[Federal Register Volume 63, Number 187 (Monday, September 28, 1998)]
[Rules and Regulations]
[Pages 51706-51766]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25317]
[[Page 51705]]
_______________________________________________________________________
Part IV
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 73
Acid Rain Program: 1998 Reallocation of Allowances; Final Rule
Federal Register / Vol. 63, No. 187 / Monday, September 28, 1998 /
Rules and Regulations
[[Page 51706]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 73
[FRL -6164-1]
RIN 2060-AG86
Acid Rain Program: 1998 Reallocation of Allowances
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: Title IV of the Clean Air Act, as amended by the Clean Air Act
Amendments of 1990, (``the Act'') authorizes the Environmental
Protection Agency (``EPA'' or ``Agency'') to establish the Acid Rain
Program. The purpose of the Acid Rain Program is to reduce
significantly emissions of sulfur dioxide and nitrogen oxides from
electric generating plants in order to reduce the adverse health and
ecological impacts of acidic deposition (or acid rain) resulting from
such emissions. On March 23, 1993, the Agency promulgated a final rule
(``1993 rule'') allocating allowances to utility units. That rule
provided the methodology for revising the allocation of allowances for
utility units in 1998, as required by Title IV. On December 27, 1996,
the Agency proposed changes (``1996 proposal'') to unadjusted
allowances for certain units. These changes were proposed to respond to
litigation over the Agency's interpretation of section 405(c) of the
Act, to correct documented Agency errors in making the allocations, and
to incorporate more recent information on whether or not certain new
units met requirements pertaining to their construction or commencement
of commercial operation. On January 7, 1998, the Agency proposed
(``1998 proposal'') to revise allowance allocations using the
methodology in the 1993 rule. Today's rule implements the revision
methodology in the 1993 rule, based on the 1998 proposal, and
incorporates final changes to unadjusted allowances based on the 1996
proposal.
DATES: This rule is effective October 28, 1998.
ADDRESSES: Docket. Docket No. A-97-24, containing supporting
information used to develop the rule is available for public inspection
and copying from 8:00 a.m. to 5:30 p.m., Monday through Friday,
excluding legal holidays, at EPA's Air Docket Section (6102), Waterside
Mall, Room M1500, 1st Floor, 401 M Street S.W., Washington, D.C. 20460.
Information on the allowance revisions in the 1996 proposal, which are
reflected in this rule, is in Docket No. A-95-56. A reasonable fee may
be charged for copying.
FOR FURTHER INFORMATION CONTACT: Kathy Barylski at (202) 564-9074 or
Dwight Alpern at (202) 564-9151, Acid Rain Division (6204J), U.S.
Environmental Protection Agency, 401 M Street S.W., Washington, D.C.
20460; or the Acid Rain Hotline at (202) 564-9620. Electronic copies of
this rulemaking and technical support documents can be accessed through
the Acid Rain Division website at www.epa.gov/acidrain. These documents
are also available in the Docket listed above.
SUPPLEMENTARY INFORMATION:
Judicial Review
Under section 307(b)(1) of the Act, judicial review of this rule is
available only by filing a petition for review in the U.S. Court of
Appeals for the District of Columbia Circuit within 60 days of today's
publication of these final rule revisions. Under section 307(b)(2) of
the Act, the requirements that are the subject of today's document may
not be challenged in civil or criminal proceedings brought by the EPA
to enforce these requirements.
I. Affected Entities
II. Background
III. Part 73: Allowances
A. Method for Revision
B. Units under Section 405(i)(2)
C. Surrender of Allowances and Return and Distribution of Allowance
Auction Proceeds
D. Revision of the Repowering Reserve
E. Treatment of Allocations to Certain Units under Table B
F. Revised Tables
G. Miscellaneous
IV. National Allowance Data Base
V. Administrative Requirements
A. Executive Order 12866
B. Unfunded Mandates Act, Executive Orders 12875 and 13084
C. Paperwork Reduction Act
D. Regulatory Flexibility
E. Children's Health Protection
F. National Technology Transfer and Advancement Act
G. Submission to Congress and the General Accounting Office
I. Affected Entities
Entities potentially regulated by this action are fossil-fuel fired
boilers or turbines that serve generators producing electricity for
sale. Regulated categories and entities include:
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Examples of regulated
Category entities
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Industry.................................. Electric service
providers.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your facility is regulated by this action, you should carefully examine
the applicability criteria in Sec. 72.6 and the exemptions in
Secs. 72.7, 72.8 and 72.14 of title 40 of the Code of Federal
Regulations. If you have questions regarding the applicability of this
action to a particular entity, consult the persons listed in the
preceding FOR FURTHER INFORMATION CONTACT section.
II. Background
The overall goal of the Acid Rain Program is to achieve significant
environmental benefits through reductions in emissions of sulfur
dioxide (SO2) and nitrogen oxides (NOX), the
primary precursors of acid rain. To achieve this goal at the lowest
cost to society, the program employs both traditional and innovative,
market-based approaches for controlling air pollution. In addition, the
program encourages energy efficiency and promotes pollution prevention.
Title IV of the Clean Air Act sets as a primary goal the reduction
of annual SO2 emissions by 10 million tons below 1980
levels. To achieve these SO2 emissions reductions, the law
requires a two-phase tightening of restrictions placed on fossil fuel-
fired power plants. Phase I began in 1995 and affected 110 mostly coal-
burning electric utility plants located in 21 eastern and midwestern
states. Phase II, beginning in 2000, tightens the annual emissions
limits imposed on the large, higher emitting plants regulated in Phase
I and also sets restrictions on other smaller or cleaner plants fired
by coal, oil, or gas. Title IV also requires certain coal-fired units
to reduce their emissions of NOX to a level achievable
through installation of applicable NOX reduction technology.
(See 40 CFR part 76.)
The centerpiece of the Acid Rain Program is a unique trading system
in which allowances (each authorizing the emission of up to one ton of
SO2) may be bought and sold at prices determined by the free
market. Most existing utility units are allocated allowances based on
formulas specified in the Act. Affected
[[Page 51707]]
utility units are required to limit SO2 emissions to the
number of allowances they hold, but because allowances are
transferrable, utilities may meet their emissions control requirements
in the most cost-effective manner.
This rule concerns the allocation of allowances for Phase II of the
program. Phase II allowances were allocated by the 1993 rule (58 FR
15634, March 23, 1993). However, section 403(a)(1) of the Act requires
EPA to publish a revised statement of allowance allocations no later
than June 1, 1998. That revision must account for units eligible for
allowances under section 405(g)(4) (units commencing operation from
1992 through 1995), section 405(i)(2) (units that reduce their
emissions rates), and section 409 (units with approved repowering
extensions). The 1993 rule established the methodology for the 1998
revision of allowance allocations, which is codified at 40 CFR
Sec. 73.11. This rulemaking implements the revision methodology.
III. Part 73: Allowances
A. Method for Revision
In order to facilitate consideration of the many issues, EPA has
chosen to prepare the 1998 revision of allowance allocations in a
staged approach. The 1996 proposal (61 FR 68349) was the first stage
and included deletion of certain unaffected units from Table 2 of
Sec. 73.10, changes in unadjusted allowances of certain units, and
deletion of units from and addition of units to Table 3 of Sec. 73.10.
The comment period ran from December 27, 1996 through February 10,
1997. The issues raised in the 1996 proposal are discussed primarily in
this subsection and subsections B and C below, regarding units under
section 405(i)(2) of the Act and surrender of allowances and return and
distribution of allowance auction proceeds.
The second stage was the 1998 proposal (63 FR 0714). EPA proposed
to follow the 1993 reallocation methodology set forth in the existing
Secs. 73.11 and 73.12 and apply it to the data in NADB version 2.2,
which is discussed below. The technical support document explaining in
detail the application of the 1998 reallocation methodology is included
in the docket. Docket Item A-97-24 IV-A-02, Technical Documentation for
the 1998 Reallocation of Allowances (hereinafter, ``Technical
Documentation''). The comment period ran from January 7, 1998 through
March 9, 1998. The issues raised in the 1998 proposal are discussed in
subsections B, C, D, and E below, regarding units under section
405(i)(2) of the Act, surrender of allowances and return and
distribution of allowance auction proceeds, the repowering reserve, and
units listed under Table B of section 405(g)(2) of the Act. Also, as
discussed below, the regulatory tables allocating allowances are
consolidated into a single, simplified table.
Changes proposed in the first stage (the 1996 proposal) and the
second stage (the 1998 proposal) (including the revised allowance
allocations resulting from the application of the 1993 reallocation
methodology) are finalized in today's action as one final rule, the
last stage of the 1998 reallocations. In the 1996 proposal, EPA
proposed to revise unadjusted allowances for certain units, to include
certain units on the original allocation tables, and to delete some
units from the original tables. See 61 FR 68340, 68355-362. The 1996
proposal included rule language that would implement these allowance-
related revisions by amending specific entries in the original
allowance tables (Tables 2 and 3 of Sec. 73.10). These proposed
revisions were supported by all commenters that addressed them during
the comment period on the 1996 proposal. The proposal to revise the
number of unadjusted basic allowances for Rodemacher unit 2 was made
final in Sec. 73.10(b)(3) on October 24, 1997. All the other proposed
revisions were left to be addressed in today's final rule. 62 FR 55460,
55471 and 55486, October 24, 1997.
However, unlike the 1996 proposal which would have amended the
original Tables 2 and 3 of Sec. 73.10, the 1998 proposal would
consolidate those tables into one new Table 2 and republish the entire
table. Comments on the 1998 proposal supported consolidation and
republishing Table 2. EPA is herein adopting that approach and is, for
the reasons stated in the 1996 proposal, including in the new table all
the allowance-related revisions proposed in 1996. Consequently, the
proposed rule language from the 1996 proposal amending entries in the
original Tables 2 and 3 is unnecessary and not adopted in today's rule.
Further, because Rodemacher unit 2's revised unadjusted basic
allowances that were finalized on October 24, 1997 are incorporated in
the new Table 2, separate language adopted in the October 1997 rule is
no longer necessary and is removed by today's rule. EPA emphasizes that
Rodemacher unit 2 retains its revised unadjusted basic allowances which
are reflected in the new Table 2 (see the Technical Documentation for
details), rather than through a special provision amending the original
Table 2.
B. Units Under Section 405(i)(2)
A few units may be eligible for a special allocation method based
on eligibility requirements (which include, inter alia, a maximum level
for the unit's actual emission rate) under section 405(i)(2). In the
1993 rule, EPA preliminarily determined that six units may be eligible
and listed those units and resulting allowances in Table 4 of
Sec. 73.10(d). Further, EPA required, in Sec. 73.19, that the actual
1997 emission rate be used to determine eligibility for section
405(i)(2) allowances.
In the 1996 proposal, EPA proposed to modify Sec. 73.19 to use 1996
actual SO2 emissions rate data as reported by the unit's
continuous emissions monitoring system (CEMS) under part 75, rather
than 1997 emissions data collected by the Energy Information
Administration (EIA), to determine whether the units are eligible. In a
comment on the 1996 proposal, the owner of one of the affected plants
requested that the actual emission rate as of January 1, 2000 be used
for determining eligibility and that, if the unit did not qualify, its
additional allowances be rescinded and not reallocated. Because the
comment raised a significant new option, the 1998 proposal reopened the
issue of which calendar year emission rate EPA should use for the
determination of eligibility and whether EPA should reallocate any
unallocated allowances reserved for allocation under section 405(i)(2)
to other utility units after the 1998 rulemaking.
1. Calendar Year Emission Rate
In section 405(i)(2)(B) of the Act, one criterion for eligibility
is that the ``actual emissions rate is less than 1.2 lbs/mmBtu as of
January 1, 2000.'' In the 1992 allowance allocation proposal (57 FR
29940, 29956, July 7, 1992), EPA concluded that the statutory phrase
``as of January 1, 2000'' meant that the calendar year 1999 emission
rate should be used. However, in the 1992 proposal, EPA also discussed
a perceived discrepancy between the use of the 1999 emission rate under
section 405(i)(2)(B) and the mandate under section 403(a)(1) that
allowance allocations be finalized no later than June 1, 1998. In the
1993 rule (58 FR 15710), EPA decided to use calendar year 1997 emission
rates because 1997 would be the latest year of emissions data prior to
the required final allocation in 1998.
In the 1998 proposal, EPA requested comment on three options for
which calendar year of emissions rate data to use: (1) 1997, as in the
1993 rule; (2) 1999, as requested in a comment on the 1996 proposal; or
(3) the first calendar
[[Page 51708]]
year, from 1996 up to 1999, when the unit's emissions are less than the
required 1.2 lb/mmBtu rate. For all options, emissions data would be
that reported using the CEMS under 40 CFR part 75.
Five comments were received on this issue. Two recommended using
calendar year 1997. Three recommended option three above, the first
year from 1996 through 1999 that the emissions rate is less than 1.2
lb/mmBtu. One comment also recommended that the final rule reflect the
understanding that once a unit achieves an emission rate below 1.2 lb/
mmBtu, it will be eligible for section 405(i)(2) allowances and no
further demonstrations of eligibility will need to be made.
EPA believes that the option of using the first calendar year, from
1996 through 1999, is the best option. In contrast to the other
options, this option provides an incentive to units potentially
eligible for allowances under section 405(i)(2) to achieve an emission
rate of less than 1.2 lb/mmBtu as soon as possible while allowing the
full statutory timeframe to achieve such a rate. Further, as discussed
below, Table 2 of Sec. 73.10(b) shows the alternate allowance
allocations for such units if they qualify or if they fail to qualify
for section 405(i)(2) allowances. EPA maintains that this approach
reasonably squares section 405(i)(2) with the requirement that EPA
finalize allowance allocations in 1998. Allowances calculated for units
potentially eligible under section 405(i)(2) will be held in the
Allowance Tracking System and will not be available for use or transfer
until the units are determined to be eligible for the allowances. If a
unit becomes eligible during 1996 through 1999 for such allowances, the
allowances will be made available for use or transfer. EPA review of
annual CEMS data is generally completed by May following the calendar
year of that data. Thus, EPA believes that the allowances could be made
available by June following the year for which the eligible unit first
has an emission rate of less than 1.2 lb/mmBtu. Also, as requested by
the commenter, EPA is clarifying that once the unit achieves an
emission rate of less than 1.2 lb/mmBtu, that unit will not be required
to make further demonstrations of eligibility.
2. Unallocated Allowances
EPA also sought comment regarding whether any unallocated
allowances reserved for allocation under section 405(i)(2) should be
reallocated to other utility units after the 1998 rulemaking. EPA
proposed that any allowances reserved for allocation under section
405(i)(2) that are not actually allocated based on 1996 through 1999
emissions should not be utilized or otherwise reallocated to other
utility units. One commenter believed that this option fulfills the
statutory requirements for finalized allowance allocations in 1998 and
for using emissions data as of January 1, 2000. Also, the commenter
pointed out that section 403(a)(1) does not require EPA to allocate
exactly 8.9 million basic allowances, but no more than 8.9 million
allowances. As the commenter emphasized, the allocation under section
405(i)(2) is no more than 5000 allowances, or only 0.05 percent of the
unadjusted basic allowances. In the 1998 proposal, EPA noted that the
administrative burden of reallocating the allowances would be
considerable, due to the need to develop allowance software and to
recalculate all basic allowances and refinalize Table 2 of
Sec. 73.10(b).
A number of other comments were received in this issue. One
commenter agreed that reallocation was overly burdensome and not
mandated in the statute. Another considered reallocation to be
compelled by law but suggested that selling any remaining allowances at
the annual auction (and distributing the proceeds on a pro rata basis
to the utility units) would be sufficient. Another commenter
recommended allocating any remaining allowances to affected
``industrial units'' that have not received allowance
allocations.1
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\1\ This comment is also addressed in section IV of this
preamble.
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EPA has further analyzed section 405(i)(2) and determined that
there will, in fact, be no unallocated allowances under section
405(i)(2). Thus, the question of whether or how to reallocate them is
moot. Section 405(i)(2) limits the number of allowances available under
the section to 5000. The only situation in which there could be
unallocated allowances under section 405(i)(2) would be if the total
number of allowances for which all units eligible under section
405(i)(2) qualified was less than 5000. Two units (Anclote 1 and 2) are
eligible for section 405(i)(2) allowances, based on 1997 CEMS data, and
would qualify for more than 5000 allowances if there were no limit on
section 405(i)(2) allowances.2 See Docket Item A-97-24 IV-C-
01 (letter explaining basis for concluding that Anclote 1 and 2 qualify
for section 405(i)(2) allowances). Thus, even if no other units qualify
for section 405(i)(2) allowances, all 5000 section 405(i)(2) allowances
will still be allocated and there will be no allowances remaining to
reallocate or auction.
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\2\ Anclote 1 would qualify for 4038 allowances under section
405(i)(2), and Anclote 2 would qualify for 4400 allowances, if
allowances under section 405(i)(2) were not limited to 5000. In
addition to the allowances for Anclote 1 and 2, Detroit Edison's
Monroe 1 would be eligible for 571 allowances, Monroe 2 for 1423,
Monroe 3 for 1280, and Monroe 4 for 2676.
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3. Allocations in Table 2
The allowance allocations for all six potentially eligible units in
Table 2 will reflect section 405(i)(2) allowances calculated on the
assumption that all six units will in fact be eligible for section
405(i)(2) allowances. Each unit is allocated its proportionate share of
the available section 405(i)(2) allowances. Anclote units 1 and 2 have
already been determined to be eligible for allowances under section
405(i)(2). As noted above, until units are determined to be eligible
for allowance allocations under section 405(i)(2), their additional
allowances from this section will be held in the Allowance Tracking
System and will not be available for transfer. If the Monroe units are
not eligible for section 405(i)(2) allowances as of January 1, 2000,
additional 405(i)(2) allowances will be available to Anclote and are
shown in footnote 4 of Table 2. Monroe's allowance allocations without
additional allowances from section 405(i)(2) are also shown in footnote
4 of Table 2.
Footnote 4 of Table 2 of Sec. 73.10 of the 1998 proposal did not
properly reflect the effect of ineligibility by some but not all six
units. The methodology used by EPA to calculate the allowances
(provided in Appendix C of the Technical Documentation) correctly
reflects the effect of ineligibility of units. In today's final rule,
EPA is correcting footnote 4 of Table 2 to be consistent with this
methodology.
C. Surrender of Allowances and Return and Distribution of Allowance
Auction Proceeds
As required under section 416 of the Act and subpart E of part 73,
EPA has facilitated the auction of allowances since 1993. Phase I and
Phase II allowances are deducted as shown in Tables 1 and 2 of 40 CFR
73.10. Phase II deductions are calculated as a fixed percentage of each
unit's unadjusted basic allowances, so the total number of allowances
reserved equals 250,000. Each unit's designated representative then
receives a portion of the proceeds from the auction based on the number
of allowances deducted.
The 1996 proposal changed the unadjusted basic allowances for a few
units, deleted many units from Tables 2 and 3 of Sec. 73.10, and added
a few units
[[Page 51709]]
to the Tables. The 1996 proposal stated that the designated
representative of each unit to be deleted that has received an
allowance allocation must surrender the allowances to the Agency and
must return any proceeds received from the auction. The 1996 proposal
also provided that the Agency would, in a future action, explain how
the returned proceeds would be redistributed. No comments were received
on the issues of the allowance surrender and return and redistribution
of proceeds in the 1996 proposal.
The 1998 proposal clarified how proceeds from the auction would be
distributed. In the 1998 proposal, the Agency considered the following
objectives: minimization of the number of allowances and proceeds to be
surrendered; minimization of any disruption to the Allowance Tracking
System; and fair distribution of proceeds. The Agency recognized that
five auctions had already taken place and proceeds had been distributed
and that providing a complete redistribution of proceeds based on the
1996 proposal would be extremely burdensome to the Agency while
providing a minimal benefit to any unit. Therefore, the Agency rejected
the option of a complete redistribution of auction proceeds. However,
the Agency found that providing no redistribution would be unfair for
the few affected units that had their unadjusted basic allowance
allocation changed or were found for the first time to be eligible to
receive allocations, in the 1996 proposal.3 Moreover, EPA
explained that, as provided in the 1996 proposal, all units deleted
from the tables of affected units must surrender any allowances and
return any proceeds received. Very few of the units deleted had
designated representatives and so were not able to transfer any
allowances or receive any proceeds.
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\3\ A total of 17 units are in this category, as explained in
the 1996 proposal. Nine units have changes due to resolution of
litigation. Three units have changes due to data errors by the
Agency. Four units were found to be eligible for allocations. One
unit, Twin Oak 2, as discussed below, is eligible only for
allocations under section 405(g)(2).
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The Agency's 1998 proposal provided, for all auctions completed
before the finalization of this rulemaking (including the 1998 auction)
that: (1) units deleted from Table 2 of Sec. 73.10, and units deleted
from Table 3 and not added to Table 2, would surrender any allowances
allocated and return any proceeds received; (2) affected units that had
changes to their unadjusted basic allowance allocation would receive
proceeds based on the changed allocation; and (3) the proceeds for all
other units would not be changed. To implement this, the 1998 proposal
provided a column in Table 2 listing the number of allowances each unit
has provided for each auction taking place from 1993 through 1998 (with
modifications from the original Tables 2 and 3 for the 17 units listed
in footnote 3 above and for units deleted from Tables 2 or 3).
References in proposed Sec. 73.27 to allowances deducted for auctions
before June 1, 1998 cited this new column. Five comments were received
on this issue in the 1998 proposal. One commenter thought the proposal
was fair. However, another stated that the method results in some
proceeds from auctions from 1993 through 1998 being retained by the
Agency, contrary to law. Two options were posed in comments regarding
how remaining proceeds should be dealt with. One option would be for
the Agency to redistribute those proceeds on a pro rata basis, although
the method for such redistribution need not be as rigorous as a full
redistribution. The other option would allow the Agency to dedicate the
funds for educational and research activities related to emissions
trading. While this second option is innovative, the Agency has decided
not to dedicate the funds to education and research because of the lack
of express Agency authority to use auction proceeds in this way.
EPA continues to believe, for the reasons stated in the 1996
proposal, that the allowance surrender and return of proceeds are
necessary. However, EPA concludes that a simple pro rata redistribution
of the proceeds from the allowances meets the requirements of the Act
and is not overly burdensome. To fairly redistribute all remaining
proceeds, EPA will use values in Column D of new, final Table 2 (1993-
98 Purchase Year Reserve Deduction), which were included in the 1998
proposal, to determine each unit's pro rata share of the remaining
funds. This methodology is set forth in revised Sec. 73.27(b)(4). Each
unit's designated representative will receive one check for all five
years of additional auction proceeds.
Also, as explained in the proposal, existing paragraphs (b)(4) and
(c)(4) of Sec. 73.27 are unnecessary because allowances from calendar
years 2010 and thereafter are not auctioned before 2003. No comments
were received concerning the elimination of the paragraphs, which is
implemented in today's action.
Finally, today's final rule requires in Sec. 73.10(b)(3) the
surrender of allowances and return of proceeds. In order to make clear
which specific units are subject to this requirement, the paragraph
includes a new table of the units, the number of allowances to be
surrendered, and the value of proceeds to be returned. This table
replaces the general provisions in the 1996 proposal (Sec. 73.10(b)(5)
and (c)(3)) which required allowance surrender and return of proceeds
without naming the units.
Today's final rule also requires completion of the allowance
surrender and return of proceeds no later than 60 days after the
effective date of this final rule.
D. Revision of the Repowering Reserve
Finalization of the allowance allocations is also dependent upon a
reasonably accurate calculation of the number of allowances allocated
for units with Phase II repowering extensions under section 409 of the
Act. See 42 U.S.C. 7651 and 40 CFR 72.44. For the 1993 rule, EPA
estimated that a set-aside of up to 500,000 allowances could be needed
for repowering extensions. EPA based this number on an estimate of 10
GW of capacity being repowered. To create the set-aside, EPA withheld
50,000 allowances for each year from 2000 through 2009 from Phase II
units' basic allowance allocations. 58 FR 15642. In the 1998 proposal,
the Agency maintained a set aside of 500,000 allowances for repowering
but stated that it would reduce the set-aside in the final rule to the
amount necessary to implement all activated approved repowering plans.
Today's action, therefore, reduces the reserve to 27,124 allowances.
One commenter pointed out that the 1998 proposal modified the
method of calculating repowering allowances in Sec. 73.21. EPA has
reviewed the provision and agrees that the Agency inadvertently changed
the method of calculating allowances, as opposed to merely correcting a
reference. The 1993 rule (at Sec. 73.21) provided that a unit's
repowering allowances equal the number of allowances calculated under
section 409(c) less the unit's adjusted basic allowances calculated
under Sec. 73.11. The commenter correctly noted that the 1998 proposal,
which modified Sec. 73.21 to remove reference Sec. 73.11 and to refer
instead to proposed Table 2 Column C, had the effect of increasing the
repowering reserve. Proposed Table 2 Column C actually reflects a
different and generally lower value than adjusted basic allowances;
using the lower value in Table 2 Column C increases the calculated
repowering allowances and, thus, increases the repowering reserve.
However, the commenter recommended that a unit's repowering allowances
equal the number of allowances under
[[Page 51710]]
section 409(c) less the unit's unadjusted basic allowances. While this
would result in a smaller repowering reserve, it is not consistent with
the 1993 rule.
As stated in the 1998 proposal, EPA is using the method of
calculation from the 1993 rule. To implement that method in today's
final rule, EPA is including, in place of the reference to Sec. 73.11,
a table listing the units with activated repowering plans and the
estimated maximum number of adjusted basic allowances for which they
qualify. See Technical Documentation, Appendix A.
Of the 16 petitions for repowering that were filed prior to the
1998 proposal, only two plans have been activated, representing 11
units. Using the calculation method from the 1993 rule, the maximum
number of allowances needed for the repowering reserve is 27,124
allowances. See Docket Item A-97-24 IV-B-01 (explaining calculation of
maximum number of repowering allowances). While EPA is estimating the
units' maximum repowering allowances in order to estimate more
accurately the number of allowances to reserve for repowering, these
estimates are not final determinations of the allowances to be
allocated to specific units. The final determinations will be made in
case-by-case proceedings on each repowering extension plan, and the
actual allocations may differ from the estimates. The allowances for
this reserve are provided by deducting one-tenth of the reserve from
unit allowance allocations for each year from 2000 through 2009.
Because this reserve is much smaller than that proposed, most units are
allocated more allowances in today's final Table 2, for years 2000
through 2009 than in the 1998 proposal. Note that, because repowering
allowances have not been allocated, the reserve is set at the maximum
that may be needed to implement the two activated plans. If fewer
repowering allowances are allocated than provided in the reserve, EPA
will use the allowance forfeiture and reallocation provisions at
Sec. 73.21(c) to reallocate any remaining allowances.
Because the reserve is not evenly divisible over the ten years, EPA
has had to consider the best method of setting aside allowances for the
reserve. If EPA were to set aside a smaller number of allowances than
will be needed for the reserve (2712 each year for ten years) and
create four additional allowances to complete the reserve, those four
allowances would be in excess of the 8.9 million cap. As an
alternative, EPA could set aside more allowances annually (2713) and
provide a method whereby the excess six allowances (27130 minus 27124)
would be equitably distributed. EPA believes the second approach better
reflects the intent of title IV. As mentioned above, any allowances
remaining in the repowering reserve will be distributed by the
allowance forfeiture formula in the repowering regulations.
However, as with setting the reserve, using the existing allowance
forfeiture equation at Sec. 73.21(c)(2), if the number of allowances to
be forfeited is not evenly divisible by ten, will result in allowances
remaining after forfeiture. EPA has reviewed the existing rule and has
determined that it is not necessary to spread forfeited allowances
across ten years. To create the repowering reserve, allowances were
taken from ten years' allowance accounts. However, all allowances in
the reserve were renumbered to have a use date of 2000. Therefore, EPA
does not consider it necessary to renumber again any forfeited
allowances for use years other than 2000. This change also makes it
unnecessary to address situations where the number of forfeited
allowances is not divisible by ten.
In addition, EPA has determined that it is necessary to clarify
that the allowances to be reallocated are only those allowances from
the repowering reserve. Under section 405(a)(2) only repowering
allowances for 2000 are set aside (i.e., are put in the reserve) from
unit accounts. Allowances for 2001 through 2003 are above the allowance
cap. Therefore, only allowances forfeited in 2000 will need to be
reallocated to unit accounts.
The repowering allowance forfeiture and reallocation provisions at
Sec. 73.21(c) are revised to reflect these changes.
E. Treatment of Allocations to Certain Units Under Table B
As explained in the 1998 proposal, most units receive Phase II
allowance allocations based on various formulae specified in the Act.
However, eleven units are specified in Table B of section 405(g)(2) to
receive a fixed number of basic allowances. As provided in the 1993
rule, the owner or operator of any of these units would receive the
Table B allowances unless it elected to receive allowances under
another section of the Act for which the unit is eligible. 57 FR 29955.
Only three units (Clover 1 and 2 and Twin Oak 1) elected to receive
allowances under another section (in all three cases, section
405(g)(4)) if they were eligible. Clover 1 and 2 demonstrated
eligibility for allowances under section 405(g)(4) and are provided
their allowance allocations in Table 2. The 1996 proposal stated that
Twin Oak 1 did not commence operation in time to be eligible for
section 405(g)(4) and, so, would receive allowances under section
405(g)(2). As provided in the 1993 rule, all other units listed in
Table B of section 405(g)(2) would receive allowances listed in Table B
as unadjusted basic allowances. No comments were received concerning
section 405(g)(2), and for the reasons stated in the proposal, these
units are allocated allowances as proposed, except for adjustments to
reflect the reduced repowering reserve, discussed in section III.D. of
this preamble.
F. Revised Tables
The 1993 final allocation of allowances included three allowance
tables--Table 2 listing most affected units, Table 3 listing units
expected to be eligible under section 405(g)(4), and Table 4 listing
units expected to be eligible under section 405(i)(2). Tables 3 and 4
in the 1993 rule were provided to assist unit owners in identifying the
appropriate units for which additional information was required under
the rule.
As noted above, for the 1998 reallocation of allowances, EPA
proposed in the 1998 proposal to consolidate the tables and to include
in Table 2 only the information necessary for the operation of the
program. To provide for distribution of proceeds from the allowance
auction and sale, EPA proposed that the table include the special
allowance reserve values for 2000 and 2010. Also, the Agency proposed
that the table list the repowering reserve values in case any
repowering allowances are subsequently forfeited due to failure of the
repowering project under Sec. 72.44(g) or due to overstatement of the
repowering reserve. Final allocations for 2000 and 2010 were listed.
Additional information is provided in the Technical Documentation.
Also, as noted above, the proposed table provided a column listing the
reserve deductions for the auctions that took place from 1993 through
1998.
Two comments were received, both supporting consolidation and
streamlining of the tables. EPA has adopted that approach here. One
commenter also noted that two footnotes in the proposed tables
contained technical errors. The commenter is correct, and the footnotes
have been corrected for the final rule. In addition, consistent with
the approach in the proposal, a reference to Table 3 in Sec. 73.21(c)
has been eliminated.
[[Page 51711]]
G. Miscellaneous
EPA proposed a number of modifications and corrections to the
allowance rules to eliminate sections that are no longer necessary and
to correct references. The proposed modifications and corrections were
described in the ``Miscellaneous'' section of the preamble to the 1998
proposal. No comments were received on these issues, and the Agency has
adopted the proposed changes in this final rule.
Aside from the foregoing corrections, one commenter noted that
several proposed provisions continued to refer to the direct sales
program, which was eliminated by the Agency in 1996 (see 61 FR 28761,
June 6, 1996). The Agency has reviewed the 1998 proposal and 40 CFR
part 73 and found references to the direct sales program in
Secs. 73.27(a)(2), 73.27(b) (2), (3) and (5), 73.27(c) (2), (3) and
(5), and Sec. 73.70(b). In today's final rule, EPA is eliminating these
last references to the direct sales program, as requested by the
commenter. Also, Sec. 73.27(a)(2), establishing the auction reserve, is
corrected to reflect that the 50,000 allowances formerly in the Direct
Sale Subaccount are now incorporated into the Auction Subaccount,
making the annual Auction Subaccount total 250,000 allowances.
IV. National Allowance DataBase
Some changes have been made to the National Allowance Data Base
(NADB) since issuance of the March 23, 1993 notice of availability of
the NADB (58 FR 15720, March 23, 1993). The database used to calculate
allowances herein is NADB version 2.2 and is available from the sources
listed in the FOR FURTHER INFORMATION CONTACT section above.
As stated in the 1998 proposal, NADB version 2.2 includes new data
and data corrections discussed in the 1996 proposal. These data and
corrections are adopted for the reasons stated in the 1996 proposal.
Consistent with the 1993 rule and the 1996 proposal, EPA has not made
any other corrections based on alleged errors or any new requests for
data changes, except for changes in nonsubstantive identifying
information (e.g., boiler identifiers).
Only one comment was received on the 1998 proposal concerning the
NADB. The commenter requested EPA to add information on two units
(George F. Wheaton Units 1 and 2, which serve generators that provide
electricity to the owner's manufacturing plant and are required to make
available electricity for sale to certain utilities) to the NADB for
purposes of allocating allowances to the units. The commenter suggested
that the two units are affected utility units under the Acid Rain
Program. According to the commenter, EPA has recognized that
``industrial units,'' such as the commenter's units, should have
received allowance allocations. The only ``industrial units''
specifically identified by the commenter as warranting allowance
allocations were its own units.
EPA previously rejected, in a final rulemaking notice issued
October 24, 1997, a request by the commenter that allowances be
allocated to ``industrial units.'' In today's rulemaking, EPA is not
reconsidering its rejection of that claim, which the commenter repeated
here. Moreover, EPA here rejects, for two reasons, the new claim that
information on the commenter's units be added to the NADB for allowance
allocation. First, EPA previously decided that no allowances should be
allocated to the units because the commenter failed to submit a timely
claim (with supporting information) for allowances. A new, late
submission obviously cannot cure this deficiency. Second, the
information in the commenters' late submission is deficient on its
face.
In the prior rulemaking, this commenter made the same claim that
``industrial units'' that do not qualify for an exemption from the Acid
Rain Program should be allocated allowances.4 Compare 62 FR
55466 and Docket Item A-97-24 II-D-08, Comments of Zinc Corporation of
America at 6-7 (March 9, 1998). In the October 24, 1997 notice, EPA
rejected that claim. Id. As stated in the October 24, 1997 notice, the
commenter's claim that allowances should be allocated to ``industrial
units'' ``ignores the fact that EPA has previously specified deadlines
by which parties claiming an erroneous failure to allocate allowances
to a unit were required to submit such claims and necessary supporting
information to EPA.'' 62 FR 55466.
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\4\ In fact, in its March 9, 1998 comments in the instant
proceeding, the commenter incorporated by reference its February 10,
1997 comments submitted in the prior rulemaking where EPA
established an exemption from most Acid Rain Program requirements
for industrial-utility units. The February 10, 1997 comments are
fully addressed in the preamble of the final rule in the prior
proceeding. See 62 FR 55460, 55463-66 (1997). To the extent that
portions of either set of comments address issues concerning the
industrial-utility units exemption or the applicability of the Acid
Rain Program to ``industrial units'' or the commenter's units, those
portions (e.g., the entire section I of the February 10, 1997
comments) are outside the scope of, and so are not addressed, in
this rulemaking.
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Since the commenter has now, for the first time, submitted
information on its units for the NADB, EPA is summarizing here the
notices that established the deadlines and data requirements for NADB
submissions. In a July 1991 notice, EPA stated that it would allocate
allowances based on information in the NADB, a version (NADB version
2.0) of which was made available for public review. EPA also explained
what information on a unit and supporting data and documentation had to
be submitted to EPA in order to add information to the NADB for
purposes of allocating allowances to the unit. 56 FR 33278, 33283
(1991). A major requirement was that any additional information had to
be ``well-documented.'' Id. For example, the owner or operator of a
unit had to submit information on the unit's 1985 SO2
emissions and, if that value was based on emissions monitoring, the
underlying monitoring data or independent emissions inventory. If that
value was calculated based on the fuels burned in 1985, the ``equation
used, percent sulfur in fuel, ash retention of fuel, and any other data
used'' had to be provided. 56 FR 33284. Similarly, the other data
elements needed for allocating allowances (i.e., 1985 SO2
emission limit, generator summer net dependable capacity, 1985-87
average annual total heat input) had to be submitted with supporting
documentation. Id. (listed as data elements 16, 20, and
23).5 Further, EPA noted that ``[u]nits eligible for
allowances will not be allocated allowances if the final database does
not include the information necessary to calculate such allowances.''
56 FR 33283.
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\5\ If the commenter's units had qualified for allowances, EPA
would have calculated the annual number of basic allowances (for
2000 and thereafter) for each unit, under section 405(d)(2) of the
Act, as the unit's 1985-1987 average total heat input times the
lesser of the unit's 1985 SO2 emission rate or 1985
SO2 emission limit. Annual bonus allowances (for 2000
through 2009) would have been calculated, under section 405(d)(3)(B)
of the Act, for each unit using generator summer net dependable
capacity and the lesser of the unit's 1985 SO2 emission
rate or 1985 SO2 emission limit.
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In a July 1992 notice, EPA provided for public review of NADB
version 2.1, as well as a list (referred to as the ``Adjunct Data
File'') of units of ``nontraditional utilities'' that were not in NADB
version 2.1 and that included the commenter's units (albeit listed
under the commenter's predecessor-company, St. Joseph Minerals
Corporation). EPA indicated that the units in the Adjunct Data File
might or might not be affected units and that, in any event, it lacked
sufficient information on which to base any allowance allocations for
the listed
[[Page 51712]]
units. Id. Further, EPA gave notice that if ``the data elements
required for determining allowance allocations'' were not provided
within the comment period (i.e., by September 8, 1992) for ``a unit
that may be affected now or in the future'', the unit would not be
allocated allowances. Id.
Finally, in a March 1993 notice, EPA stated that those units in the
Adjunct Data File that were affected units and for which the necessary
data had been submitted were being included in the NADB (version 2.11)
and would be allocated the appropriate number of allowances. 58 FR
15720, 15727 (1993). Believing that it had corrected all timely
identified errors in the NADB and resulting allocations, EPA issued a
second March 1993 notice stating that any unit not allocated allowances
in the notice ``but meeting the applicability requirements [for the
Acid Rain Program] * * * will not receive allowance allocations [under
the allowance allocation regulations for the Acid Rain Program] * * *''
58 FR 15634, 15641 (1993). Consequently, EPA stated in the 1998
proposal that, except for the issues discussed in the 1996 proposal,
EPA would not consider any issues that were addressed in 1992 and 1993
concerning the NADB or ``any issues that could have been raised in
connection with NADB versions 2.0 and 2.1.'' 63 FR 718.
As stated in the October 24, 1997 notice, neither the commenter
(Zinc Corporation of America) nor its predecessor-company submitted any
information or supporting data and documentation concerning the units
by the September 8, 1992 submission deadline. 62 FR 55466. On March 9,
1998, on the instant proceeding, the commenter submitted, for the first
time, information on, inter alia, the unit's 1985 SO2
emissions, 1985 SO2 emission limit, generator summer net
dependable capacity, and 1985-87 average annual total heat input. The
fact that the submission is over five years late is alone sufficient
basis for rejecting the submission. See 62 FR 55466 (explaining basis
for September 8, 1992 submission deadline) In addition, the submission
is substantively deficient on its face because the submission included
only values for these elements and none of the supporting data or
documentation required by the July 1991 and July 1992 notices. For
example, the commenter listed the 1985 SO2 emissions but
provided neither monitoring data nor a formula and data for calculating
emissions.6 Similarly, the SO2 emission limit,
generator capacity, and heat input were not documented, whether through
a State Implementation Plan or permit, State regulatory records, or
other records. Compare Comments of Zinc Corporation of America, Exhibit
A (March 9, 1998) and 56 FR 33284.
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\6\ The commenter does not state clearly whether the emissions
data provided in its comments were from continuous emissions
monitors or were calculated. In either case, supporting
documentation was required.
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EPA notes that, while the commenter suggests in its comments that
the Acid Rain Program is applicable to its units, EPA has not made a
determination of whether the units are affected units or whether the
exemption for industrial-utility units (under Sec. 72.14) applies to
the units. As stated in the October 24, 1997 notice, assuming arguendo
that the units are affected units without any applicable exemption, the
units will be treated like any unit that has not been allocated
allowances and is or becomes an affected unit, i.e., no allowances will
be allocated, and the units must obtain allowances through the
allowance market. 62 FR 55466.
EPA's approach of imposing deadlines and substantive requirements
for the submission of information and data for allowance allocation and
rejecting submissions when the deadline or the substantive requirements
are not met has been upheld by the courts. See Texas Municipal Power
Agency v. EPA, 89 F3d. 858, 870 (D.C. Cir. 1996) (upholding EPA's
discretion to specify the information that must be submitted, and the
submission deadline, for allowance allocations and to determine how to
handle a submission that did not meet these requirements). In the
instant proceeding, the commenter's only submission, which was made
over five years after the deadline, lacked any of the required
supporting data and documentation.7 Under these
circumstances, EPA's rejection of the submission is
reasonable.8 See id. at 873 (upholding EPA's refusal to
allocate allowances where the owners of units failed to submit
necessary information ``until well after the deadlines'' set by EPA
even though the information was available).
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\7\ In contrast, in Texas Municipal, one petitioner provided
information, but no supporting data, by the submission deadline, and
EPA therefore used some of the information plus other, verifiable
information to calculate allowances for the petitioner's units. 89
F3d. 869.
\8\ The commenter has never indicated that the information
concerning its 1985 emissions, 1985 emission limit, capacity, or
1985-87 heat input were not available in 1992. In light of the
historical nature of the emission and heat input information and
since capacity of a unit does not generally change, EPA maintains
that all this information probably was available and could have been
submitted prior to the deadline.
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V. Administrative Requirements
A. Executive Order 12866
Under Executive Order 12866, 58 FR 51735 (October 4, 1993), the
Administrator must determine whether the regulatory action is
``significant'' and therefore subject to Office of Management and
Budget (OMB) review and the requirements of the Executive Order. The
Order defines ``significant regulatory action'' as one that is likely
to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, OMB has determined
that this rule is not a ``significant regulatory action.''
B. Unfunded Mandates Act, Executive Order 12875 and 13084
Section 202 of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires that the Agency prepare a budgetary impact statement before
promulgating a rule that includes a federal mandate that may result in
expenditure by State, local, and tribal governments, in aggregate, or
by the private sector, of $100 million or more in any one year. Section
203 requires the Agency to establish a plan for obtaining input from
and informing, educating, and advising any small governments that may
be significantly or uniquely affected by the rule.
Under section 205 of the UMRA, the Agency must identify and
consider a reasonable number of regulatory alternatives before
promulgating a rule for which a budgetary impact statement must be
prepared. The Agency must select from those alternatives the least
costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule, unless the Agency explains why
this alternative is not selected or the selection of this alternative
is inconsistent with law.
[[Page 51713]]
Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and creates a mandate on State, local, or
tribal governments unless the Federal government providees the funds
necessary to cover such mandates or consults with representatives of
affected State, local or tribal governments before promulgation.
Executive Order 13084 establishes similar requirements regarding
regulations the significantly or uniquely affect Indian tribal
governments.
Because this rule is estimated to result in the expenditure by
State, local, and tribal governments or the private sector of less than
$100 million in any one year, the Agency has not prepared a budgetary
impact statement under UMRA. Today's rule does not create a mandate for
State, local or tribal governments and does not significantly or
uniquely affect communities of tribal governments. The rule does not
impose any enforceable duties on these entities. Accordingly, the
requirements of section 1(a) of Executive Order 12875 and section 3(b)
of Executive Order 13084 do not apply to this rule.
The revisions to part 73 will not have a significant effect on
regulated entities or State permitting authorities. Since sections
403(a) and 405(a)(3) of the Act set a nationwide cap on annual
allowance allocations, any reduction of allowances would result in a
small increase to the annual allocations for other units that receive
allocations. As discussed in the preamble for the 1996 proposal, the
revisions explained in the 1996 proposal and incorporated in today's
final rule, do not have a significant adverse impact. 61 FR 68366. The
other revisions in today's rule (i.e., the revised qualification
requirements for allocations under section 405(i)(2), the
redistribution of auction proceeds, and reduced repowering reserve)
will also not have a significant impact and, in general, result in
increased allocations and proceeds receipts for most units.
C. Paperwork Reduction Act
This action revising the allowance allocations rule will not impose
any new information collection burden. OMB has previously approved the
information collection requirements contained in the allowance rules,
40 CFR part 73, under the provisions of the Paperwork Reduction Act, 44
U.S.C. 3501, et seq. See EPA ICR Number 1633.10; OMB Control Number
2060.0258.
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
Copies of the previously approved ICR may be obtained from
Director, Regulatory Information Division; EPA; 401 M. Street S.W.
(mail code 2137); Washington, D.C. 20460 or by calling (202) 260-2740.
Include the ICR and/or OMB number in any correspondence.
D. Regulatory Flexibility
The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions.
In the preamble of the January 11, 1993 core rules for the Acid
Rain Program, the Administrator certified that the rules would not have
a significant, adverse impact on small entities. 58 FR 3590, 3649.
Today's revisions do not add any requirements that would burden small
entities. Moreover, as explained above in this preamble and the 1996
proposal (61 FR 68367), the effect of the 1998 allowance adjustments on
owners and operators of the units is not significant. Most units gain
allowances. The only units losing allowances are: those deemed
unaffected units and, therefore, not subject to the requirements of the
Acid Rain Program; those that have requested to receive fewer basic
allowances in order to receive bonus allowances; and those that have
been determined to be ineligible for certain allocations, based on
information supplied by the utilities. Thus, the 1998 allowance
revisions take allowances only from units when the units are not
eligible to receive them or when the unit's owner or operator prefers
an alternative allocation. For these reasons, EPA has determined that
this rule will not have a significant, economic impact on a substantial
number of small entities.
E. Children's Health Protection
This final rule is not subject to E.O. 13045, entitled Protection
of Children from Environmental Health Risks and Safety Risks (62 FR
19885, April 23, 1997), because it does not involve decisions on
environmental health risks or safety risks that may disproportionately
affect children.
F. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Pub. L. No. 104-113, 15 U.S.C. 272 note,
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specification, test methods, sampling
procedures, business practices, etc.) that are developed or adopted by
voluntary consensus standards bodies. The NTTAA requires EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
This final rule does not involve any technical standards that would
require Agency consideration of voluntary consensus standards pursuant
to section 12(d) of the NTTAA.
G. Submission to Congress and to the General Accounting Office
The Congressional Review Act, 5 U.S.C. 801, et seq., as added by
the Small Business Regulatory Enforcement Fairness Act of 1996,
generally provides that before a rule may take effect, the agency
promulgating the rule must submit a rule report, which includes a copy
of the rule, to each House of the Congress to the Comptroller General
of the United States. EPA will submit a report containing this action
and any other required information to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the General
Accounting Office prior to publication of this document in the Federal
Register. This action is not a ``major rule'' as defined in 5 U.S.C.
804(2).
List of Subjects in 40 CFR Part 73
Environmental protection, Acid rain, Air pollution control,
Electric utilities, Reporting and recordkeeping requirements, Sulfur
dioxide.
[[Page 51714]]
Dated: September 15, 1998.
Carol M. Browner,
Administrator.
For the reasons set forth in the preamble, 40 CFR part 73 is
amended as set forth below.
PART 73--[AMENDED]
1. The authority citation for part 73 continues to read as follows:
Authority: 42 U.S.C. 7601 and 7651, et seq.
2. Section 73.10 is amended by:
a. In paragraph (b)(1) revising the words ``Table 2 Column E'' to
read ``Table 2 Column C''; and removing the words ``, except that units
listed in both Table 2 and Table 4 will be allocated allowances as
specified in Table 4 Column C, multiplied by .9011, reduced by 1.3185
times Table 2 Column B, and increased by Table 2 Columns C and D'';
b. In paragraph (b)(2) revising the words ``Table 2 Column I'' to
read ``Table 2 Column F''; and removing the words ``, except that units
listed in both Table 2 and Table 4 will be allocated allowances as
specified in Table 4 Column F, multiplied by .8987, reduced by Table 2
Column G, and increased by Table 2 Column H'';
c. Removing paragraphs (c) and (d) (including Tables 3 and 4); and
d. Revising Table 2 of paragraph (b) and paragraph (b)(3) to read
as follows:
Sec. 73.10 Initial allocations for phase I and phase II.
* * * * *
(b) * * *
* * * * *
BILLING CODE 6560-50-U
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BILLING CODE: 6560-50-C
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(3) The owner of each unit listed in the following table shall
surrender, for each allowance listed in Column A or B of such table, an
allowance of the same or earlier compliance use date and shall return
to the Administrator any proceeds received from allowances withheld
from the unit, as listed in Column C of such table. The allowances
shall be surrendered and the proceeds shall be returned by December 28,
1998.
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Allowances for Allowances for
2000 through 2010 and
State Plant name Unit 2009 column thereafter Proceeds
(A) column (B)
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CA................. El Centro........... 2 285 272 $2749.48
CO................. Valmont............. 11 4 0 0
FL................. Lauderdale.......... PFL4 776 781 7904.74
FL................. Lauderdale.......... PFL5 796 802 7904.74
LA................. R S Nelson.......... 1 30 34 0
LA................. R S Nelson.......... 2 33 32 0
MD................. R P Smith........... 9 0 56 687.37
NM................. Maddox.............. **3 85 85 687.37
SD................. Mobile.............. **2 17 17 0
VA................. Chesterfield........ **8B 409 411 4124.21
WI................. Blount Street....... 7 0 13 343.68
WI................. Blount Street....... 8 0 294 3093.16
WI................. Blount Street....... 9 0 355 3436.84
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Sec. 73.11 [Removed and Reserved]
3. Section 73.11 is removed and reserved.
Sec. 73.12 [Removed and Reserved]
4. Paragraph (b) of Sec. 73.12 is removed and reserved.
Sec. 73.13 [Amended]
5. Paragraph (b) of Sec. 73.13 is amended by revising the words
``Secs. 73.16, 73.18,'' to read ``Secs. 73.18,''.
Sec. 73.16 [Removed and Reserved]
6. Section 73.16 is removed and reserved.
7. Section 73.19 is amended by revising paragraph (a)(5) and
removing and reserving paragraph (b) to read as follows:
Sec. 73.19 Certain units with declining SO2 rates.
(a) * * *
(5) Its actual SO2 emission rate is less than 1.2 lb/
mmBtu in any one calendar year from 1996 through 1999, as reported
under part 75 of this chapter;
* * * * *
8. Section 73.21 is amended by:
a. In paragraph (a) revising the words ``Sec. 73.11'' to read
``Sec. 73.10(b)''; and revising the words ``=Unit's Year 2000 Adjusted
Basic Allowances as calculated at Sec. 73.11(a)(3)'' to read ``are as
listed in the following table'' and adding a table as set forth below:
b. In paragraph (b) revising the words ``Sec. 73.11(a) and (b)'' to
read ``Sec. 73.10(b)'';
c. In paragraph (c)(1) revising the words ``=Unit's Year 2000
Adjusted Basic Allowances as calculated at Sec. 73.11(a)(3)'' to read
``are as listed in the table in paragraph (a) of this section.''; and
d. Revising paragraph (c)(2) to read as follows:
Sec. 73.21 Phase II repowering allowances.
(a) * * *
------------------------------------------------------------------------
Year 2000
adjusted
Unit basic
allowances
------------------------------------------------------------------------
RE Burger 1................................................ 1273
RE Burger 2................................................ 1245
RE Burger 3................................................ 1286
RE Burger 4................................................ 1316
RE Burger 5................................................ 1336
RE Burger 6................................................ 1332
New Castle 1............................................... 1334
New Castle 2............................................... 1485
New Castle 3............................................... 2935
New Castle 4............................................... 2686
New Castle 5............................................... 5481
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(c)(2) The Administrator will reallocate any allowances forfeited
in paragraph (c)(1) of this section with a compliance use date of 2000
or any allowances remaining in the repowering reserve to all Table 2
units' years 2000 through 2009 subaccounts in the following manner:
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9. Section 73.27 is amended by removing paragraph (a)(3) and
revising paragraphs (a)(2), (b)(2) through (5), and (c)(2) through (5)
to read as follows:
Sec. 73.27 Special allowance reserve.
(a) Establishment of reserve. * * *
(2) The Administrator will allocate 250,000 allowances annually for
calendar year 2000 and each year thereafter to the Auction Subaccount
of the Special Allowance Reserve.
(b) Distribution of proceeds. * * *
(2) Until June 1, 1998, monetary proceeds from the auctions of
allowances from the Special Allowance Reserve (under subpart E of this
part) for use in calendar years 2000 through 2009 will be distributed
to the designated representative of each unit listed in Table 2
according to the following equation:
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(3) On or after June 1, 1998, monetary proceeds from the auctions
of allowances from the Special Allowance Reserve (under subpart E of
this part) for use in calendar years 2000 through 2009 will be
distributed to the designated representative of each unit listed in
Table 2 according to the following equation:
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(4) Monetary proceeds from the auctions of allowances from the
Special Allowance Reserve (under subpart E of this part) from years of
purchase from 1993 through 1998, remaining in the U.S. Treasury as a
result of the surrender of allowances and return of proceeds under
Sec. 73.10(b)(3), will be distributed to the designated representative
of each unit listed in Table 2 according to the following equation:
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(5) Monetary proceeds from the auctions of allowances from the
Special Allowance Reserve (under subpart E of this part) for use in
calendar years 2010 and thereafter will be distributed to the
designated representative of each unit listed in Table 2 according to
the following equation:
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(c) * * *
(2) Until June 1, 1998, allowances, for use in calendar years 2000
through 2009, remaining in the Special Allowance Reserve at the end of
each year, following that year's auction (under subpart E of this
part), will be reallocated to the unit's Allowance Tracking System
account according to the following equation:
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(3) On or after June 1, 1998, allowances, for use in calendar years
2000 through 2009, remaining in the Special Allowance Reserve at the
end of each year, following that year's auction (under subpart E of
this part), will be reallocated to the unit's Allowance Tracking System
account according to the following equation:
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(4) [Reserved]
(5) Allowances, for use in calendar years 2010 and thereafter,
remaining in the Special Allowance Reserve at the end of each year,
following that year's auction (under subpart E of this part), will be
reallocated to the unit's Allowance Tracking System account according
to the following equation:
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* * * * *
10. Paragraph (b) of Sec. 73.70 is revised to read as follows:
Sec. 73.70 Auctions.
* * * * *
(b) Timing of the auctions. The spot auction and the advance
auction will be held on the same day, selected each year by the
Administrator, but no later than March 31 of each year. The
Administrator will conduct one spot auction and one advance auction in
each calendar year.
* * * * *
[FR Doc. 98-25317 Filed 9-25-98; 8:45 am]
BILLING CODE 6560-50-U
