E9-19805. Approval of Implementation Plans of Michigan: Clean Air Interstate Rule

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Direct final rule.

SUMMARY:

EPA is approving revisions to the Michigan State Implementation Plan (SIP) submitted on July 16, 2007, and on June 10, 2009. Together, the revisions address the requirements for an abbreviated Clean Air Interstate Rule (CAIR) SIP. EPA is also providing notice that the December 20, 2007, conditional approval of the July 16, 2007, submittal automatically converted to a disapproval.

DATES:

This direct final rule will be effective October 19, 2009, unless EPA receives adverse comments by September 17, 2009. If adverse comments are received, EPA will publish a timely withdrawal of the direct final rule in the Federal Register informing the public that the rule will not take effect.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-R05-OAR-2009-0294, by one of the following methods:

1. http://www.regulations.gov: Follow the online instructions for submitting comments.

2. E-mail: [e-mail].

3. Fax: [phone].

4. Mail: John M. Mooney, Chief, Criteria Pollutant Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604.

5. Hand Delivery: John M. Mooney, Chief, Criteria Pollutant Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. Deliveries are only accepted during the regional office normal hours of operation, and special arrangements should be made for deliveries of boxed information. The regional office official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding Federal holidays.

Instructions: Direct your comments to Docket ID No. EPA-R05-OAR-2009-0294. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI or otherwise protected. The http://www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through http://www.regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters and any form of encryption and should be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at http://www.epa.gov/​epahome/​dockets.htm.

Docket: All documents in the electronic docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in http://www.regulations.gov or in hard copy at the U.S. Environmental Protection Agency, Region 5, Air and Radiation Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. This facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. We recommend that you telephone Douglas Aburano, Environmental Engineer, at [phone], before visiting the Region 5 office.

FOR FURTHER INFORMATION CONTACT:

Douglas Aburano, Environmental Engineer, Criteria Pollutant Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, [phone], [e-mail].

SUPPLEMENTARY INFORMATION:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

Table of Contents

I. What Action Is EPA Taking?

II. What Is the Regulatory History of CAIR and the CAIR Federal Implementation Plans (FIPs)?

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

IV. What Are the Types of CAIR SIP Submittals?

V. Analysis of Michigan's CAIR SIP Submittal

VI. Disapproval Notice and Approval Action

VII. Statutory and Executive Order Reviews

I. What Action Is EPA Taking?

EPA is approving two revisions to Michigan's abbreviated CAIR SIP and at the same time is providing notice that one of those revisions, which EPA had conditionally approved, converted to a disapproval on December 20, 2008. The revision that was automatically disapproved does not fulfill the CAIR requirements on its own but does when considered in conjunction with the second revision.

On July 16, 2007, Michigan submitted a SIP revision to address the CAIR requirements. EPA conditionally approved the SIP submittal because the majority of Michigan's SIP submittal was approvable but there were several minor deficiencies that needed to be corrected. After the Michigan Department of Environmental Quality (MDEQ) failed to address all the issues in EPA's December 20, 2007, conditional approval of the submittal, the conditional approval lapsed to disapproval on December 20, 2008. Today's action provides notice of the disapproval. On April 13, 2009, MDEQ submitted a proposed SIP revision to address the deficiencies in the July 16, 2007, submittal. MDEQ requested that EPA process the April 13, 2009, submittal while the State completed the State rule adoption process. Additionally, in a letter dated May 7, 2009, MDEQ requested that “EPA reconsider the conditional approval given to the original SIP submitted in July 2007.” MDEQ completed the State adoption process for the rules submitted to EPA on April 13, 2009, and submitted the adopted rules as a complete SIP revision on June 10, 2009, in place of the April 13, 2009, submittal. Since the conditional approval automatically converted to a disapproval on December 20, 2008, EPA cannot “reconsider the conditional approval” as requested by MDEQ. However, it is clear from the aforementioned correspondence with the State, as well as correspondence accompanying the June 10, 2009, submittal, that the State intends that EPA should act on the July 16, 2007, submittal in conjunction with the June 10, 2009, SIP revision request.

The combination of these two submittals fulfills the CAIR requirements for abbreviated SIPs. The July 16, 2007, submittal generally meets the CAIR requirements, and the June 10, 2009, submittal corrects certain deficiencies EPA found with the July 16, 2007, submittal. The automatic disapproval of the July 16, 2007, submittal is inconsequential because, as explained above, we are approving both the July 16, 2007, and June 10, 2009, submittals.

II. What Is the Regulatory History of CAIR and the CAIR Federal Implementation Plans (FIPs)?

EPA published CAIR on May 12, 2005 (70 FR 25162). In this rule, EPA determined that 28 States and the District of Columbia contribute significantly to nonattainment and interfere with maintenance of the national ambient air quality standards (NAAQS) for fine particles (PM_2.5) and/or 8-hour ozone in downwind States in the eastern part of the country. As a result, EPA required those upwind States to revise their SIPs to include control measures that reduce emissions of sulfur dioxide (SO₂), which is a precursor to PM_2.5 formation, and/or nitrogen oxides (NO_X), which is a precursor to both ozone and PM_2.5 formation. For jurisdictions that contribute significantly to downwind PM_2.5 nonattainment, CAIR sets annual State-wide emission reduction requirements (i.e., budgets) for SO₂ and NO_X. Similarly, for jurisdictions that contribute significantly to 8-hour ozone nonattainment, CAIR sets State-wide emission budgets for NO_X for the ozone season (May 1st to September 30th). Under CAIR, States may implement these reduction requirements by participating in the EPA-administered cap-and-trade programs or by adopting any other control measures.

The CAIR establishes requirements that must be included in SIPs to address the requirements of section 110(a)(2)(D) of the Clean Air Act (CAA) with regard to interstate transport for ozone and PM_2.5. On May 25, 2005, EPA made national findings that the States had failed to submit SIPs meeting the requirements of section 110(a)(2)(D). The SIPs were due in July 2000, three years after the promulgation of the 8-hour ozone and PM_2.5 NAAQS. These findings started a two-year clock for EPA to promulgate a FIP to address the requirements of section 110(a)(2)(D). Under CAA section 110(c)(1), EPA may issue a FIP anytime after such findings are made, and must do so within two years unless EPA has approved a SIP revision correcting the deficiency before the FIP is promulgated.

On April 28, 2006, EPA promulgated FIPs for all States covered by CAIR to ensure that the emissions reductions required by CAIR are achieved on schedule. The CAIR FIPs require electric generating units (EGUs) to participate in the EPA-administered CAIR SO₂, NO_X annual, and NO_X ozone season trading programs, as appropriate. The CAIR FIP trading programs impose essentially the same requirements as, and are integrated with, the respective CAIR SIP trading programs. The integration of the FIP and SIP trading programs means that these trading programs will work together to create a single trading program for each regulated pollutant (SO₂, NO_X annual, and NO_X ozone season) in all States covered by CAIR FIP or SIP trading programs for that pollutant. Further, as provided in a rule published by EPA on November 2, 2007 (72 FR 62338), a State's CAIR FIP is automatically withdrawn when EPA approves a SIP revision as fully meeting the requirements of CAIR. Where only portions of the SIP revision are approved, the corresponding portions of the FIPs are automatically withdrawn and the remaining portions of the FIP stay in place. Finally, the CAIR FIPs also allow States to submit abbreviated SIP revisions that, if approved by EPA, automatically replace or supplement certain CAIR FIP provisions (e.g., the methodology for allocating NO_X allowances to sources in the State), while the CAIR FIP remains in place for all other provisions.

On October 19, 2007, EPA amended CAIR and the CAIR FIPs to clarify the definition of “cogeneration unit” and, thus, the applicability of the CAIR trading program to cogeneration units.

EPA was sued by a number of parties on various aspects of CAIR, and on July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit issued its decision to vacate and remand both CAIR and the associated CAIR FIPs in their entirety. North Carolina v. EPA, 531 F.3d 836 (DC Cir. Jul. 11, 2008). However, in response to EPA's petition for rehearing, the Court issued an order remanding CAIR to EPA without vacating either CAIR or the CAIR FIPs. North Carolina v. EPA, 550 F.3d 1176 (DC Cir. Dec. 23, 2008). The Court thereby left CAIR in place in order to “temporarily preserve the environmental values covered by CAIR” until EPA replaces it with a rule consistent with the Court's opinion. Id. at 1178. The Court directed EPA to “remedy CAIR's flaws” consistent with its July 11, 2008, opinion, but declined to impose a schedule on EPA for completing that action. Id. Therefore, because EPA has not fully approved any CAIR SIP for Michigan, CAIR and the CAIR FIP are currently in effect in Michigan.

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

CAIR, which establishes State-wide emission budgets for SO₂ and NO_X, is to be implemented in two phases. The first phase of NO_X reductions starts in 2009 and continues through 2014, while the first phase of SO₂ reductions starts in 2010 and continues through 2014. The second phase of reductions for both NO_X and SO₂ starts in 2015 and continues thereafter. CAIR requires State s to implement the budgets by either: (1) Requiring EGUs to participate in the EPA-administered cap-and-trade programs; or (2) adopting other control measures of the State's choosing and demonstrating that such control measures will result in compliance with the applicable State SO₂ and NO_X budgets.

The May 12, 2005, and April 28, 2006, CAIR rules provide model rules that State s must adopt (with certain limited changes, if desired) if they want to participate in the EPA-administered trading programs.

With two exceptions, only State s that choose to meet the requirements of CAIR through methods that exclusively regulate EGUs are allowed to participate in the EPA-administered trading programs. One exception is for State s that adopt the opt-in provisions of the model rules to allow non-EGUs individually to opt into the EPA-administered trading programs. The other exception is for State s that include all non-EGUs from their NO_X SIP Call trading programs into their CAIR NO_X ozone season trading programs.

IV. What Are the Types of CAIR SIP Submittals?

States have the flexibility to choose the type of control measures they will use to meet the requirements of CAIR. EPA anticipates that most State s will choose to meet the CAIR requirements by selecting an option that requires EGUs to participate in the EPA-administered CAIR cap-and-trade programs. For such State s, EPA has provided two approaches for submitting and obtaining approval for CAIR SIP revisions. States may submit full SIP revisions that adopt the model CAIR cap-and-trade rules. If approved, these SIP revisions will fully replace the CAIR FIPs. Alternatively, States may submit abbreviated SIP revisions. These SIP revisions will not replace the CAIR FIPs; however, the CAIR FIPs provide that, when approved, the provisions in these abbreviated SIP revisions will be used instead of, or, if appropriate, in conjunction with the corresponding provisions of the CAIR FIPs (e.g., the NO_X allowance allocation methodology).

Michigan has submitted its CAIR SIP submittals as an abbreviated CAIR SIP.

V. Analysis of Michigan's CAIR SIP Submittals

A. History of the July 16, 2007, Submittal

EPA conditionally approved Michigan's July 16, 2007, submittal on December 20, 2007 (72 FR 72256). Due to the uncertainty created by the Court's decisions to vacate and then remand CAIR, Michigan was unable to complete the rulemaking process and address the requirements of EPA's conditional approval by the December 20, 2008, deadline, and the conditional approval automatically converted to a disapproval on that date. Therefore, we are providing the required notice that the July 16, 2007, submittal automatically converted to a disapproval without further action by EPA because the December 20, 2008, deadline passed. As provided in the conditional approval, we are publishing a notice informing the public of the disapproval. On April 13, 2009, MDEQ submitted a SIP revision addressing the issues from the December 20, 2007, conditional approval. However, because of the disapproval of the July 16, 2007, submittal, in a letter dated May 7, 2009, Michigan requested that EPA consider the July 16, 2007, submittal and the April 13, 2009, submittal together as fully meeting the CAIR requirements. At the time Michigan submitted the April 13, 2009 SIP revision request, the rule revisions were not completely adopted by the State; therefore, MDEQ requested that EPA parallel process the submittal. On June 10, 2009, MDEQ submitted fully adopted rules for approval.

B. Analysis of the July 16, 2007, and June 10, 2009, Submittals

The rationale for now approving Michigan's July 16, 2007, submittal is the same as when we originally conditionally approved it. (Please see the original proposal and final notices for the analysis of that submittal, 72 FR 52038 and 72 FR 72256, respectively.)

EPA identified several minor deficiencies in Michigan's July 16, 2007, rules. In the June 10, 2009, submittal, MDEQ corrects the deficiencies identified by EPA, corrects other typographical errors, and clarifies portions of the rule. These minor deficiencies and the manner in which MDEQ corrected each deficiency are as follows:

1. In the December 20, 2007, conditional approval, EPA stated “in rule 803(3), Michigan needs to add a definition for `commence operation.' This definition, and the revised definition of `commence commercial operation,' are necessary to take account of NO_X SIP Call units brought into the CAIR NO_X ozone season trading program that do not generate electricity for sale and to ensure that they have appropriate deadlines for certification of monitoring systems under 40 CFR Part 97.”

Correction: MDEQ has added the definition of “commence operation” and has also revised the definition of “commence commercial operation.” Both definitions now adopt by reference the definitions found in 40 CFR 97.102 and 40 CFR 97.302. Adopting these definitions ensures consistency with EPA definitions and addresses the deficiency.

2. In the December 20, 2007, conditional approval, EPA stated “in rule 803(3)(c), Michigan needs to revise the definition for `commence commercial operation,' as described in Condition 1, above.”

Correction: Corrected as described above for deficiency 1.

3. In the December 20, 2007, conditional approval, EPA stated “in rule 803(3)(d)(ii), Michigan needs to revise the definition of `electric generating unit' or `EGU.' EPA interprets Michigan's current rule 803 as properly including in the CAIR NOx ozone season trading program all EGUs in Michigan that were subject to the NOx SIP Call trading program. Michigan must revise the rule to clarify that all EGUs in Michigan that were subject to the NOx SIP Call trading program are included in the CAIR NOx ozone season trading program.”

Correction: MDEQ has added language to clarify that all EGUs in Michigan that were subject to the NOx SIP Call trading program are included in the CAIR NOx ozone season trading program.

4. In the December 20, 2007, conditional approval, EPA stated, “in rule 823(5)(c), Michigan needs to reference `subrule (1)(a), (b), (c), and (d)' of the rule. While EPA interprets Michigan's current rule as limiting the new unit set-aside allocations to the amount of allowances in the set-aside, Michigan must revise this provision to clarify the mechanism for implementing this limitation on such allocations.”

Correction: MDEQ has changed this provision to correctly reference subrule (1)(a), (b), (c) and (d) of the rule.

MDEQ has made other changes that correct terminology and typographical errors. MDEQ has also clarified language in parts of the rule and in the submittal letter. These changes are in addition to the changes required by EPA for approval but they do not significantly alter the rule and are, therefore, also being approved.

VI. Disapproval Notice and Approval Action

EPA is providing notice that Michigan's July 16, 2007, abbreviated CAIR SIP submittal was automatically disapproved because MDEQ did not meet the December 20, 2008, deadline to correct certain deficiencies. This disapproval is inconsequential because EPA is approving both the July 16, 2007 and the June 10, 2009, submittals, in combination, as meeting the CAIR requirements. The June 10, 2009, submittal makes the required changes to Michigan's CAIR SIP and also makes additional minor changes to Michigan's CAIR rule that correct typographical errors and that clarify Michigan's CAIR rule.

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the State plan if relevant adverse written comments are filed. This rule will be effective October 19, 2009 without further notice unless we receive relevant adverse written comments by September 17, 2009. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. The EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. If we do not receive any comments, this action will be effective October 19, 2009.

VII. Statutory and Executive Order Reviews

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and, therefore, is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves State law as meeting Federal requirements and would impose no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this rule would not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601, et seq.). Because this action approves pre-existing requirements under State law and would not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have Tribal implications because it would not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a State rule implementing a Federal standard and to amend the appropriate appendices in the CAIR FIP trading rules to note that approval. It does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it would approve a State rule implementing a Federal standard.

In reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272, note) do not apply. This rule would not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Electric utilities
• Incorporated by reference
• Intergovernmental relations
• Nitrogen oxides
• Ozone
• Particulate matter
• Reporting and recordkeeping requirements
• Sulfur dioxide

Dated: August 4, 2009.

Bharat Mathur,

Acting Regional Administrator, Region 5.

40 CFR part 52 is amended as follows:

PART 52—[AMENDED]

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

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

Subpart X—Michigan

2. In § 52.1170, the table in paragraph (c) entitled “EPA—Approved Michigan Regulations” is amended by revising entries in Part 8 “R 336.1802a”, “R 336.1803”, “R 336.1821 through R 336.1826”, and “R 336.1830 through 336.1834” and adding entry “R 336.1801” in Part 8 to read as follows:

§ 52.1170

Identification of plan.

* * * * *

(c) * * *

EPA-Approved Michigan Regulations

Michigan citation	Title	State effective date	EPA approval date	Comments
*         *         *         *         *         *         *
Part 8. Emission Limitations and Prohibitions—Oxides of Nitrogen
R 336.1801	Emission of oxides of nitrogen from non-sip call stationary sources	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1802a	Adoption by reference	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1803	Definitions	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1821	CAIR NOX ozone and annual trading programs; applicability determinations	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1822	CAIR NOX ozone season trading program; allowance allocations	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1823	New EGUs, new non-EGUs, and newly affected EGUs under CAIR NOX ozone season trading program; allowance allocations	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1824	CAIR NOX ozone season trading program; hardship set-aside	6/25/07	8/18/09, [Insert page number where the document begins]
R 336.1825	CAIR NOX ozone season trading program; renewable set-aside	6/25/07	8/18/09, [Insert page number where the document begins]
R 336.1826	CAIR NOX ozone season trading program; opt-in provisions	6/25/07	8/18/09, [Insert page number where the document begins]
R 336.1830	CAIR NOX annual trading program; allowance allocations	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1831	New EGUs under CAIR NOX annual trading program; allowance allocations	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1832	CAIR NOX annual trading program; hardship set-aside	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1833	CAIR NOX annual trading program; compliance supplement pool	5/28/09	8/18/09, [Insert page number where the document begins]
R 336.1834	Opt-in provisions under the CAIR NOX annual trading program	6/25/07	8/18/09, [Insert page number where the document begins]
*         *         *         *         *         *         *

* * * * *