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OTAG's webpage at http://www.epa.gov/ttn/otag. The OTAG’s
States. The proposed SIP call explained the basis for
EPA also conducted a regulatory cost analysis which is
II-B-01) as a technical support document (TSD) to the
section 110(a)(1) and section 110(k)(5) in order to meet the
States. Part of the information EPA considered in this
OTAG 2007 Base Case and OTAG "zero-out" subregional UAM-V
(NPR). These source sectors are discussed separately below
Inventory and Budgets for the Ozone Transport SIP Call”
(revised Budget TSD)
(40 CFR part 76). Detailed information on the sources of
Action Plan (CCAP) was projected to produce from the year
2000 and on. Details on how EPA prepared this electricity
SNPR is correcting one error in the growth factor
Planning Model (IPM) and EPA’s baseline electricity
2000 to 2010 as forecasted by the IPM. The average annual
OTAG utility data were replaced by the acid rain data
OTAG recommendations as follows:
RACT to all medium-sized sources in the affected States. A
Model (IPM) was run to estimate costs under an interstate
NOx Budget Trading Program as well as all such sources in
(SCR) and Selective Non Catalytic Reduction (SNCR) were
Ozone Transport Rulemaking Regulatory Analysis”
(Supplemental Regulatory Analysis TSD)
SNCR costs for non-electricity generating sources is now
Based on the Least Cost Scenario for non-electricity
FR 60365). It further explained that each “SIP revision
SIP call first will be determined to be either incomplete or
Section 1.2 of Appendix V, in accordance with section
The EPA has issued documents to assist States in developing
SIP submissions appear in proposed 40 CFR 51.121. Most of
Register in the near future. Electric utility units have
State’s projected levels is that recent changes in the
section V of today’s notice. States may voluntarily choose
State has the legal authority to adopt the model rule and
Program requirements (see 40 CFR part 51 subpart U) and
Strategies Guidance. This Section presents guidance that
Emission Factors (CHIEF) Web Site
FIRE. The most recently finished AP-42 stationary source
Improvement Program (EIIP)” (EPA-454/R-97-004a)--
Estimating Air Emissions from Point Sources”
Estimating Air Emissions from Area Sources”
Estimating Air Emissions from Mobile Sources”
General Guidance for Stationary Sources”
Emission Inventory Requirements for Photochemical Air
Quality Simulation Models” (Revised)
Mobile Sources” (EPA-450/4-81-026d [Revised]) (You can
CHIEF Web Site.)
EPA will evaluate any revision to these growth factors or
NOx and VOC ozone precursors in all areas. Under such an
Strategies for the 15 Percent Rate-Of-Progress Plans”
SIP actually performed in meeting the statewide NOx
NOx budget. Section 110(a)(2)(F) provides additional
Section will be used by EPA in air quality modeling to
NOx SIP call. The regulatory text appears in proposed §
Statewide area and mobile source ozone season emissions
2003. The State must submit annual reports for all sources
State would not have to submit an annual report for NOx
Section below
(May 1 to September 30). The direct reporting from sources
40 CFR Part 75 to account for their emissions. This topic
State does not require additional NOx reductions from that
States would be required to submit to EPA statewide NOx
NOx sources within the State which are subject to measures
Several options are available for data reporting. The State
Information Retrieval System (AIRS) using the AIRS facility
Emission Inventory Improvement Program/Electronic Data
Interchange (EIIP/EDI) format. This file can then be made
The EPA is soliciting comment on whether the State reporting
EPA is soliciting comment on whether no later than 6 or 9
EPA Regional Office should be consulted for final
EPA’s authority to cooperate with and assist the States in
103(a) and (b) generally authorize EPA to cooperate with and
301(a) grants EPA broad authority to prescribe such
Section V.B.1.). When designed and implemented properly, a
Uniformity of the key operational elements across the NOx
Budget Trading Program region is necessary to ensure a
Trading Program as a part of the SIP. The EPA proposes that
Monitoring Revisions” that will be published in the Federal
Register in the near future.) The monitoring of emissions
Budget Trading Program. A specific recommendation would be
Coast Air Quality Management District’s Regional Clean Air
Incentives Market (RECLAIM) and the Ozone Transport
Commission’s (OTC) NOx Budget Program. Today’s proposed NOx
Budget Trading Program builds directly upon the OTC program
Understanding (MOU) committing the signatory States to the
NOx emissions in the Ozone Transport Region (OTR) to create
(Phase II) and 2003 (Phase III). (Phase I required the
Trading Rule includes Sections describing: to whom the NOx
Program’s applicability. Additional options for the trading
The second is to ensure that EPA could successfully
2003. The RECLAIM program has focused on a larger breadth
10 percent for the OTC program and units with emissions of
CEMS requirements.” The audit goes on to explain that “this
RECLAIM staff have indicated that units that have high
250 mmBtu cutoff used for industrial boilers. The EPA
40 CFR part 75. These are also source categories that are
40 CFR 75.19 do not contain default emission factors
Rain Program; Continuous Emission Monitoring Revisions” that
EPA would strongly encourage any State wishing to
Section iii, Inclusion of Additional Source Categories. The
Reduction Credit programs. This effort has focused on the
Trading Program requirements for retired units. The purpose
Trading Rule establishes the process for certifying the NOx
AAR and describes his or her duties. A NOx AAR is the
Because the NOx AAR is representing the owners and operators
AAR must certify that he or she was selected by an agreement
AAR (alternate NOx AAR) for a NOx budget source. The
While the alternate NOx AAR would have full authority to act
The EPA believes the NOx AAR requirements afford the
Budget sources that would participate in the NOx Budget
CFR parts 70 and 71. Since there would be some NOx budget
Program would require only that a NOx budget source have a
NOx Budget source have a title V permit. The EPA believes
NOx budget permit would be administered. For those sources
The NOx budget permit renewal application deadlines are the
Budget Trading Program requires that a NOx budget permit
Budget Trading Program permit application should include all
Budget Trading Program requirements into a NOx budget permit
Budget Trading Program permit regulations generally require
Program. The NOx AAR must submit a compliance certification
Administrator. This report must identify the NOx budget
NOx allowances that each State allocates to its NOx budget
State’s sources meeting the definition of “NOx budget unit”
State may determine the number of NOx tons allotted for the
Trading Program and submit them to EPA for inclusion into
NOx allowances are allocated to NOx budget units at the
EPA allocations for the control period in the year that is 5
Program would receive NOx allowance allocations at the same
EPA proposes that the final NOx Budget Trading Rule include
The second approach was for the rule to recommend one method
The option of allocating NOx allowances based on a unit’s
5) output data would be available for States to calculate
V.C.9.b of this preamble
Integrated Planning Model (IPM) and on the proposal to
NOx budget units for control periods that the unit was not
State issues a permit to construct the NOx budget unit. The
NOx AAR may not request an amount of NOx allowances for each
NOx budget unit’s maximum design heat input (in mmBtu) for
State would not allocate any NOx allowances to additional
(in mmBtu) x 0.15 lb/mmBtu)). The NOx allowances deducted
Section V.C.7.b of this preamble, the proposed rule reflects
Section of the proposed rule. However, requests for NOx
IV accelerated price discovery and provided useful
In considering these options identified by OTAG for managing
The EPA is not adopting or recommending an option in this
Banking. December 1997 Analysis of Banking in a NOx Trading
Program”. This paper is available as item number V-A-28 in
Docket No. A-96-56 of the Air and Radiation Docket (see the
The EPA hopes that these analyses will help stakeholders
Budget Trading Program would result in the automatic
Any NOx allowances not awarded from this reserve would be
Budget Trading Program would also require determinations of
Budget Trading Program could necessitate the consideration
Budget Trading Program region exceeds 10 percent of the
(November 30) of each year until EPA completes the annual
The form would include: the transferror and transferee NATS
AARs would be informed of developments and/or requirements
Trading Program. The EPA is proposing that units subject to
CFR part 75 subpart H to support the monitoring and
Rain Program or the OTC’s NOx Budget Program will also
40 CFR part 75 monitoring and reporting are used in the
While comments on the proposed revisions to 40 CFR part 75
(including proposed 40 CFR part 75 subpart H) should be
40 CFR part 75 revisions require units to determine NOx mass
Program would be required to measure NOx emission rate using
Assurance Monitoring (CAM) requirements and other State
40 CFR part 75 which will be published in the Federal
SIP. If a State wants to approve a methodology that is not
Program. A State would account for the opt-in unit in the
State’s SIP by adding the opt-in unit’s NOx emissions to the
Section of this preamble discusses and requests comment on
Budget Units. Today’s proposal does not include special or
The EPA solicits comment on the desirability and method of
NOx to use up its NOx allowance allocation for the control
CFR part 96 subpart E of the proposed trading rule for each
The EPA would use the same system that it is currently using
NOx Budget Program. There are a number of advantages to the
ETS. This assistance may include: answering individual
The NOx AAR’s would also have to provide EPA with an end of
Section IV.A of this supplemental proposal. One of the
State might choose would be to implement this NOx Budget
Trading Rule (40 CFR 96). If a State chooses to implement
Trading Rule portion of the SIP (see Section IV.A.3 for
OTC Program and is aware of the issues that the OTC States
Section is to identify how EPA believes that these specific
States undertake rulemakings to implement Phase III
(beginning in 2003) of the OTC program
Budget Trading Program is applicable to any of the 23
Budget Trading Program; the other is to offer the States the
Budget Trading Program by voluntarily enrolling in the
OTC States
OTC program applicability provisions to be reasonably
Section V.C.7 of this preamble and an audit to assess the
Section of this preamble. The EPA requests comments on how
Program. The monitoring and reporting requirements in the
OTC’s NOx Budget Program are based on the current version of
40 CFR part 75 and on additional guidance that was developed
This additional guidance sets forth requirements for
Program. For sources that are subject to both the Acid Rain
40 CFR part 75 would require few changes to address the NOx
Budget Trading Program would be that all units that burn
Program and the proposed NOx Budget Trading Program would be
Program offers a number of different options for these
40 CFR part 75 that would affect OTC NOx Budget Trading
Program sources are designed to reduce monitoring costs and
Continuous Emission Monitoring Revisions” that will be
Rule requires federally enforceable permits. The EPA’s
Trading Program defined in today’s proposed rule. Simply
Commenters should consider how these sources would be
Both the DOE study and the findings and results from similar
5-lab study’s “Efficiency” case level of improvement include
(GSP) of over $60 billion by achieving the efficiency
The EPA noted in its December workshop discussion paper that
NOx Budget Trading Program. The EPA continues to consider
Question 1. How do States determine the amount of
Question 2. What information do States and other entities
December workshop discussion paper. One option is to limit
(MEC). The EPA could establish the “30 percent better than
MEC” as the benchmark that must be attained for applicants
Question 3. Do States and potential applicants for energy
Question 5. In addition to Energy Star Buildings and Energy
NOx Budget units. Other respondents to the December
Question 9. For States that may be interested in an “off-
State or region specific data; (2) an average NOx rate
This marginal NOx rate is calculated by dividing the
State specific NOx rate (average or marginal) in lbs/kWh
State-specific NOx factors to be used in translating energy
Question 10. What access do States or end users have to
Question 11. If a marginal NOx rate is not available or
State or end user take into account the type of different
Is this necessary to do?
This would mean that an applicant for set-aside NOx
Question 13. How many applications could a State reasonably
Budget Trading Program region. If it is likely that the end
Question 14. Will States be able to reasonably estimate the
NOx Budget Trading Program. Since the first year for the
Question 20. Which of the options listed above for over
Question 21. What other options or suggestions could be
Protocol (IPMVP) developed by DOE with energy service
MPCIRF prescribes precise monitoring and verification
IPMVP and the MPCIRF exist that States or other entities
These strategies could range from a low verification/high
Question 28. What are other options to the
Question 29. What kinds of record keeping are currently
Question 30. Which option seems most manageable for States?
CFR 76.16 in order to provide additional opportunity for
Program in title IV (as under other emission limit
section 407(b)(2) to provide relief from the revised Group 1
Section 407(b)(2) gives the Administrator discretion to
407(b)(2) limits were considered on a boiler-by-boiler or
Administrator's consideration of whether to grant relief may
IV NOxemission limits must be subject to either (i) a cap
FR 18466). The EPA will evaluate NOx allowance surrender
section 407(b) limits, the effect of alternative emission
60 FR 18769). If averaging includes units not subject to
II NOx limits, and the air pollution control agencies in
EPA maintains that newspaper notice in these circumstances
section 407(b)(2) limits that would otherwise apply to the
OTAG modeling domain. The Base Year scenario is intended to
IV and RACT, were applied to all sources in the modeling
(i.e. >250 MMBtu/hr). For medium sources (i.e. <=250
OTAG "level 0" for highway mobile and OTAG "level 1" for
State in the domain are presented. Table VII-4 shows the
Budget NOx emissions used as input for modeling
State-level assessment is supplemented with the OTAG
Standard Table of Metrics to quantify the impacts in several
Section C.1.a.ii, Procedures for Calculating State-Level
C.1.a.ii, Procedures for Calculating State-Level Metrics)
Determination of Significant Contribution" to quantify the
NAAQS (e.g. >=125 ppb for the 1-hour NAAQS and >=85 ppb for
NAAQS. The 1-hour and 8-hour State-level metrics identified
NAAQS. The next step was to select the subset of 1-hour
Report-Procedures for Linking the OTAG Episodes to the 8-
(with predictions >=125 ppb) in the State. The State total
Standard Table of Metrics was developed to evaluate the
OTAG to relate the grid cells used in these calculations to
The preceding 1-hour and 8-hour OTAG metrics are self-
2007 Base Case ozone prediction in that grid cell. These
Analysis of Modeling Results. The discussion is organized
For each NAAQS the results for the State-level metrics are
1-hour and 8-hour ozone above the NAAQS in areas which
Northeast. The States included in each of these regions
1-hour ozone in the OTAG "problem areas" were investigated
2007 Base Case ozone is >124 ppb. This last metric is
Distribution court). For a more detailed analysis by EPA of
The Agency received a number of comments on this
The NOx budget trading program is a recommendation to
... in any one year.” A “Federal mandate” is defined under
CAA Amendments and which applies directly to sources. The
section 203 (2 U.S.C. 1533) do not apply to the revisions to
40 CFR Part 76
Request (ICR) document has been prepared by EPA (ICR No
EPA. Certain process data may be identified as sensitive by
EPA's national data base systems. Costs associated with
The OMB control numbers for EPA's regulations are listed in
Officer for EPA." Comments are requested by [Insert date 45
Section 307(b)(1) of the CAA indicates which Federal
Call must be filed in the Court of Appeals for the District
Management and Budget (OMB) review and the requirements of
(4) raise novel legal or policy issues arising out of
Section, which is listed in the ADDRESSES section of this
2. Subpart G is amended to add §§ 51.121 and 51.122 to read
section must submit to EPA a SIP revision that provides for
State has demonstrated to EPA provides equivalent or greater
The summary must assume the same NOx mass emissions for
State to determine whether the sources are in compliance
State determines provide the authorities required under this
section must be specifically identified, and copies of such
section, EPA may make a finding under § 179(a)(1)-(4) of the
(ii) State FIPS code
(iii) County FIPS code
(iv) Federal ID code (plant)
(v) Federal ID code (point)
(vi) Federal ID code (process)
(vii) Federal ID code (stack)
(ix) SCC
(ix) SIC
(vi) Activity (VMT by Roadway Class)
State must submit for EPA approval an example of the
EPA Aerometric Information Retrieval System (AIRS) system
State may have sources submit the data directly to EPA
Information Placement System (FIPS). FIPS is the system of
Chemical Abstracts Service (CAS) numbers are used for all
U.S. Department of Commerce's categorization of businesses
Since VMT does not directly correlate to emissions that
Phase II coal-fired utility units with a tangentially fired
(i) Is subject to:
State or the group of States to use a NOx averaging plan
(A) Any NOx emissions by such unit; and
Administrator that any NOxemissions under this paragraph
(b)(1)(iii)(B) will not result in higher total NOx emissions
section for providing notice of the draft decision; and
Administrator to each NOx Allowance Tracking System account
IV of the Clean Air Act
Administrator means the Administrator of the United States
NOx allowances to be initially credited to a NOx Budget unit
Automated data acquisition and handling system or DAHS means
NOx Budget unit under § 96.4 on the date the unit commences
NOx Budget source’s or a NOx Budget unit's compliance or
Compliance account means a NOx Allowance Tracking System
Continuous emission monitoring system or CEMS means the
Energy Information Administration means the Energy
Information Administration of the United States Department
EPA means the United States Environmental Protection Agency
General account means a NOx Allowance Tracking System
Maximum potential NOx emission rate means the emission rate
Most stringent State or Federal NOx emissions limitation
NOx emissions limitation (in terms of lb/mmBtu) that is
States Department of Energy standards
Clean Air Act and regulatory authority under the Clean Air
NOx allowance deduction or deduct NOx allowances means the
NOx allowances held or hold NOx allowances means the NOx
NOx Allowance Tracking System means the system by which the
NOx Allowance Tracking System account means an account in
NOx allowance transfer deadline means midnight of November
NOx allowances may be submitted for recordation in a NOx
NOx Budget emissions limitation means the tonnage equivalent
NOx Budget opt-in source means a unit that has been elected
NOx Budget permit means the legally binding and federally
Trading Program requirements applicable to a NOx Budget
NOx Budget source means a source that includes one or more
NOx Budget units
NOx Budget Trading Program means a regional nitrogen oxides
NOx Budget unit means a unit that is subject to the NOx
Opt-in means to be elected to become a NOx Budget unit under
NOx Budget opt-in permit under subpart I of this part
Overdraft account means the NOx Allowance Tracking System
Administrator from one NOx Allowance Tracking System account
State means one of the 48 contiguous States and the District
Budget Trading Program pursuant to § 51.121 of this chapter
State trading program budget means the total number of NOx
(2) By United States Postal Service; or
Title V operating permit means a permit issued under title V
For the purpose of determining compliance with the NOx
(1) The total electrical generation (MWe) for use within
section shall become effective the day on which the unit is
section to submit a NOx Budget permit application
NOx Budget source and each NOx Budget unit at the source
(e) Recordkeeping and Reporting Requirements
NOx Budget Trading Program or to demonstrate compliance with
Budget source and each NOx Budget unit at the source shall
Budget Trading Program shall be subject to criminal
NOx Budget source) shall also apply to the owners and
Program concerning the source or any NOx Budget unit at the
NOx Budget source shall be selected by an agreement binding
Allowance Tracking System account shall be established for a
The NOx authorized account representative may be changed at
96.13. Notwithstanding any such change, all
Budget source or a NOx Budget unit is not included in the
NOx Budget unit at the source for which the account
V operating permit:
V permit:
A complete NOx Budget permit application shall include the
Budget source and whether it is a NOx Budget unit under §
NOx Budget units covered by the permit or the overdraft
The initial NOx Budget permit covering a NOx Budget unit for
(1) Identification of each NOx Budget unit;
NOx Budget Trading Program and make appropriate adjustments
The State trading program budget allocated by the permitting
State implementation plan
NOx allowance allocations for each NOx Budget unit under §
section will be determined in accordance with part 75 of
chapter for the year
Unit’s NOx allowances deducted for actual utilization =
(Unit’s NOx allowances allocated for control period) - (
Unit’s actual control period utilization x 0.15 lb/mmBtu)
Administrator will establish one compliance account for each
NOx Budget unit and one overdraft account for each source
section, no objection or other communication submitted to
Administrator will deduct NOx allowances until the number of
Allowance Tracking System account. Within 10 business days
(a) The NOx authorized account representative of a
The NOx authorized account representatives seeking
(b) A specification by serial number of each NOx
(a) Within 5 business days of receiving a NOx allowance
section, the Administrator will record a NOx allowance
(2) The transferror account includes each NOx allowance
(b) A NOx allowance transfer that is submitted for
(1)(i) The owner or operator of each NOx Budget unit
(ii) The owner or operator of each NOx Budget unit under
(A) The maximum potential NOx emission rate and the
(B) Reference methods under § 75.22 of this chapter; or
(2)(i) The owner or operator of each NOx Budget unit
(3)(i) The owner-operator of a NOx Budget unit that
(1) No owner or operator of a NOx Budget unit shall use
(2) No owner or operator of a NOx Budget unit shall
(3) No owner or operator of a NOx Budget unit shall
(4) No owner or operator of a NOx Budget unit shall
(ii) The owner or operator is monitoring emissions from
(iii) The NOx authorized account representative submits
(a) The owner or operator of a NOx Budget unit that is
(2) For any additional NOx emission rate CEMS required
(b) The owner or operator of a NOx Budget unit that is
NOx Budget unit that is subject to an acid rain emissions
chapter (which includes the automated data acquisition and
chapter or appendix B to part 75 of this chapter, the owner
(i) Notification of certification. The NOx authorized
(ii) Certification application. The NOx authorized
(A) Approval notice. If the certification application is
(B) Incomplete application notice. A certification
(B) The NOx authorized account representative shall
The NOx authorized account representative for a NOx
(2) If the NOx authorized account representative for the
(b) For NOx Budget units that are not subject to an acid
(1) Monitoring Plans. The owner or operator shall comply
(2) Certification Applications. The NOx authorized
(i) (A) Except as provided in paragraph (b)(3)(i)(B) of
(iii) Compliance certification. The NOx authorized
(iv) The NOx authorized account representative shall
(a)(1) The NOx authorized account representative of a NOx
chapter to the Administrator requesting approval to apply an
(b)(1) The NOx authorized account representative of a NOx
chapter to the permitting authority and the Administrator
A unit for which an application for a NOx Budget opt-in
(a) Applying for initial NOx Budget opt-in permit. In
(1) A complete NOx Budget permit application under §
(b) Duty to reapply. The NOx authorized account
The permitting authority will issue or deny a NOx Budget
(d) After calculating the baseline heat input and the
NOx Budget opt-in permit on the NOx authorized account
(e) Confirmation of intention to opt-in. Within 20 days
NOx Budget opt-in permit application
(f) Issuance of draft NOx Budget opt-in permit. If the
NOx authorized account representative confirms the intention
section, if at any time before issuance of a draft NOx
(h) Withdrawal of application for NOx Budget opt-in
NOx Budget opt-in permit. Once the application for a NOx
NOx Budget opt-in permit shall be May 1 of the first control
(a) Each NOx Budget opt-in permit (including any draft or
(a) Requesting withdrawal. To withdraw from the NOx
(b) Conditions for withdrawal. Before a NOx Budget
(2) If the NOx Budget opt-in source has excess emissions
Administrator will deduct from the NOx Budget opt-in
NOx Budget source where the NOx Budget opt-in source is
NOx authorized account representative for the NOx Budget
Budget Trading Program shall comply with all requirements
NOx authorized account representative of the NOx Budget
(g) Ability to return to the NOx Budget Trading Program
Budget Trading Program and its NOx Budget opt-in permit is
NOx Budget opt-in permit became effective
(a) Notification. When a NOx Budget opt-in source
(b) Permitting authority's and Administrator’s action
(1)(i) When the NOx Budget opt-in source becomes a NOx
(ii)(A) The Administrator will deduct from the compliance
(1) Any NOx allowances allocated to the NOx Budget unit
(as a NOx Budget opt-in source) under § 96.88 for any
(2) If the effective date of the NOx Budget permit
Budget unit (as a NOx Budget opt-in source) under § 96.88
(iii) (A) For every control period during which the NOx
Budget permit revised under paragraph (b)(1)(i) of this
section is effective, the NOx Budget unit under paragraph
NOx Budget permit revision under paragraph (b)(1)(i) of this
section and will be allocated NOx allowances under § 96.42
(B) Notwithstanding paragraph (b)(1)(iii)(A) of this
section, if the effective date of the NOx Budget permit
(b)(1)(i) of this section under § 96.42 for the control
NOx Budget opt-in source’s compliance account. If any NOx
Administrator will close the NOx Budget opt-in source's
(a) NOx allowance allocation. (1) By December 31
(b) For each control period for which the NOx Budget opt-
Budget opt-in source will be allocated NOx allowances in
(1) The heat input (in mmBtu) used for calculating NOx
(i) The NOx Budget opt-in source’s baseline heat input
(2) The permitting authority will allocate NOx allowances
(i) The NOx Budget opt-in source’s baseline NOx emissions
(ii) The most stringent State or Federal NOx emissions
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Environmental Protection Agency: final1

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