06-3028. Revisions to the California State Implementation Plan

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing to approve a revision to the existing Priority Reserve rule, Rule 1309.1, into the South Coast Air Quality Management District (District) portion of the California State Implementation Plan (SIP). Rule 1309.1 was approved into the SIP in 1996 to allow the District to provide emission reduction credits (ERCs) for specific priority sources, such as sources using innovative technology, conducting research operations or providing essential public services. The revision to Rule 1309.1 that we are proposing to approve merely adds specific types of electrical generating facilities to the list of sources entitled to use ERCs from the Priority Reserve. We are proposing to approve the revision to Rule 1309.1 and taking comment on the revision that adds specific types of electrical generating facilities to the sources eligible for ERCs from the Priority Reserve. We plan to follow this proposal with a final action.

DATES:

Any comments must arrive by April 28, 2006.

ADDRESSES:

Submit comments, identified by docket number EPA-R09-OAR-2006-0281, by one of the following methods: Federal eRulemaking Portal: www.regulations.gov. Follow the on-line instructions.

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

2. Mail or deliver: Gerardo Rios (Air-3), U.S. Environmental Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901.

Instructions: All comments will be included in the public docket without change and may be made available online at www.regulations.gov,, including any personal information provided, unless the comment includes Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Information that you consider CBI or otherwise protected should be clearly identified as such and should not be submitted through www.regulations.gov or e-mail. www.regulations.gov is an “anonymous access” system, and EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send e-mail directly to EPA, your e-mail address will be automatically captured and included as part of the public comment. 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.

Docket: The index to the docket for this action is available electronically at www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location (e.g., copyrighted material), and some may not be publicly available in either location (e.g., CBI). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT:

Laura Yannayon, EPA Region IX, [phone], [e-mail].

SUPPLEMENTARY INFORMATION:

Throughout this document, “we,” “us” and “our” refer to EPA.

Table of Contents

I. The State's Submittal

A. What rule did the State submit?

B. Are there other versions of this rule?

C. What is the purpose of the submitted rule revision?

II. EPA's Evaluation and Action

A. How is EPA evaluating the rule?

B. Do the rules meet the evaluation criteria?

C. EPA Recommendations To Further Improve the Rule

D. Public Comment and Final Action

III. Statutory and Executive Order Reviews

I. The State's Submittal

A. What rule did the State submit?

Table 1 lists the rule addressed by this proposal with the date it was adopted by District and submitted by the California Air Resources Board (CARB).

Table 1.—Submitted Rules

Local agency	Rule #	Rule title	Adopted	Submitted
SCAQMD	1309.1	Priority Reserve	05/03/02	12/23/02

On December 30, 2002, the rule submittal was found to meet the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review.

B. Are there other versions of this rule?

We approved the Priority Reserve rule, Rule 1309.1, into the SIP on December 4, 1996. 61 FR 64291 (December 4, 1996). The District adopted revisions to the SIP-approved version of Rule 1309.1 on April 20, 2001, November 9, 2001 and May 5, 2002 and CARB submitted those revisions to us on October 30, 2001, January 22, 2002 and December 23, 2002, respectively. While we can act on only the most recently submitted version of the rule, we have reviewed materials provided with previous submittals.

C. What is the purpose of the submitted rule revision?

The only purpose of revising Rule 1309.1 is to include specific types of electrical generating facilities (EGFs) to become eligible to use ERCs in accordance with the previously approved Priority Reserve rule. The revision adds section 1309.1(1)(4) to the list of priority sources allowed to use ERCs established by the District.

The revision to Rule 1309.1 requires qualified EGFs to meet the specific requirements prior to receiving access to ERCs held by the District as priority reserve offsets. Such sources must: Apply BARCT control to all sources at the facility for the pollutants for which ERC's are obtained from the priority reserve within 3 years of permit issuance; pay a non-refundable mitigation fee to the District for each pound of carbon monoxide (CO), sulfur dioxide (SO₂), and particulate matter (PM₁₀) obtained from the priority reserve; submit a complete application during the specified time period; conduct a due diligence effort to secure available ERCs from other sources; operate the source at full capacity within 3 years; and enter into a long-term contract with the state of California to sell at least 50% of the power generated by the use of Priority Reserve credits. EPA's technical support document (TSD) has more information about this rule.

II. EPA's Evaluation and Action

A. How is EPA evaluating the rule?

Our analysis of Rule 1309.1 in 1996 occurred during approval of a package of rules submitted to meet the CAA air quality planning requirements for nonattainment NSR as set out in part D of Title I of the Act, with implementing regulations at 40 CFR 51.160 through 51.165. 61 FR 64291 (December 4, 1996) The revised version of Rule 1309.1 being evaluated in this action is a minor change that does not change fundamental approvability of Rule 1309.1. The revisions to Rule 1309.1 merely establish an additional source category, EGFs, as eligible to receive ERCs from the priority reserve provided certain criteria are met. The revisions also add some administrative provisions that EGFs must meet to obtain ERCs from the Districts Priority Reserve.

B. Do the rules meet the evaluation criteria?

We believe that the revision to Rule 1309.1 to allow EGFs to qualify for ERCs from the Priority Reserve is consistent with the Act, EPA regulations and EPA policy.

C. EPA Recommendations To Further Improve the Rule

The TSD describes additional rule revisions that do not affect EPA's current action but are recommended for the next time the District modifies Rule 1309.1.

D. Public Comment and Final Action

Because EPA believes revision to the existing Priority Reserve rule, Rule 1309.1, fulfills all relevant requirements, we are proposing to fully approve it as described in section 110(k)(3) of the Act. We will accept comments from the public on this proposal, specifically the proposal to allow the District to add EGFs to the priority sources for receiving ERCs from the Priority Reserve, for the next 30 days. Unless we receive convincing new information during the comment period, we intend to publish a final approval action that will incorporate revised Rule 1309.1 into the federally enforceable SIP.

III. Statutory and Executive Order Reviews

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed 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 proposed action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This proposed rule also does not have tribal implications because it will 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 does 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 proposes to approve a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This proposed 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 is not economically significant.

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

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Intergovernmental relations
• Ozone
• Reporting and recordkeeping requirements
• Volatile organic compound

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

Dated: March 17, 2006.

Laura Yoshii,

Acting Regional Administrator, Region IX.