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Ozone Implementation

Rulemaking on Section 126 Petitions;
Revision of Definition of Requirement

Information provided for informational purposes onlyNote: EPA no longer updates this information, but it may be useful as a reference or resource.

[Federal Register: February 22, 2002 (Volume 67, Number 36)]

[Proposed Rules]

[Page 8385-8394]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]




40 CFR Parts 52, 70, and 71


RIN 2060-AJ36


Rulemaking on Section 126 Petitions From New York and Connecticut 

Regarding Sources in Michigan; Revision of Definition of Applicable 

Requirement for Title V Operating Permit Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.


SUMMARY: The EPA is proposing to revise one element of a final rule 

published on January 18, 2000, regarding petitions filed by four 

Northeastern States under section 126 of the Clean Air Act (CAA). The 

petitions seek to mitigate interstate transport of nitrogen oxides 

(NOX), one of the main precursors of ground-level ozone 

pollution. The final rule partially approved the four petitions under 

the 1-hour ozone national ambient air quality standard, thereby 

requiring certain types of sources located in 12 States and the 

District of Columbia to reduce their NOX emissions.

    Subsequently, on March 3, 2000, the U.S. Court of Appeals for the 

District of Columbia Circuit issued a decision on a related EPA 

regulatory action, the NOX State implementation plan call 

(NOX SIP call), that potentially affects the section 126 

Rule. Although the court decision did not directly address the State of 

Michigan, the reasoning of the court regarding the significance of 

NOX emissions from sources in two other States calls into 

question the inclusion of a portion of Michigan in the area covered by 

the NOX SIP call. The section 126 Rule is based on many of 

the same analyses and information used for the NOX SIP call 

and covers part of Michigan. Thus, in light of the court ruling, EPA is 

proposing to withdraw its section 126 findings and to deny the 

petitions under the 1-hour ozone standard with respect to sources 

located in the portion of Michigan that is at issue in the 

NOX SIP call, known as the ``coarse grid'' part of that 

State. Although EPA has not identified any existing section 126 sources 

located in the coarse grid, this proposal would affect new sources 

locating in the coarse grid.

    The EPA is also proposing to revise the definition of the 

``applicable requirement'' for title V operating permit programs by 

providing expressly that any standard or other requirement under 

section 126 is an applicable requirement and must be included in 

operating permits issued under title V of the CAA.

DATES: The comment period on this proposal ends on April 15, 2002. 

Comments must be postmarked by the last day of the comment period and 

sent directly to the Docket Office listed in ADDRESSES (in duplicate 

form if possible). A public hearing will be held on March 15, 2002 in 

Arlington, VA, if one is requested by March 7, 2002. Please refer to 

SUPPLEMENTARY INFORMATION for additional information on the comment 

period and hearing.

ADDRESSES: Comments may be submitted to the Office of Air and Radiation 

Docket and Information Center (6102), Attention: Docket No. A-97-43, 

U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue NW., 

Washington, DC 20460, telephone (202) 260-7548. The EPA encourages 

electronic submission of comments and data following the instructions 

under SUPPLEMENTARY INFORMATION of this document. No confidential 

business information should be submitted through e-mail.

    Documents relevant to this action are available for inspection at 

the Docket Office, located at 401 M Street SW., Room M-1500, 

Washington, DC 20460, between 7:30 a.m. and 5:30 p.m., Monday though 

Friday, excluding legal holidays. A reasonable fee may be charged for 


    The public hearing, if requested, will be held at Crystal Mall 2 

(Room 1110 ``the fish bowl''), Crystal City, 1921 Jefferson Davis Hwy, 

Arlington, VA 22202.

FOR FURTHER INFORMATION CONTACT: Questions concerning today's action 

should be addressed to Carla Oldham, Office of Air Quality Planning and 

Standards, Air Quality Strategies and Standards Division, C539-02, 4930 

Old Page Road, Research Triangle Park, NC, 27711, telephone (919) 541-

3347, e-mail at oldham.carla@epa.gov. 


Public Hearing

    The EPA will conduct a public hearing on this proposal on March 15, 

2002 beginning at 9:00 a.m., if requested by March 7, 2002. The EPA 

will not hold a hearing if one is not requested. Please check EPA's 

webpage at https://www.epa.gov/ttn/rto/whatsnew.html on March 11, 2002 

for the announcement of whether the hearing will be held. If there is a 

public hearing, it will be held at Crystal Mall 2 (Room 1110 ``the fish 

bowl''), Crystal City, 1921 Jefferson Davis Hwy, Arlington, VA 22202. 

The Metro stop is Crystal City. If you want to request a hearing and 

present oral testimony at the hearing, you should notify, on or before 

March 7, 2002, JoAnn Allman, Office of Air Quality Planning and 

Standards, Air Quality Strategies and Standards Division, C539-02, 4930 

Old Page Road, Research Triangle Park, NC 27711, telephone (919) 541-

1815, e-mail allman.joann@epa.gov. Oral testimony will be limited to 5 

minutes each. The hearing will be strictly limited to the subject 

matter of the proposal, the scope of which is discussed below. Any 

member of the public may file a written statement by the close of the 

comment period. Written statements (duplicate copies preferred) should 

be submitted to Docket No. A-97-43 at the address given above for 

submittal of comments. The hearing schedule, including the list of 

speakers, will be posted on EPA's webpage at https://www.epa.gov/ttn/

rto/whatsnew.html. A verbatim transcript of the hearing, if held, and 

written statements will be made available for copying during normal 

working hours at the Office of Air and Radiation Docket and Information 

Center address given above for inspection of documents.

Availability of Related Information

    The official record for this rulemaking, as well as the public 

version, has been established under docket number A-97-43 (including 

comments and data submitted electronically as described below). A 

public version of this record, including printed, paper versions of 

electronic comments, which does not include any information claimed as 

confidential business information, is available for inspection from 

7:30 a.m. to 5:30 p.m., Monday through Friday, excluding legal 

holidays. The official rulemaking record is located at the address in 

ADDRESSES at the beginning of this document. In addition, the Federal 

Register rulemaking actions and associated documents are located at 


    The EPA has issued a separate rule on NOX transport 

entitled, ``Finding of Significant Contribution and Rulemaking for 

Certain States in the Ozone Transport Assessment Group Region for 

Purposes of Reducing Regional Transport of Ozone.'' The rulemaking 

docket for that rule (Docket No. A-96-56), hereafter referred to as the 

NOX SIP call, contains information and analyses that EPA has 

relied upon in the section 126 rulemaking, and hence documents in that 

docket are part of the rulemaking record for this rule. Documents 

related to the NOX SIP call

[[Page 8387]]

rulemaking are available for inspection in docket number A-96-56 at the 

address and times given above.

Submitting Electronic Comments

    Electronic comments are encouraged and can be sent directly to EPA 

at A-and-R-Docket@epa.gov. Electronic comments must be submitted as an 

ASCII file avoiding the use of special characters and any form of 

encryption. Comments and data will also be accepted on disks in 

WordPerfect 8.0 or ASCII file format. All comments and data in 

electronic form must be identified by the docket number A-97-43. 

Electronic comments may be filed online at many Federal Depository 



I. Background

    A. What Does the May 1999 Section 126 Rule Do?

    B. How Did the January 2000 Rule Revise the May 1999 Rule?

    1. How Did the Court Ruling on the 8-Hour Standard Affect the 

May 1999 Section 126 Rule?

    2. How Did the Court Stay of the NOX SIP Call Affect 

the Section 126 Rule?

    C. March 3, 2000 Court Decision on the NOX SIP Call

    1. What is the Relevance of the NOX SIP Call Court 

Decision to the Section 126 Rule?

    2. What is the NOX SIP Call Litigation Regarding 

Coarse Grid Sources?

    3. What is EPA's Response to the NOX SIP Call Court 


II. Section 126 Proposal

    A. What is the Geographic Scope of the 1-Hour Findings for 

Michigan Sources?

    B. What is Today's Proposal on the Michigan Coarse Grid Sources 

Under the 1-Hour Standard?

    C. Is EPA Proposing Action Under the 8-Hour Standard on the 

Affirmative Technical Determinations that Affect Coarse Grid 


    D. Does Today's Proposal Affect the Section 126 Requirements for 

Michigan Fine Grid Sources or Sources Located in Other States?

III. What is the Revision to the Definition of ``Applicable 

Requirement'' for Title V Operating Permit Programs?

IV. Administrative Requirements

    A. Executive Order 12866: Regulatory Planning and Review

    B. Unfunded Mandates Reform Act

    C. Executive Order 13132: Federalism

    D. Executive Order 13175: Consultation and Coordination with 

Indian Tribal Governments

    E. Regulatory Flexibility Act

    F. Executive Order 13045: Protection of Children from 

Environmental Health Risks and Safety Risks

    G. National Technology Transfer and Advancement Act

    H. Paperwork Reduction Act

    I. Executive Order 13211: Actions Concerning Regulations that 

Significantly Affect Energy Supply, Distribution, or Use

I. Background

    In final rules published on May 25, 1999 (64 FR 28250) (May 1999 

Rule) and January 18, 2000 (65 FR 2674) (January 2000 Rule), EPA took 

action on petitions filed separately by eight Northeastern States under 

section 126 of the CAA. Each petition requested that EPA make a finding 

that certain stationary sources located in other specified States are 

emitting NOX in amounts that significantly contribute to 

ozone nonattainment and maintenance problems in the petitioning State. 

All of the States directed their petitions at the 1-hour ozone 

standard. Five of the States also directed their petitions at the 8-

hour ozone standard. The petitions targeted electric utilities, 

industrial boilers and turbines, and certain other stationary sources 

of NOX. The States that submitted petitions are Connecticut, 

Maine, Massachusetts, New Hampshire, New York, Rhode Island, 

Pennsylvania, and Vermont.

    Section 126 of the Clean Air Act (CAA) authorizes a downwind State 

to petition EPA for a finding that any new (or modified) or existing 

major stationary source or group of stationary sources upwind of the 

State emits or would emit in violation of the prohibition of section 

110(a)(2)(D)(i) because their emissions contribute significantly to 

nonattainment, or interfere with maintenance, of a national ambient air 

quality standard in the State. Sections 110(a)(2)(D)(i), 126(b)-(c). If 

EPA makes the requested finding, the sources must shut down within 3 

months from the finding unless EPA directly regulates the sources by 

establishing emissions limitations and a compliance schedule, extending 

no later than 3 years from the date of the finding, to eliminate the 

prohibited interstate transport of pollutants as expeditiously as 

possible. See sections 110(a)(2)(D)(i) and 126(c).

A. What Does the May 1999 Section 126 Rule Do?

    In the May 1999 Rule, EPA determined which petitions were 

approvable based on their technical merit. The EPA made affirmative 

technical determinations that NOX emissions from existing 

and new large electric generating units (EGUs) and large industrial 

boilers and turbines (non-EGUs) located in certain States identified in 

the petitions are significantly contributing to nonattainment in, or 

interfering with maintenance by, one or more of the petitioning States 

with respect to the 1-hour and/or 8-hour ozone standard. Separate 

determinations were made under the 1-hour and 8-hour standards.

    The EPA deferred making the section 126 findings based on the 

affirmative technical determinations pending certain actions by EPA and 

the States with respect to the NOX SIP call. Instead, 

according to the rule, the section 126 findings and associated control 

requirements would be automatically triggered at specific future dates 

if States and EPA failed to stay on track to meet the SIP call 

obligations. In the May 1999 Rule, EPA also denied the portions of the 

petitions that did not have technical merit.

    In evaluating the petitions, EPA relied on the analyses and 

information from the NOX SIP call.

B. How Did the January 2000 Rule Revise the May 1999 Rule?

    Shortly after EPA issued the May 1999 Rule (which was signed by the 

Administrator on April 30, 1999), two separate rulings by the U.S. 

Court of Appeals for the District of Columbia Circuit (D.C. Circuit) 

affected the Rule. In light of the court rulings, on January 18, 2000 

EPA published a final rule (January 2000 Rule) which modified two 

aspects of the May 1999 Rule.

1. How Did the Court Ruling on the 8-Hour Standard Affect the May 1999 

Section 126 Rule?

    In one of the court rulings, issued on May 14, 1999, the D.C. 

Circuit questioned the constitutionality of the CAA authority to review 

and revise the national ambient air quality standards (NAAQS), as 

applied by EPA in its promulgation of the 8-hour ozone standard (as 

well as the particulate matter NAAQS). See American Trucking Ass'ns v. 

EPA, 175 F.3rd 1027 (D.C. Cir.), modified, 195 F.3rd 4 (D.C. Cir. 

1999), cert. granted, 68 U.S.C.W. 3724 (May 22, 2000), 68 U.S.C.W. 3739 

(May 30, 2000). The court's ruling curtailed EPA's ability to require 

States to comply with a more stringent ozone NAAQS. On October 29, 

1999, the D.C. Circuit granted in part and denied in part EPA's 

rehearing request.

    On January 27, 2000, the Administration filed a petition of 

certiorari with the Supreme Court seeking review of this opinion. 

Several of the parties who challenged the NAAQS filed conditional 

cross-petitions for certiorari on the issue of whether the CAA 

precludes the consideration of costs in establishing NAAQS. In May 

2000, the Supreme Court granted EPA's petition and the petitioners' 

cross-petitions, and the parties have filed their briefs with the 

Court. The ongoing litigation continues to create uncertainty

[[Page 8388]]

with respect to EPA's ability to rely upon the 8-hour ozone standard as 

a basis for making findings under section 126 at this time.

    In the January 2000 section 126 Rule, EPA explained that it 

believed it should not continue implementation efforts under section 

126 with respect to the 8-hour standard that could be construed as 

inconsistent with the Court ruling in American Trucking. Therefore, in 

the January 2000 Rule, EPA voluntarily stayed the 8-hour affirmative 

technical determinations set forth in the May 1999 Rule. The EPA will 

address the 8-hour portion of the section 126 Rule through additional 

notice-and-comment rulemaking if and when EPA is able to implement the 

8-hour standard.

2. How Did the Court Stay of the NOX SIP Call Affect the 

Section 126 Rule?

    The NOX SIP Call required submission of the SIP 

revisions by September 30, 1999. State Petitioners challenging the 

NOX SIP Call filed a motion requesting the Court to stay the 

submission schedule until April 27, 2000. In response, on May 25, 1999, 

the D.C. Circuit issued a stay of the SIP submission deadline pending 

further order of the Court. Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 

2000) (May 25, 1999 order granting stay in part).

    Because the court had stayed the NOX SIP call schedule, 

and there was no explicit and expeditious deadline for compliance with 

that rule, EPA believed there was no longer a basis for deferring 

making the section 126 findings based on a failure to meet the SIP call 

submission requirements. Therefore, in the January 2000 Rule, EPA 

deleted the automatic trigger mechanism for making findings and instead 

simply made final findings under the 1-hour standard based on the 

affirmative technical determinations in the May 1999 Rule. The 1-hour 

findings were made with respect to the section 126 petitions from 

Connecticut, Massachusetts, New York, and Pennsylvania. The findings 

affected large EGUs and large non-EGUs located in the District of 

Columbia and 12 States, including Michigan. EPA promulgated the Federal 

NOX Budget Trading Program as the control remedy and issued 

NOX allowance allocations to each source. The rule required 

sources affected by the 1-hour findings to reduce NOX 

emissions by May 1, 2003.\1\ (On August 24, 2001, the D.C. Circuit 

temporarily suspended the section 126 Rule compliance date for EGUs 

while EPA resolves a remanded issue related to EGU growth factors. The 

EPA is currently developing its response to the remand. In a January 

16, 2002 memorandum from John Seitz, Director of EPA's Office of Air 

Quality Planning and Standards, to Regional Air Division Directors 

entitled, ``Deadlines for Electric Generating Units (EGUs) and Non-

Electric Generating Units (non-EGUs) under the Section 126 Rule,'' EPA 

has indicated its intent to reset the compliance date for EGUs and non-

EGUs to May 31, 2004, subject to EPA's response to the growth factor 



    \1\ The EPA notes that on June 22, 2000, the Court lifted the 

stay of the SIP submittal date for the NOX SIP call and 

ordered that the SIP submissions be due 128 days from the June 22, 

2000 date of the order. At the time of the May 25, 1999 stay of the 

SIP submittal date, States had 128 days left to submit their SIPs. 

Thus, the new SIP submittal date became October 30, 2000. The EPA 

has established a two-phased process for submitting the 

NOX SIPs; the October 30, 2000 date is for the phase I 

SIP. The EPA will be establishing the due date for the phase II 

NOX SIP through notice-and-comment rulemaking. Therefore, 

the deadline for States to meet their full NOX SIP call 

obligation has not yet been set. For further details, see the 

proposal on the NOX SIP call that is being issued in the 

same general timeframe as today's proposal. Because EPA delinked the 

making of the section 126 findings from the NOX SIP call 

SIP submittal date, the lifting of the stay of the SIP submittal 

date did not affect the section 126 action.


C. March 3, 2000 Court Decision on the NOX SIP Call

1. What Is the Relevance of the NOX SIP Call Court Decision 

to the Section 126 Rule?

    On March 3, 2000, the United States Court of Appeals for the 

District of Columbia Circuit Court issued its decision on the 

NOX SIP call, ruling in favor of EPA on all major issues. 

Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000).

    However, the Court ruled against EPA on several points, one of 

which is relevant to today's proposal on the section 126 Rule. 

Specifically, the court vacated the inclusion of Georgia and Missouri 

in the NOX SIP call in light of the Ozone Transport 

Assessment Group (OTAG) conclusions that emissions from coarse grid 

portions of States did not merit controls. The court remanded this 

issue concerning Georgia and Missouri to EPA for further consideration. 

The section 126 Rule is based on NOX SIP call analyses and 

also affects sources located in the coarse grid. (See section II.C.2 

below for an explanation of coarse versus fine grid areas of States.)

What Is the NOX SIP Call Litigation Decision Regarding 

Coarse Grid Sources?

    In the NOX SIP call, Georgia and Missouri industry 

petitioners challenged EPA's decision to calculate NOX 

budgets for these two States based on NOX emissions 

throughout the entirety of each State. The petitioners maintained that 

the record supports including only eastern Missouri and northern 

Georgia as contributing to downwind ozone problems.

    The challenge from these petitioners generally stems from the OTAG 

recommendations. The OTAG recommended NOX controls to reduce 

transport for areas within the ``fine grid'' of the air quality 

modeling domain, but recommended that areas within the ``coarse grid'' 

not be subject to additional controls, other than those required by the 



    \2\ The OTAG recommendation on Utility NOX Controls 

approved by the Policy Group, June 3, 1997 (62 FR 60318, Appendix B, 

November 7, 1997).


    In its modeling, OTAG used grids drawn across most of the eastern 

half of the United States. The ``fine grid'' has grid cells of 

approximately 12 kilometers on each side (144 square kilometers). The 

``coarse grid'' extends beyond the perimeter of the fine grid and has 

cells with 36 kilometer resolution. As shown in Figure F-10, Appendix F 

of part 52.34, the fine grid includes the area encompassed by a box 

with the following geographic coordinates: Southwest Corner: 92 degrees 

West longitude, 32 degrees North latitude; Northeast Corner: 69.5 

degrees West longitude, 44 degrees North latitude (OTAG Final Report 

Chapter 2). The OTAG could not include the entire Eastern U.S. within 

the fine grid because of computer hardware constraints.

    It is important to note that there were two key factors directly 

related to air quality that OTAG considered in determining the location 

of the fine grid-coarse grid line.\3\ (See OTAG Technical Supporting 

Document, Chapter 2, page 6; www.epa.gov/ttn/otag/finalrpt/.) 

Specifically, the fine grid-coarse grid line was drawn to: (1) Include 

within the fine grid as many of the 1-hour ozone nonattainment problem 

areas as possible and still stay within the computer and model run time 

constraints, (2) avoid dividing any individual major urban area between 

the fine grid and coarse grid, and (3) be located along an area of 

relatively low emissions density. As a result, the fine grid-coarse 

grid line did not track State boundaries, and Missouri and Georgia were 

among several States that were split between the fine and coarse grids.

[[Page 8389]]

Eastern Missouri and northern Georgia were in the fine grid while 

western Missouri and southern Georgia were in the coarse grid.


    \3\ In addition to these two factors, OTAG considered three 

other factors in establishing the geographic resolution, overall 

size, and the extent of the fine grid. These other factors dealt 

with the computer limitations and the resolution of available model 



    The analysis OTAG conducted found that emissions controls examined 

by OTAG, when modeled in the entire coarse grid (i.e., all States and 

portions of States in the OTAG region that are in the coarse grid) had 

little impact on high 1-hour ozone levels in the downwind ozone problem 

areas of the fine grid.\4\


    \4\ OTAG recommendation on Major Modeling/Air Quality 

Conclusions approved by the Policy Group, June 3, 1997 (62 FR 60318, 

Appendix B, November 7, 1997).


    The Court vacated EPA's determination of significant contribution 

for all of Georg