stationary sources in rural areas, as well as natural
sources, combine to form a ``background'' of moderate hourly ozone
levels ranging from 80 to 100 ppb ² of

[[Page 24061]]

which only 30 to 40 ppb may be due to natural sources. Hourly ozone
concentration levels in the range of 80 to 100 ppb and higher have also
been measured by aircraft aloft, across portions of the Northeast
³. Because this level of background ozone is so close to the
ozone NAAQS, even a small amount of locally-generated ozone will result
in an exceedance.
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\1\ National Research Council, Committee on Tropospheric Ozone
Formation and Measurement, ``Rethinking the Ozone Problem in Urban
and Regional Air Pollution,'' pp. 93-107, National Academy Press,
Washington, DC, 1991.
\2\ Northeast States for Coordinated Air Use Management, ``The
Long-Range Transport of Ozone and Its Precursors in the Eastern
United States,'' March 1997, Boston, MA. (Document is available in
Docket A-96-56 for the NOX SIP call.)
\3\ Ibid.
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C. Collective Contribution to Nonattainment

Ozone is generally the result of cumulative emissions of
NOX and volatile organic compounds (VOC) from hundreds of
stationary sources and millions of vehicles, each of which is likely to
be responsible for much less than 1 percent of the overall inventory of
precursor emissions. A source (or group of sources) should not be
exempted from treatment as a significant contributor merely because it
may be a small part, in terms of total emissions, of the overall
problem when all or most other contributors, individually, are also
relatively small parts of the overall problem. This situation, in which
a number of individual (and sometimes small) sources collectively cause
a significant impact on air quality, is a major aspect of the
contribution issue. As noted above, the moderate-to-high ozone levels
which cover broad regions are the result of emissions from millions of
individual sources interacting over multiple days. The contribution to
downwind nonattainment results from the cumulative contribution from
all sources involved in this process.
In light of these considerations, in the proposed NOX
SIP call, EPA believed it not appropriate to define a bright line test
for significant contribution. Instead, EPA relied on a weight of
evidence approach, based on a range of information, for determining
whether a State makes a significant contribution to downwind
nonattainment.

D. Weight of Evidence Approach and Findings of Significant Contribution

The factors considered by the EPA in the proposed NOX
SIP call for determining whether a contribution is significant include:
the transport distance between the upwind source area and
the downwind problem area;
the amount of the contribution (ppb above the level of the
ozone standard) made to the downwind nonattainment area;
the geographic extent of the contribution downwind; and
the level of emissions in the area upwind of a
nonattainment area.
Details of the methodology and approaches followed by EPA in its
analysis of these factors are documented in the proposed NOX
SIP call.⁴
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\4\ For a technical description of this modeling, see proposed
NOX SIP call, 62 FR 60,335-60,337.
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In brief, the results of the OTAG air quality, trajectory, and wind
vector analyses indicate that the 1- to 2-day transport distance scale
for the northern portion of the OTAG domain is generally in the range
of 150 to 500 miles. This information was used to identify a set of
States which could potentially contribute to downwind nonattainment.
The amount of contribution and geographic extent of contribution from
upwind areas to downwind nonattainment were quantified by EPA based on
analysis of the OTAG subregional modeling. In these model runs, all
manmade emissions were removed in each of 12 subregions (see Figure 1),
individually. The resulting ``ppb'' contributions were tabulated by
State for areas within the State which (a) currently violate the NAAQS,
based on 1993-1995 ambient monitoring data and (b) which are also
expected to continue to violate the NAAQS, based on future-year 2007
modeling of CAA controls.⁵ Contributions to 1-hr and 8-hr
nonattainment were considered separately. The modeling results indicate
that emissions from States wholly or partially contained in Subregions
1 through 9 produce large and frequent contributions to downwind
nonattainment for both NAAQS. The EPA then examined NOX
emissions data along with the OTAG trajectory and modeling results to
identify 23 jurisdictions which it proposed to determine make a
significant contribution to nonattainment of both the 1-hr and 8-hr
NAAQS in downwind States. These jurisdictions are: Alabama,
Connecticut, Delaware, District of Columbia, Georgia, Illinois,
Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New
Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island,
South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin.
BILLING CODE 6560-50-P
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\5\ These areas are considered as having a ``monitored'' plus
``modeled'' ozone problem and are referred to as ``nonattainment''
for the purposes of this discussion.

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[[Page 24062]]

Figure 1. Location of Subregions
[GRAPHIC] [TIFF OMITTED] TP30AP98.000

BILLING CODE 6560-50-C

E. Technical Approach to Preliminary Analysis of Petitions

The EPA is in the process of gathering and reviewing technical
information to determine whether EPA should find that certain large
upwind stationary sources and/or source categories of NOX
named in each petition contribute significantly to nonattainment in the
petitioning States. The EPA expects to propose its findings in a
subsequent notice of proposed rulemaking. The following preliminary
analysis should not be interpreted as a proposed finding of significant
contribution for these petitions.
The EPA has examined the petitions based on the significant
contribution analysis in the proposed NOX SIP call. First,
EPA determined if those source areas identified by the petitioners are
located in States which EPA, in the proposed NOX SIP call,
proposed to determine make a significant contribution to downwind
nonattainment. Second, EPA examined subregional modeling results to
ascertain the predicted contributions to nonattainment relative to the
source areas named in each petition.
The source areas named in petitions submitted by Connecticut,
Massachusetts, New Hampshire, New York, Rhode Island and Vermont are
generally limited to States which were found in the proposed
NOX SIP call to make a significant contribution to downwind
nonattainment. The geographic area covered by each petition is shown in
Figure 2. Specifically, the New York and Connecticut petitions cover
sources in areas extending west and south of each of these States up to
the western boundaries of Subregions 2 and 6 and the southern
boundaries of Subregions 6 and 7. For the New York petition, this
includes all or portions of the following States: Delaware, Indiana,
Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio,
Pennsylvania, Tennessee, Virginia, and West Virginia. In addition to
these States, the Connecticut petition also covers sources in portions
of New York. The Massachusetts and Rhode Island petitions name specific
sources in individual counties within the Subregion 6 States of
Indiana, Kentucky, Ohio, and West Virginia. The New Hampshire petition
includes sources in upwind portions of the Ozone Transport Region and
in Subregions 1 through 7, which includes all or portions of
Connecticut, Delaware, District of Columbia, Illinois, Indiana,
Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New
York, Ohio, Pennsylvania, Rhode Island, Virginia, West Virginia, and
Wisconsin. Also, the New Hampshire petition includes a portion of
eastern Iowa (which is part of Subregion 1) which EPA, in the proposed
NOX SIP call, proposed to determine did not make a
significant contribution to downwind nonattainment problems. The
Vermont petition named sources in upwind portions of the Ozone
Transport Region and in all or portions of Illinois, Indiana, Kentucky,
Michigan, North Carolina, Ohio, Tennessee, Virginia, and West Virginia.
Further, the petition notes that it intends to cover additional
unidentified sources within an area extending 1,000 miles Southwest of
Vermont if EPA determines the sources to be significantly contributing
to Vermont. This broader geographic area includes South Carolina and
portions of Alabama, Georgia, Missouri, and Wisconsin. The Vermont
petition also

[[Page 24063]]

includes a portion of eastern Iowa which EPA, in the proposed
NOX SIP call, proposed to determine did not make a
significant contribution to downwind nonattainment problems. The
Pennsylvania petition named Alabama, Georgia, Illinois, Indiana,
Kentucky, Michigan, Missouri, North Carolina, Ohio, South Carolina,
Tennessee, Virginia, West Virginia, and Wisconsin. However, the
Pennsylvania petition also named several States which EPA, in the
proposed NOX SIP call, proposed to determine did not make a
significant downwind contribution including: Arkansas, Iowa, Louisiana,
Minnesota, and Mississippi. The petition from Maine named source
categories for sources in upwind portions of the Ozone Transport Region
and generally within all or portions of Subregions 2, 3, 4, 6, and 7.
The Maine petition includes all or parts of the following
jurisdictions: Connecticut, Delaware, District of Columbia, Maryland,
Massachusetts, New Jersey, New York, North Carolina, Ohio,
Pennsylvania, Rhode Island, Virginia, and West Virginia. The Maine
petition also identified New Hampshire and Vermont as containing
sources which contribute significantly to nonattainment in Maine, but
in the proposed NOX SIP call these States were not found to
make a significant contribution downwind.

BILLING CODE 6560-50-P

[[Page 24064]]

Figure 2a. Areas Covered by the Section 126 Petitions: New York
(Top) and Connecticut (Bottom)
[GRAPHIC] [TIFF OMITTED] TP30AP98.001

[[Page 24065]]

Figure 2b. Areas Covered by the Section 126 Petitions: Pennsylvania
(Top), Massachusetts and Rhode Island (Bottom)
[GRAPHIC] [TIFF OMITTED] TP30AP98.002

[[Page 24066]]

Figure 2c. Areas Covered by the Section 126 Petitions: Maine (Top)
and New Hampshire (Bottom)
[GRAPHIC] [TIFF OMITTED] TP30AP98.003

[[Page 24067]]

Figure 2d. Areas Covered by the Section 126 Petitions: Vermont
[GRAPHIC] [TIFF OMITTED] TP30AP98.004

BILLING CODE 6560-50-C
Although there are differences between the petitions in terms of
the sources named as significant contributors, the petitions have
generally targeted NOX emissions from utility and large non-
utility (>250 mmBtu/Hr) fossil fuel-fired boilers. In this regard,
analyzing the contributions from these emissions categories (i.e.
utility and large non-utilities) is somewhat complicated because the
subregional modeling in the proposed NOX SIP call quantifies
the contributions from all man-made emissions in each subregion, not
just these categories. It is likely that the emissions from these
categories produce downwind contributions which are at least roughly
proportional to their relative amount of emissions, compared to the
total man-made emissions in the subregion. As shown in Table 1,
NOX emissions from these categories combined, range from 33
percent to 60 percent of the total 2007 projected NOX
emissions within Subregions 1-9 ⁶. Thus, the utility and
large non-utility emissions combined represent a relatively large
portion of total NOX emissions within these nine subregions.
The collective contribution approach discussed above suggests that if
total emissions in an upwind area are found to make a significant
contribution to downwind nonattainment, then the individual components
of the areas' emissions are considered to be part of the significant
contribution. Thus, the subregional modeling results are relevant to
the source categories identified in the petitions because these
categories are a large component of the total man-made NOX
emissions and are therefore expected to produce contributions in
proportion to their emissions.
---------------------------------------------------------------------------

\6\ Note that these subregions are important because all man-
made emissions in these subregions were found to make large and
frequent contributions to downwind nonattainment.

Table 1.--Percent of total subregion NOX emitted by Utility and Large
Non-Utility Sources (OTAG 2007 Base Case)
------------------------------------------------------------------------
Subregion Percent
------------------------------------------------------------------------
1............................................................ 39
2............................................................ 37
3............................................................ 46
4............................................................ 33
5............................................................ 60
6............................................................ 53
7............................................................ 39
8............................................................ 36
9............................................................ 39
10........................................................... 38
11........................................................... 29
12........................................................... 32
------------------------------------------------------------------------

Table 2 provides the contributions to 1-hr and 8-hr nonattainment
in each of the petitioning States from those upwind subregions which
(a) correspond to upwind areas named in the petitions and (b) contain
States which were found to make a significant contribution to downwind
nonattainment in the proposed NOX SIP call. These
contributions are based on zero-out modeling of all man-made emissions
in the subregion. Data are provided for the areas which have both
``monitored'' violations and ``modeled'' concentrations exceeding the
NAAQS. This information was extracted from Tables II-10 and II-12 in
the proposed NOX SIP call. Note that 2 ppb is the lower
range of the tabulated contributions, following the convention adopted
by OTAG.
These results are discussed for each petition:
New York--This petition named sources in Subregions 2, 6, and 7.
The subregional modeling results indicate a number of contributions in
the range of 5-10 ppb or more from each of these subregions to both 1-
hr and 8-hr nonattainment in New York. Contributions of 15-20 ppb are
predicted from Subregion 7 to 1-hr nonattainment and from Subregions 2
and 7 to 8-hr nonattainment.
Connecticut--Subregions 2, 6, and 7 were named as source areas by
Connecticut. For the both 1-hr and 8-hr nonattainment, frequent
contributions are predicted from each of these subregions. The
magnitude of the contributions ranges up to 15-20 ppb for 1-hr
nonattainment and up to 10-15 ppb for 8-hr nonattainment.

[[Page 24068]]

Table 2.--Contributions to 1-Hour and 8-Hour Nonattainment in Each
Petitioning State From Selected Subregions (Sub)
------------------------------------------------------------------------
Impacts (ppb) Sub 2 Sub 6 Sub 7
------------------------------------------------------------------------
NEW YORK
Contributions to 1-Hour Nonattainment
------------------------------------------------------------------------
2-5.............................. 47 41 30
5-10............................. 6 16 52
10-15............................ 0 4 15
15-20............................ 0 0 4
20-25............................ 0 0 0
>25.............................. 0 0 0
------------------------------------------------------------------------
Contributions to 8-Hour Nonattainment
------------------------------------------------------------------------
2--5............................. 25 15 39
5--10............................ 4 3 16
10-15............................ 4 0 4
15-20............................ 0 0 0
20-25............................ 0 0 0
>25.............................. 0 0 0
------------------------------------------------------------------------
CONNECTICUT
Contributions to 1-Hour Nonattainment
------------------------------------------------------------------------
2-5.............................. 65 4 50
5-10............................. 3 9 31
10-15............................ 0 0 8
15-20............................ 0 0 2
20-25............................ 0 0 0
>25.............................. 0 0 0
------------------------------------------------------------------------
Contributions to 8-Hour Nonattainment
------------------------------------------------------------------------
2-5.............................. 19 44 36
5-10............................. 0 2 16
10-15............................ 0 0 1
15-20............................ 0 0 0
20-25............................ 0 0 0
>25.............................. 0 0 0
------------------------------------------------------------------------

------------------------------------------------------------------------
Sub 6 1- Sub 6 8-
Impacts (ppb) hour hour
------------------------------------------------------------------------
MASSACHUSETTS
Contributions to 1-hour and 8-hour Nonattainment
------------------------------------------------------------------------
2-5........................................... 0 22
5-10.......................................... 0 0
10-15......................................... 0 0
15-20......................................... 0 0
20-25......................................... 0 0

[[Page 24069]]

>25........................................... 0 0
------------------------------------------------------------------------
RHODE ISLAND
Contributions to 1-hour and 8-hour Nonattainment
------------------------------------------------------------------------
2-5........................................... 0 1
5-10.......................................... 2 0
10-15......................................... 0 0
15-20......................................... 0 0
20-25......................................... 0 0
>25........................................... 0 0
------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Impacts (ppb) Sub 2 Sub 3 Sub 4 Sub 6 Sub 7
----------------------------------------------------------------------------------------------------------------
MAINE
Contributions to 1-Hour Nonattainment
----------------------------------------------------------------------------------------------------------------
2-5............................................ 0 7 0 0 0
5-10........................................... 0 0 2 0 0
10-15.......................................... 0 0 15 0 0
15-20.......................................... 0 0 0 0 0
20-25.......................................... 0 0 0 0 0
>25............................................ 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------
Contributions to 8-Hour Nonattainment
----------------------------------------------------------------------------------------------------------------
2-5............................................ 8 28 0 0 3
5-10........................................... 0 0 20 0 0
10-15.......................................... 0 0 6 0 0
15-20.......................................... 0 0 4 0 0
20-25.......................................... 0 0 0 0 0
>25............................................ 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
Impacts (ppb) Sub 1 Sub 2 Sub 3 Sub 4 Sub 5 Sub 6 Sub 7 Sub 8 Sub 9
--------------------------------------------------------------------------------------------------------------------------------------------------------
VERMONT
Contributions to 1-Hour Nonattainment
--------------------------------------------------------------------------------------------------------------------------------------------------------
2-5................................ 0 0 0 0 0 0 0 0 0
5-10............................... 0 0 0 0 0 0 0 0 0
10-15.............................. 0 0 0 6 0 0 0 0 0
15-20.............................. 0 0 0 0 0 0 0 0 0
20-25.............................. 0 0 0 0 0 0 0 0 0
<25................................ 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" contributions="" to="" 8-hour="" nonattainment="" --------------------------------------------------------------------------------------------------------------------------------------------------------="" 2-5................................="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 5-10...............................="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 10-15..............................="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 15-20..............................="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 20-25..............................="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0=""><25................................ 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" 0="" --------------------------------------------------------------------------------------------------------------------------------------------------------="" [[page="" 24070]]="" pennsylvania--this="" petition="" named="" states="" which="" generally="" correspond="" to="" subregions="" 1,="" 2,="" 5,="" 6,="" 7,="" 8,="" and="" 9.="" of="" these,="" subregions="" 2,="" 5,="" 6,="" 7,="" and="" 8="" contribute="" to="" 1-hr="" nonattainment="" in="" pennsylvania.="" the="" largest="" and="" most="" frequent="" contributions="" are="" predicted="" to="" come="" from="" subregions="" 7="" and="" 6,="" respectively.="" no="" contributions="">2 ppb are predicted from Subregions
1 or 9. For 8-hr nonattainment, the largest contributions are from
Subregions 2, 6, and 7. The magnitude of the contributions from these
three subregions is in the range of 15-20 ppb or more. No contributions
to 8-hr nonattainment >2 ppb were predicted from Subregion 9.
Massachusetts--This petition named sources within a portion of
Subregion 6. However, no contributions >2 ppb were predicted to 1-hr
nonattainment from this subregion to nonattainment in Massachusetts.
Contributions to 8-hr nonattainment from this subregion were in the
range of 2-5 ppb.
Rhode Island--This petition also named sources within a portion of
Subregion 6. Contributions from this subregion to 1-hr nonattainment
were 5-10 ppb. The predicted contribution to 8-hr nonattainment from
this subregion was in the range of 2-5 ppb.
Maine--Of the five subregions (i.e. Subregions 2, 3, 4, 6, and 7)
which are associated with sources named in Maine's petition,
contributions to 1-hr nonattainment were predicted from Subregions 3
and 4, with contributions to 8-hr nonattainment from Subregions 2, 3,
4, and 7. The largest contributions were from Subregion 4 at 10-15 ppb
for 1-hr contributions and 15-20 ppb for 8-hr contributions. No
contributions were predicted from Subregion 6 to either 1-hr or 8-hr
nonattainment.
New Hampshire--Subregions 1 through 7 are associated with sources
named in the New Hampshire petition. Of these subregions, however, only
Subregions 3 and 4 are predicted to contribute >2 ppb to 1-hr
nonattainment with the largest contributions, >25 ppb, from Subregion
4. Subregions 2, 3, and 4 are predicted to contribute >2 ppb to 8-hr
nonattainment with contributions of 10-15 ppb from Subregion 4.
Vermont--There is no current or predicted ``nonattainment'' in
Vermont, based on 1993-1995 ambient monitoring data and/or model
predictions from the OTAG 2007 Base Case.

F. Results of Preliminary Assessment of Section 126 Petitions

As indicated above, the purpose of this preliminary analysis is not
to make a proposed finding of ``significance'' relative to the sources
and/or source categories named in each petition. Rather, the intent is
to identify the contributions to 1-hr and 8-hr nonattainment in each
State based on information developed in the proposed NOX SIP
call as part of the significant contribution determination. As a whole,
the eight petitions cover sources in States within OTAG Subregions 1,
2, 3, 4, 5, 6, 7, 8, 9, 11, and 12, as well as in Massachusetts, New
Hampshire, Rhode Island, and Vermont. Of these, emissions in States
covered by Subregions 1, 2, 3, 4, 5, 6, 7, 8, and 9 along with
Massachusetts and Rhode Island were proposed, by EPA, to make a
significant contribution to downwind nonattainment in the
NOX SIP call.
This preliminary assessment indicates that sources in Subregions 2,
3, 4, 5, 6, and 7 contribute to 1-hr nonattainment in at least one of
the petitioning States. The 16 States and the District of Columbia that
are wholly or partially within these subregions include: Connecticut,
Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, Missouri,
New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee
⁷, Virginia, and West Virginia. Based on these results,
EPA's preliminary assessment indicates that the source categories
identified by the petitions that are located within these 16 States and
the District of Columbia make a significant contribution to
nonattainment of the 1-hr standard. In addition, in the proposed
NOX SIP call, EPA proposed that Massachusetts and Rhode
Island be considered significant contributors to nonattainment in
downwind States, including Maine and New Hampshire. Accordingly,
sources in these two States are preliminarily included in this
assessment as significant contributors.
---------------------------------------------------------------------------

\7\ Tennessee is included because it is part of Subregions 5 and
6. Tennessee is also part of Subregion 9 which, based on the
subregional modeling, does not contribute to 1-hr nonattainment in
any of the petitioning States.
---------------------------------------------------------------------------

Sources in Subregions 1, 2, 3, 4, 5, 6, 7, and 8 contribute to 8-hr
nonattainment in at least one of the petitioning States. However, it
should be noted that sources in only Subregions 1, 2, 5, 6, 7, and 8
contribute to 8-hr nonattainment in one of the three petitioning States
(Massachusetts, Pennsylvania, and Vermont) that requested EPA to make a
finding under the 8-hr NAAQS. The 15 States and the District of
Columbia which are wholly or partially within the subregions
contributing to 8-hr nonattainment in Pennsylvania (i.e. subregions 1,
2, 5, 6, 7, and 8) and Massachusetts (i.e., subregion 6) and which were
proposed to make a significant contribution to downwind nonattainment
in the proposed NOX SIP call are Delaware, Georgia
⁸, Illinois, Indiana, Kentucky, Maryland, Michigan,
Missouri, North Carolina, Ohio, South Carolina, Tennessee ⁹,
Virginia, West Virginia, and Wisconsin. The EPA's preliminary
assessment indicates that the source categories identified by the
petitions that are located within these States make a significant
contribution to nonattainment of the 8-hr standard (or interfere with
maintenance of that standard) in the petitioning States. Because there
are no current or predicted nonattainment problems in Vermont, there
are no upwind source areas that are included in the preliminary
assessment of significant contribution due to the Vermont petition.
---------------------------------------------------------------------------

\8\ Georgia is included because it is part of Subregion 8.
Georgia is also part of Subregion 9 which, based on subregional
modeling, does not contribute to 8-hr nonattainment in any of the
petitioning States.
\9\ Tennessee is included because it is part of Subregions 5 and
6. Tennessee is also part of Subregion 9 which, based on the
subregional modeling, does not contribute to 1-hr nonattainment in
any of the petitioning States.
---------------------------------------------------------------------------

As noted above, the petitioning States submitted technical data in
addition to the zero-out modeling data just described. The EPA is
continuing to review the States' technical data, as well as other data
relevant to the petitions, to develop a proposed finding for each
petition.
By comparison to the above section 126 analysis, in the proposed
NOX SIP call, EPA determined that sources in 22 States and
the District of Columbia are significantly contributing to 1-hr and 8-
hr nonattainment problems. In the proposed NOX SIP call, EPA
considered nonattainment problems throughout the Eastern half of the
United States. In the section 126 rulemaking action, EPA is limited to
considering nonattainment problems in the 8 petitioning States, which
are all located in the Northeast.

III. Preliminary Assessment of Emission Limitations and Compliance
Schedules

The EPA is currently analyzing each of the section 126 petitions to
determine whether to propose to grant the States' requests for findings
of significant contribution or to deny the petitions; as a result, EPA
is not prepared to propose a response at this time. If EPA does propose
to find that certain source categories described in one or more of the
petitions significantly contribute to nonattainment or interfere with
maintenance of an ozone standard in a downwind State, then EPA would be

[[Page 24071]]

authorized to propose new control requirements for those sources.
The EPA anticipates that any requirements it may eventually propose
would resemble the controls described in the proposed NOX
SIP call. As noted above, it is EPA's preliminary view that the
NOX SIP call rulemaking overlaps considerably with EPA
action on the section 126 petitions because both are governed by the
requirements of section 110(a)(2)(D) with respect to ozone for a
similar geographic region. The EPA intends to employ the extensive
analysis in the proposed NOX SIP call action, including the
NOX Budget Trading Program (described in a supplemental
rulemaking), in developing any proposed remedy for the petitions. Thus,
if EPA were to propose to grant any or all of the section 126
petitions, EPA's response would include the proposal of a cap-and-trade
program. The EPA expects to base any remedy granted under section 126
on the assumption of a uniform control level for the covered universe
of sources, based on the criteria delineated in Section III.C. The
following sections outline the remedies sought by petitioners and
discuss how EPA would address the petitions if it were to propose
granting any or all of them.

A. Remedies Recommended in Petitions

The eight petitions submitted to EPA collectively cover the 23
jurisdictions named by EPA in the proposed NOX SIP call, as
well as seven additional States that were not named (Iowa, New
Hampshire, Vermont, Arkansas, Louisiana, Mississippi, and Minnesota).
This section focuses on the source categories named in the petitions as
significant contributors and the requested relief sought by
petitioners.
Several of these petitions reference the OTC NOX MOU,
agreed to by eleven Northeastern States and the District of Columbia to
implement NOX emissions reductions across the Ozone
Transport Region (OTR). The OTC NOX MOU signatories were
Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode
Island, New York, New Jersey, Pennsylvania, Maryland, Delaware, and the
District of Columbia. The OTC NOX MOU commits these States
to reductions in ozone season NOX emissions from large
utility and industrial combustion sources through implementation of a
phased-in regionwide cap-and-trade program. Specifically, affected
sources in the OTR are fossil fuel-fired boilers and other indirect
heat exchangers with a maximum rated heat input capacity of 250 mmBtu/
hr or greater, and electric generating facilities with a rated output
of 15 megawatts (MW) or greater.
The OTC NOX MOU established emissions reduction
requirements for these sources in the OTR, creating emissions budgets
for 1999 (Phase II) and 2003 (Phase III). (Phase I required the
installation of reasonably available control technology (RACT) by May
1995.) The requirements vary across three control zones in the region:
an inner zone ranging from the District of Columbia metropolitan area
northeast to southeastern New Hampshire (covering all contiguous
moderate and above nonattainment areas), an outer zone ranging out from
the inner zone to western Pennsylvania, and a northern zone which
includes much of northern New York and northern New England (including
most of New Hampshire).
For Phase II of the OTC NOX MOU, which begins in 1999,
sources in the inner zone are subject to emissions reduction
requirements based on the less stringent of an emission rate of 0.20
pounds NOX per million British thermal units of heat input
(lb/mmBtu), or a 65 percent reduction from 1990 NOX levels;
sources in the outer zone are subject to emissions reduction
requirements based on the less stringent of a 0.20 lb/mmBtu rate, or a
55 percent reduction from 1990 NOX levels; and sources in
the northern zone must adopt RACT. The Phase III requirements, which
may be altered by a ``mid-course correction'' based on new information
such as refined air quality modeling, establish emissions reduction
requirements based on the lesser of a 0.15 lb/mmBtu rate, or a 75
percent reduction from 1990 levels for sources in both the inner and
outer zones. Northern zone sources would face emissions reduction
requirements based on the lesser of a 0.20 lb/mmBtu rate, or a 55
percent reduction from 1990 levels. In both Phase II and III in all
three zones, electric generating facilities less than 250 mmBtu/hr but
above 15 MW are subject only to a capping of emissions at 1990 levels
for purposes of budget calculation. However, individual States
determine specific allocations for each source from their overall
budget based on independent allocation formulas, and thus the
allocation for these sources will not necessarily reflect this level.
All of the section 126 petitions, except Pennsylvania's,
Massachusetts' and Rhode Island's, named States in the OTR as
significant contributors. However, only New Hampshire and Maine
requested relief beyond OTC NOX MOU requirements from
sources in the OTR. It may be noted that the OTC NOX MOU
requirements are not federally enforceable at this time since these
requirements have not been adopted into SIPs.
Table 3 shows, by petitioner, the named source categories, the
named geographic areas, and the requested remedy sought by the
petitioning States. Please note that the named source categories are
worded as they appear in the petitions.

Table--3. EPA's Summary of Section 126 Petitions
------------------------------------------------------------------------
Named source
State categories Named states Request
------------------------------------------------------------------------
NY................ Fossil fuel- All or parts of Establish, at a
fired boilers IN, KY, MI, NC, minimum,
or indirect OH, TN, VA, WV. emission
heat exchangers Also lists OTR limitations and
with a maximum States DE, MD, a schedule of
heat input rate NJ, PA, but compliance
of 250 mmBtu/hr does not consistent with
or greater and request relief. the OTC NOX
electric MOU, and a cap-
utility and-trade
generating program.
facilities with
a rated output
of 15 MW or
greater.
CT................ Fossil fuel- All or parts of Establish, at a
fired boilers IN, KY, MI, NC, minimum,
or other OH, TN, VA, WV. emission
indirect heat Also lists OTR limitations and
exchangers with States DE, MD, a schedule of
a maximum gross NJ, NY, PA, but compliance
heat input rate does not consistent with
of 250 mmBtu/hr request relief. the OTC NOX
or greater and MOU, and a cap-
electric and-trade
utility program.
generating
facilities with
a rated output
of 15 MW or
greater.

[[Page 24072]]

PA................ Fossil fuel- AL, AR, GA, IL, Establish
fired indirect IN, IA, KY, LA, emission
heat exchange MI, MN, MS, MO, limitations and
combustion NC, OH, SC, TN, a compliance
units with a VA, WV, WI. schedule for a
maximum rated cap-and-trade
heat input program
capacity of 250 requiring: (a)
mmBtu/hr or Seasonal
greater, and reductions of
fossil fuel- the less
fired electric stringent of
generating 55% from 1990
facilities baseline
rated at 15 MW levels, or 0.20
or greater. lbs/mmBtu,
beginning by
May 1999; (b)
if necessary,
seasonal
reductions of
the less
stringent of
75% from 1990
baseline
levels, or 0.15
lbs/mmBtu,
beginning by
May 2003; (c)
such additional
reductions as
necessary
beginning in
2005.
MA................ Electricity Parts of IN, KY, Establish
generating OH, WV. Also emissions
plants. names sources limitation of
in OTR States, 0.15 lbs/mmBtu
but does not or 1.5 lbs/MWh
request relief. and a
compliance
schedule.
RI................ Electricity Parts of IN, KY, Establish
generating OH, WV. Also emissions
plants. names sources limitation of
in OTR States, 0.15 lbs/mmBtu
but does not or 1.5 lbs/MWh
request relief. and a
compliance
schedule.
ME................ Electric Sources within Establish
utilities and 600 miles of compliance
steam- Maine's ozone schedule and
generating nonattainment emissions
units with a areas (all or limitation of
heat input parts of NC, 0.15 lbs/mmBtu
capacity of 250 OH, VA, WV, and for electric
mmBtu/hr or OTR States CT, utilities and
greater. DE, DC, MD, MA, the OTC NOX MOU
NJ, NY, NH, PA, level of
RI, VT). control for
steam
generating
units, in a
multi-state cap-
and-trade NOX
market system.
NH................ Fossil fuel- All or parts of Establish
fired indirect IL, IN, IA, KY, compliance
heat exchange MI, MO, OH, VA, schedule and
combustion WV, WI. Also emission
units and names sources limitations no
fossil fuel- in OTR States less stringent
fired electric CT, DE, DC, MD, than: (a) Phase
generating MA, NJ, NY, PA, III OTC NOX MOU
facilities RI. reductions; and/
which emit ten or (b) 85%
tons of NOX or reductions from
more per day. projected 2007
baseline; and/
or (c) An
emission rate
of 0.15 lbs/
mmBtu.
VT................ Fossil fuel- All or parts of Establish
fired electric IL, IN, KY, MI, emissions
utility NC, OH, TN, VA, limitation of
generating WV. Also AL GA, 0.15 lbs/mmBtu
facilities with IA, MO, SC, WI. or 1.5 lbs/MWh
a maximum gross Also names OTR and a
heat input rate sources, but compliance
of 250 mmBtu/hr does not schedule.
or greater and request relief.
potentially
other
unidentified
major sources.
------------------------------------------------------------------------

The petitions vary somewhat with regard to the universe of sources
they name as significant contributors to their ozone problem. Three of
the petitioning States--New York, Connecticut, and Pennsylvania--name
the same universe of sources covered by the OTC NOX MOU. New
Hampshire names fossil fuel-fired indirect heat exchangers and electric
generating facilities as well, but uses a tonnage applicability cut-off
to include only sources that emit ten tons or more of NOX
per day. Massachusetts and Rhode Island name ``electricity generating
plants'' as the universe requiring controls, without naming a specific
size cutoff. Finally, Vermont names fossil fuel-fired electric
generating facilities of 250 mmBtu or greater.
The petitions also vary regarding the remedy requested. Though all
of the petitions request that EPA impose controls in terms of various
emissions limitations, four of the eight petitions--New York,
Connecticut, Pennsylvania, and Maine--also request that a trading
program with a cap, or emissions budget, be established to implement
these controls. Massachusetts, Rhode Island, and Vermont request that
limitations be established for all named sources at 0.15 lbs/mmBtu,
which is the level of control for electric generating facilities used
to calculate the budget in the proposed NOX SIP call. Maine
requests an emission limitation of 0.15 lbs/mmBtu for named electric
utilities, but the OTC NOX MOU level of control for named
steam generating units. New Hampshire requests emission limitations no
less stringent than the Phase III OTC NOX MOU reductions,
and/or 85 percent reductions from projected 2007 baseline, and/or an
emission rate of 0.15 lbs/mmBtu. New York, Connecticut and Pennsylvania
all request that emissions limitations consistent with the OTC
NOX MOU be imposed on named sources, but only Pennsylvania
specifies the outer zone requirements; neither Connecticut nor New York
specifies a zone. The level of reduction requested for 2003 in these
three petitions specifying basic OTC NOX MOU requirements
appears to be less stringent than that in the petitions requesting 0.15
lbs/mmBtu, since the remedy requested would allow sources the option to
implement the less stringent of a percentage reduction or an emission
rate. In terms of smaller sources named by these three States,
Pennsylvania's petition appears to seek somewhat more reductions than
the OTC NOX MOU by requiring the same emission level for
electric generating facilities less than 250 mmBtu/hr and greater than
15MW as for larger units. Both Connecticut and New York appear to be
aligned with the OTC NOX MOU in seeking only a capping of
emissions at 1990 levels for these smaller sources.
New York, Connecticut and Pennsylvania recommend a date for the
implementation by sources of control requirements: the OTC
NOX MOU schedule of compliance, including its phased-in
controls and implementation dates of 1999 and 2003. The remaining
States request that EPA establish a schedule of compliance requiring
sources to comply with emission limitations as expeditiously as
practicable.

B. EPA's Analytic Approach

If EPA proposes to grant a section 126 petition, and thereby
proposes to find that identified sources either contribute

[[Page 24073]]

significantly to nonattainment or interfere with maintenance in the
petitioning State, EPA intends to propose emissions reduction
requirements for those sources. The EPA would not, however, propose
controls on sources other than those named in the petitions under
section 126.
To determine the level of requirements to propose, EPA intends to
consider the remedies described in the petitions (see III.A. of this
section), relevant comments received in a timely manner on today's
notice, the availability and cost effectiveness of potential control
measures, the ambient impact of the control measures, OTAG's
recommendations, and the similar efforts EPA is already undertaking to
address the transport problem in the proposed NOX SIP call.
In developing proposed budgets for States as part of the proposed
NOX SIP call, EPA assumed the application of a uniform
NOX emission rate of 0.15 lb/mmBtu to projected electricity
generating activity levels at large electric generating devices, and 70
percent control for other large stationary sources. The EPA's rationale
for assuming these control levels is explained in the proposed
NOX SIP call, and is based upon cost effectiveness, OTAG
recommendations, the collective contribution approach described in the
NOX SIP call notice, equity concerns, EPA's air quality
modeling approach, and concerns over emissions shifting (62 FR 60342).
The EPA believes that it needs to coordinate and integrate the
proposed NOX SIP call and the section 126 rulemaking to the
greatest extent possible in order to reduce the possibility that
affected sources would be faced with inconsistent or conflicting
control requirements and deadlines. Such inconsistency could hamper the
sources' abilities to plan and achieve the needed reductions as cost-
effectively as possible. Further discussion of the proposed integration
of these two efforts is included in Section IV.B.
The EPA believes that promoting consistent requirements among the
States affected by the NOX SIP call and the section 126
rulemaking would greatly facilitate participation in a common trading
program to address the transport problem on a regional scale.
Therefore, EPA anticipates that any section 126 proposed rulemaking
will attempt to coordinate the schedules for the SIP revisions, and the
implementation of reductions required under the proposed NOX
SIP call, with the schedule for completing the rulemaking on the
section 126 petitions in accordance with the consent decree proposed by
the petitioning States and EPA.
In determining the appropriate control requirements to propose in
response to the granted section 126 findings, EPA would use the same
cost effectiveness approach that it used in the proposed NOX
SIP call with respect to stationary sources. In the upcoming proposed
rulemaking for the section 126 petitions, EPA intends to present
analyses conducted for the proposed NOX SIP call regarding
the feasibility, performance, and cost of NOX controls, and
factor this into the control level recommendation. The application of
this control level would determine the allocation of NOX
allowances each source would receive under a trading program.
The EPA's preliminary assessment is that it would propose the
control levels assumed in formulating the budgets for the proposed
NOX SIP call in response to the section 126 petitions. In
addition, EPA's preliminary assessment is that it would propose the
full 3-year period for sources to implement those controls. Comments
are sought on these approaches, as indicated in Section IV of today's
notice.
Also in the proposal, EPA intends to use the Integrated Planning
Model (IPM) to explore the cost of achieving emission levels among
sources affected by the section 126 rulemaking. The EPA uses the IPM to
evaluate the emissions and cost impacts expected to result from the
requirements of the proposed NOX SIP call on the electric
power generation sector. The IPM has been used for over 10 years to
address a wide range of electric power market issues, including
environmental policy and compliance planning, and undergoing frequent
and extensive review and validation. The EPA has used IPM for many
analytic efforts, most recently as a tool to analyze alternative
trading and banking programs during the OTAG process in 1996 and 1997,
and to analyze the economic impacts of the proposed NOX SIP
call.

C. Intent To Implement Controls Through Cap-and-Trade Program

A cap-and-trade program is expected to be the most cost-effective
approach to achieving any emissions reductions required under section
126. Under such a program, the sources for which EPA proposes a
positive finding would be limited to specified amounts of emissions as
a group, but would be authorized to trade emissions. Four of the eight
petitioning States (New York, Connecticut, Pennsylvania, and Maine)
requested that EPA establish such a trading program to implement the
required reductions. The EPA is proposing a framework for a cap-and-
trade program in a supplemental notice to the proposed NOX
SIP call to facilitate cost effective achievement of the proposed
reductions, (``Purpose of the NOX Budget Trading Program''
and ``Benefits of Participating in the NOX Budget Trading
Program''). If one or more of the section 126 petitions are granted, a
remedy can be integrated with this program, consolidating the two
actions and lowering the cost of compliance.
The EPA anticipates defining all the program elements for a cap-
and-trade program in the proposed rulemaking for the section 126
petitions, including a list of covered sources, monitoring requirements
for these sources, an allowance allocation methodology, source-specific
NOX allowance allocations for the initial control period,
timing of the program, and permitting requirements.

IV. Legal and Policy Issues

A. Issues Involving Significant Contribution

As discussed earlier in Sections I.A and I.C. of this notice, both
the section 126 petitions and proposed NOX SIP call are
premised on a violation of section 110(a)(2)(D) of the CAA. This
section requires that SIPs prohibit emissions that contribute
significantly to nonattainment or that interfere with maintenance
downwind.¹⁰ Because of the link between section 126 and
section 110, EPA should use similar criteria in its analysis for each
case.
---------------------------------------------------------------------------

\10\ As indicated earlier, it is EPA's preliminary
interpretation that the cross reference in section 126(b) to section
110(a)(2)(D) should be treated as a cross reference to sentence (i)
of the provision, which includes the significant contribution test.
---------------------------------------------------------------------------

As described in the proposed NOX SIP call and earlier in
this notice, EPA used a ``weight of evidence'' approach in determining
whether sources in one State significantly contributed to ozone
nonattainment in another State. This approach applies multiple factors
which focus on emission quantities and air quality impacts, as well as,
under certain formulations, control costs. It is EPA's intent to use
this same ``weight of evidence'' approach in determining whether or not
to grant any of the section 126 petitions.
The EPA is soliciting comment on whether there is any reason why it
should rely on a different approach and, if so, what that approach
should be. It should be noted that EPA is not soliciting comment on the
issues of significant contribution discussed in the proposed
NOX SIP call. It is only asking

[[Page 24074]]

for comment on whether or not the same approach should be used in
evaluating the section 126 petitions.
Additionally, EPA is asking for comment on whether it should focus
on the contributions to the downwind areas of named sources in a each
petition, considered by themselves, or whether EPA should consider the
named sources in one petition in conjunction with the named sources in
all the other petitions under a type of ``collective contribution''
approach. In the latter case, even if the emissions from the named
sources in a single petition have a relatively minor impact on downwind
areas, the emissions may be considered significant if they are
considered as part of a broader set of emissions from all the sources
named in all the petitions, which together have a larger impact on the
same downwind areas.

B. Issues Involving Trading

The EPA is proposing the framework for a cap-and-trade program in
its supplemental notice to the proposed NOX SIP call. As
noted previously, EPA believes a trading program should be part of any
remedy it proposes in response to the section 126 petitions. At this
time, EPA is not prepared to define the scope of the trading program it
would propose in response to the section 126 petitions, but would like
to solicit comment on some important issues regarding trading program
development.
First, EPA believes that when a petition identifies as significant
contributors both named sources and generally identified source
categories, EPA may make findings of significant contribution, apply
controls, and implement a trading program, with respect to all sources
within those source categories in geographic areas named in the
petitions. Second, EPA foresees that the proposed response to the
section 126 petitions would resemble the proposed NOX Budget
Trading Program in EPA's supplemental proposed NOX SIP call
and that the two efforts could be integrated into one common trading
program. Under this common trading program, sources subject to controls
under the section 126 rulemaking, or sources in States choosing to
participate in the NOX Budget Trading Program in response to
the NOX SIP call, or sources in States subject to a Federal
implementation plan (FIP) under the NOX SIP call, could
trade with one another under a regionwide NOX cap. The EPA
solicits comments as to whether the trading program that EPA would
propose in response to the section 126 petitions should be essentially
the same trading program proposed by EPA in its proposed NOX
SIP call, and whether there are any reasons why the programs should not
be integrated.
In order to address the ozone transport problem in the most cost-
effective manner, EPA believes one trading program can and should be
established in response to both the final NOX SIP call and
the section 126 petitions. The EPA believes that there are two
principal criteria that sources must meet to be eligible to participate
in a cap-and-trade program, as stated in the supplemental notice for
the proposed NOX SIP call. The first criterion requires that
sources be able to account accurately and consistently for all of their
emissions to ensure the trading program goal of maintaining emissions
within a cap. The second criterion for participation in a trading
program is the ability to identify a responsible party for each
regulated source who would be accountable for demonstrating and
ensuring compliance with the program's provisions. The EPA solicits
comment on these, or additional, criteria that should be considered.
Assuming that these criteria are met, and consistent control levels are
used in setting emission requirements for the affected sources, EPA
supports the establishment of a common trading program for all sources
in States subject to the final NOX SIP call who hold EPA-
approved SIPs and choose to participate, and all sources subject to any
section 126 remedy established by EPA. The EPA would administer this
common trading program in collaboration with affected States. The EPA
anticipates proposing to establish the geographic boundaries of the
common trading program as those States submitting SIPs in response to
the final NOX SIP call or subject to FIPs and/or the sources
in geographic areas for which EPA makes a finding for the section 126
petitions.
A common trading program integrating the NOX Budget
Trading Program and the section 126 actions would necessarily include
those source categories in States for which EPA makes a finding in the
section 126 process, sources located in States that are both named in
the final NOX SIP Call and which choose to participate in
the NOX Budget Trading Program, as well as sources subject
to a FIP. States choosing to participate through the NOX SIP
call would be required to include a core group of sources in the
trading program, but would be provided the option to include additional
stationary source categories, and certain qualifying individual
stationary sources would be provided the opportunity to opt in. Sources
subject to section 126 findings would be required to participate in the
common trading program under EPA's section 126 authority. However, EPA
does not believe that section 126 provides EPA authority to make
findings or require controls beyond the named sources or source
categories in the petitions. The EPA seeks comment on this issue of
whether it may include additional sources beyond the named sources or
source categories in the petitions through the section 126 remedy.
Specifically, EPA requests comment on whether the sources EPA includes
in the common trading program under the section 126 petitions should be
confined to source categories in geographic areas for which petitioning
States request, and EPA grants, a finding of significant contribution.
In the alternative, EPA requests comment as to whether additional
sources not named in a petition, but located in a State where a finding
is made under section 126, should be able to voluntarily participate in
a trading program remedy. Further, EPA requests comment on whether such
a trading program may include sources in other States subject to the
NOX SIP call.
Because sources may be included in the common trading program
through one of three possible mechanisms (section 126 petitions,
NOX SIP Call, and FIP), the sources included in the trading
program for purposes of the NOX SIP call may vary from
sources included for purposes of the section 126 remedy. The EPA
solicits comment as to whether this is problematic for integration
concerns.
The EPA does not anticipate that a trading program designed for
sources subject to the final NOX SIP call and the section
126 petitions for which EPA makes a finding could be expanded
geographically to include sources in geographic areas not subject to
requirements under either program. The EPA solicits comment on this
preliminary view.
The effect of NOX emissions on air quality in downwind
nonattainment areas depends, in part, on the distance between sources
and receptor areas. Sources that are closer to the nonattainment areas
tend to have much larger effects on air quality than sources that are
far away. In light of this and as discussed in Section IV.C, the EPA
plans to evaluate alternative approaches, other than one based on the
application of uniform controls, in developing the rulemaking proposal.
The Agency solicits comments on whether a trading program should
factor in differential effects of NOX emissions in an
attempt to strike a balance

[[Page 24075]]

between achieving the cost savings from a broader geographic scope of
trading and avoiding the adverse effects on air quality that could
result if the geographic domain for trading is inappropriately large or
trades across areas are not appropriately adjusted to reflect
differential environmental effects. The EPA could consider establishing
``exchange ratios'' for tons traded between areas. The large number of
areas in the petitioning States that are violating the standards and
the several different weather patterns associated with summertime ozone
pollution episodes complicate the development of a stable set of
trading ratios. Alternatively, the Agency could consider establishing
subregions for trading within the geographic area that may ultimately
be subject to any section 126 findings and apply a discount to or
prohibit trades between regions. The Agency solicits comments on this
issue.

C. Cost-Effectiveness Issues

Where EPA proposes to grant a section 126 petition and, therefore,
also to propose control measures, it plans to use the cost-
effectiveness approach used in the proposed NOX SIP call
action with respect to stationary sources. This approach focuses on the
selection of reasonable, cost-effective control measures and the
application of uniform controls. Further, as in the proposed
NOX SIP call, EPA plans to propose to require sources in
upwind areas to decrease emissions through cost-effective controls that
compare favorably, at least qualitatively, with the costs of controls
downwind and that reduce ozone levels downwind.
However, the effect of NOX emissions on air quality in
areas violating the ozone air quality standard depends, in part, on the
distance between sources and receptor areas. Sources that are closer to
areas violating the air quality standards tend to have larger effects
on air quality than sources that are far away. If there is a
significant variation in the contribution of emissions in different
subregions within the geographic area that may be subject to any
section 126 findings, alternative approaches to developing a remedy,
other than one based on the application of uniform control measures,
will be evaluated. On the other hand, the large number of nonattainment
areas in the States that filed petitions and the several different
weather patterns associated with summertime ozone pollution episodes
should also be considered when evaluating a subregional approach. The
EPA plans to evaluate alternative approaches at levels below and above
the levels used in the calculation of the budgets in the proposed
NOX SIP call as well as regional approaches that apply
different control levels to different geographic regions.
The EPA is soliciting comment on approaches for the section 126
control remedy that factor in the differential effects on air quality
in areas violating the standard. Comments advocating alternative
approaches would be most helpful if they set forth concrete proposals
on what analysis should form the basis of the remedy. For example, some
have suggested an approach that would attempt to quantify more
explicitly the cost-effectiveness of emissions reductions in terms of
improvements in ambient ozone concentrations in areas violating a
standard (measures, for example, as cost per population-weighted
changes in parts per billion peak ozone concentration) taking into
account the location of control measures through subregional modeling.
The EPA invites comment on whether the criteria for cost
effectiveness applied in any section 126 petition decision should be
the same as the criteria used in the proposed NOX SIP call
action; or whether the criteria should be different because, for
example, there are fewer sources involved in the section 126 petitions
than in the proposed NOX SIP call. (The EPA is not asking
for comment, in this notice, on the issue of cost effectiveness as it
applies to the proposed NOX SIP call, but only on whether
the approach taken in the proposed NOX SIP call is
appropriate for the section 126 action.) Similarly, EPA invites comment
on whether to consider the cost effectiveness of controls for sources
named in a single petition or whether EPA should look at the collective
cost effectiveness of controls for all the sources named in all the
petitions which EPA may propose to grant. In both cases, even if some
sources' emissions reduction requirements taken by themselves are not
cost effective, EPA believes that these controls may be considered cost
effective if they are part of a set of controls which, when taken as a
whole, are considered cost effective.
The EPA also invites comments on whether and to what extent cost
effectiveness should differentiate between large and small sources
within a specific source category. Specifically, EPA notes that its
proposed NOX SIP call included a cutoff of 25 MWe for
utility boilers and 250 mmBtu for non-utility boilers; units below
these cutoffs were not included in emissions decrease calculations for
the statewide budgets. Because certain petitions suggest controlling
15-25 MWe generators, and one suggests controlling all electric
generators, EPA specifically invites comment on the cost effectiveness
of these requests.
As a preliminary matter, EPA anticipates making determinations as
to cost effectiveness through the same approach as discussed in the
proposed NOX SIP call. Specifically, EPA would employ the
following steps in proposing the control levels: First, EPA would
compile a list of available NOX control measures for the
various emissions sectors named in the petitions. For the control
measures on this list, EPA would estimate the average cost
effectiveness of those controls. The average cost effectiveness is
defined as the cost of a ton of reductions from the source category
based on full implementation of the proposed controls, as compared to
the pre-existing level of controls.
Second, EPA would determine the average cost effectiveness of a
representative sample of recently proposed and adopted State and
Federal controls. The EPA believes that the average cost effectiveness
for measures that would form the basis of the remedy to the petitions
should be comparable to the average cost effectiveness of those
controls recently proposed and adopted. Third, EPA would use this
information to determine which controls may be appropriate to propose
as the remedy for any petitions that are proposed to be granted.
Fourth, EPA would determine that the proposed controls--or generally
comparable levels--result in an adequate level of ambient reductions
downwind. The EPA used this approach to propose the level of control
assumed in the proposed NOX SIP call. The EPA solicits
comments on whether this approach should be changed in the section 126
rulemaking.

D. Legal Issues

The EPA also solicits comment on a series of issues concerning the
legal interpretation of section 126(b) and associated provisions.
Section 126(b) provides that a State may petition EPA for a finding
that specified sources in other States emit air pollutants ``in
violation of the prohibition of section 110(a)(2)(D)(ii) of this title
or this section.'' Section 110(a)(2)(D) provides the requirement that a
SIP contain adequate provision:

[[Page 24076]]

maintenance by, any other State with respect to [any] national * * *
ambient air quality standard, or
(II) interfere with measures required to be included in the
applicable implementation plan for any other State under part C to
prevent significant deterioration of air quality or to protect
visibility.
(ii) insuring compliance with the applicable requirements of
sections 126 and 115 (relating to interstate and international
pollution abatement)* * *

One issue is whether the cross-reference in section 126(b) to
``section 110(a)(2)(D)(ii)'' is valid, or instead should be considered
to be a typographical error that should be read to refer to section
110(a)(2)(D)(i). The EPA has offered this view in general and
preliminary guidance. (Nichols Letter cited earlier in Section I.B.)
Some have argued that section 126(b) should be read literally, and
that this reading would require EPA to deny the petitions submitted to
date on grounds that section 126 allows a State to file a petition with
EPA only to force other States to meet the requirements of section 126
itself, (i.e., the requirement in section 126(a) that SIPs include
provisions to require new and modified major stationary sources to give
preconstruction notification to nearby States under certain
circumstances). (Letter from Henry V. Nickel, et.al, Counsel for the
Utility Air Regulatory Group, to Carol M. Browner, Administrator, U.S.
EPA, November 21, 1997 (UARG Letter); Letter from Betty D. Montgomery,
Attorney General of Ohio, et. al., to Richard Wilson, Acting Assistant
Administrator for Air & Radiation, U.S. EPA, November 5, 1997 (letters
included in the docket to this rulemaking).)
If the proper interpretation of section 126(b) is that the cross-
reference represents a typographical error, an issue arises as to what
the appropriate cross-reference should be. The EPA has offered the
view, in general and preliminary guidance, that the proper cross-
reference should be to section 110(a)(2)(D)(i) (Nichols Letter). Some
have argued that the appropriate cross-reference should be to section
110(a)(2)(D)(i)(II), and not section 110(a)(2)(D)(i)(I) (UARG letter).
The effect of this reading would be to limit section 126 petitions to
cases in which the upwind sources are adversely affecting: (i) Clean
areas under the prevention of significant deterioration requirements of
part C of Title I of the CAA; or (ii) visibility.
A further issue arises as to the interpretation of the requirement
of section 110(a)(2)(D)(i) that the ``SIP contain adequate provisions
prohibiting, consistent with the provisions of this title,'' sources
from emitting air pollutants in amounts that contribute significantly
to nonattainment problems downwind. Some have argued that the phrase
``consistent with the provisions of this title'' should be interpreted
to limit the requirements imposed with respect to sources in a
contributing State to the control requirements that the petitioning
State demonstrates would be necessary to allow the petitioning State to
reach attainment of the NAAQS after the petitioning State implements
the applicable requirements under section 182 (requirements for
nonattainment areas), and under sections 176A and 184 (transport region
provisions). The EPA solicits comments on each of the issues of
interpretation noted earlier.
Additional legal issues, which assume that section 126(b) should be
read to authorize EPA to grant the petitions if they have an adequate
technical basis, concern:
Whether, if EPA grants a section 126 petition, EPA may
allow sources a period longer than 3 years from the date of granting
the petition to implement required controls under section 126(c).
Whether administrative complexity is an appropriate factor
to consider in determining whether to grant a petition with respect to
certain sources, so that EPA would have the discretion to determine not
to grant a finding with respect to, for example, smaller sources that
would be administratively complex for EPA to regulate.
Whether EPA should evaluate each of the section 126
petitions under both the 1-hr ozone NAAQS and the 8-hr ozone NAAQS or
whether EPA should limit its evaluation of the 8-hr standard only to
those petitions which cite the 8-hr standard as a basis for their
petition.
Whether EPA has the authority to evaluate petitions under
the 8-hr standard in light of the fact that EPA has not yet designated
areas under the 8-hr standard or required SIP revisions under that
standard.
Whether EPA, in determining whether sources are
significant contributors to nonattainment problems downwind, may
consider the impact of upwind sources named in a petition on only the
petitioning State, or whether EPA may consider the impact of upwind
sources named in one petition on other petitioning States (or non-
petitioning States).

V. Schedule for Rulemaking Action on Section 126 Petitions

As discussed in the Section I Background, the eight petitioning
States have sued EPA to establish a schedule for rulemaking on the
section 126 petitions, and EPA and those States have filed with the
court a proposed consent decree. The EPA took comment on the proposed
consent decree under section 113(g) of the CAA and is considering those
comments. The EPA has not asked the court to lodge the consent decree.
Section 2(b) of the proposed consent decree requires that EPA
publish in today's ANPR ``the schedule set forth in [the] consent
decree for finalizing action on the section 126 petitions, including
the date and location of the public hearing.''
The proposed consent decree sets forth the relevant schedule as
follows:

3. EPA will publish in the Federal Register a notice of proposed
rulemaking regarding the section 126 petitions no later than
September 30, 1998.* * *
5. a. EPA will take a final action on the section 126 petitions
no later than April 30, 1999.
b. Unless EPA takes the final action described in paragraph 6,
as to each individual petition, EPA's final action will be to--
(i) Grant the requested finding, in whole or part; and/or
(ii) Deny the petition, in whole or part.
c. Unless EPA denies a petition in whole, its final action will
include promulgation of the Proposed Remedy for sources to the
extent that a requested finding is granted with respect to those
sources.
6. EPA shall be deemed to have complied with the requirements of
Paragraph 5(a) if it instead takes a final action by April 30, 1999,
that--
a. Makes an affirmative determination concerning the technical
components of the ``contribute significantly to nonattainment'' or
``interfere with maintenance'' tests under CAA section
110(a)(2)(D)(i), 42 U.S.C. sec. 7410(a)(2)(D)(i);
b. Further provides that--
(i) If EPA does not issue a proposed approval of the relevant
upwind State's SIP revision (submitted in response to the
NOX SIP call) by November 30, 1999, then the finding will
be deemed to be granted as of November 30, 1999, without any further
action by EPA;
(ii) If EPA issues a proposed approval of said SIP revision by
November 30, 1999, but does not issue a final approval of said SIP
revision by May 1, 2000, then the finding will be deemed to be
granted as of May 1, 2000, without any further action by EPA;
(iii) If EPA issues a final approval of said SIP revision by May
1, 2000, EPA must take any and all further actions, if necessary to
complete its action under section 126, no later than May 1, 2000;
and
c. Promulgates the Proposed Remedy for sources to the extent
that an affirmative determination is made with respect to those
sources.

A public hearing on the future proposed rulemaking on the section
126 petitions will be held on October 28 and 29, 1998 at the EPA
Auditorium at 401 M Street SW,

[[Page 24077]]

Washington, DC, 20460. The oral testimonies, as well as all written
comments received during the comment period for the proposed
rulemaking, will be considered in the development of the final
rulemaking.

VI. Impact on Small Entities

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq.,
provides that whenever an agency is required to publish a general
notice of proposed rulemaking, it must prepare and make available a
regulatory flexibility analysis, unless it certifies that the proposed
rule, if promulgated, will not have ``a significant economic impact on
a substantial number of small entities.'' Id., section 605(b).
No such requirements or certification apply in the case of an
advance notice of proposed rulemaking. However, in accordance with
section 609(a)(1) of the RFA, EPA is today notifying the public that if
EPA grants the findings requested by the petitioning States, the
controls that EPA would promulgate may have a significant economic
impact on a substantial number of small entities. Accordingly, EPA has
begun an informal outreach process to work with the Small Business
Administration (SBA), the Office of Management and Budget (OMB), and a
number of small-entity representatives. On April 14, 1998, EPA held a
meeting in Washington, D.C. to provide an opportunity for small-entity
representatives to provide advice and recommendations and to join in a
discussion of the issues related to small-entities. Representatives
from SBA and OMB also participated in the meeting. If this outreach and
further analysis show that EPA's action appears likely to have a
significant adverse impact on a substantial number of small entities,
EPA would then convene a Federal Small Business Advocacy Panel for this
rulemaking under the Small Business Regulatory Enforcement Fairness Act
(SBREFA). The EPA would examine such issues as the number of small
entities likely to be affected by the rule; the associated compliance,
reporting and recordkeeping burdens; Federal rules which might
duplicate, overlap, or conflict with the rule; and alternative
compliance strategies and approaches that would help to minimize any
significant economic impact on small entities.

Dated: April 24, 1998.
Carol M. Browner,
Administrator.
[FR Doc. 98-11475 Filed 4-29-98; 8:45 am]
BILLING CODE 6560-50-P

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Document Information

Published:: 04/30/1998
Department:: Environmental Protection Agency
Entry Type:: Proposed Rule
Action:: Advance notice of proposed rulemaking.
Document Number:: 98-11475
Dates:: The EPA is establishing an informal 30-day comment period for today's advance notice of proposed rulemaking (ANPR), ending on June 1,
Pages:: 24058-24077 (20 pages)
Docket Numbers:: FRL-6006-1
RINs:: 2060-AH88: Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport
RIN Links:: https://www.federalregister.gov/regulations/2060-AH88/findings-of-significant-contribution-and-rulemaking-on-section-126-petitions-for-purposes-of-reducin
PDF File:: 98-11475.pdf
Supporting Documents:: » Legacy Index for Docket A-97-43 (Part II); » Legacy Index for Docket A-97-43 (Part I); » Docket A 97-43, IV-D-56: This document has been removed due to an indexing error; » Docket A 97-43, IV-D-35: This document has been moved to II-A-10 due to an indexing error; » Notes from March 25 meeting of Workgroup on Updating Allowance Allocation; » Findings of Significant Contribution and Rulemakings on Section 126 Petitions and Federal Implementation Plans for Purposes of Reducing Interstate Ozone Transport; » Letter to Art Fraas, OMB/OIRA and Steve Polasky, CEA, from Scott Mathias, OAQPS/AQSSD/USEPA, re: USEPA revisions; » Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport; » Letter to The Honorable Carol Browner, Administrator, USEPA, from John P. Cahill, Commissioner, State of New York, Department of Environmental Conservation, re: New York's (York) petition pursuant to Section 126 of the Federal Clean Air Act; » Fax transmission to Art Fraas, from Carla Oldham, USEPA Office of Air Quality Planning and Standards, Ozone Policy and Strategies Group, re: changes to the section 126 Advance Notice of Proposed Rulemaking (ANPR)
CFR: (1): 40 CFR 52